S&P 500 Surges Above 4,000; Bonds Bid, Dollar Skids To Start The Quarter

S&P 500 Surges Above 4,000; Bonds Bid, Dollar Skids To Start The Quarter

Mission Accomplished?

S&P 500 tagged 4,000 at the cash open

As SpotGamma noted this morning:

4000 is obviously the big number for today as it is the SPY/SPX Call Wall and therefore a resistance/magnet point. Our view is that the market likely does shift higher without the Call Wall rolling to a higher strike. As you can see below, at the moment there are currently no higher strikes approaching the size of 400/4000.

To the downside our Vol Trigger and gamma flips lines have shifted up to 3950, indicating that as critical support.

While stocks are surging, bonds are also bid to start the month with 10Y Yields down 5bps…

And for the second day in a row, the dollar has roundtripped, tumbling since the open of the Europe session…

Ahead of tomorrow’s stock market holiday and payrolls print, one might think a derisking was in order, but this is opposite-land after all.

Tyler Durden
Thu, 04/01/2021 – 09:39

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Violent Crime in Baltimore Plunges After City Ditches Prosecution of Prostitution, Drug Possession, Other Minor Offenses


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Decarceral experiment in Baltimore gets results. After a year of foregoing prosecution of certain nonviolent misdemeanor crimes, Baltimore has seen a serious drop in violent crimes and property crimes, too. Between March 2020 and March 2021, violent crime in Baltimore dropped 20 percent and property crime dropped 36 percent. Homicides were also down slightly (13 fewer compared to the previous year).

Baltimore State’s Attorney Marilyn Mosby announced in March 2020 that her office would dismiss all pending charges for drug possession, prostitution, trespassing, open container, public urination, paraphernalia possession, attempted distribution of drugs, and minor traffic offenses. It would also stop prosecuting new cases for these offenses—a decision born out of the desire to thwart COVID-19 spreading through jails.

Mosby’s office dismissed 1,423 pending cases and dismissed 1,415 warrants related to these offenses between March 2020 and March 2021. Now, the change will be permanent.

“The police are going to follow what they’ve been doing for the past year, which is not arresting people based on the offenses I mentioned,” Mosby said at a March 26 press conference. “Clearly, the data suggest there is no public safety value in prosecuting low-level offenses.”

Of course, it doesn’t necessarily follow that halting prosecution of some nonviolent offenses actually caused Baltimore’s widespread drop in violent and property crimes. For instance, the pandemic and business and school shutdowns alone could explain the decline. But the fact that the pandemic and shutdowns have corresponded to rising violent crime rates in many other U.S. cities casts doubt on their power to explain Baltimore’s decrease in both nonviolent and violent offenses.

In any event, Baltimore authorities are keen to continue the experiment. “We leave behind the era of tough-on-crime prosecution and zero tolerance policing and no longer default to the status quo to criminalize mostly people of color for addiction,” said Mosby in a statement. “We will develop sustainable solutions and allow our public health partners to do their part to address mental health and substance use disorder.”

Mosby’s office will be partnering with Baltimore Crisis Response, Inc. and other community groups, including the Sex Workers Outreach Project (SWOP) Baltimore, to help provide a range of services to those who need them.

“The decision not to prosecute drug and nonviolent misdemeanor crimes meant a huge paradigm shift for police, Commissioner Michael Harrison said in an interview,” according to The Washington Post. “Officers who made drug arrests saw prosecutors dismissing the charges at the jail, and so the arrests mainly stopped. Mosby said there were 80 percent fewer arrests for drug possession in Baltimore in the past year.”

Overall incarceration in the city of Baltimore “is down 18% during COVID and the data reveals there has been a 39% decrease in people entering the criminal justice system compared to this time last year,” the city says.

A study from the Baltimore City State’s Attorney’s Office and Johns Hopkins University researchers found that of the 1,431 people whose charges or warrants were dismissed at the start of Baltimore’s criminal justice experiment, only five were rearrested for any crime. In addition:

The data showed that 911 calls about drug use, public intoxication and sex work (a proxy for public concern) did not increase following the policy; rather, from March – December 2020, there was a 33% reduction in calls mentioning drugs and a 50% reduction in calls mentioning sex work compared to the prior 2 years.

Professor Susan Sherman of Johns Hopkins says, “The fact that we saw drops in 911 calls and recidivism for these offenses shows us that communities are less impacted by these announcements than one might assume. The trend is different for other offenses during that time period. The policy is therefore making a positive impact on communities.”


FREE MINDS

The Institute for Justice (IJ) can move forward with a case challenging cash seizures at airports by Transportation Security Administration (TSA) and Drug Enforcement Administration (DEA) agents. From IJ:

When travelers go online to find out whether it is legal to fly with cash, the government tells them that there are no restrictions on traveling with any amount of money on domestic flights. What it does not tell flyers is that, upon seeing cash, Transportation Security Administration (TSA) screeners will detain them and turn them over to law enforcement, who will take their money without any cause for suspicion and without filing any criminal charges.

Now, a Fourth Amendment, class action lawsuit filed by the Institute for Justice (IJ) to end these unconstitutional practices by the TSA and the Drug Enforcement Administration (DEA) will move forward in federal court after a judge rejected the government’s motion to dismiss.


FREE MARKETS

President Joe Biden’s “infrastructure plan” is just another omnibus spending and regulation measure. The $2 trillion proposal from the president would “force non-union workers to pay union dues even in states that have explicitly said that’s not mandatory,” as Eric Boehm pointed out in yesterday’s Reason Roundup. It would allocate $10 billion for a Civilian Climate Corps, $174 billion in subsidies for electric vehicles, $12 billion for community colleges, and $25 billion “to help upgrade child care facilities and increase the supply of child care in areas that need it most.” Some $5 billion would go to violence prevention initiatives. And that’s only some of the spending unrelated or tangentially related to infrastructure.

In terms of spending on infrastructure, Biden’s plan is less concerned with what works and more concerned with launching a massive jobs creation program, as Reason‘s Christian Britschgi notes:

The president said in his speech today that his American Jobs Plan would replace the 10 most economically significant bridges in the country, but otherwise omitted details about what specific projects he’d like to fund.

Biden’s transportation infrastructure plans are “vague because the focus is all on the second-order effects of transportation, not on actual transportation,” says Adrian Moore, vice president of research at the Reason Foundation. “It’s all about what’s going to happen for equity or climate change or suburban development.”

Indeed, one can see that in the very name of the American Jobs Plan, the title of which does not mention infrastructure. That’s more than a rhetorical point. The focus on jobs, and particularly unionized American jobs, means that Biden’s $2 trillion spending plan will buy a lot less infrastructure than it otherwise could.


QUICK HITS

• More on the Matt Gaetz saga, from me, from the Washington Examiner, and from The Daily Beast.

Reason‘s Peter Suderman serves up weird, delicious cocktail recipes:

• New York Gov. Andrew Cuomo signed the state’s new marijuana legalization measure into law yesterday.

Washington Post Fact Checker Glenn Kessler corrects the record on a repeated Biden claim about the new Georgia voting law:

• “Police investigators say Michael Forest Reinoehl, a Portland, Oregon, activist wanted for killing another man during ongoing street battles in that city last summer, likely shot at police before he was killed by a fugitive task force in Lacey, Washington, last September,” reports Reason‘s C.J. Ciaramella.

• Psychology professor Kevin Nadal and the Anti-Defamation League’s Steven Freeman debate hate crime laws on the excellent Jane Coaston podcast, The Argument.

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Micron Soars On Chip Shortage “Perfect Storm”

Micron Soars On Chip Shortage “Perfect Storm”

In a time when pervasive chip and semiconductor shortages are snarling supply chains across the globe, it is hardly a surprise that chip giant Micron shares surged more than 5% in premarket trading, after the chipmaker gave a bullish sales and earnings forecast, with analysts positive on pricing trends for dynamic random access memory (DRAM), while highlighting improving demand from enterprise customers.

Shares in chip stocks peers also climbed in premarket trading, with Applied Materials up 2.6%, Nvidia gaining 1.5%, and Intel +1.2%. Separately, the WSJ reported that Micron and Western Digital are each exploring a potential deal for Japan’s Kioxia.

Below, courtesy of Bloomberg, is a snapshot of what analysts said about Micron’s stellar results:

RBC Capital Markets (outperform, raises PT to $120 from $110)

  • Micron’s results are “solid across the board” and news of potential consolidation of NAND is an added bonus
  • While revenue midpoint guidance was on top of RBC’s expectations for the May quarter, profits are expanding at a faster rate
  • Micron continues to see “robust” demand from hyperscale companies, and enterprise demand looks to be improving

Cowen (outperform, raises PT to $105 from $100)

  • Says it is “hard to argue this was anything but a watershed quarter,” noting better results, better guidance and immediate accretion from halting XPoint
  • Prudent capacity planning is now paying off, and is evident from improved pricing and margins

Evercore (outperform, PT $135)

  • Severe shortages and disciplined capex is driving a “perfect storm”
  • Says the DRAM market is in “severe” shortage, pricing is increasing rapidly, and Micron’s management expects further tightening through 2021
  • Reflecting on current spending levels on DRAM capex, it’s “hard to see issues head,” especially considering lean inventories at Micron’s customers as well as equipment slots that are largely full until 1H22

Piper Sandler (neutral, PT $90)

  • Micron saw strength across the board, and it appears demand has outpaced supply in the DRAM market, driving improving pricing trends
  • Notes data center, 5G handsets, automotive demand all remaining strong, with enterprise demand improving
  • Believes strength is likely to persist through much of calendar 2021 before potentially subsiding to more normal trends in calendar 2022

Tyler Durden
Thu, 04/01/2021 – 09:34

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

Bob Jones Redux: The Question SG Verrilli Was Unwilling to Answer in Obergefell Now Needs to Be Answered

Obergefell v. Hodges was decided about 6 years ago. During the oral argument, Justice Alito posed a critical question to Solicitor General Don Verrilli. He asked whether religious colleges that favor traditional marriage could lose their tax exempt status. Verrilli was unwilling, or perhaps unable, to answer the question. Bill Eskridge and Chris Riano write in their excellent new book that “the issue had never come up in his preparation for the argument.” Here is the exchange.

Justice Alito: Well, in the Bob Jones case, the Court held that a college was not entitled to tax­-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same­-sex marriage?

General Verrilli: You know, ­­I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I don’t deny that. I don’t deny that, Justice Alito. It is –it is going to be an issue.

Six years later, Alito’s question is no longer “going to be an issue.” It is “an issue.”

This week, 30 LGBTQ students filed a class action complaint against the Department of Education in the District of Oregon. The plaintiffs allege:

The U.S. Department of Education is duty-bound by Title IX and the U.S. Constitution to protect sexual and gender minority students at taxpayer-funded colleges and universities, including private and religious educational institutions that receive federal funding. The religious exemption to Title IX, however, seemingly permits the Department to breach its duty as to the more than 100,000 sexual and gender minority students attending religious colleges and universities where discrimination on the basis of sexual orientation and gender identity is codified in campus policies and openly practiced….

Religious exemptions may be constitutionally permissible, or even compelled, when the government regulates private action, even where some amount of harm to members of the community is involved. However, when the government provides public funds to private actors, like the colleges and universities represented by Plaintiffs, the Constitution restrains the government from allowing such private actors to use those funds to harm disadvantaged people. This Constitutional principle remains true even when the private actors are operating according to sincerely held religious beliefs, and it remains true whether the people they are harming are racial or ethnic minorities, sexual or gender minorities or those who reflect multiple, intersecting identities.

The plaintiffs seek sweeping relief:

a. Prohibiting Defendants from granting further religious exemptions to Title IX as applied to sexual and gender minority students;

b. Rescinding all prior religious exemptions to Title IX as applied to sexual and gender minority students;

c. Mandating that Defendants treat Title IX complaints from sexual and gender minority students at all taxpayer-funded religious colleges in the same manner as complaints from sexual and gender minority students at taxpayer-funded nonreligious colleges.

d. Requiring the Department to ensure that all federally-funded educational institutions respect the sexual orientation, gender identity and gender expression of their students.

The effect of this suit would be comparable to withdrawing tax exempt status. How many of these institutions can afford to abjure all federal money? Perhaps BYU and Baylor. Maybe Liberty University. I doubt others could swing it. If this suit is successful, most religious colleges will have to comply, or close. Bob Jones, of course, is the first college listed in the complaint. But Notre Dame, quite conspicuously, is not mentioned. The Fighting Irish are not far behind. All schools with any codes governing sexual relations are at risk.

And make no mistake. We are not simply talking about traditional four-year colleges with religious missions. One of the plaintiffs attended the Fuller Theological Seminary. The complaint states that he “only attended for several days before the school expelled him for being gay and married to a man.” If the Plaintiffs are successful, even theological seminaries would have to decline all federal funding–and perhaps state funding. Espinoza would be diluted. The government will fund religious schools, so long as they eschew traditional teachings on sexuality.

We are looking at a potential revolutionary change in how religious colleges function. Tax-exempt status is next. Barely six years after Obergefell, the courts will soon have to confront these issues. And, I fear, Justice Gorsuch’s Bostock opinion has already settled the Title IX statutory issue. The Plaintiffs assert that the current exemptions violate substantive due process. As a formal matter, RFRA would not trump the 5th Amendment. Perhaps if the Court overrules Smith, there would be a direct conflict between the 5th Amendment and the Free Exercise Clause. The stakes of Fulton grow greater by the day.

For those curious, the case was assigned to Judge Ann Aiken. She was also the judge who presided over the Juliana class in the juvenile climate change litigation. Judge Aiken found there was a fundamental substantive due process right to a clean environment. This assignment is not auspicious for religious colleges.

Currently, the Acting Assistant Secretary for the Office of Civil Rights, U.S. Department of Education is Suzanne Goldberg, formerly a professor at Columbia Law School. She founded Columbia’s Sexuality and Gender Law Clinic. I suspect she may be sympathetic to this claim. I worry about a “sue and settle.” For example, the Department of Education would enter into a consent decree with the class, forcing the federal government to accept new responsibilities without going through the formal rulemaking process. And once that consent decree is in place, it will be very difficult for other groups to challenge the arrangements.

I expect religious colleges will try intervene. I have not researched this issue, but the class will likely argue that intervention is not appropriate. If intervention is denied, then “sue and settle” becomes even more likely. And Judge Aiekn would preside over those proceedings.

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Fauci Rejects CDC Director’s “Impending Doom” View Of Pandemic

Fauci Rejects CDC Director’s “Impending Doom” View Of Pandemic

The old flip-flopper is back. Having supported CDC Director Walensky’s dystopian outlook for America unless we all “obey” ‘the science’ and hunker down just a little longer (2 more weeks to flatten the curve?), Dr. Fauci has changed his mind now, telling CBS in an interview this morning that he is “not sure ‘impending doom'” about the pandemic.

Is this an April Fool’s Joke? Is the plague actually improving or are we facing the end of the world?

As Contra Corner’s David Stockman details below, America is indeed suffering from a dangerous plague – a plague of misanthropic fear-mongering from the likes of Dr. Fauci, the Scarf Lady and the Biden’s new CDC director, among countless others of the self-designated Virus Patrol.

All three took to the mainstream media in recent days, with new CDC director Rochelle Walensky getting positively teary-eyed as she allegedly veered off-script to sound yet another Covid Alarm:

“I’m going to reflect on the recurring feeling I have of impending doom,” Walensky said, appearing to hold back tears.

“We do not have the luxury of inaction. For the health of our country, we must work together now to prevent a fourth surge.”

What? Where? Wait!

Here’s the source of Doom. Well, if you have your magnifying glass handy you might possibly spot it – the squiggle down there in the yellow box below!

Actually, she was not nearly done. When it comes to paint by the numbers exaggeration and hysteria the following is hard to top.

Amazon Essentials Men&…Buy New $29.90(as of 03:24 EDT – Details)It seems that the reason for Walensky’s alarm is that from the winter-flu season peak on January 13th, when the 7-day moving average reported 251,912 so-called “new cases”, the 7-day rate had plummeted by 77.8% to 55,840 on March 15th, but as of March 28 it was down by only, um, 75.3%!

The nation is recording a seven-day average of about 57,000 new Covid-19 cases per day, a 7% jump over the last week, CDC Director Dr. Rochelle Walensky said during a White House news briefing on the pandemic.

You can’t make up this kind of calculated mendacity, including, presumably, the off-script scripted tears.

That’s especially because it’s now an established fact that upwards of 60-80% of these “new cases” are not medical cases at all: They are asymptomatic individuals who got swabbed and had their nasal secretions run to at 35-40+ CTs on the PCR test, which immense magnification systematically generates false positives based on harmless RNA fragments and dead viral debris.

Yet with only 15,000 to 20,000 actual infected cases per day at best, of which 95% will not result in serious illness, hospitalization or death, the head of the CDC is out yelling fire in the theater still another time.

“I remain deeply concerned about this trajectory,” Walensky said. “We have seen cases and hospital admissions move from historic declines to stagnations and increases. We know from prior surges that if we don’t control things now, there is a real potential for the epidemic curve to soar again.”

Walensky urged the public to “take this moment very seriously,” adding people should continue to wear masks, stay 6 feet apart and avoid crowds or traveling. “We can turn this around, but it will take all of us working together,” she added.

We have bolded the last sentence because that’s what the political class is really all about. They are forever searching out societal ills–some real, mostly imagined – that require state-orchestrated collective action to remedy. After all, that is how they gain power and pelf in the arena of politics and governance, and on that score the Covid-Hysteria was made to order.Amazon Essentials Wome…Buy New $22.90(as of 03:24 EDT – Details)

By contrast, under a regime of spontaneous markets and social order, tens of millions of uninfected or asymptomatic people would never be getting Covid tests in the first place, and they certainly would not have been quarantining or shutting-down their normal economic and social lives.

All of that flowed from the misbegotten predicate that the coronavirus was some kind of modern Black Plague equivalent, but with a hideously perverted twist: Namely, that to stop its spread the healthy and well should be isolated at home or via distancing and masks on the infinitesimal chance that they might unknowingly have a sufficient viral load to transmit the pathogen in the community.

The fact is, back in the more benighted times of earlier centuries, they quarantined the sick, not the well; and when people got sick from seriously dangerous pathogens, they stayed home because they were too sick to wander around the community.

Stated differently, in the face of serious general contagions, society didn’t need officialdom constantly beating the tom-toms to induce fear-based changes in behavior that were not warranted by the facts at hand.

To the contrary, in the midst of real pandemics, communities quickly apprehended the dangers and organized themselves to cope. And when the sick stayed home or were committed to treatment or isolation facilities, real contagions and viruses eventually burned themselves out.

Not this time. There was no spontaneous community defense because the Covid is lethal to only a small subset of the population, consisting of the very elderly with weak immune systems and the co-morbid already suffering from other life-threatening conditions.

Beyond that, the”science” provides no basis at all for the notion that healthy or asymptomatic people transmit the virus. The political class’ false project of “stopping the spread”, in fact, buried the real science which overwhelmingly ixnays the whacko theory that healthy people going about their ordinary business are stealthy vessels of disease and death.USHTH Black Waterproof…Best Price: $16.55Buy New $17.99(as of 03:24 EDT – Details)

Instead, Fauci et. al. have seized upon the prosaic mechanics of human activity centered around social congregation, which inherently generates the probability that a respiratory virus–whether relatively benign or deathly – will spread through the community, and called it “the science”.

But that is not the science of Covid at all, which actually says that for 95% of the population it is not a lethal pathogen, as we will amplify below.

Instead, “community spread” is just an obvious mechanical fact of social life that got peddled as the “science” of lockdowns and became the basis for the whole regime of economic-martial law that has been stood-up since March 2020.

In any event, the sheer destructive absurdity of the matter was crystallized this weekend by the 55-year government lifer and windbag, Anthony Fauci, who has single-handedly made a mockery of “the science” and the U.S. Constitution during the past 14 months.

Said the sainted Dr. Fauci on the weekend CBS show:

“When the children go out into the community, you want them to continue to wear masks when they’re interacting with groups or multiple households,” Fauci proclaimed during an appearance on CBS News.

Fauci added that “children can clearly wind up getting infected” even if other kids they play with have been vaccinated against coronavirus.

With respect to the bolded phrase, what in the world is this dope talking about?

Of course, kids get infected with all kinds of germs which pass-around the classrooms and playgrounds, but in the case of the Covid, few of them get sick, virtually none are hospitalized and, thankfully, a nearly invisible fraction become fatalities.Western Chief Women&rs…Best Price: $26.71Buy New $41.95(as of 03:24 EDT – Details)

Indeed, after a full year of this full-on Covid-Hysteria, here is what we know about the “kids”. To wit, there are 73.2 million of them in America (17-years and under), yet only 238 of them are reported by the CDC itself as being among “all deaths involving Covid-19″.

As a statistical matter that represents just 0.3 mortalities per 100,000 population. The tip-off that this is ultra-thin gruel by any standard can be illustrated many different ways, but here are three of them:

  1. For the same 17 years and younger population during the same period (weeks of February 1, 2020 to March 24, 2021), the mortality rate from all causes other that WITH-Covid was 51.9 per 100,000 or 160X higher;

  2. The WITH-Covid mortality rate for the truly vulnerable population 85-years and older was 2,460 per 100,000 or 7,500X higher.

  3. The pediatrics association estimates that kids account for 13% of Covid “cases”, but have accounted for only 0.05% of deaths – meaning that the survival rate is 99.993%.

Nor is that all. Even the CDC tables show that nearly 20% of the WITH-Covid deaths in this age cohort also included pneumonia; and that there were also 602 deaths from pneumonia that did not include a positive Covid test or physician’s diagnosis.

Stated differently, among the entire youthful population of 73.2 million, there were 194 deaths from pure Covid versus 602 cases from pure pneumonia and another 179 deaths attributable to influenza.

So why in the world is Dr. Fauci worried about children being “infected”?

The answer is simple: He isn’t.

His game is stopping the spread for its own sake, and taking 73 million children hostage to the dictates of the Virus Patrol is all in a day’s work.

In fact, when it comes to the science of picking statistical pepper out of what is self-evidently numeric fly-shit, Dr. Fauci has few peers.

Thus, he told his fawning CBS host on Sunday that 10,000 additional, mostly false positive, cases are a new reminder that normalization is still a grave danger. In fact, he allowed that maybe by mid-summer people can go back to baseball parks, but only if they sit far apart and wear a mask!

ANTHONY FAUCI: …I’ve said many times to you that when you’re coming down from a big peak and you reach a point and start to plateau, once you stay at that plateau, you’re really in danger of a surge coming up. And unfortunately, that’s what we’re starting to see. We got stuck at around 50,000 new cases per day, went up to 60,000 the other day, and that’s really a risk.

…What we’re likely seeing is because of things like spring break and pulling back on the mitigation methods that you’ve seen. Now, several states have done that. I believe it’s premature,” Fauci said.

“I would expect that as we get through the summer – late spring, early summer – there’s going to be a relaxation where you’re going to have more and more people who will be allowed into baseball parks, very likely separated with seating, very likely continuing to wear masks.”

We undercover the real motivation behind this blithering crackpottery below, but for want of doubt consider this data. The on age-adjusted deaths from all sources during the 2020 Year of the Covid is now in, and the thin green bar on the far right margin speaks for itself.

The age-adjusted death rate in the US was only a tad above its recent level, and actually much lower than it was during the entirety of the 105 years between 1900 and 2005. Yet we are still being told about Impending Doom and Sleepy Joe is calling upon governors of some of the Red States who have finally come to their senses to reimpose the mandatory mask requirement.

And that’s the Spoiler Alert. This whole Covid enchilada has not been about public health all along.

Its an excuse for increased social control and aggrandizement of the state that the political classes have opportunistically seized upon, and are now determined to perpetuate indefinitely with new variants, new pretexts and new assaults on constitutional liberty, fiscal sanity and free market prosperity.

Notwithstanding the above, we actually can imagine a pathogen which would be as deadly as Ebola, as transmissible as the worst strain of SARS-2 and a Grim Reaper of one and all, regardless of age, health status or prophylactic measures taken.

While that might justify a sweeping economic Lockdown and government campaign to stop the spread on the grounds that society was being literally invaded by an army of fatal pathogens, the crucial point is this: The Covid has now proven itself in spades to be just the opposite of that theoretical deathly contagion.

And for want of doubt, we don’t mean modestly dissimilar. We are talking about upside-down, black and white, opposite-end-of-the-earth different.

Truly, the data below tells you all you need to know as to why the Virus Patrol is and has been dead-wrong all alone. Sweeping nonparmaceutical interventions (NPIs) have been unjustified from the get-go, as has the relentless blunderbuss campaign by the arms of the state to stop the spread of the coronavirus dead-in-its-tracks.

The reason is simple. The Covid is a pathogenic bully that hones in with malice aforethought on the very most vulnerable segments of the population. That is, those exhibiting the immunological frailties of old age, life-threatening comorbidities or rare genetic predispositions for immune system overreaction to this viral interloper, especially in the form of cytokine storms where the human body essentially attacks and kills itself.

On the one hand, the proof that the Covid is not a universally deadly pathogen is in the aggregate pudding. Based on the overwhelming findings of serological studies (i.e. blood serum tests for antibodies), upwards of 125 million Americans have been infected to date, albeit most of this number have not been symptomatic or confirmed via the wholly unreliable PCR test.

Even among the 30 million who have tested positive – including many individuals who have tested positive multiple times in order to get free of government or employer restrictions – less than 10 million have been seriously ill, fewer than one million have been hospitalized, and even by the CDC’s expansive counting system, about 525,000 have died.

That computes to a 0.4% IFR (infection fatality rate), which ain’t no Black Plague or Ebola equivalent. Full stop.

Indeed, even at this most aggregated level, the Covid does not present as a marauding army of death. In no way shape or form does it merit the “deathly” prefix that has become embedded in the vocabulary and word processors of the mainstream narrative.

In fact, even when you use age as a crude proxy for health status, there are virtually no community-spread illnesses that have the kind of extreme skew to the least healthy as shown in the table below.

This is the mortality rate per 100,000 for the period from February 1, 2020 through March 24, 2021, and the mortality figures are extracted from the CDC’s own expansive count of WITH-Covid deaths.

Population/ WITH-Covid deaths/ rate per 100,000 by Age Cohort:

  • 0-17 Years: 73.2 million persons/ 238 deaths/ 0.33 per 100k;

  • 18-29 years: 53.6 million persons/ 1,916 deaths/ 3.6 per 100k;

  • 30-49 years: 84.5 million persons/ 20,717 deaths/ 24.5 per 100k;

  • 50-64 years: 62.9 million persons/78,883 deaths/ 125.4 per 100k;

  • 65-74 years: 31.5 million persons/ 115,381 deaths/ 366.4 per 100k;

  • 75-84 years: 16.0 million persons/ 146,310 deaths/ 916.2 per 100k;

  • 85+ years: 6.6 million persons/ 162,583 deaths/ 2,460.0 per 100k;

  • All ages: 328.2 million persons/ 526,028 deaths/ 160.3 per 100k.

In round terms, the above shows that 81% of all WITH-Covid deaths have been among the 16% of the population (54.1 million) 65 years and older. By contrast, the the 64.4% of the population under 50 years (211.4 million) accounted for just 22,900 or 4.4% of the WITH-Covid deaths tallied by the CDC.

Yet it is the under 50 years population – the Kids, the socially congregating 20-30 year olds and the core working age population 30-50 years – that has borne the brunt of the Lockdowns and NPIs. Self-evidently, these measures were not imposed for their own protection since their risks of death from Covid were infinitesimal compared to the ordinary risks of life.

As shown in the table below, for instance, the risk of death from all causes other than WITH-Covid during the last 14 months for the 18-29 years cohort was 183.1 per 100,000. That’s 51X greater than the 3.6 per 100,000 risk of dying from Covid during the same period for the 53.6 million members of this most socially active and interactive cohort of the US population.

Even in the case of the core working age population age 30-49, the all causes (other than Covid) risk of death was 283.3 per 100,000 or 12X greater than the incidence of WITH-Covid deaths (24.5 per 100k).

Of course, the Virus Patrol might argue that the WITH-Covid deaths were preventable by stern Lockdowns and other NPIs, while deaths from, say, heart disease or respiratory illnesses were not. In fact, that’s exactly what the Scarf Lady argued on a weekend show this past Sunday.

Had the Donald not been such a obstinate dolt, Dr. Birx essentially claimed, and strictly followed the advice of herself and Fauci et. Al, most of the WITH-Covid deaths would not have happened.

The “vast majority” of the almost 550,000 coronavirus deaths in the US could have been prevented if Donald Trump’s administration had acted earlier and with greater conviction…. “There were about 100,000 deaths that came from that original surge. All of the rest of them, in my mind, could have been mitigated or decreased substantially.”

If we were Sleepy Joe, we’d probably risk a chauvinism charge and say, c’mon woman!

Here is the seven-day moving average of deaths WITH-Covid for two of the most open states (Texas and Florida) compared to the the nation’s Lockdown capital of California. For the past 370 days, the curves have risen and fallen pretty much in tandem with the normal flu seasonality, and in recent months California has taken a turn for the worse relative to Texas and Florida.

Indeed, since Governor Abbott belatedly saw the light and opened Texas completely in early March, the data are so compelling as to make a complete fool of the Scarf Lady, as shown below:

Texas: 7-day new cases average:

  • March 2 (before): 6,663

  • March 28 (after): 3,320

Texas: 7-day new deaths average:

  • March 2 (before): 231;

  • March 28 (after): 107

The fact is, there is now overwhelming proof among both the states and among different countries that the vast disparities in Covid-control regimes didn’t make any difference in mortality and other health outcomes. Dr. Birx was not talking science, she was spouting political cant.

Internationally, the case of Sweden should finally tell Dr. Fauci, the Scarf Lady and the rest of the Virus Patrol to shut-up and go home. After 14 months of firmly resisting the Wuhan Lockdown Model that was foolishly adopted in the US, the UK and throughout much of Western Europe, half of Sweden should be dead by now if the egregious fear-mongering of the Virus Patrol was even remotely correct.

In fact, based on preliminary data from EU statistics agency Eurostat, Sweden had 7.7% more deaths in 2020 than its average for the preceding four years. By contrast, countries that opted for several periods of strict lockdowns, such as Spain and Belgium, had so-called excess mortality of 18.1% and 16.2% respectively.

In all, twenty-one of the 30 countries with available statistics had higher excess mortality outcomes than Sweden.

Here’s the thing. The misbegotten one-size fits all regime adopted by the Donald’s advisors in March 2020 didn’t happen because America’s admittedly lumbering Federal and local governments weren’t capable of targeting protective measures on the nation’s 54 million or so population of the most vulnerable Americans.

For crying out loud, the Federal government (via Medicare/Medicaid) actually knows the social security numbers, preferred physicians and health facilities and medical conditions of damn near every single American over 65 years.

It could have put on a full court press of notifications, advisories about health risks, prophylactics and treatments and provided financial support and protective services wherever warranted at a tiny fraction of the fiscal and economic costs that have been incurred by the NPI strategies.

So why wasn’t this targeted approach taken?

There is a very simple and deeply disturbing answer. To wit, there was nothing in this targeted approach for publicity-hounds and wanna be power players like Dr. Fauci and the Scarf Lady, who would have otherwise soldiered on in relative obscurity in the backwaters of the Federal public health apparatus.

Worse still, once these wanna be Federal power players bamboozled the Donald (easy enough to do) and basically redefined a targeted medical challenge as a sweeping, across-the-board public health crisis, the governors, mayors and other petty officials throughout the land were unleashed to impose economic martial law, and they did so on the basis of dubious and rubbery local statues.

Needless to say, this unconstitutional, unplanned, disorganized blunderbuss of interventions turned into a totalitarian nightmare within a matter of weeks.

Even then, there was no excuse. The data from the Covid-struck cruise ship called the Diamond Princess was already in, and it showed that among even a senior citizen-aged population of about 3,711 guests and crew, of which 712 (19%) were confirmed cases or became symptomatic or ill, only a tiny fraction needed hospital care and just 14 died.

That made for a IFR of just 0.4%, assuming all passengers were infected owing to close quarters at sea. At worst, the IFR was 2.0% if you assume the improbability that only the 712 passengers who were tested and diagnosed as Covid-positive had been infected.

Moreover, among the ship’s crew of 1,045 with a median age of 36 years, there were 145 positive cases, but zero deaths.

By contrast, among the 2,666 passengers on board with a median age of 69 years, there were 567 positive cases. Yet all of the fatalities were among these far older passengers, and virtually all of those who succumbed were in their 70s and 80s.

In short, when the 14th passenger, who was in his late 70s, died on April 14th, the entire profile of the Covid had been live fire tested and demarcated: It wasn’t a deathly pathogen for society as a whole, and it was fatal for just a small subset of the elderly population over 70 years.

Needless to say, the Diamond Princess lessons never got the time of day once the White House Coronavirus Task Force was up and running, and conducting it nightly reality TV show.

Then-and-there, the public health apparatchiks turned the Federal government’s Covid response into an all-of-society political crusade to accomplish the impossible: Namely, extinguish a novel respiratory virus that by its very nature was destined to spread to most of the population, and could have been permitted to do so had it been accompanied with protective measures targeted on the vulnerable.

Under that kind of regime, real medical science would have been the driver. We are referring to hundreds of thousands of trained physicians and health care institutions providing one-patient-at-a-time care and treatments. That is, the real science would have been brought to bear on sick patients – including the kind of ad hoc improvisations and off-label treatments that quickly emerge from the decentralized medical community when a novel medical threat arises.

As it happened, by contrast, we got a clumsy, sometimes brutal social control regime targeted mainly on the healthy from the public officials who were not remotely competent to manage anything as stunningly complex and interdependent as the American economy and social order. And whatever their ad hocery and constantly changing advice, rules and orders were based upon, it wasn’t “the science”.

Worse still, the pseudo-science behind the NPI regime quickly got hyper-politicized once the Donald discovered that he had been bamboozled and began to let loose with randomized doubts about the undertaking that he had authorized and sanctioned.

Accordingly, within a few weeks the most extreme form of Faucist public health nonsense became the sanctioned orthodoxy among the anti-Trump political class and media organs. And wearing a mask became the very badge of honor in a purported war on the Covid that actually amounted to a political war on the Trumpian Right.

If there were any doubts, Biden removed them this week when he called upon Red State governors to reinstate their mandatory mask orders, and adopted the same misbegotten language that was used in the state-aggrandizing War on Poverty by LBJ, War On Drugs by Nixon and War on Energy by Carter, among others.

“We still are in a war with this deadly virus,” he said. “And we’re bolstering our defenses, but this war is far from won.”

Of course, in these phony wars what amounts to statistical noise is transposed into heavy duty warnings, such as CDC Director Walensky’s cry of doom Monday morning that we are facing an impending 4th wave breakout owing to some tiny squiggles in the incoming case and mortality data.

Then again, if you can spot this incipient breakout in the chart below, your eyes are surely better than ours.

In fact, there is no uptick in the overwhelming majority of states, if such upticks of positive PCR tests results were meaningful, which they are not. Just six states, which are shown in color below, account for most of the national uptick, and these are the six most consistent and heavy duty Blue State Lockdown regimes!

Notwithstanding the meaningless statistical noise shown above, the establishment media has now been house-trained to replicate and amplify the false alarms issued by officialdom.

Here is the nonsense that the media megaphones at POLITICO were quick to issue upon Walensky’s doom pronouncement. Self-evidently, what is really transmissible is the mainstream party line, not the disease:

Covid strikes back – Pardon this interruption to the “everything is awesome” narrative. Because Covid-19 is surging again, leaving the CDC director with a sense of “impending doom” regarding a fourth wave in the pandemic.

Debbie Lai, chief operating officer of Covid Act Nowtold POLITICO Nightly’s Renuka Rayasam that the country’s Covid trajectory is deteriorating: “There may be a fourth surge underway, with cases now growing in two-thirds of states versus half before the weekend.”

The numbers: New cases jumped by 11 percent over the past week to a seven-day average of about 60,000 daily cases, according to an interagency memo dated March 29 and obtained by POLITICO.

Likewise, a WSJ paint-by-the-numbers story obsessed on the same trivia.

The US reported 507 deaths for Sunday, down from a day-earlier 741 but up from 447 a week earlier.

Well, here’s the fact of the matter. Every day about 8,200 American die on average, and more in the winter-early spring months. So the Sunday-to-Sunday difference cited by the WSJ amounts to 0.7% of the daily mortality average; it’s a statistical fluctuation, not news or information.

Needless to say, these statistical noise emissions – even though they are heralded with bated breath in the MSM – are still just plain noise. And they are also a testament to the utter lack of context in which Sleepy Joe’s war on this ostensibly “deadly virus” is being waged.

As indicated earlier, here is the mortality rates for the same seven age cohorts shown above – but this time for all causes of death except WITH-Covid. What it shows is the obvious point that mortality rates are a function of age, but that compared to the all-causes curve depicted below, the Covid skew to the very elderly is in a class all by itself.

To wit, the ratio of deaths from all causes other than Covid for the 85 and older population is 164X higher than for the 0-17 years cohort. And that’s not even in the same ballpark as the 7,455X ratio for the incidence of Covid deaths as between the oldest and youngest Americans.

Medical science and targeted help versus a blunderbuss non-science based political power grab is what the so-called Covid crisis has been about since the very beginning. It was another false crisis defined by the political class and their media subalterns to facilitate a further aggrandizement of the state.

All Causes Mortality Except Covid: # of deaths/rate per 100k, February 2020-March 2021:

  • 0-17 years: 70,731 deaths/96.6 per 100k;

  • 18-29 years: 98,083 deaths/183.1 per 100k;

  • 30-49 years: 239,400 deaths/283.3 per 100k;

  • 50-64 years: 581,170 deaths/923.8 per 100k;

  • 65-74 years: 694,765 deaths/2,206 per 100k;

  • 75-84 years: 840,052 deaths/5,260 per 100k;

  • 85 years & older: 1,045,660 deaths/ 15,819 per 100k;

  • All age groups: 3,509,979 deaths/ 1,069 per 100k

Nor are these data unique to the US. Covid is an elderly-assaulting bully the world over.

But rather than protection of the bottom two classes of the population, the Covid became an excuse for house arrest and economic and social disenfranchisement of the bulk of the population that was never in serious danger, as the chart below makes so stunningly clear.

Yet the apparatchiks who falsely seized power are not about to give it up – vaccinations, herd immunity and plunging cases notwithstanding.

That’s the real impending doom.

Tyler Durden
Thu, 04/01/2021 – 09:25

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Bob Jones Redux: The Question SG Verrilli Was Unwilling to Answer in Obergefell Now Needs to Be Answered

Obergefell v. Hodges was decided about 6 years ago. During the oral argument, Justice Alito posed a critical question to Solicitor General Don Verrilli. He asked whether religious colleges that favor traditional marriage could lose their tax exempt status. Verrilli was unwilling, or perhaps unable, to answer the question. Bill Eskridge and Chris Riano write in their excellent new book that “the issue had never come up in his preparation for the argument.” Here is the exchange.

Justice Alito: Well, in the Bob Jones case, the Court held that a college was not entitled to tax­-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same­-sex marriage?

General Verrilli: You know, ­­I don’t think I can answer that question without knowing more specifics, but it’s certainly going to be an issue. I don’t deny that. I don’t deny that, Justice Alito. It is –it is going to be an issue.

Six years later, Alito’s question is no longer “going to be an issue.” It is “an issue.”

This week, 30 LGBTQ students filed a class action complaint against the Department of Education in the District of Oregon. The plaintiffs allege:

The U.S. Department of Education is duty-bound by Title IX and the U.S. Constitution to protect sexual and gender minority students at taxpayer-funded colleges and universities, including private and religious educational institutions that receive federal funding. The religious exemption to Title IX, however, seemingly permits the Department to breach its duty as to the more than 100,000 sexual and gender minority students attending religious colleges and universities where discrimination on the basis of sexual orientation and gender identity is codified in campus policies and openly practiced….

Religious exemptions may be constitutionally permissible, or even compelled, when the government regulates private action, even where some amount of harm to members of the community is involved. However, when the government provides public funds to private actors, like the colleges and universities represented by Plaintiffs, the Constitution restrains the government from allowing such private actors to use those funds to harm disadvantaged people. This Constitutional principle remains true even when the private actors are operating according to sincerely held religious beliefs, and it remains true whether the people they are harming are racial or ethnic minorities, sexual or gender minorities or those who reflect multiple, intersecting identities.

The plaintiffs seek sweeping relief:

a. Prohibiting Defendants from granting further religious exemptions to Title IX as applied to sexual and gender minority students;

b. Rescinding all prior religious exemptions to Title IX as applied to sexual and gender minority students;

c. Mandating that Defendants treat Title IX complaints from sexual and gender minority students at all taxpayer-funded religious colleges in the same manner as complaints from sexual and gender minority students at taxpayer-funded nonreligious colleges.

d. Requiring the Department to ensure that all federally-funded educational institutions respect the sexual orientation, gender identity and gender expression of their students.

The effect of this suit would be comparable to withdrawing tax exempt status. How many of these institutions can afford to abjure all federal money? Perhaps BYU and Baylor. Maybe Liberty University. I doubt others could swing it. If this suit is successful, most religious colleges will have to comply, or close. Bob Jones, of course, is the first college listed in the complaint. But Notre Dame, quite conspicuously, is not mentioned. The Fighting Irish are not far behind. All schools with any codes governing sexual relations are at risk.

And make no mistake. We are not simply talking about traditional four-year colleges with religious missions. One of the plaintiffs attended the Fuller Theological Seminary. The complaint states that he “only attended for several days before the school expelled him for being gay and married to a man.” If the Plaintiffs are successful, even theological seminaries would have to decline all federal funding–and perhaps state funding. Espinoza would be diluted. The government will fund religious schools, so long as they eschew traditional teachings on sexuality.

We are looking at a potential revolutionary change in how religious colleges function. Tax-exempt status is next. Barely six years after Obergefell, the courts will soon have to confront these issues. And, I fear, Justice Gorsuch’s Bostock opinion has already settled the Title IX statutory issue. The Plaintiffs assert that the current exemptions violate substantive due process. As a formal matter, RFRA would not trump the 5th Amendment. Perhaps if the Court overrules Smith, there would be a direct conflict between the 5th Amendment and the Free Exercise Clause. The stakes of Fulton grow greater by the day.

For those curious, the case was assigned to Judge Ann Aiken. She was also the judge who presided over the Juliana class in the juvenile climate change litigation. Judge Aiken found there was a fundamental substantive due process right to a clean environment. This assignment is not auspicious for religious colleges.

Currently, the Acting Assistant Secretary for the Office of Civil Rights, U.S. Department of Education is Suzanne Goldberg, formerly a professor at Columbia Law School. She founded Columbia’s Sexuality and Gender Law Clinic. I suspect she may be sympathetic to this claim. I worry about a “sue and settle.” For example, the Department of Education would enter into a consent decree with the class, forcing the federal government to accept new responsibilities without going through the formal rulemaking process. And once that consent decree is in place, it will be very difficult for other groups to challenge the arrangements.

I expect religious colleges will try intervene. I have not researched this issue, but the class will likely argue that intervention is not appropriate. If intervention is denied, then “sue and settle” becomes even more likely. And Judge Aiekn would preside over those proceedings.

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AOC Finally Criticizes Biden Border Crisis… Very Carefully And Without Parking-Lot Dramatics

AOC Finally Criticizes Biden Border Crisis… Very Carefully And Without Parking-Lot Dramatics

Rep. Alexandria Ocasio-Cortez (D-NY) – who in 2019 became overwrought with emotion in front of an empty parking lot leading to a Trump-era ‘concentration camp’ – has finally managed to (sort of) criticize the Biden administration over a mounting humanitarian crisis at the same Border Patrol facilities – after weeks of seemingly not giving a shit.

During a Wednesday night virtual town hall, AOC called conditions at the facilities built by the Obama-Biden administration “inhumane,” “horrifying,”unacceptable” and “barbaric,” according to the New York Post. Apparently they no longer qualify as ‘concentration camps.’

The Democratic Socialist – who wore a $600 watch during her Trump-era parking lot stunt – then pivoted, blaming the “political failure of both parties” for the border crisis, adding “I don’t want to excuse any of this.”

“We should be doing better by now,” she added.

Defending the ‘surge’ of migrants (a phrase which on Tuesday she said invokes a ‘white supremacist philosophy‘), AOC claimed “This is not an invasion. US foreign policy has contributed to the destabilization of these regions…where the children are fleeing …. We have decades of interventionist foreign policies that have contributed to this issue.”

“People don’t want to talk about it but then they want to act like this is brand new every time,” she added.

AOC then suggested that Biden is trying to solve the problem – instead of blaming him for sparking it with campaign promises of a safe haven for illegal immigrants if he was elected.

“I’ve been in contact with the Biden Administration personally. What is different is they’re trying to figure out … how to find the resources to end his problem,” she said, adding that the crisis could get worse if the United States doesn’t address the ‘root cause’ through climate, trade, and foreign policies.

“The volume of these shifts are going to increase as droughts increase,” she confidently predicted.

We presume border facility parking lots are safe from dramatic lawmakers for the time being.

Tyler Durden
Thu, 04/01/2021 – 09:05

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Blain: Q1’s Madness & A Plentiful Supply Of Hype

Blain: Q1’s Madness & A Plentiful Supply Of Hype

Authored by Bill Blain via MorningPorridge.com,

Things Can Only Get?

“No one ever went broke underestimating the intelligence of the people…”

Q1 was “interesting”. More financial madness in 3 months than I’ve seen in 35 years, but at least it was fun. How much more sober and boring might the market become? Deliveroo’s botched IPO suggests Investors ain’t as stupid as we think.

And finally, after the misery of driech 1st quarter and lockdown, we enter the bright sunlit promising uplands of Q2. As the song goes … “Things can only get better”. Except, of course, they seldom do…

April 1st would traditionally be the day I attempt to play some un-hilarious joke on the market – a April Fool… but the market has pretty much beaten me in terms of barely believable stooopid throughout 2021. Hype is a commodity in plentiful supply.

You really can’t compete with the madness we see all around and everyday. From SPACs of “tech” companies using Excel spread-sheets to make a dollar sale for every $5 they spend. Meme stocks that roller-coaster depending on the anger of RobinHoods. An unwearable digital sneaker that costs $10k as a Non-Fungible Token. ESG funds with oil majors as their top positions, or the sustainables fund highlighting an auto’s green bond dedicated to improving car safety as an ESG compliant investment – car safety? Who would have thought? Or a fund up to its’ oxters in tumbling EV paper sagely declaring the stock will quadruple despite rising competition.

Or maybe it’s the way the market was on tenterhooks as a result of 3 basis points move in the “risk-free-rate” of government bonds. In bonds there is truth – and if they rise, the whole confabulation of higher for longer in stocks will shatter.. or so say the doomster pessimists. The optimists are certain central banks will keep juicing the party forever.

Or maybe it’s been the proofs of how distorting ultralow interest-rates are to market behaviour. The hunt for returns distorts common sense. Investors become easy marks for promises of low-risk/high returns. Widely speculative investment moonshots are passed off as safe and predictable. Shirts will be lost. And zero returns means investors have to juggle – and might just be tempted to bargain their souls with the pernicious gods of leverage. That didn’t end well for Archegos or the bank’s that found themselves funding it.

The reality, however, is the madness may be passing.

I think there are shades of reality beginning to make themselves felt across markets. Telsa, the bell-weather of hyped valuations, remains well off its Jan peak. It is still seriously overpriced. The rotation out of the over-hyped corners of Trend and Momentum driven Tech hopes, into the dull, boring and predictable earnings of fundamental and value equity plays is well underway.

That shift is being accelerated by the growing realisation – no matter what the Germans say – that vaccines are beating the pandemic and the world will reopen. Stocks that did well on pandemic now face a reckoning; did they meet and exceed their adoption expectations? Likewise, the pandemic losers are the next guess – which will recover fastest and strongly enough to survive.

I detect a new sense of purposefulness hitting many of the investment desks I speak with – they hype, fear and bubble of the pandemic is being replaced with a more sober and facts-based analysis of what the future looks like.

I’m particularly excited by Blackboulder’s new “ERM” ETF. The Economic Reality & Management Fund aims to realise value in firms adversely affected by the swirls and currents of market fashion – investing in underperforming stocks impacted primarily by direction and distortions. Target investments include firms derated by the market because of perceived ESG failings, pandemic side-effects, political factors such as race and gender, and market hype.

The concept isn’t a “bad-boys” fund, but seeking price discrepancies where the effects are overplayed. The key feature of the fund, however, will be the quality of target firm’s management. The concept is to pick strong management who can deliver highly profitable, high dividends and growth with “sustainable” future earnings rather vague and woolly notions about saving the planet. A surprisingly high number of long-established firms meet the fund’s criteria – but attract little market focus when the unmissable alternative is investing in an asteroid mining start-up valued at $10 bln.

And speaking of disappointments.. I guess we have to talk about Deliveroo, officially the worst IPO in UK financial history.

Oh dear. Yesterday’s crash sets the bar high in term of fantabulous hopes meeting crushing reality. Embarrassing for our financial genius and ex-Vampyre Squid Chancellor Rishi Sunak who hyped the already over-hyped deal with his comments on “sky-high growth”, and “dynamic business”.

There wasn’t much to like about the deal. The fact it would not qualify for the index because of the golden share structure leaving control in the hands of the founder – failing the Governance test, or the way in which it treats its gig-workers – failing the Social test.  Most big London funds used these excuses to back away. James Anderston, the soon to retire manager of Scottish Mortgage was “lukewarm” on the deal because of its slowgrowing market and overreliance on London.

I am going recycle something I wrote for CapX back way back in Feb on Deliveroo.. I originally entitled it: “Deliveroo – Just what is a pizza delivery firm worth?”

“The Deliveroo IPO (“Initial Primary Offering”) at a valuation around …. well anywhere from £5-£10 bln depending on whom you ask. Apparently attracting a new listing of such high calibre highlights the attractions of UK Finance Inc relative to Europe. It’s being hailed as a major Tech listing for the UK. Really? If the definition of Tech is ordering a bike delivered pizza online, then it seems a pretty low threshold.

The 8-year-old Deliveroo is riding high (pardon the pun) as a result of the pandemic – not everyone took lockdown as an opportunity to learn new cooking skills. It’s been taking over 6 million orders per month, distributing over £4.1 bln from food outlets in 2020, primarily in the UK, with Deliveroo taking up to 25% of that value in fees from the food providers. It claims rising repeat orders and steadily growing “user engagement” providing “a recurring revenue stream that grows over time” as the company says.

Yet, 8-year-old Deliveroo has consistently failed to post a yearly profit. (Note the deliberate emphasis on 8-year old.) That’s apparently ok – its prioritising growth over returns. Although revenues in the Pandemic year rose 55%, it still lost £224 mm in the last quarter! It remains to be seen just how resilient user engagement will be once the economy reopens – especially after D-Day (“Drunk Day”) April 12th when Pub Gardens reopen.

The whole proposition of Deliveroo and competitors like Just East is based around expectations the online food delivery market will continue to grow to infinity. Fantastic. What’s not to like or even question about Gen XYZ and their inability to feed themselves… And apparently it’s not about delivering them a pizza, but being able to collate data to target more junk food at them and lining them up for robotic drone deliveries tomorrow. (Always tomorrow.)

Let’s be brutally honest – the takeaway food sector has been around for years, and isn’t really that disruptive. There was a time, a long, long time ago when we walked or drove to the Chinese or Fish & Chip shop. Now Deliveroo picks up food from its own dark “editions” kitchens flipping out Micky Dees’ burgers or another brand’s Peri-Peri Chickens. Apparently Dark Kitchens – cheap and easy to run are a massive differentiator when it comes to the long-term returns from Deliveroo.

The company has done “tech”: “Frank” is its’ algo based on predictive tech to “efficiently” distribute orders based on the position of restaurants, riders and customers. Smart tech means they’ve been able to cut preparation time by 20% enabling everyone to get more delivery work, make more food, and get food faster. Wow.. (that’s a very unimpressed wow btw.)

Moreover, Deliveroo is also a classic case-study of 2020s finance. Call something disruptive, and no matter how base and blasé its business model is, it will soon be worth billions. Well… perhaps it’s time to step back and smell the coffee – from which ever high street shop you with it delivered from.

Just apply some simple tests – The Blain DuB-De-PreP test. (Say it fast – sounds better.) Deliveroo may be disruptive, but is it a Dull, Boring, Defensible, Predictable and Profitable stock? No. Its not.

Are there any barriers to entry into Deliveroo’s market? Nope. Anyone can deliver take-away food. Mini-cab drivers have been doing it for years. Now there are a plethora of other firms including larger, better funded firms like Uber Eats, Door Dash, and big ad spending Just Eats. All of these firms compete for clients with deals and advertising spend. All of them compete for delivery staff. All of them compete to get restaurants into their dark kitchens. In a market with room for maybe 2 competitors, Deliveroo is at number 3.

Are the risks limited? No, there are major extrinsic risk factors including health and safety, regulation, and market risk. In addition, delivery drivers are increasingly demanding better pay and conditions – which are being agreed by the courts. A business model founded on ripping off cheap Gig economy workers will fail when the courts mandate pension plans. To be fair, its delivery riders have been allocated stock.

Is Deliveroo in possession of a strong balance sheet? Can any firm which consistently fails to post profits be called strong? (Rhetorical question.) And just how dependent on capital markets conditions is the firm? If interest rates rise and the current tech bubble bursts then how is the firm going to attract the ongoing capital markets infusions it requires to cover up its long-term losses?

Let’s say it triples its market share, and keeps its cost base low and turns profitable next year? What stock multiple should it command? Something massive because it’s such a secure business, or some low to reflect the obvious weakness?

Nor can I get myself particularly enthused about Deliveroo’s management. If I was talking about a founder who fundamentally loved and understood the rich culinary history of the UK (in other words, someone focused entirely on delivering the best fish’n’chips or Curry), I might get it. But, Will Shu was an investment banker posted to London peeved at the lack of quality delivery options to Morgan Stanley’s Canary Wharf offices.

Looking at the rest of the board I’m not getting that strong governance and passion vibe – I’m seeing a firm providing junk food hits to folk who should be eating healthy, meaning food delivery firms as probably a fail on the S of ESG – Unless they can show me 80% plus of their revenues are organic salads grown by transgender cooperatives..?

All of which means… I’m not terribly excited about Deliveroo. But, having worked in Canary Wharf late into the evenings many times in the past, I can understand exactly why it might have seemed a good idea at the time..”

Tyler Durden
Thu, 04/01/2021 – 08:45

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There Are Still Over 18 Million Americans Getting Government Jobless Benefits

There Are Still Over 18 Million Americans Getting Government Jobless Benefits

After mixed messages in last week’s claims data (low initial claims, record high pandemic continuing claims), analysts expected a further fall in first time jobless benefit seekers but were disappointed as claims rose from 684k the previous week to 719k last week.

Source: Bloomberg

Virginia and Kentucky saw the biggest rise in initial claims. Ohio saw the biggest drop in claims…

Continuing claims continue to slide towards pre-COVID levels, but in context, they remain dramatically higher. Pandemic emergency claims dipped but  remain near record highs…

Source: Bloomberg

The total number of Americans receiving some form of unemployment benefit from the US government remains above 18 million (18,213,575 – a decrease of 1,517,926 from the previous week)…

Source: Bloomberg

For context, there were 2,102,852 weekly claims filed for benefits in all programs in the comparable week in 2020.

Does this bode well for tomorrow’s payrolls (which some suggest could be a stunning 1.8 million job addition).

Tyler Durden
Thu, 04/01/2021 – 08:36

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Wood Rides Again: ARKK Sees Record Inflows, ARKX Trades Almost $300 Million In Debut

Wood Rides Again: ARKK Sees Record Inflows, ARKX Trades Almost $300 Million In Debut

Despite some of its questionable holdings, which we outlined days ago, the ARK Invest Space Exploration ETF saw more than $294 million of shares change hands during its debut on Tuesday. Bloomberg’s Eric Balchunas reported:

It marked the eighth best ETF debut in history, Bloomberg noted. ARKX’s inflow bested the $280 million initial inflow for Dave Portnoy’s VanEck Vectors Social Sentiment ETF (BUZZ). 

On Wednesday, ARKX traded $150 million, according to Balchunas. 

Additionally, on Tuesday, ARK’s flagship Innovation fund saw record inflows of $717 million. 

Matthew Weller, global head of market research at Forex.com, said: “That performance naturally attracts more investments, especially on the part of retail traders. The optimism evoked by Cathie Wood and her team is almost infectious — that’s something that has legs.”

ARKX is the first new “product” from Cathie Wood and ARK since 2019. Wood already has five actively managed funds and two that track indexes. While 2021 has been rocky for many of them, ARK continues to get play in the financial media due to ARKK’s meteoric rise of 154% over the last 12 months (which, again, was mostly attributable in our opinion to a gamma squeeze in Tesla and the NASDAQ). 

Matt Benkendorf, chief investment officer of Vontobel Quality Growth, said: “It’s certainly what the market has appetite for right now. Ark has shown a tremendous propensity to attract money, and all eyes are on them.”

“They’ve certainly built up a loyal following of investors that will seed that fund well. It just seems like a good encapsulation of the market moment that we started the year in, with all the money going into these super high-growth, long-term ideas,” said Ross Mayfield, investment strategy analyst at Baird.

Tyler Durden
Thu, 04/01/2021 – 08:20

via ZeroHedge News https://ift.tt/3cCrB6V Tyler Durden