Month: July 2021

Is The Retail Investor Rampage Over?

Is The Retail Investor Rampage Over?

Authored by Lance Roberts via RealInvestmentAdvice.com,

Since the crash in March 2020, the “retail investor army” marched propelled by chat rooms and social media channels. As discussed previously in “Blind Leading The Blind:”

  • In all, 46% have used social media for investing information in the past month.

  • 22% of Gen Z investors say they were younger than 18 when they started investing, versus 8% of millennial investors. 

  • Only 36% of young investors plan to use that money for retirement. 35% will make additional investments, while 19% will use the funds to pay for a major purchase.

“Considering that many of these individuals have never seen an actual ‘bear market,’ such is the very definition of the ‘blind leading the blind.’”

Of course, with fresh stimulus checks in hand, and sports betting shut down along with the economy, the stock market became the “casino of choice.”

However, something seems to be changing.

A Loss Of Interest

With sports betting back in action and stimulus checks running out, there seems to be a waning interest in the market. Recent google trend searches show some interesting trends.

Learn How To Trade Stocks

For beginner investors with a fresh stimulus check in their hands, a search for learning how to trade or invest stocks faded along with the money.

Invest In Stocks

Even the more speculative traders looking to leverage their returns seem to have lost interest.

How To Trade Options On Robinhood

That loss of interest also shows up in the areas where retail investors were most focused.

How To Invest In Dogecoin

AMC Theatres (AMC)

The Reddit website of the “Wall Street Bets” army has gone quiet in recent weeks as the stimulus support faded from the markets.

WallStreet Bets

It all reminds me of what Yogi Berra once quipped:

“Nobody ever goes there anymore – it’s too crowded.”

The Death Of WallStreet Bets

When I was growing up, my brother and I regularly had “BB gun” wars. Of course, there was no such thing as safety equipment, helmets, or goggles. It was him, me, and a bunch of kids armed with brass BB’s and pump-action guns going after it. Of course, I can still hear my mother’s warnings:

“It’s all fun and games until someone gets an eye put out.” 

Fortunately, we all survived. That in itself is quite a feat considering we rode in cars without seatbelts, drank from garden hoses, rode bikes without helmets, and regularly settled our differences behind the school. And, it all had to happen before the street lights came on.

Today, everyone is looking for someone else to blame. That is the story of Wall Street Bets.

“But since January, the success of WallStreetBets has become an albatross, with the board’s moderators coming under fire for what many of the board’s 10.6 million users saw as inconsistent enforcement of the rules and a growing sense that the moderators were playing it too safe in fear of angering Wall Street and regulators.

There is also rampant speculation that the size and popularity of WallStreetBets made it susceptible to bad actors trying to create pump and dump schemes by spamming old conversation threads with ticker-specific posts that give the appearance of new social media interest in that stock.” – MarketWatch

Interestingly, it was Wall Street Bets which led to an exodus of users from the Robinhood trading app. Now the tables have turned as investors lost money, the excitement died, and having to go back to work for a paycheck crashed the party.

Stimulus

Remote Jobs

Retail Investors Are All In

As Sam Stovall once quipped:

“If everybody’s optimistic, who is left to buy?”

Such is currently the problem for the markets in the near term. Investors are exceedingly optimistic about future market returns as we noted last week:

Wealthy Americans are pretty optimistic about their long-term investment returns, expecting to earn average annual returns of 17.5% above inflation from their portfolios. That’s according to a new survey from Natixis that surveyed households that have over $100,000 in investable assets in March and April of 2021.”

With allocations to equities as a ratio to the disposable income at a record peak, such suggests there is little buying power left.

Such becomes more problematic as real disposable incomes return to more normal levels.

Of course, as liquidity dries up, the demand from retail investors which has made up nearly 20% of trading volumes this year also evaporates. The problem of “liquidity” becomes an important concern when markets are historically elevated from long-term means.

The chart below shows the deviation from the 3-year moving average, CAPE valuations, and RSI. These are levels never seen historically.

In other words, it’s all fun and games until someone gets their eye put out.

Looking For Someone To Blame

Some things don’t seem to change.

Currently, there seems to be no end to the rally. However, such is always the case just before it ends. In February of 2020 sentiment was much the same before a hair raising 35% plunge. Furthermore, those that chased the markets took on excess risk, and leveraged up to do it, will look for someone to blame for their losses.

“History repeats itself all the time on Wall Street”  – Edwin Lefevre

Unfortunately, investors are faced with a terrible choice. Invest in extremely overvalued, extended, and bullish markets and hope they can navigate the eventual turn. Or, they can sit on the sidelines waiting for the eventual correction to take on equity risk.

In both cases, investors will wrong. The ones that pile in now will fail to navigate the turn as the “Fear Of Missing Out” keeps them allocated all the way down to the next bottom. Those that wait to get in will see the crash, and then stay out expecting stocks to continue to go lower. In the end, those that stayed in will eventually see their portfolio value recover, and those hoping to get in will still be on the sidelines.

Such is the psychology of investing, and eventually, individuals wind up looking for someone to blame.

Is the retail investing rampage over yet? Maybe. Maybe Not.

However, when the eventual unwinding occurs a new generation of investors will learn the brutal lessons of excess risk, speculation, leverage, and greed.

It is the oldest story on Wall Street.

Tyler Durden
Tue, 07/06/2021 – 09:20

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

Tropical Storm Elsa Expected To “Strengthen” Just West Of Key West

Tropical Storm Elsa Expected To “Strengthen” Just West Of Key West

Tropical Storm Elsa traversed Cuba’s southern coast Monday as we’ve warned it could track towards South Florida. 

The National Hurricane Center (NHC) said Elsa has maximum sustained winds of around 60 mph and is moving north-northwest at 12 mph. 

Millions of Floridians are under Tropical warnings Tuesday morning as the storm is expected to intensify today and move along the state’s western coast. 

The good news is weather models have shifted the storm more west and will avoid a direct hit in Surfside. Part of why the rest of Champlain Towers South was leveled late Sunday night was fear the storm could topple the wobbling structure. 

Elsa’s trajectory shows parts of Florida’s west coast will be affected by the storm late Tuesday and into Wednesday. The storm will then ride up the East Coast through the end of the week.

Elsa is the earliest fifth-named storm on record. It also broke the speed record for the fastest-moving hurricane, hitting 31 mph on Saturday morning. 

Tyler Durden
Tue, 07/06/2021 – 09:02

via ZeroHedge News https://ift.tt/36l8XMM Tyler Durden

Is El Salvador’s Embrace of Bitcoin Good, Bad, or Both?


elsalvadorbitcoin_1161x653

Have you heard the good news? The fiduciary light of Satoshi is coming to the nation of El Salvador in a big way.

Our Constantine in this case is the young and social media-savvy (and member of the bitcoin class of 2017) President Nayib Bukele, who recently signed into law a proposal that would make bitcoin a currency of the realm. And like that other historical reformer, this turn to embrace a burgeoning (monetary) morality may introduce some pain on those who might not right now be on board. No wonder bitcoin evangelists have opposing opinions on what should be a great institutional turn. What role should the state play in encouraging bitcoin adoption?

First, the facts. El Salvador—”the Savior“—may not have been the first place most would have suspected to be on the vanguard of monetary innovation, but the conditions were good. Many Latin American countries receive a good number of overseas remittances, and El Salvador is no different. It has a considerable population with no access to financial services at all, which makes the process of receiving remittances expensive and difficult. El Salvador is distinct in that it had no state-issued currency, but rather just used the good old U.S. dollar.

And El Salvador had already been attracting crypto-utopians (and anonymous investment) in the “Bitcoin Beach” surfer community in El Zonte that uses the cryptocurrency for daily transactions. One of these eventual bitcoin beachbums was none other than the young Lightning network entrepreneur Jack Mallers, who worked closely with Bukele in drafting the law and announced the initiative to the receptive acolytes at this year’s Bitcoin Conference in Miami.

Here’s what it does: Citing the need to generate “the necessary conditions to increase national wealth for the benefit of the greatest number of inhabitants” and noting that “approximately 70 percent of the population does not have access to traditional financial services,” the law establishes that bitcoin will be “unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.” Prices may be expressed in BTC, taxes collected in BTC, and exchange rates set by the market. So far, so good.

It’s really good, actually. To date, most countries have been lukewarm at best when it comes to bitcoin. To see a state not only not immediately try to crack down on bitcoin but instead give it a big old bearhug is remarkable. That the state that is doing this happens to rule over people that could enjoy some of the greatest benefits from sovereign finance and censorship-resistant payments makes it that much more exciting. At a time when powerful central banks seem to be readying their arrows, who could blame the faithful for their joy?

Then comes Article 7: “Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.” This is where some bitcoiners get off the bandwagon. It’s one thing to allow people to pay taxes in bitcoin or make clear that bitcoin transactions are legal and encouraged, they say. It’s another to mandate that everyone must accept bitcoin any time it is offered.

There is an ideological argument. Bitcoiners are often libertarians with the usual spectrum of attending procedural and deontological values. In one school of thought, individual actions and preferences are not only usually more efficient, they are also always more morally correct than government fiat. Even if bitcoin is a good in itself, if it is imposed by immoral means, it becomes a moral bad. bitcoin critics, who are decidedly not libertarian, have homed in on this seeming hypocrisy as well.

This is where logistical concerns arise. Let’s assume that every single El Salvadoran is happy with the new law. Requiring all merchants to have working bitcoin processes by September 7, the date by which the law takes effect, could create headaches.

Maybe merchants will scramble to comply by the date and their systems won’t be as good as they should be. Maybe a wave of social engineering attacks opens El Salvador up to major theft and scams. Maybe the price of bitcoin takes a sudden dive and turns people off from the currency unnecessarily. It’s easy to imagine how things could turn south, and of course bitcoin’s critics would have a happy field day. Worse, it could make other countries that desperately need monetary sovereignty to turn away.

Or maybe, possibly, things will turn out alright after all. Bitcoiners are bitcoiners because they believe that this technology can financially free people from monetary mismanagement and third-party control. If we believe bitcoin is such a good thing in itself, is it so terrible that a government is putting it on legal footing with the U.S. dollar?

And maybe, possibly, the law is not even as forceful as it appears. Supporters point out that Article 12 of the law has something of an escape clause. It holds that “those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in bitcoin are excluded from the obligation expressed in Art. 7.” Nor does the law require that Salvadorans hold bitcoin. They may exchange it immediately for another currency like U.S. dollars. The goal is to use merchant adoption as a way to build up the technological infrastructure needed to make bitcoinization meaningful.

Great! Or, not? Critics counter that the next line effectively cancels that out since it directs the state to “promote the necessary training and mechanisms so that the population can access bitcoin transactions.” Article 8 also holds that the State will “promote the necessary training and mechanisms so that the population can access bitcoin transactions.”

It’s already doing it: The government is releasing a “public option” wallet, called Chivo (“cool” in Salvadoran slang), and will gift $30 of bitcoin to every adult citizen. Salvadorans won’t be forced to use that wallet, as per Article 8 the state cannot “prejudice [the] actions of the private sector.” It’s intended to be an accessible option that is custom-built for the Salvadoran people—it can immediately exchange BTC for USD, as the law provides. If Salvadorans would rather use a different wallet, they can.

The international bitcoin community, mostly in developed countries like the United States, is—in true bitcoin fashion—still engaged in this heated back and forth over whether or not “we” should support this law. It’s probably baffling to outsiders. Here is a country that is adopting bitcoin as legal tender (and then some), yet many bitcoiners have been just as much, if not more, opposed to the law than bitcoin’s critics. Do we really think Salvadoran troops will knock down the front door of every pupuseria to make sure they are accepting bitcoin?

It seems unlikely, and for his part President Bukele is doing the rounds in the bitcoin influencer sphere to defend the bill. He says you can’t just take Article 7 out, as it will help kickstart the financial infrastructure needed to make a bitcoin standard that is more than legally theoretical. He says each element of the bill is necessary to bring bitcoin to his country where 70 percent of the people are totally unbanked—a way to “awaken dead capital.” He says he believes in bitcoin and that it will help his countrymen build and save wealth. Besides, the bill was drafted and voted on by a supermajority in the democratically elected (at least in Latin terms) legislature. Has anyone checked to see what the Salvadorans think?

There is no way around the procedural dilemma in Salvadoran bitcoinization for rights-based libertarians. The promise of a politician will hardly make that better. And bitcoiners have been burned by false prophets before. But for those of a more consequentialist bent, such ritual impurity poses no problem on its own. Anyway, if bitcoin truly frees people from government repression, wouldn’t bitcoinization, even if forced, hoist any possible Salvadoran tyranny by its own petard?

It’s a metamethodical conversation that touches on tender fault lines that have always existed within libertarian, and now bitcoin, circles. While we chatter online, the Salvadoran experiment continues apace. Let’s hope it goes well. Concerned catechumens could have turned to prayer in response to any Constantinian excesses. Unless they feel so strongly that they want to engage in some external subversion, bitcoiners and critics outside of El Salvador will mostly just have to keep arguing on the internet.

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Military Members Say They’ll “Quit” If Army Mandates COVID-19 Vaccine: Congressman

Military Members Say They’ll “Quit” If Army Mandates COVID-19 Vaccine: Congressman

Authored by Jack Phillips via The Epoch Times,

Rep. Thomas Massie (R-Ky.) said he was informed by some members of the U.S. military that they would quit if the armed forces mandated a COVID-19 vaccine, coming after a report claimed that Army headquarters told commanders to prepare for mandatory vaccinations in September.

“I’ve been contacted by members of our voluntary military who say they will quit if the COVID vaccine is mandated. I introduced HR 3860 to prohibit any mandatory requirement that a member of the Armed Forces receive a vaccination against COVID-19. It now has 24 sponsors,” Massie wrote on Twitter. He didn’t provide more details.

It isn’t clear how the service members could quit or how many would try to do so. Once a member reports to their first duty station, they are obligated to stay within the service of the armed forces. If a service member leaves without approval, they can be declared AWOL, or absent without leave.

The Republican lawmaker was referring to a report published by the Army Times over the weekend that detailed an executive order sent by the Department of the Army Headquarters that commands should be prepared to administer COVID-19 vaccines starting as early as Sept. 1. The date is contingent on when the Food and Drug Administration (FDA) issues its full approval of the vaccines.

The Army Times reported that it had obtained the directive, HQDA EXORD 225-21, COVID-19 Steady State.

“Commanders will continue COVID-19 vaccination operations and prepare for a directive to mandate COVID-19 vaccination for service members [on or around] 01 September 2021, pending full FDA licensure. Commands will be prepared to provide a backbrief on servicemember vaccination status and way ahead for completion once the vaccine is mandated,” the directive reads.

An EXORD is a directive issued by the president to the defense secretary to execute a military operation.

In this May 28, 2019, file photo, Rep. Thomas Massie (R-Ky.) speaks to reporters at the U.S. Capitol after he blocked a unanimous consent vote on a long-awaited hurricane disaster aid bill in the chamber. (J. Scott Applewhite/AP Photo)

The Department of Defense and the U.S. Army didn’t respond to a request for comment by press time.

“We do not comment on leaked documents,” a U.S. Army spokesperson told the Army Times, noting that “the vaccine continues to be voluntary.”

“If we are directed by [Department of Defense] to change our posture, we are prepared to do so.”

On July 5, Massie noted that his Twitter post was “targeted” by “science-illiterate, military hating, angry blue [checkmark]” users on Twitter.

“There are no health outcomes based studies that show any benefit from the vaccine for those who have already had COVID,” he wrote.

The congressman also pointed to a Department of Defense study published in late June that found a higher number of military members who got the vaccine experienced higher than expected rates of heart inflammation.

U.S. Army, Navy, and Air Force physicians found 23 cases of myocarditis, a type of heart inflammation, in previously healthy men. They developed the condition within four days of getting the vaccine, a study published in JAMA Cardiology found.

The study comes weeks after the U.S. Centers for Disease Control and Prevention panel found a higher rate of heart inflammation after mRNA vaccines were administered. However, the agency and other health officials have said the benefit of getting the vaccine outweighs the risks.

Tyler Durden
Tue, 07/06/2021 – 08:45

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

Is El Salvador’s Embrace of Bitcoin Good, Bad, or Both?


elsalvadorbitcoin_1161x653

Have you heard the good news? The fiduciary light of Satoshi is coming to the nation of El Salvador in a big way.

Our Constantine in this case is the young and social media-savvy (and member of the bitcoin class of 2017) President Nayib Bukele, who recently signed into law a proposal that would make bitcoin a currency of the realm. And like that other historical reformer, this turn to embrace a burgeoning (monetary) morality may introduce some pain on those who might not right now be on board. No wonder bitcoin evangelists have opposing opinions on what should be a great institutional turn. What role should the state play in encouraging bitcoin adoption?

First, the facts. El Salvador—”the Savior“—may not have been the first place most would have suspected to be on the vanguard of monetary innovation, but the conditions were good. Many Latin American countries receive a good number of overseas remittances, and El Salvador is no different. It has a considerable population with no access to financial services at all, which makes the process of receiving remittances expensive and difficult. El Salvador is distinct in that it had no state-issued currency, but rather just used the good old U.S. dollar.

And El Salvador had already been attracting crypto-utopians (and anonymous investment) in the “Bitcoin Beach” surfer community in El Zonte that uses the cryptocurrency for daily transactions. One of these eventual bitcoin beachbums was none other than the young Lightning network entrepreneur Jack Mallers, who worked closely with Bukele in drafting the law and announced the initiative to the receptive acolytes at this year’s Bitcoin Conference in Miami.

Here’s what it does: Citing the need to generate “the necessary conditions to increase national wealth for the benefit of the greatest number of inhabitants” and noting that “approximately 70 percent of the population does not have access to traditional financial services,” the law establishes that bitcoin will be “unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out.” Prices may be expressed in BTC, taxes collected in BTC, and exchange rates set by the market. So far, so good.

It’s really good, actually. To date, most countries have been lukewarm at best when it comes to bitcoin. To see a state not only not immediately try to crack down on bitcoin but instead give it a big old bearhug is remarkable. That the state that is doing this happens to rule over people that could enjoy some of the greatest benefits from sovereign finance and censorship-resistant payments makes it that much more exciting. At a time when powerful central banks seem to be readying their arrows, who could blame the faithful for their joy?

Then comes Article 7: “Every economic agent must accept bitcoin as payment when offered to him by whoever acquires a good or service.” This is where some bitcoiners get off the bandwagon. It’s one thing to allow people to pay taxes in bitcoin or make clear that bitcoin transactions are legal and encouraged, they say. It’s another to mandate that everyone must accept bitcoin any time it is offered.

There is an ideological argument. Bitcoiners are often libertarians with the usual spectrum of attending procedural and deontological values. In one school of thought, individual actions and preferences are not only usually more efficient, they are also always more morally correct than government fiat. Even if bitcoin is a good in itself, if it is imposed by immoral means, it becomes a moral bad. bitcoin critics, who are decidedly not libertarian, have homed in on this seeming hypocrisy as well.

This is where logistical concerns arise. Let’s assume that every single El Salvadoran is happy with the new law. Requiring all merchants to have working bitcoin processes by September 7, the date by which the law takes effect, could create headaches.

Maybe merchants will scramble to comply by the date and their systems won’t be as good as they should be. Maybe a wave of social engineering attacks opens El Salvador up to major theft and scams. Maybe the price of bitcoin takes a sudden dive and turns people off from the currency unnecessarily. It’s easy to imagine how things could turn south, and of course bitcoin’s critics would have a happy field day. Worse, it could make other countries that desperately need monetary sovereignty to turn away.

Or maybe, possibly, things will turn out alright after all. Bitcoiners are bitcoiners because they believe that this technology can financially free people from monetary mismanagement and third-party control. If we believe bitcoin is such a good thing in itself, is it so terrible that a government is putting it on legal footing with the U.S. dollar?

And maybe, possibly, the law is not even as forceful as it appears. Supporters point out that Article 12 of the law has something of an escape clause. It holds that “those who, by evident and notorious fact, do not have access to the technologies that allow them to carry out transactions in bitcoin are excluded from the obligation expressed in Art. 7.” Nor does the law require that Salvadorans hold bitcoin. They may exchange it immediately for another currency like U.S. dollars. The goal is to use merchant adoption as a way to build up the technological infrastructure needed to make bitcoinization meaningful.

Great! Or, not? Critics counter that the next line effectively cancels that out since it directs the state to “promote the necessary training and mechanisms so that the population can access bitcoin transactions.” Article 8 also holds that the State will “promote the necessary training and mechanisms so that the population can access bitcoin transactions.”

It’s already doing it: The government is releasing a “public option” wallet, called Chivo (“cool” in Salvadoran slang), and will gift $30 of bitcoin to every adult citizen. Salvadorans won’t be forced to use that wallet, as per Article 8 the state cannot “prejudice [the] actions of the private sector.” It’s intended to be an accessible option that is custom-built for the Salvadoran people—it can immediately exchange BTC for USD, as the law provides. If Salvadorans would rather use a different wallet, they can.

The international bitcoin community, mostly in developed countries like the United States, is—in true bitcoin fashion—still engaged in this heated back and forth over whether or not “we” should support this law. It’s probably baffling to outsiders. Here is a country that is adopting bitcoin as legal tender (and then some), yet many bitcoiners have been just as much, if not more, opposed to the law than bitcoin’s critics. Do we really think Salvadoran troops will knock down the front door of every pupuseria to make sure they are accepting bitcoin?

It seems unlikely, and for his part President Bukele is doing the rounds in the bitcoin influencer sphere to defend the bill. He says you can’t just take Article 7 out, as it will help kickstart the financial infrastructure needed to make a bitcoin standard that is more than legally theoretical. He says each element of the bill is necessary to bring bitcoin to his country where 70 percent of the people are totally unbanked—a way to “awaken dead capital.” He says he believes in bitcoin and that it will help his countrymen build and save wealth. Besides, the bill was drafted and voted on by a supermajority in the democratically elected (at least in Latin terms) legislature. Has anyone checked to see what the Salvadorans think?

There is no way around the procedural dilemma in Salvadoran bitcoinization for rights-based libertarians. The promise of a politician will hardly make that better. And bitcoiners have been burned by false prophets before. But for those of a more consequentialist bent, such ritual impurity poses no problem on its own. Anyway, if bitcoin truly frees people from government repression, wouldn’t bitcoinization, even if forced, hoist any possible Salvadoran tyranny by its own petard?

It’s a metamethodical conversation that touches on tender fault lines that have always existed within libertarian, and now bitcoin, circles. While we chatter online, the Salvadoran experiment continues apace. Let’s hope it goes well. Concerned catechumens could have turned to prayer in response to any Constantinian excesses. Unless they feel so strongly that they want to engage in some external subversion, bitcoiners and critics outside of El Salvador will mostly just have to keep arguing on the internet.

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AMC Shares Rally As CEO Abandons Proposal To Issue 25 Million More Shares

AMC Shares Rally As CEO Abandons Proposal To Issue 25 Million More Shares

AMC CEO Adam Aron on Monday decided to pull a proposal to lift the cap on the number of shares that AMC is allowed to issue from the company’s upcoming annual shareholders meeting, pushing AMC shares more than 3% higher in premarket trading.

The decision marks a reversal for AMC’s outspoken CEO Adam Aron, who has been pushing for shareholders to authorize issuance of up to another 25MM shares, which would allow the theater chain – which has already taken advantage of the run-up in its share price by issuing millions of new shares – to further capitalize on its lofty valuation. The company first disclosed the proposal, which was on the docket for its upcoming July 29 annual meeting, last month.

In a series of tweets Aron said that while he still believes issuing more shares would be in the company’s best interest, enough AMC shareholders have expressed opposition to the proposal to make management have second thoughts. Because of this, the proposal has been “officially tabled”.

If approved, the proposal would have increased the number of total shares by 25MM to a total of 549.2MM shares. Aron hinted that the company might revive the proposal at next year’s meeting.

In other AMC news, Aron announced last night that the company will show live MMA fights in its theaters offering ticket prices that are well below the cost of ordering these fights on pay-per-view at home. The first fight to air at the company’s theaters will be the upcoming McGregor-Poirier fight set for Saturday.

Trey’s Trades, one of the de facto leaders of AMC’s army of ‘apes’ – the diamond-handed investors who have helped bid up the stock – praised the move in a tweet, proclaiming that “AMC listens”.

It’s just the latest example of Aron’s radical management strategy of building an intense bond of trust with AMC’s dedicated army of retail backers. These efforts have also included the launch of a rewards program for shareholders, with perks like free popcorn.

Tyler Durden
Tue, 07/06/2021 – 08:29

via ZeroHedge News https://ift.tt/2VeAxJx Tyler Durden

Want to Reduce the Danger of Illegal Fireworks? Legalize Them.


zumaamericastwentynine518724

A good rule of thumb is that there’s no activity so dangerous that authorities can’t make it worse by restricting it and driving it underground. Last week, the Los Angeles Police Department demonstrated that point when it stole tons of illegal fireworks from a black market vendor, set aside a small proportion for on-site detonation, and promptly blew up the neighborhood and injured 17 people. As the cherry on top, the guy who had (precariously) stored the fireworks without incident until police showed up and fumbled the job is the one facing federal charges from the embarrassed authorities.

“What was supposed to be a safe operation to destroy a cache of illegal fireworks turned into a ‘total, catastrophic failure’ of a Los Angeles police bomb squad vehicle that resulted in a massive explosion in South L.A., rocking a neighborhood and injuring 17 people, including 10 law enforcement officers,” KABC reported of the June 30 incident.

The explosion occurred after police arrived at the home of Arturo Ceja III in response to a complaint that he had illegal fireworks—initially reported as 5,000 pounds, but later revised upwards to 32,000 pounds—stored in his backyard. The fireworks, “including aerial displays and large homemade fireworks containing explosive materials” according to the United States Attorney’s Office for the Central District of California, were reportedly purchased in Nevada for resale in California.

It’s possible—even likely—that neighbors dropped a dime on Ceja out of concern that tons of homemade fireworks stacked on his back patio threatened a spectacular but extremely unfortunate Independence Day display. Instead, dangerous consequences had to await the arrival of the authorities. Things didn’t go as planned when the LAPD decided to detonate “improvised explosive devices”—some of the homemade fireworks described by the U.S. Attorney’s office.

“Following established protocols, they then transferred that material into a total containment vehicle,” LAPD Chief Michael Moore described in a June 30 press conference. “This is a semitruck, multi-ton, commercial-grade transport. Within it is an iron chamber that is meant to house explosive material that can be safely detonated and its pressure vented in a manner that renders that material safe… this vessel should have been able to safely dispose of that material.”

Instead, the cops blew up the neighborhood, causing extensive injuries and property damage.

That Arturo Ceja III and people like him exist across California and elsewhere is no surprise. People enjoy fireworks, the possession and use of which are severely restricted by law in California. Inevitably, underground dealers emerge to satisfy demand that can’t be met by legal sources. “Fireworks in California can be sold for as much as four times what purchasers pay for the fireworks in Nevada,” the U.S. Attorney’s office helpfully points out.

Black market dealers aren’t necessarily the sorts of professionals who adhere to standards dictated by industries and insurance companies. They offer commercial-grade rockets mixed with homemade devices and store their goods in residential neighborhoods. That can have nasty outcomes.

“In March of this year, a home was rocked by explosions caused by a massive cache of illegal fireworks,” KABC reported earlier this month. “Two cousins were killed in the blast and subsequent fire.”

State and local authorities have stepped up enforcement, but that’s had little impact.

“California residents already know the struggle to rein in the use of illegal fireworks,” Priya Arora noted in The New York Times in mid-June. “Residents in Fresno have made hundreds of complaints to law enforcement agencies and City Council members in recent weeks about the almost nightly sound of popping fireworks,” Arora added.

As authorities should know by now, imposing legal restrictions on any popular good or service does less to limit availability than it does to drive the market beyond control and into the hands of criminals. We’ve seen that with alcohol, the sex trade, drugs, guns, and now fireworks. Prohibitionists don’t eliminate the things they hate; they bring us moonshine, sex workers dodging both cops and pimps, smuggled heroin of uncertain purity, garage-built ghost guns, and explosives piled in backyards. Once a market is driven underground, quality becomes unpredictable, business practices are sketchy, and safety standards take a turn for the not-so-safe.

That’s not to say that legal markets are entirely without risk. On July 4, a cache of commercial fireworks blew up in Ocean City, Maryland, as professionals were setting up for a scheduled display. “One employee with the fireworks company suffered minor injuries,” according to WGAL. “Police said no one else was hurt.”

Compare that toll to the two deaths in the Ontario, California fireworks explosion—or to the 17 people injured when the LAPD tried to dispose of illegal fireworks. Legal markets can’t guarantee perfect safety in a world in which that’s never an option. But they do create environments in which industry standards, legal liability, insurance rules, public opinion, and regulatory pressures act to encourage responsible behavior and reduce risk.

On the other hand, if you want to maximize the dangers of any activity, go ahead and impose tight restrictions or prohibitions. Then sit back and watch as people who don’t give a damn about rules move in and set the standards—and face off against enforcers who can be as dangerous as criminals.

Official attitudes don’t have to be restrictive and risk-maximizing.

“This is the time of year that people always ask us about obtaining a fireworks permit,” the Marlborough, New Hampshire Police Department posted on its Facebook page the day before the LAPD blew up a neighborhood it was “protecting” from illegal fireworks. “Marlborough does not have a fireworks ordinance so permits are not required. If you insist, you can issue yourself a permit using the template pictured below. Please keep safety a priority, as freedom is best celebrated with ten fingers.”

Attached was a picture of Ron Swanson, the libertarian character from Parks and Recreation, holding a paper with text saying “I can do what I want.”

There are all sorts of goods and activities in this world that come with a bit of danger attached. Minimizing the associated risks requires keeping those things legal so that people so inclined can enjoy them in a reasonably responsible way. The alternative to legalization isn’t an absence of peril; it’s a guy stacking contraband on his back patio until cops come rumbling down the street to “protect” the public with ill-considered tactics that blow out windows and put people in the hospital.

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Weibo Soars On Report Chairman Seeks To LBO China’s Twitter For Up To $100/Share

Weibo Soars On Report Chairman Seeks To LBO China’s Twitter For Up To $100/Share

With Didi shares crashing as much as 25% in U.S. pre-market trade on Tuesday..

… ahead of its first session since Chinese regulators ordered the company’s app be taken down days after its $4.4 billion IPO, having become the latest stock to suffer the wrath of Beijing for daring to fly too close to the sun following well-known crackdowns against Jack Ma’s fintech empire, is China’s infatuation with public capital markets over?

That would be one conclusion from the just released Reuters report that Weibo chairman Charles Chao and a state investor are in talks to take the Chinese microblogging giant and twitter-equivalent private in a deal which would value the firm at at least $20 billion and facilitate major shareholder Alibaba Group exit.

Citing two sources, Reuters reported that Chao, whose holding company New Wave is the largest shareholder of Weibo, is teaming up with a Shanghai-based state firm to form a consortium for the deal. The identity of the state firm could not immediately be determined. New Wave held a 45% stake in Weibo as of February valued at $5.6 billion as per the stock’s Friday price, followed by Alibaba (9988.HK) with 30% worth $3.7 billion, according to the company’s 2020 annual report.

According to Reuters, the consortium looks to offer about $90-$100 per share to take Weibo private, two of the sources told Reuters, representing a premium of 80%-100% to the share’s $50 average price over the past month.

As Reuters notes, privatizing China’s largest microblogging platform would pave the way for second largest shareholder and top customer Alibaba to sell out, disposing of one of its key media assets, the sources noted. More importantly, it would mark a significant reversal in sentiment, one where instead of entering capital markets, local tech giants – faced with Beijing’s fury – are instead seeking to cash out.

Weibo stock surged 40% in premarket trading, last seen just over $77, although if the report is accurate, there is a way to go until the $90-$100 price is reached.

Tyler Durden
Tue, 07/06/2021 – 08:13

via ZeroHedge News https://ift.tt/3yr2H2b Tyler Durden

Tata Motors Plunges 10% As Jaguar Land Rover Warns Of ‘Greater’ Chip Shortages

Tata Motors Plunges 10% As Jaguar Land Rover Warns Of ‘Greater’ Chip Shortages

While there was hope the ongoing semiconductor pain would subside for the auto industry in the second half of the year, shares of Tata Motors, the parent of luxury carmaker Jaguar Land Rover (JLR), crashed Tuesday after it warned: “shortages will continue through to the end of the year and beyond,” according to The Economic Times.

Tata shares trading on the National Stock Exchange of India plunged 10% but recovered some losses and closed down 8.50%. 

 “The present semiconductor supply issues represent a significant near-term challenge for the industry which will take time to work through but we are encouraged by the strong demand we see for when supply recovers,” said Thierry Bollore, chief executive officer, JLR.

“We are taking strong steps to ensure the security of our supply chain for the future, working with our suppliers and chip manufacturers directly to increase the visibility and control over the chip supply for our vehicles,” Bollore said.

JLR expects the chip shortage to diminish in the second half of the year. “However, the broader underlying structural capacity issues will only be resolved as supplier investment in new capacities comes online over the next 12-18 months, and so we expect some level of shortages will continue through to the end of the year and beyond.” 

The ongoing global chip shortage could result in a 50% decline in production for JLR in the September quarter as sourcing continues to become an issue. 

“Jaguar Land Rover (JLR) retail sales for the three-month period to 30 June 2021 were significantly up year-on-year, reflecting the continuing recovery in demand from the Covid 19 pandemic, particularly compared to a year ago. However, wholesales in particular were lower than demand would have permitted due to semiconductor supply issues affecting the global auto industry,” Tata Motors added.

Resolving JLR’s chip shortage could be a 2022 story and result in lower production this year. 

Some believe semiconductor pain for the auto industry could be in the beginning innings of subsiding in the second half of this year as car chip vendors are expected to increase production in the coming months. 

Tyler Durden
Tue, 07/06/2021 – 08:10

via ZeroHedge News https://ift.tt/3dNkn0h Tyler Durden

Want to Reduce the Danger of Illegal Fireworks? Legalize Them.


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A good rule of thumb is that there’s no activity so dangerous that authorities can’t make it worse by restricting it and driving it underground. Last week, the Los Angeles Police Department demonstrated that point when it stole tons of illegal fireworks from a black market vendor, set aside a small proportion for on-site detonation, and promptly blew up the neighborhood and injured 17 people. As the cherry on top, the guy who had (precariously) stored the fireworks without incident until police showed up and fumbled the job is the one facing federal charges from the embarrassed authorities.

“What was supposed to be a safe operation to destroy a cache of illegal fireworks turned into a ‘total, catastrophic failure’ of a Los Angeles police bomb squad vehicle that resulted in a massive explosion in South L.A., rocking a neighborhood and injuring 17 people, including 10 law enforcement officers,” KABC reported of the June 30 incident.

The explosion occurred after police arrived at the home of Arturo Ceja III in response to a complaint that he had illegal fireworks—initially reported as 5,000 pounds, but later revised upwards to 32,000 pounds—stored in his backyard. The fireworks, “including aerial displays and large homemade fireworks containing explosive materials” according to the United States Attorney’s Office for the Central District of California, were reportedly purchased in Nevada for resale in California.

It’s possible—even likely—that neighbors dropped a dime on Ceja out of concern that tons of homemade fireworks stacked on his back patio threatened a spectacular but extremely unfortunate Independence Day display. Instead, dangerous consequences had to await the arrival of the authorities. Things didn’t go as planned when the LAPD decided to detonate “improvised explosive devices”—some of the homemade fireworks described by the U.S. Attorney’s office.

“Following established protocols, they then transferred that material into a total containment vehicle,” LAPD Chief Michael Moore described in a June 30 press conference. “This is a semitruck, multi-ton, commercial-grade transport. Within it is an iron chamber that is meant to house explosive material that can be safely detonated and its pressure vented in a manner that renders that material safe… this vessel should have been able to safely dispose of that material.”

Instead, the cops blew up the neighborhood, causing extensive injuries and property damage.

That Arturo Ceja III and people like him exist across California and elsewhere is no surprise. People enjoy fireworks, the possession and use of which are severely restricted by law in California. Inevitably, underground dealers emerge to satisfy demand that can’t be met by legal sources. “Fireworks in California can be sold for as much as four times what purchasers pay for the fireworks in Nevada,” the U.S. Attorney’s office helpfully points out.

Black market dealers aren’t necessarily the sorts of professionals who adhere to standards dictated by industries and insurance companies. They offer commercial-grade rockets mixed with homemade devices and store their goods in residential neighborhoods. That can have nasty outcomes.

“In March of this year, a home was rocked by explosions caused by a massive cache of illegal fireworks,” KABC reported earlier this month. “Two cousins were killed in the blast and subsequent fire.”

State and local authorities have stepped up enforcement, but that’s had little impact.

“California residents already know the struggle to rein in the use of illegal fireworks,” Priya Arora noted in The New York Times in mid-June. “Residents in Fresno have made hundreds of complaints to law enforcement agencies and City Council members in recent weeks about the almost nightly sound of popping fireworks,” Arora added.

As authorities should know by now, imposing legal restrictions on any popular good or service does less to limit availability than it does to drive the market beyond control and into the hands of criminals. We’ve seen that with alcohol, the sex trade, drugs, guns, and now fireworks. Prohibitionists don’t eliminate the things they hate; they bring us moonshine, sex workers dodging both cops and pimps, smuggled heroin of uncertain purity, garage-built ghost guns, and explosives piled in backyards. Once a market is driven underground, quality becomes unpredictable, business practices are sketchy, and safety standards take a turn for the not-so-safe.

That’s not to say that legal markets are entirely without risk. On July 4, a cache of commercial fireworks blew up in Ocean City, Maryland, as professionals were setting up for a scheduled display. “One employee with the fireworks company suffered minor injuries,” according to WGAL. “Police said no one else was hurt.”

Compare that toll to the two deaths in the Ontario, California fireworks explosion—or to the 17 people injured when the LAPD tried to dispose of illegal fireworks. Legal markets can’t guarantee perfect safety in a world in which that’s never an option. But they do create environments in which industry standards, legal liability, insurance rules, public opinion, and regulatory pressures act to encourage responsible behavior and reduce risk.

On the other hand, if you want to maximize the dangers of any activity, go ahead and impose tight restrictions or prohibitions. Then sit back and watch as people who don’t give a damn about rules move in and set the standards—and face off against enforcers who can be as dangerous as criminals.

Official attitudes don’t have to be restrictive and risk-maximizing.

“This is the time of year that people always ask us about obtaining a fireworks permit,” the Marlborough, New Hampshire Police Department posted on its Facebook page the day before the LAPD blew up a neighborhood it was “protecting” from illegal fireworks. “Marlborough does not have a fireworks ordinance so permits are not required. If you insist, you can issue yourself a permit using the template pictured below. Please keep safety a priority, as freedom is best celebrated with ten fingers.”

Attached was a picture of Ron Swanson, the libertarian character from Parks and Recreation, holding a paper with text saying “I can do what I want.”

There are all sorts of goods and activities in this world that come with a bit of danger attached. Minimizing the associated risks requires keeping those things legal so that people so inclined can enjoy them in a reasonably responsible way. The alternative to legalization isn’t an absence of peril; it’s a guy stacking contraband on his back patio until cops come rumbling down the street to “protect” the public with ill-considered tactics that blow out windows and put people in the hospital.

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