Month: July 2021

Joe Biden isn’t one to let things go to waste, apparently.

During a Friday virtual meeting with governors from western states to discuss wildfires, an aide slipped Biden a note which read “Sir – There is something on your chin.”

The 78-year-old Biden then groped for what appeared to be a yellow-orange object, possibly a piece of egg, then analyzed the object – and ate it.

https://t.co/HUUFInxUwU

— RNC Research (@RNCResearch) July 30, 2021

After the nosh, Biden not-so-subtly picked up the card, flipped it over, and inadvertently revealed the note to photographers covering the event.

As the New York Post notes, ‘egg on his face’ wasn’t Biden’s only gaffe this week.

Earlier this week, he had a “Rick Perry moment” while making remarks at a Pennsylvania truck factory, claiming he had sought the presidency for three reasons — before only naming two.

At the same event in Pennsylvania he mistakenly uttered the name of his predecessor — “President Trump” — chalking it up to a “Freudian slip” even though he was talking about his longtime boss Barack Obama.

Meanwhile, Biden’s history of insults, angry outbursts and tone-deaf remarks — especially on the subject of race — led him to bluntly acknowledge in 2018: “I am a gaffe machine.” -NY Post

Biden also claimed on Wednesday that he once drove an 18-wheeler truck.

There is zero evidence that Biden “used to drive an 18 wheeler”

The extent of Biden’s trucking experience is that he **rode in** a truck once, for one night in 1973 (he made sure to return home by plane though) https://t.co/p9sPMU20W3 pic.twitter.com/A7tmkoOSHB

— Zach Parkinson (@AZachParkinson) July 28, 2021

Authored by Dave DeCamp via AntiWar.com,

Western powers continue to blame Iran for stalled negotiations to revive the nuclear deal, known as the JCPOA. In comments reported by Germany’s Der Spiegel on Friday, German Foreign Minister Heiko Maas said Iran was “delaying” the JCPOA talks that have been held in Vienna.

“I am seeing with growing unease that Iran is delaying the resumption of the Vienna nuclear talks on the one hand, and on the other hand it is simultaneously moving further and further away from core elements of the agreement,” Maas said.

After the US withdrew from the JCPOA in 2018, Iran gave other signatories one year to offset US sanctions before gradually increasing the activity of its civilian nuclear program. Over the past year, Tehran has taken steps to increase enrichment in response to Israeli covert attacks inside Iran, which are tacitly endorsed by the US since Washington never condemns them.

Throughout the years, Iran has been clear that it can reverse its nuclear activity to the limits set by the JCPOA if the US lifts sanctions. But since the Biden administration has refused to lift all Trump-era sanctions, the process to revive the deal has been dragged out.

On Wednesday, Iranian Supreme Leader Ayatollah Ali Khamenei said the US has been demanding additional concessions from Iran while not providing guarantees on sanctions relief or a guarantee that it wouldn’t withdraw from the agreement again.

The Vienna talks started in April, and the last round concluded on June 20th. The next round won’t start until after President-elect Ebrahim Raisi replaces Iranian President Hassan Rouhani in early August.

Maas also said that the “option” to revive the JCPOA “will not be open to us forever,” echoing comments made by US Secretary of State Antony Blinken on Thursday. Blinken said the process to revive the nuclear deal “cannot go on indefinitely.”

As the talks are stalled, there are reports that the US is planning fresh sanctions on Iran, which would likely sabotage the negotiations. The Wall Street Journal reported Thursday that the US has plans to sanctions Iran’s drone and guided missile programs.

President Joe Biden and the Democrats in Congress are pushing for another one-month extension of the federal eviction moratorium. It’s unlikely to pass, and while Democrats are essentially using the whole setup to bash Republicans for being standing by while thousands are evicted, they probably won’t say much about the billions of dollars in rental assistance approved by Congress that hasn’t been spent, even in deep blue states like New York (one of the slowest states to start doling out the aid).

With restaurants, retailers and other small businesses struggling to find workers to fill lower-paying jobs, a gap is already opening between red states (which have curtailed some of the expanded federal unemployment assistance) and blue states (which are keeping the money taps open).

As Democrats argue for even more federal spending and aid, it’s important for people to take a step back and consider how much assistance has already been doled out by the government. As the NYT claimed in a report published earlier this week using data compiled by some left-wing think tank, the trillions of dollars spent on handouts to families and individuals, and loans and grants to businesses, has led to the biggest reduction in poverty in American history.

Per the report, the number of poor Americans has fallen by nearly 20MM since 2018, a decline of almost 45%.

The Urban Institute’s projections show poverty falling to 7.7 percent this year from 13.9 percent in 2018. That decline, 45 percent, is nearly three times the previous three-year record, according to historical estimates by researchers at Columbia University. The projected drop in child poverty, to 5.6 from 14.2 percent, amounts to a decline of 61 percent. That exceeds the previous 50 years combined, the Columbia figures show.

(Source: NYT)

What’s even more remarkable is that the US managed to achieve this even as 7MM jobs evaporated last year during the early months of the pandemic. It’s likely that these gains will prove ephemeral, since without more emergency measures, many families will see their total income decline as programs like increased food stamps and expanded unemployment insurance have either already ended, or soon will.

The decline in poverty has been steady across race and age and practically every demographic group.

(Source: NYT)

But while plenty of the aid helped keep families afloat, many spent their money on luxuries like new TVs, or worse, indulgences like illegal narcotics. Perhaps unwittingly, the NYT beautifully illustrated this point with an anecdote: the case of Kathryn Goodwin, a single mother of five from St. Charles, Missouri.

Before the pandemic, she managed a group of ptrailer parks which paid her $33K per year. When she was working, she received food stamps, tax credits and aid fro a disabled child which raised her total income per year to $52K. For context, the local poverty line is $34K. Without the expanded assistance, Goodwin would have seen her income drop to just $29K, but instead, her income exploded.

Instead, her income rose above its prepandemic level, though she has not worked for a year. She received about $25,000 in unemployment benefits (about three times what she would have received before the pandemic) and $12,000 in stimulus checks. With increased food stamp benefits and other help, her income grew to $67,000 — almost 30 percent more than when she had a job.

“Without that help, I literally don’t know how I would have survived,” she said. “We would have been homeless.”

Still, Ms. Goodwin, 29, has mixed feelings about large payments with no stipulations.

While hers is an example where the money spent helped keep a familiy in its home, even Goodwin has mixed feelings, since she knows plenty of people who squandered the money.

Still, Ms. Goodwin, 29, has mixed feelings about large payments with no stipulations. “In my case, yes, it was very beneficial,” she said. But she said that other people she knew bought big TVs and her former boyfriend bought drugs. “All this free money enabled him to be a worse addict than he already was,” she said. “Why should taxpayers pay for that?”

This is just one example of how the federal money wasn’t always spent in the most responsible way. Critics, including economists from the University of Chicago, believe the government should have been more discerning with how it distributed the money.

Critics said the aid was poorly devised, noting that many people received more from unemployment benefits than they had earned on the job.

“We spent like we’ve never spent before and we reduced hardship for most people quite dramatically,” said Bruce D. Meyer, an economist at the University of Chicago. “But this came at a very high and unnecessary cost.”

Dems are already fighting for more spending via Biden’s infrastructure package and $3.5 trillion budget. Unfortunately for those who perhaps didn’t save as much money as they should have, it looks like Americans have already burned through the savings they accumulated during the pandemic, according to the latest data on ‘excess savings’ from the BEA.

Authored by Jonathan Turley,

Just yesterday, we discussed the censoring of a commentator by Twitter for merely expressing an opinion over the need for a “pause” on any federal mandates on Covid-19 as new research is studied.

Now, a former New York Times science reporter, Alex Berenson, has been suspended for simply quoting the results from a clinical trial by Pfizer and raising questions over any vaccine mandate. In the meantime, the White House accused both the Washington Post and New York Times of irresponsible reporting on Covid, but surprisingly Twitter has not suspended those accounts.  It is the license of the censor.  Twitter is unwilling to let people read or discuss viewpoints that it disagrees with as a corporation. Many on the left, however, have embraced the concept of corporate speech and censorship. It turns out that the problem with censorship for many was the failure to censor views that they opposed. With the “right” censors at work, the free speech concerns have been set aside.

I have little ability to judge the science on such questions. However, I welcome the debate. Yet, rather than answer such critics and refute their arguments, many people focus on silencing anyone with dissenting viewpoints like Berenson.

Berenson has been effectively confined to Substack by Big Tech due to his discussing dissenting views on the science surrounding Covid-19. His latest offense against Big Tech came when he posted the results published by Pfizer of its own clinical data. He claimed that the research showed little difference in morality between those in the trial with a vaccine and those given a placebo.

In the meantime, the White House sent out an all caps condemnation for “completely irresponsible” reporting on the infliction of vaccinated people according to another study.

Ben Wakana, deputy director of strategic communications and engagement for the White House, blasted the Washington Post over its headline about a study of a COVID-19 outbreak in Provincetown, Massachusetts on July 4th. The Post tweet read “Vaccinated people made up three-quarters of those infected in a massive Massachusetts covid-19 outbreak, pivotal CDC study finds.” Wakana responded “Completely irresponsible,. 3 days ago the CDC made clear that vaccinated individuals represent a VERY SMALL amount of transmission occurring around the country. Virtually all hospitalizations and deaths continue to be among the unvaccinated. Unreal to not put that in context.”

Completely irresponsible.

3 days ago the CDC made clear that vaccinated individuals represent a VERY SMALL amount of transmission occurring around the country.

Virtually all hospitalizations and deaths continue to be among the unvaccinated.

Unreal to not put that in context. https://t.co/BbmSNvQlrb

— Ben Wakana (@benwakana46) July 30, 2021

Wakana addressed the same issue with  a New York Times tweet stating “Breaking News: The Delta variant is as contagious as chickenpox and may be spread by vaccinated people as easily as the unvaccinated, an internal C.D.C. report said.” That sent Wakana into all caps: “VACCINATED PEOPLE DO NOT TRANSMIT THE VIRUS AT THE SAME RATE AS UNVACCINATED PEOPLE AND IF YOU FAIL TO INCLUDE THAT CONTEXT YOU’RE DOING IT WRONG.”

VACCINATED PEOPLE DO NOT TRANSMIT THE VIRUS AT THE SAME RATE AS UNVACCINATED PEOPLE AND IF YOU FAIL TO INCLUDE THAT CONTEXT YOU’RE DOING IT WRONG. https://t.co/gBkDbJ21xX

— Ben Wakana (@benwakana46) July 30, 2021

Now all three posters (Berenson, The Post, and The Times) were citing studies and accused on not putting them into context. However, only Berenson was suspended.

Obviously, none of these posters should be suspended and Twitter should not be enforcing one of the largest censorship programs in history. However, the silence of free speech supports, academics, and journalists to this hypocrisy is deafening.

The rise of corporate censors has combined with a heavily pro-Biden media to create the fear of a de facto state media that controls information due to a shared ideology rather than state coercion.  That concern has been magnified by demands from Democratic leaders for increased censorship, including censoring political speech, and now word that the Biden Administration has routinely been flagging material to be censored by Facebook.

This is why I have described myself as an Internet Originalist:

The alternative is “internet originalism” — no censorship. If social media companies returned to their original roles, there would be no slippery slope of political bias or opportunism; they would assume the same status as telephone companies. We do not need companies to protect us from harmful or “misleading” thoughts. The solution to bad speech is more speech, not approved speech.

If Pelosi demanded that Verizon or Sprint interrupt calls to stop people saying false or misleading things, the public would be outraged. Twitter serves the same communicative function between consenting parties; it simply allows thousands of people to participate in such digital exchanges. Those people do not sign up to exchange thoughts only to have Dorsey or some other internet overlord monitor their conversations and “protect” them from errant or harmful thoughts.

The late night Thursday attack of an Israeli-managed vessel in the Arabian Sea off the coast of Oman which left two international crew members dead was the result of a drone strike, the US Navy’s Fifth Fleet has said in a Saturday statement.

The US Navy had boarded and assisted in the distressed Liberian-flagged ‘Mercer Street’ tanker’s moving to safer waters on Friday after the incident which had initially been reported as possible piracy. The US military had immediately conducted an investigation in the aftermath, and is now citing “clear visual evidence that an attack had occurred,” according to the new statement.

“Initial indications clearly point to a (drone)-style attack,” the US Navy said, without naming specific evidence for that conclusion. Currently a pair of US warships, the aircraft carrier USS Ronald Reagan and guided missile destroyer USS Mitscher, are escorting the Mercer to a safe port.

London-based Zodiac Maritime, owned by Israeli billionaire Eyal Ofer, had issued a statement on Friday confirming that two crew members died as a result of the attack, including one Romanian and one British crew member. As we noted in our initial reporting, one prominent maritime security risk management firm is pointed to a likely drone attack.

This was followed by state media in Iran appearing to confirm that it was carried out by the Islamic Republic as “retaliation” for recent Israeli attacks and sabotage operations, including the latest airstrikes on Iran-backed targets inside Syria. 

Late in the day Friday and early Saturday, reports out of Israeli media and The New York Times have cited Israeli intelligence officials who say “several” drones struck the tanker:

The New York Times reported that two officials who spoke on condition of anonymity said that “the attack appeared to have been carried out by several unmanned Iranian drones that crashed into living quarters underneath the ship’s command center, or bridge.” This looks like a serious and complex attack that is not just a major escalation, but a new use of Iran drone technology.  

Drones carried out the attack on a tanker managed by an Israeli-led firm, killing two people, officials said — apparently the latest in a series of maritime clashes between Iran and Israel.@PatrickKingsley @ronenbergman https://t.co/luag310Uin

— Farnaz Fassihi (@farnazfassihi) July 30, 2021

US officials are also pointing the finger at Iran, reports CNN: “A US defense official familiar with the details of the incident said Friday that the tanker was attacked by an armed drone thought to be operated by Iran.”

So it appears the ‘tanker wars’ are back and in full force, with industry analysts Dryad Global describing that “this latest attack has the hallmarks of the ongoing Israel/Iran ‘shadow war‘”. The Israelis have taken the incident to the Untied Nations, likely also as part of efforts to halt nuclear negotiations in Vienna, which are already stalled at least into August.

Israel’s Foreign Minister Yair Lapid spoke with his British counterpart Dominic Raab, and noted “the need to respond harshly” to the attack on the Mercer Street oil tanker, his office says.

— Emanuel (Mannie) Fabian (@manniefabian) July 30, 2021

“Israel’s foreign minister said he has ordered the nation’s diplomats to push for UN action against Iran over a deadly attack on a ship managed by an Israeli billionaire,” AFP reports. “I’ve instructed the embassies in Washington, London and the UN to work with their interlocutors in government and the relevant delegations in the UN headquarters in New York,” Israeli Foreign Minister Yair Lapid said in a statement.

All of this likely means we’re about to see the Israelis escalate in a major way if the recent tit-for-tat history of military strikes is any guide. And none of this bodes well for the prospect of the upcoming seventh round of indirect US-Iran JCPOA nuclear talks in Vienna, which might prove to be derailed before they even get started again – and then there’s Iran’s new hardline president entering office in a matter of days on August 3rd, to complicate matters further.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Market Rally Continues

Last week, we discussed that as the market hit new highs, further upside was likely limited. To wit:

“While the upside remains somewhat limited, given the already substantial advance this year, the rally will alleviate downside concerns momentarily. However, with that said, the extremely low level of volatility this year is reminiscent of 2017. The reason is that “stability” is fragile. In other words, stability ultimately leads to instability.“

For more information on the “instability of instability,” read “The Next Minsky Moment.”

Not surprisingly, the market didn’t make much headway this past week, given the current extended and overbought conditions. For now, “buy signals” remain intact, which likely limits the downside over the next week. However, a retest of the 50-dma is certainly not out of the question.

With that said, we are entering into the two weakest trading months of the year. Stocktrader’s Almanac had a good note on why the rally could experience a “pause” over the next two months.

“For the past 33 years from 1988-2020 August and September are the worst two months of the year for DJIA, S&P 500, and NASDAQ. August is the worst for DJIA and S&P 500 and September is worst for NASDAQ.

Despite the persistence and resilience of this bull rally market internals and technicals are showing some signs of fatigue.“

• Advancing issues have barely outpaced decliners in recent weeks.

• New highs have been shrinking while new lows remain high.

• Technical indicators are struggling to break through resistance.

• Relative Strength, Stochastics and MACD are breaking down again.

“The timing of a pause coincides with the weak seasonal patterns mentioned above during the worst months of the year August and September (not to mention Octoberphobia) as well as the 4-Year Presidential Election Cycle.” 

6-Month Advances Are Rare

Given the bullish bias currently remains unfettered, and the Fed is still applying $120 billion a month in liquidity, there is no reason to be overly “bearish” at this juncture. Thus, while we are carrying slightly reduced exposure currently and have increased our “risk hedges” as of late, we remain nearly fully invested.

With our “money flow buy signals” triggered, such suggests there is support for stocks currently. Such means two things over the next week or so: 1) there is not a great deal of downside, and 2) there is not much upside either. Thus, a sideways consolidation and a pickup in volatility are likely. One concern is the “negative divergence” of money flows (bottom panel) against an advancing market. Such corresponds with the technical weakness we will discuss momentarily.

Therefore, given this backdrop, we increased portfolio hedges.

An additional “red flag” is the S&P 500 has had positive returns for 6-straight months. As shown in the 10-year monthly chart below, such streaks are a rarity, and when they do occur, they are usually met by a month, or more, of negative returns.

(It is also worth noting that when the 12-Month RSI is this overbought, larger corrective processes have occurred.)

While prices have advanced sharply, the bullish mantra remains that “earnings” support the increase. While that “rationalization” may seem to have merit, investors are paying more today for the same expected earnings from January of 2020.

The Mirage Of Strong Earnings

The second-quarter earnings season started with a bang, with several companies reporting earnings “knocking the cover off the ball.”

“Overall, 24% of the companies in the S&P 500 have reported earnings to date for the second quarter. Of these companies, 88% have reported actual EPS above the mean EPS estimate. Another 1% have reported actual EPS equal to the mean EPS estimate, and 11% have reported actual EPS below the mean EPS estimate. The percentage of companies reporting EPS above the mean EPS estimate is above the 1-year (83%) average and above the 5-year (75%) average.” – FactSet

It is not surprising that stocks are rallying to new highs again this week with those kinds of numbers.

However, the longer-term problem for investors is that while the earnings were strong, they are only getting back to levels where they were supposed to be at the beginning of 2020. As shown, in January of 2020, the earnings estimate for the end of 2021 was $171/share. Currently, before estimates get downwardly revised, it is presently estimated that earnings will be just $174/share at the end of 2021.

As noted, the problem for investors comes down to valuations. For example, in January of 2020, investors were paying 19x for 2-year forward earnings. Today, they are paying 25x earnings for essentially the same dollar amount of earnings.

While it gets lost in the daily media, the reality is the price of the market is outpacing actual earnings growth. More importantly, when looking back historically, we see that earnings growth isn’t as strong as headlines suggest.

We certainly understand that valuations have very little importance in the short term. For now, all that matters is price momentum. However, as investors, it is essential to remember that valuations have great importance longer-term.

Sales Are Worse

Of course, such doesn’t even come close to premiums paid for each dollar of “actual sales” generated by the underlying companies. As we noted in “Priced For Perfection,” sales will decline this quarter, driving the price-to-sales ratio to historical levels. To wit:

Thought this was interesting.#Earnings are expected to hit $151 #reported this quarter

Q4-2020 = 94.13
Q1-2021 = 128.20
Q2-2021 = 151.17 est.

But here is revenue

Q4-2020 = 367.48
Q1-2021 = 364.05
Q2-2021 = 360.81

Anyone notice an issue relating to #Price/Sales

— Lance Roberts (@LanceRoberts) July 13, 2021

“Investors should not dismiss the above quickly. Revenue is what happens at the top line. Secondly, revenue CAN NOT grow faster than the economy. Such is because revenue comes from consumers, and consumption makes up 70% of the GDP calculation. Earnings, however, are what happens at the bottom line and are subject to accounting gimmicks, wage suppression, buybacks, and other manipulations.“

Currently, the price-to-sales (revenue) ratio is at the highest level ever. As shown, the historical correlation suggests outcomes for investors will not be kind.

Currently, there are more than 70 companies in the S&P 500 trading above 10x sales. That is 14% of the entire index, one of the highest levels ever on record. (How many of these companies do you own?)

A Lesson From 2000

Why is that important? For that answer, let’s revisit what Scott McNealy, then CEO of Sun Microsystems, said in 2000.

“At 10-times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10-straight years in dividends. That assumes I can get that by my shareholders. It also assumes I have zero cost of goods sold, which is very hard for a computer company.

That assumes zero expenses, which is hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that expects you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10-years, I can maintain the current revenue run rate.

Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those underlying assumptions are? You don’t need any transparency. You don’t need any footnotes.

What were you thinking?”

Of course, much of this is “forgotten history,” as many investors today were either a) not alive in 1999 or b) still too young to invest. However, for the newer generation of investors, the lack of “experience” provides no basis for the importance of “valuations” to future outcomes.

That is something only learned through experience.

GDP Eclipses Pre-Pandemic Level

On Thursday, CNBC ran the following headline:

To wit:

“The U.S. economy is now larger than it was before the pandemic, but its growth rate may have peaked this year at a much slower pace than expected.” – Patti Dom, CNBC

Patti is correct; economic growth just peaked.

The problem with the 6.5% annualized rate is it was more than 50% lower than the original estimates of 13.5%. More troubling was the report was even lower than the Atlanta Fed’s much-reduced 7.6% estimate.

What was missed by the mainstream media are two very critical factors.

1. The sharp decline in expected GDP growth rates suggests that “deflationary” pressures are present; and,

2. Given the relationship between economic growth and earnings, current estimates will be revised lower.

Over the next two quarters and fully into 2022, economic growth rates will decline back to 2% or less.

More importantly, the weaker than expected GDP report pushed the Market Capitalization / GDP ratio (inflation-adjusted) to a record high. But, again, given that revenues are a function of consumption (70% of the GDP calculation), earnings growth will weaken by default.

Lastly, while the economy is indeed larger than pre-pandemic, such is of little consolation. When you realize it took $8 Trillion in monetary stimulus (40% of the economy) to create $406 billion in growth from Q1-2020, it is a little underwhelming.

Next year, the fiscal impulse will become a drag.

Such will make it much harder to justify current valuations in a much slower economic growth environment.

Portfolio Update (Party On Garth)

For now, as noted above, the markets remain bullishly biased, and there seems little to derail that mentality currently. The weaker than expected economic growth rate gave the markets reassurance the Fed won’t “taper” anytime soon.

In the meantime, we continue to maintain nearly full equity exposure in our portfolio models. However, the one change we have been quietly making over the last two months is increasing the duration of our bond portfolios. Such is because the recent peak in interest rates is more telling about the economy’s outlook and markets than many would like to admit. (See Why Bonds Aren’t Overvalued.)

While the markets are indeed in “Party On Garth” mode, the current extended, overbought, and bullish conditions provide the necessary backdrop for a short-term correction.

As discussed over the last couple of weeks, August and September tend to be weaker performance months. Therefore, with the bulk of earnings soon behind us, the focus will turn back to the economy and the Fed.

In the near term, the most significant risk for the market comes from the Federal Reserve at the Jackson Hole Summit this summer. If there is a change in their outlook to a more “hawkish” stance or more detailed “taper” discussions, the markets may react negatively.

Another immediate risk could be a failure to pass additional stimulus in Congress or a movement to “lockdowns” due to the virus.

In conclusion, it is simple enough to say “I have no idea” what could derail the markets. Such is why we analyze the risk each week and try to make prudent and informed decisions about portfolio exposures and risk management.

It’s the best we can do for you and our clients.

Have a great weekend.

No more heat wave for the Northeast, at least through the first week of August. 

All the weather data so far point to a very cool start to August compared with seasonal averages. 

The six-to-10 day temperature forecast highlights a cool first week of August for the Northeast. 

The colder weather may linger through the second week of August. 

Temperature anomaly forecast for July 31 through August 7 shows more than half the country may experience temperatures well below their norms from Texas to the Midwest to the Northeast. 

The colder weather may coincide with a dry spell for the Corn Belt to Mid Atlantic to Northeast. Probabilities for precipitation increase for the Pacific Northwest, in desperate need of rain amid wildfires and drought. 

This is a perfect time to open up the windows at night to naturally cool down the house amid an entire summer of scorching heat that has left tens of millions of Americans will high power bills. 

Authored by Paul Joseph Watson via Summit News,

Lockdown advocates who have repeatedly cited rising infection rates as a reason to maintain restrictions are now saying that those same figures are “fishy,” “suspicious,” and unreliable after they started to drop.

Who are the ‘conspiracy theorists’ now?

Reported COVID cases in the UK have dropped by 22% since Thursday last week and cases are falling in every English local authority.

Up until Wednesday, official day to day statistics showed that cases had dropped for seven days in a row, despite restrictions largely being lifted on July 19th.

The fact that the Euro football championships, ‘freedom day’ and the delta variant haven’t combined to create an explosion of new COVID cases seems to have disappointed lockdown advocates like Professor Tim Spector.

According to Spector, who previously called for mask mandates to remain indefinitely, the “sudden drop” in people testing positive for the virus in the government’s data is “very suspicious”.

“It’s dropped something like 30% in two days, which is pretty much unheard of in pandemics, and remember this is happening without restrictions, without lockdowns, without some sudden event,” said Spector.

“To me, it looks a bit fishy. It looks as if there’s some other explanation for this other than suddenly the virus has given up,” he added.

OK, calm down Mr. tin foil hat.

Spector’s rhetoric is particularly funny given that the media has previously demonized anyone who questions official government statistics on COVID infection rates and death tolls as dangerous conspiracy theorists.

Now that the numbers appear to be disproving the argument for lockdown, suddenly those numbers are “suspicious” and unreliable.

As we previously highlighted, Professor Neil Ferguson, the epidemiologist who predicted there would be as many as 200,000 COVID cases a day by this point, was also proven spectacularly wrong yet again.

This also speaks to the fact that lockdown advocates who have built up significant acclaim and media exposure over the last 16 months are seemingly upset that the pandemic might be coming to an end.

Irate Twitter mobs who have repeatedly demanded harsher lockdowns also seem to be genuinely upset when COVID infection rates and death tolls begin to drop.

While all the time grandstanding as “kind” and “compassionate” as they screech at you for “killing granny.”

*  *  *

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Some things simply sound too good to be true, but when money is involved, our judgement can become clouded.

This is often the case with Ponzi schemes, a type of financial fraud that lures investors by promising abnormally high returns. Money brought in by new members is used to pay the scheme’s founders, as well as its earlier investors.

The scheme is named after Charles Ponzi, an Italian who became infamous in the 1920s for claiming he could double his clients’ money within 90 days. Since then, numerous Ponzi schemes have been orchestrated around the globe.

To help you learn more about these sophisticated crimes, Visual Capitalist’s Marcus Lu examines some of the biggest Ponzi schemes in modern history.

 

In many cases, these schemes thrived by taking advantage of the unsuspecting public who often lacked any knowledge of investing. Caritas, for example, was a Ponzi scheme based in Romania that marketed itself as a “self-help game” for the poor.

The scheme was initially very successful, tricking millions of people into making deposits by offering the chance to earn an 800% return after three months. This was not sustainable, and Caritas was eventually unable to distribute further winnings.

Caritas operated for only two years, but its “success” was undeniable. In 1993, it was estimated that a third of the country’s money was circulating through the scheme.

Ponzi Schemes in the 21st Century

The American public has fallen victim to numerous multi-billion dollar Ponzi schemes since the beginning of the 21st century.

Many of these schemes have made major headlines, but much less is said about the thousands of everyday Americans that were left in financial ruin.

For victims of the Madoff Investment Scandal, receiving any form of compensation has been a drawn-out process. In 2018, 10 years after the scheme was uncovered, a court-appointed trustee managed to recover $13 billion by liquidating Madoff’s firm and personal assets.

As NPR reported, investors may recover up to 60 to 70 percent of their initial investment only. For victims who had to delay retirement or drastically alter their lifestyles, this compensation likely provides little solace.

Do the Crime, Pay the Time

Running a Ponzi scheme is likely to land you in jail for a long time, at least in the U.S.

In 2009, for example, 71-year-old Bernie Madoff pled guilty to 11 federal felonies and was sentenced to 150 years in prison. That’s 135 years longer than the average U.S. murder conviction. He died in prison on April 14, 2021.

Outside of the U.S., it’s a much different story. Weaker regulation and enforcement, particularly in developing countries, means a number of schemes are ongoing today.

Sergei Mavrodi, known for running the Russian Ponzi scheme MMM, started a new organization shortly after being released from prison in 2011. Now known as MMM Global, the self-described “social financial network” has established a base in several Southeast Asian and African countries.