Month: June 2021

Authored by Steve Watson via Summit News,

The former head of British intelligence agency MI6, who previously said he believes the coronavirus outbreak originated from a lab leak in Wuhan, has warned that it may be too late now to hold the communist state accountable because it will have probably destroyed all the evidence.

Speaking on a London Telegraph podcast, Sir Richard Dearlove lamented that the paper trail of ‘gain of function’ research at the Wuhan Institute of Virology will likely be gone now.

“We don’t know that’s what’s happened, but a lot of data has probably been destroyed or made to disappear so it’s going to be difficult to prove definitely the case for a gain-of-function chimera being the cause of the pandemic,” Dearlove noted.

Dearlove, who served as head of Britain’s foreign intelligence for five years in the early 2000’s, added that China has worked relentlessly to silence scientists who tried to warn the rest of the world.

“The People’s Republic of China is a pretty terrifying regime and does some things we consider unacceptable, and extreme in silencing opposition to the official line of the government,” he said.

Over a year ago, Dearlove was citing scientific research by Professor Angus Dalgleish of St George’s Hospital, University of London and Norwegian virologist Birger Sorensen which presents evidence suggesting the virus was manufactured in a laboratory.

As the scientists recently noted, they were ostracised and ignored until recently.

“This is why scientific analysis is now so important because although that can’t prove the case 100 per cent, the thorough biochemical analysis puts the weight of evidence to this being a man-made lab experiment, a natural virus that has been enhanced,” Dearlove explained.

Referring to the renewed focus on the lab leak theory, Dearlove noted that  “The whole argument has shifted and I’m pretty sure in my own mind that the US must have material which has accelerated this development.”

“China was originally let off the hook. I think the problem was the style of the Trump regime, a lot of people understandably found it hard to go along with his more outlandish allegations,” Dearlove continued, adding that

“In the end it’s going to boil down to scientific evidence because the data is no longer available, unless some courageous Chinese individual, probably a scientist, comes forward.”

Dearlove concluded that “We have been through a period of extraordinary nativete in our relationship with China,” adding that he has been “staggered the sheer naivete” of Western leaders believing they could “develop a relationship with China without understanding they were dealing with a communist dictatorship.”

The former MI6 chief also asserted that the World Health Organisation should not be investigating the origin of the pandemic, given its track record over the past year.

“The WHO looks like a lost cause and that should not be the agency to deliver material which gives us a clear understanding of what the hell happened,” Dearlove emphasised, adding

“The WHO report was farcical and it’s clear now they are losing control of the narrative.”

Dearlove’s comments highlight how vital it was to China that tech companies and the establishment media censored information on the lab leak for a year, at the behest of the likes of the World Health Organisation and Dr Anthony Fauci.

Those self appointed arbiters of truth may have enabled the biggest cover up in in a generation.

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Oil prices are holding gains, with WTI around $69, after last night’s bigger than expected crude draw reported by API, helped by signs of demand rebounding in the US (PMI/ISM) offsetting China concerns.

Crude prices have extended gains this week on OPEC’s new outlook and because nuclear talks between Iran and world powers stalled.

“There will always be a good amount of supply to meet demand,” Saudi Energy Minister Prince Abdulaziz bin Salman said at a forum in St. Petersburg on Thursday.

“We’ll have to see demand” before producers increase supply, he said.

Additionally, Saudi Arabia increased oil prices for customers in its main market of Asia by more than expected after Brent crude surged above $70 a barrel and OPEC forecast that global demand would heavily outstrip supply over the rest of the year.

API

• Crude -5.36mm (-3.3mm exp)

• Cushing +741k

• Gasoline +2.51mm (-1.1mm exp)

• Distillates +1.585mm (-1.6mm exp)

DOE

• Crude -5.079mm (-3.3mm exp)

• Cushing +784k – biggest build since Feb

• Gasoline +1.499mm (-1.1mm exp) – biggest build since April

• Distillates +3.72mm (-1.6mm exp) – biggest build since March

Crude stocks fell notably last week but product inventories unexpectedly rose…

Source: Bloomberg

US Crude production continues to remain ‘disciplined’ (in fact, falling 200kb/d last week) despite the soaring prices and surging rig counts….

Source: Bloomberg

Oil is in “strong demand right now” amid the world’s “strong recovery,” Daniel Yergin, the oil historian and vice chairman at IHS Markit, said in a Bloomberg TV interview. U.S. oil production will start to go up “at a modest rate” in 2H, Yergin said. Shale producers are focused on returning capital to investors, and companies  are “getting on board” about net zero carbon by 2050. He sees oil prices this year in $60-$75/bbl range, though it could touch $80.

WTI hovered around $69 ahead of the official data and extended gains after…

Finally, as we detailed earlier, the world’s largest petrostates rejected calls for a rapid shift away from oil and gas, warning that starving the industry of investment would harm the global economy.

If the world were to follow the IEA’s controversial road map, which said investment in new fields would have to stop immediately to achieve net-zero carbon emissions by 2050, “the price for oil will go to, what, $200? Gas prices will skyrocket,” said Russian Deputy Prime Minister Alexander Novak. His warnings were echoed by the energy ministers of Qatar and Saudi Arabia.

It appears the Biden administration has realized their ambitious tax hikes have a snowball’s chance in hell of passing, given the slim majority Democrats hold in both chambers of Congress – which include two serious moderates (Manchin and Sinema) and a parliamentarian who won’t let them get away with forcing legislation through via reconciliation (a simple majority).

Now, according to the Washington Post, Biden has outlined a $1 trillion plan financed through tax changes which would not focus on raising the top corporate rate – a major concession to Republicans who opposed an earlier proposal to raise the corporate tax rate from 21% to 28%.

The news immediately sent markets higher:

Developing…

After in recent months crude oil prices have clearly recovered from their COVID-19 slump on steadily increasing demand, Russian Deputy Prime Minister Alexander Novak addressed the much anticipated decision-making at the upcoming OPEC+ conference set for August and the expectation that it will decide to raise output significantly beyond the current pandemic-induced strategy of gradually releasing more barrels into a strengthening oil market.

Novak said in his Thursday remarks at the St Petersburg International Economic Forum that while it remains “premature” to talk about output decisions for August, he affirmed “The current oil price is good enough for Russia,” adding: “Oil prices reflect the balance of supply and demand,” and noted it’s expected the seasonal oil demand will increase in the third quarter of the year. On Wednesday Brent crude futures touched their highest price since September 2019 at $71.99, with the international benchmark gaining 1.6%, following the day prior the benchmark seeing a rise of almost 3%.

Novak confirmed the upcoming OPEC+ conference will address and finalize oil output for August and other months, while stressing that oil prices shooting too high “may force users to switch to other energy sources.”

On that front in particular, he blasted current IEA proposals and a “road map” being pushed which in the end could lead to $200 a barrel oil(!):

If the world were to follow the International Energy Agency’s controversial road map, which said investment in new fields would have to stop immediately to achieve net-zero carbon emissions by 2050, “the price for oil will go to, what, $200? Gas prices will skyrocket,” Novak said.

And naturally Qatar and Saudi Arabia seconded that dire assessment, vowing to continue expanding their oil and gas facilities while pointing the finger at the climate activists for seeking to starve industry cash. Bloomberg presents the Gulf statements Thursday as follows: 

The “euphoria” around the transition to clean energy is “dangerous,” Qatar’s Energy Minister Saad Sherida Al Kaabi said at the St Petersburg International Economic Forum in Russia on Thursday.

“When you deprive the business from additional investments, you have big spikes” in prices, he stressed further.

As a reminder, IEA’s roadmap set out in the Paris Accords for achieving net zero carbon emissions by 2050 requires reducing emissions as much as possible then offsetting the rest with “carbon removal” plans financed by carbon credits.

Source: IEA

However as we’ve detailed before, with economists expecting global growth to expand at even faster rates thanks to the infusion of stimulus inspired by the pandemic, it follows that energy demand will also increase more quickly. Despite this, many economists and scientists expect that improvements in energy efficiency and the shift to renewables means that global energy demand will be around 8% smaller than it is today in 2050, even though the global economy will be more than twice as large as it is today.

With this in mind, it was perhaps the recent Saudi comments from St. Petersburg which put it best, dismissing the “la-la-land” scenario in an earlier statement…

“Saudi Energy Minister Prince Abdulaziz bin Salman has already dismissed the IEA road map, which would limit the average increase in global temperatures to 1.5 Celsius, calling it a la-la-land scenario,” he said according to Bloomberg. “When asked on Thursday if oil is dead, he responded by saying the kingdom is increasing its production capacity.”

With Democrats’ slim majority in both houses in Congress and two of their own moderate members unwilling to sign off on the party’s ambitious progressive agenda, there’s yet another Democrat who may have just killed any chance of railroading legislation through Congress without casting a single vote; Senate Parliamentarian Elizabeth MacDonough.

And as Red State reports, she may have just “ripped the heart out of the Democrat agenda (emphasis ours):

While the Democrats have high, if not delusional hopes of fundamentally changing every aspect of American life, from federal voting dictates to essentially outlawing sub-contracting, the actual rules of the Senate have stood in their way. The filibuster, which Joe Manchin and Kyrsten Sinema (among others who are laying low) have pledged to not touch, means that Chuck Schumer and his merry band can’t force through things on a simple 50-50 vote.

The Democrats were given a shot of life a few months ago, though, in the form of a parliamentarian ruling that Schumer claimed greenlit most of his agenda. I expressed skepticism at the time in an article discussing the infrastructure package.

Chuck Schumer recently claimed the Senate parliamentarian gave him free rein, yet that decision has not been made public, and there’s probably a reason for that.

Well, it appears my skepticism was warranted. In what is claimed as a “new ruling,” the parliamentarian effectively rips the heart out of the Democrat agenda.

the ruling ALSO said Congress would have to start over. Repass budget in committees and bring them to the floor. in the senate, that would trigger another vote-a-rama. This would be exceedingly time consuming, and potentially politically risky.

— Jake Sherman (@JakeSherman) June 2, 2021

Reconciliation is a very narrow process, and the Byrd Rule requires that anything included in a reconciliation bill must deal with taxes and budgetary issues. You also have stipulations about deficit offsets that must be taken into account. You can not pass regularly legislative items under the guise of reconciliation.

Given that, this ruling essentially defeats HR1, the ProAct, and much of what is included in the current “infrastructure” bill. Of course, none of those bills were likely getting support from Manchin anyway, but with reconciliation off the table to get this stuff passed, Schumer is now officially out of options.

Of course, as I explained last week, don’t count some Republicans out in regards to handing Democrats what they want anyway, especially in regards to the infrastructure bill. Now is not the time for compromise. The GOP must buckle down and stand in the gap to stop the radical agenda Schumer and his allies are pushing for. If the Republican Party can’t do that, what’s the point of it existing?

Let this nonsense languish. Nancy Pelosi’s tears are edifying. Besides, I’m not even sure Schumer really wants this stuff to pass save the federal takeover of the voting system. That would mean having to own the terrible results. It’s easier to propose garbage, watch it die, and virtue signal about it.

Just as thousands of Twitter power-users feared, the company is breaking ranks with other social media giants and introducing a premium subscription service that will initially cost $2.99 per month. The service, dubbed “Twitter Blue”, will include tools to help users undo and organize posts.

The stock whipsawed on the news as kneejerk gains were almost immediately undone amid a broader market selloff.

The decision isn’t a surprise. Twitter has previously confirmed to the press that it is considering launching premium features available to power users like brands and journalists.

In a statement to the Verge announcing the launch, Wwitter said it’s launching Twitter Blue first in Australia and Canada “to gain a deeper understanding of what will make your Twitter experience more customized, more expressive, and generally speaking more [fire emoji].” The service will cost $3.49 CAD or $4.49 AUD per month. It will likely expand to the US shortly after.

As the Verge reminds us, Twitter began testing a Tip Jar service in early May that lets users send one-off payments to their favorite accounts. In February, a Super Follows feature will eventually let users charge subscriptions for things like bonus tweets, community groups, or newsletters. Newsletters were made possible after Twitter acquired newsletter service Revue at the beginning of the year. Twitter has not yet announced when its Super Follows feature will launch.

One of the many features will be an “undo send” feature for tweets that users have been demanding for years. Other features will include a Bookmark Folders feature lets you group saved tweets to make them easier to find later. “Reader Mode” will let users read and share threads more easily by “turning them into easy-to-read text” and combining together tweets into one page. Other Twitter Blue features will include a new interface: with a new color theme options as well as the ability to change the color of Twitter’s app icon.

After announcing that it was launching an 11.55 million “at the market” stock offering this morning, the stock – as if in disbelief – was initially reluctant to drop. Eventually, however, the reality hit and shortly after the close, AMC stock plunged 20% leading to an immediate halt, after which it was halted again, when it tumbled another 10%, bringing its full day drop to 30%.

AMC wasn’t alone, and as it cratered, old school retail-trader favorites including Gamestop, Bed Bath & Beyond and Koss all tumbled after surging in the previous session as the meme stock rally shows signs of fading: at last check Bed Bath was down 21% with Koss down 20% and GME down 7%.

Yet not everything was gloomy in short squeeze land.

As readers surely recall, yesterday we said “Step Aside AMC: Here Are The Most Shorted Stocks Right Now” and listed the new batch of most shorted names which included such names as Workhorse and GTT communications.

Fast forward to today when WKHS, the new most shorted name in the Russell 2000, has exploded 40% higher…

… but it is the third name on the list, the microcap GTT Communications, which we urged readers (and especially subs in our private twitter feed) to pay close attention to, that has nearly doubled today after soaring yesterday, and was last trading at $4.65 after trading just $1.50 at the time of our post.

So to those who heeded our advice, which as a reminder, was the following, “If the performance of our previous most shorted index is any indication, going long a market cap-weighted basket of these names – and especially the smaller, less liquid ones – could turn out to be the trade of the year, if not a lifetime”, congratulations: the new most shorted basket is already soaring.

… which is more than we can say about the market where things are deteriorating rapidly…

… as bond yields soar after today’s shocking beat in the ADP and subsequent strong Service PMI and ISM prints.

Following the stagflationary signals from this week’s Manufacturing survey data, ISM and Markit were expected to show further gains in the Services sector even as the ‘hard’ data continues to serially disappoint, and both surveys significantly beat expectations, rising to new record highs…

Source: Bloomberg

The data was, for once, in somewhat of an agreement – though Markit respondents are notably more excited than ISM’s…

• Markit US Manufacturing up in May to 62.1 – a record high

• Markit US Services up in May to 70.4 – a record high

• ISM US Manufacturing up in May to 61.2 – well below the March highs

• ISM US Services up in May to 64.0 – a record high

Source: Bloomberg

Markit notes that service providers stepped up their efforts to pass on higher costs to clients, with the pace of charge inflation quickening to the steepest in the survey’s history.

Companies mentioned that greater costs were being progressively passed through to customers amid burgeoning demand.

Stagflation fears persist as ISM notes that similar to the group’s manufacturing survey, the report showed elevated price pressures, growing order backlogs and softening in the pace of hiring.

Limited availability of both materials and skilled workers risks tempering the pace of economic growth.

The US Composite PMI posted 68.7 in May, up from 63.5 in April, to signal the steepest upturn in business activity since data collection began in October 2009.

Once again, inflationary pressures intensified in May.

The rate of cost inflation was unprecedented amid substantial supplier shortages and delays. As a result, firms sought to pass on greater costs to their clients, with the pace of charge inflation quickening to a new series high.

US Composite PMI is leading the world…

Source: Bloomberg

Commenting on the latest survey results, Chris Williamson, Chief Business Economist at IHS Markit, said:

“The US economic recovery shifted up a gear in May, with output of the combined manufacturing and service sectors surging past all prior peaks by an impressive margin.”

The strong correlation between the PMI and GDP means the economy looks set to enjoy rapid – potentially double-digit – growth in the second quarter:

“Further robust expansions are indicated for the summer months, with an improving order book situation accompanied by elevated levels of business confidence and the further easing of virus restrictions both at home and abroad.”

But, Williamson warns: “the survey’s price gauges have also climbed to unsurpassed levels, which will add to inflation worries. These unprecedented output and price growth rates will inevitably lead to speculation about an earlier than previously expected tapering of Fed policy.”