Month: February 2024

Authored by Jonathan Turley,

We have been writing about the alarming record of the Biden dogs attacking staff and Secret Service agents through the years. At first, the story was a humorous distraction as some of us wondered if the First Family had a vicious dog.

It then became more alarming as each of the dogs were found to be attacking staff and had to be eventually removed. Even more worrisome was the response of the White House and President Joe Biden, who dismissed a Secret Service agent’s account and brushed off the incidents. Now, a report indicates that Commander is responsible for at least 24 attacks. The record shows not only a lack of concern by the Bidens for staff, but a bizarre litany of vicious German Shepherds in their care.

We began our discussion of these incidents with Major, who continued to attack staff until the press finally reported on the complaints from staff. Only when it became a public embarrassment did the Bidens send Major to Delaware. Major was adopted in November 2018 from an animal shelter.

Then, after the coverage died down, the Bidens simply brought Major back to the chagrin of the Secret Service.

He then proceeded to continue to bite agents and staff.

It was then discovered that their other dog, Champ, was also chomping on staff and agents.

Again, the White House dismissed the concerns.

First lady Jill Biden’s press secretary Michael LaRosa told CNN:

“Yes, Major nipped someone on a walk. Out of an abundance of caution, the individual was seen by WHMU and then returned to work.”

The difference between “nipped” and “bitten” is that you are bitten by other people’s dogs. Your dog however only nips, which is somewhere on the spectrum between a lick and a complete devouring.

Then a book came out that detailed these attacks and the President himself seemed to attack an agent.

The book, “The Fight of His Life,” by author Chris Whipple details Biden’s continued mistrust of the Secret Service and his alleged avoidance of saying anything in front of agents. Biden has long had tense relations with the Secret Service, particularly after female agents complained about his exposing himself to them by insisting on swimming in the nude.

The book claims that Biden has his own “deep state” conspiracy theories. Biden reportedly views the Secret Service as essentially the enemy within, suggesting that it is populated by “MAGA sympathizers” due to the fact that the service “is full of white ex-cops from the South who tend to be deeply conservative.”

However, this is a major escalation in that reportedly strained relationship. In one eight-day period, agents were bitten every day. Indeed, outside of the White House, the Biden dogs would qualify for strict liability under the common law as displaying a vicious disposition.

After prior incidents, White House press secretary Jen Psaki characterized the injury as “minor” and insisted that Major was just “getting acclimated and accustomed to his surroundings and new people.”  He was then sent away to Delaware with Champ. It was the equivalent of a politician going into “treatment” at the height of a scandal. Major was later returned to the White House but proceeded to “acclimate” himself on the limbs of Secret Service agents.

The White House failed to disclose the incidents and only partially confirmed past attacks when pressed by the media.

Joe Biden was then quoted as saying that he does not trust the Secret Service and believes that one agent is outright lying about one attack by Major. The President is quoted as saying “Look, the Secret Service are never up here. It didn’t happen.”

The incident was reported by the agent and photos were taken to document that attack. The President’s denial of the location ignored the confirmed attack itself. Other agents complained about the disregard of the agents by the Bidens in the repeated attacks, including one agent who reportedly insisted that the president personally pay to repair a ripped coat after one attack on March 6, 2021.

Then Commander was brought in to replace Major. Commander then started to bite people.

Again, neither the Bidens nor the White House seemed particularly concerned for the staff and brushed off questions.

It now turns out that the attacks increased but the press were not informed . . . again.

According to new internal USSS documents obtained by CNN, that does not even include additional incidents that were previously reported involving executive residence staff and other White House workers.

One June 2023 email even says that the Secret Service has had to change security procedures to deal with the vicious dog:

“The recent dog bites have challenged us to adjust our operational tactics when Commander is present – please give lots of room,” an unnamed assistant special agent in charge of USSS’ Presidential Protective Division wrote to their team in a June 2023 email, warning that agents “must be creative to ensure our own personal safety.”

The material obtained by CNN included a picture that shows how one shirt of an agent was torn up by the dog in one attack.

One Secret Service technician wrote in October 2022, that they were “worried about the family pets behavior escalating and that … something worse was going to happen to others.”

I have taught torts for three decades, including animal liability. In that time, I have never come across a case with such a long history of dog attacks from multiple animals in one family. There is no question that the Bidens would be strictly liable in these attacks, but have been allowed to escape such liability due to the fact that this is the official residence.

Under the common law, the Bidens could claim that Major and Commander were entitled to “one free bite.” They are well beyond that threshold.

The “one free bite rule” is a commonly misunderstood torts doctrine — suggesting that you are not subject to strict liability until after the first time your dog bites someone. In fact, you are subject to strict liability whenever you know or have reason to know of the vicious propensity of your animal. That can be satisfied by conduct such as frequent snapping or aggressive behavior.

However, even with Major, the Bidens failed to protect agents and others. Now they have shown the same failure with Commander.

Indeed, a family with this history of dog attacks (with successive pets) would face a highly skeptical, if not hostile, court in a tort action.

The Biden case is more analogous to  the infamous case from San Francisco involving lawyers and dog owners Marjorie Knoller and Robert Noel. They were found both criminally and civilly liable after their two Presa Canario dogs killed apartment neighbor Diane Whipple. Various neighbors complained about the dogs. The dogs had not bitten anyone but were known to be aggressive. That was sufficient.

In one account involving Commander, an agent had to defend himself from the dog with a chair. That was after prior biting incidents. As many as ten people were either bitten or threatened by the dog.

In other words, the Bidens would likely be viewed as knowing the vicious propensity of Commander and subject to strict liability. They showed a pattern of knowledge and a lack of precautions not just with regard to this dog but all of their dogs.

For Secret Service agents, one could understand if they felt that they were high-priced chew toys for the Biden pets.

The record belies the claims of the First Family that they are heartbroken or deeply concerned for staff. They have used these agents like a captive staff who cannot readily complain or sue over their failure to control their dogs. It also raises questions of whether this family should have dogs. If there was just one dog, it could be discounted as a problem pet. The Bidens how have multiple dogs which developed the same vicious propensity.

If these attacks were litigated, I have little doubt that the Bidens would be held liable if they were an average family. Indeed, I would expect a court to seriously consider an order barring the possession of dogs in the future or requiring training classes not only for the dogs but for the Bidens.

Oil pries rallied for the second straight day near the highs of their range since early November on a combination of further tensions in the Red Sea, signs of tightness in physical markets, and Reuters reports that OPEC+ will consider extending voluntary oil output cuts into the second quarter to provide additional support for the market.

Bulls will be hoping to see continued trend lower in crude builds and ongoing product draws in tonight’s API data…

API

• Crude +8.428mm (+1.5mm exp)

• Cushing +1.825mm

• Gasoline -3.27mm(-1.3mm exp)

• Distillates -523k (-2.0mm exp)

Big surprise crude build was not what the doctor ordered, but another bigger than expected gasoline draw helps offset some of the pain…

Source: Bloomberg

WTI was hovering around $78.65 ahead of the API print and dropped on the print…

So-called prompt spreads – the premium that the most immediate crude futures contract commands over the next one – for Brent and West Texas Intermediate recently rallied to the widest backwardation in about four months, excluding contract expiry anomalies.

Spreads are “on fire, pointing to tight physical markets,” said Daniel Ghali, a commodity strategist at TD Securities.

WTI prompt spread…

“With Europe taking fewer Middle East barrels due to the extra shipping costs to avoid the Red Sea, there is a preference for short haul and that pool of alternatives is thinner,” said Christopher Haines, an analyst at Energy Aspects.

Brent prompt spread..

Other gauges such as the so-called physical market swaps and the WTI cash roll have also strengthened.

Authored by Steve Watson via Modernity.news,

Louisiana Republican Sen. John Kennedy slammed Joe Biden’s economic policies Monday, declaring that inflation under Biden is a “cancer on the American Dream,” and saying Biden is about as popular as chlamydia.

Appearing on Hannity, Kennedy and the Fox News host noted how every problem under Biden is being blamed on something or someone else by his Administration.

“Blame big oil, blame big business. The border isn’t his fault, nothing’s his fault,” Hannity said, adding “Everything is Trump’s fault. The border’s safe and secure, but now it’s the Republicans’ fault…Will they get away with this shifting of blame?”

Kennedy responded, “I did not think President Obama was a very good president but compared to present Biden, President Obama just shoplifted.”

“President Biden stole the whole bank. President Biden’s inflation not only hurts people, but it hurts business’,” Kennedy continued, adding “Shrinkflation exists when a business needs to raise its prices because costs have gone up as a result of inflation, but it’s scared to raise its prices because it’s scared people won’t buy its product. So it saves money by making a smaller product.”

“Unless you were homeschooled by a day drinker, you can see that shrinkflation and inflation are just different sides of the same coin,” Kennedy further posited, adding “Any economist, any reputable economist who didn’t get his degree from Costco will tell you that President Biden’s economic policies caused both inflation and shrinkflation.”

“So much of the attention right now is on present Biden’s age,” Kennedy continued, adding “It’s true that it takes longer than a trip to Jupiter for him to walk across the stage. But we can’t lose sight of the fact that his economic policies have been, almost every time, reliably and dependably wrong.”

“His inflation is a cancer on the American dream. And the American people have figured it out and that’s why if you believe the polls, the president is polling right up there with chlamydia,” Kennedy said, slamming Biden.

Watch:

As we highlighted a fortnight ago, Biden had the gall to post a 30 second Super Bowl PSA complaining about the size of ice cream packaging due to shrinkflation, as if it’s someone else’s fault:

It’s your fault. You have been the President for over 3 years. https://t.co/tcrh4bXJgC

— m o d e r n i t y (@ModernityNews) February 11, 2024

Don’t let President Biden gaslight you. ‘Shrinkflation’ is not the problem, Bidenomics is.

Businesses are trying to stay competitive in the market by limiting how much they raise prices to offset the cost increases they’ve encountered thanks to Biden’s economic policy decisions.…

— Heritage Foundation (@Heritage) February 11, 2024

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

For the second day in a row, the biggest shorts, crypto, and oil prices ripped while the rest of the market wistfully drifted unphased by more dismal data.

Durable-goods – ugly (blame Boeing); Home-prices higher-er (blame Powell’s pivot for unaffordability); consumer sentiment shitshow (and oddly large downward revisions)

Source: Bloomberg

‘Most Shorted’ stocks were squeezed bigly once again… up 9% from Friday’s close…

Source: Bloomberg

Bitcoin ripped once again… topping $57,000 for the first time since Nov 2021…

Source: Bloomberg

And oil prices jumped once again… to their highest close since early November…

Source: Bloomberg

Small Caps were the biggest beneficiary of the short squeeze… now up 2% in the last two days while The Dow lags. S&P and Nasdaq managed gains today but are marginally lower and marginally higher on the week so far…

Bitcoin ETF inflows have been soaring…

Source: Bloomberg

And that’s started to drive Ethereum higher too (to its its highest since April 2022)…

Source: Bloomberg

The dollar continued its slow drift lower, back to pre-CPI lows…

Source: Bloomberg

Gold was steady again today at pre-CPI highs…

Source: Bloomberg

Treasuries were mixed today with the short-end outperforming (2Y unch, 30Y +4bps)…

Source: Bloomberg

And that sent the yield curve (2s30s) bear-steepening – after some serious flattening recently…

Source: Bloomberg

Finally, crypto’s total market cap is back above $2 trillion for the first time in two years…

Source: Bloomberg

No wonder ‘unknown’ officials have started to spread rumors that they fear bitcoin-mining could put the grid in jeopardy (now that the “only terrorists and money-launderers use crypto” narrative has exploded)! How f**king pathetic and predictable are these people!!!

We look forward to hearing how crypto is in a bubble… but NVDA isn’t…

Source: Bloomberg

It’s different, of course.

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

Florida and Texas should be allowed to regulate how social media platforms moderate content, lawyers for the two states told the Supreme Court on Feb. 26.

During oral arguments, the justices seemed to be grasping for a new rule they could use to apply free speech principles to online discussions.

But there are “a bunch of land mines,” according to Justice Amy Coney Barrett.

“And if that’s a land mine, if what we say about this is that this is speech that’s entitled to First Amendment protection, I do think then that has Section 230 implications for another case, and so it’s always tricky to write an opinion when you know there might be land mines that would affect things later,” she said.

This is the first time that the nation’s highest court has reviewed state laws that deem social media companies “common carriers,” a status that might allow states to impose utility-style regulations on platforms and forbid them from discriminating against users based on their political viewpoints.

Justice Clarence Thomas previously advanced the common carrier theory. He has also criticized Section 230 of the Communications Decency Act of 1996.

Section 230 reads, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

The provision generally protects internet service providers and companies from being held liable for what users say on their platforms. Supporters say the provision, sometimes called “the 26 words that created the internet,” has fostered a climate online in which free speech has flourished.

Chief Justice John Roberts suggested during the hearing that governments were ill-suited to regulate rapidly changing technologies.

It would be an “inflection point” for the government to deem the companies common carriers.

“Social media platforms, the internet, all of that stuff is an incredibly dynamic market,” the chief justice said. “The government … maybe not so much.”

Decisions in the two cases are expected by June 2024 as this year’s presidential and congressional election seasons heat up.

Competing First Amendment Rights

Observers and activists on the left and right are closely watching the cases.

At stake is the right of individual Americans to freely express themselves online and the right of social media platforms to make editorial decisions about the content they host. Both rights are protected by the First Amendment to the U.S. Constitution.

Republicans and conservatives were outraged when platforms acted in concert to ban President Donald Trump in January 2021, blocked a potentially election-altering New York Post article about Hunter Biden’s laptop in 2020, and silenced dissenting opinions about the origins of the COVID-19 virus, the treatments for the disease it causes, and the vaccines. They say that social media platforms have become the new town square and that users’ speech therefore enjoys constitutional protection.

Democrats and liberals, on the other hand, claim that the platforms don’t do enough to weed out so-called hate speech and alleged misinformation, which they consider to be pressing social problems.

The challenge to the Florida statute is Moody v. NetChoice LLC; the challenge to the Texas law is NetChoice LLC v. Paxton. On Feb. 26, the justices heard nearly four hours of oral arguments.

NetChoice, a coalition of trade associations representing social media companies and e-commerce businesses, challenged a Florida law that makes it a violation for a social media platform to deplatform a political candidate, punishable by a $250,000 per day fine.

The law also establishes restrictions on deplatforming other users and requires consistent application of moderation rules.

The U.S. Court of Appeals for the 11th Circuit halted part of the law and Florida appealed to the Supreme Court.

When signing the law in 2021, Florida Gov. Ron DeSantis, a Republican, said that it ensures that Floridians “are guaranteed protection against the Silicon Valley elites.”

“If Big Tech censors enforce rules inconsistently, to discriminate in favor of the dominant Silicon Valley ideology, they will now be held accountable,” he said at the time.

President Donald Trump filed a brief with the Supreme Court in October 2022 as a private citizen in support of Florida.

“Recent experience has fostered a widespread and growing concern that behemoth social media platforms are using their power to suppress political opposition,” his brief reads.

Ohio, Arizona, Missouri, Texas, and 12 other states argued in a court brief that the internet is the modern-day public square and that social media platforms engaging in censorship “undermine the free exchange of ideas that free speech protections exist to facilitate.”

The 11th Circuit struck down part of the Florida statute, finding that “with minor exceptions, the government can’t tell a private person or entity what to say or how to say it.”

Even the “biggest” platforms are “private actors whose rights the First Amendment protects … [and] their so-called content-moderation decisions constitute protected exercises of editorial judgment.”

The U.S. Court of Appeals for the Fifth Circuit took the opposite tack, finding a Texas anti-deplatforming law constitutional and rejecting the “idea that corporations have a freewheeling First Amendment right to censor what people say.”

Both state laws require platforms to explain their content moderation decisions, a mandate the platforms consider to be overly burdensome.

Oral Arguments

Florida Solicitor General Henry Whitaker told the justices during oral arguments that not upholding his state’s law would hurt the ability of online users to discuss issues of public importance.

“Internet platforms today control the way millions of Americans communicate with each other and with the world. The platforms achieved that success by marketing themselves as neutral forums for free speech. Now that they host the communications of billions of users, they sing a very different tune,” he said, arguing that they have a broad First Amendment right “to censor anything they host on their sites, even when doing so contradicts their own representations to consumers.”

“But the design of the First Amendment is to prevent the suppression of speech, not to enable it. That is why the telephone company and the delivery service have no First Amendment right to use their services as a choke point to silence those they disfavor.

“The platforms do not have a First Amendment right to apply their censorship policies in an inconsistent manner and to censor and deplatform certain users.”

Justice Brett Kavanaugh said Mr. Whitaker left out how the First Amendment applies only to government action.

“You left out what I understand to be three key words … ‘By the government,’” the justice said.

NetChoice attorney Paul Clement said Florida’s law is flatly unconstitutional.

“[The state’s] effort to level the playing field and to fight the perceived bias of big tech violates the First Amendment several times over. It interferes with editorial discretion. It compels speech. It discriminates on the basis of content, speaker, and … viewpoint,” Mr. Clement said.

“And it does all this in the name of promoting free speech but loses sight of the first principle of the First Amendment, which is it only applies to state action.”

Weighing in on behalf of the Biden administration, U.S. Solicitor General Elizabeth Prelogar said the social media platforms may be regulated by governments, but that they “have to stay within the bounds of the First Amendment.”

“And these state laws which restrict the speech of the platforms to enhance the relative voice of certain users don’t withstand constitutional scrutiny,” she said.

Content Moderation as ‘Censorship?’

Justice Samuel Alito suggested that content moderation is simply a convenient “euphemism” for “censorship.”

He pushed back against Mr. Clement’s contention that the Texas law’s transparency mandates were too onerous for the platforms, saying social media platforms outside the United States have managed to comply with such rules.

Justice Thomas asked Mr. Clement if platform moderation is considered speech when an algorithm is taking action on a post.

Mr. Clement replied in the negative, saying algorithms are designed by people.

But what happens when there is a “deep learning algorithm” that teaches itself, Justice Thomas replied.

Justice Barrett questioned whether the platforms’ moderation policies could be compared to the editorial discretion exercised by newspapers.

She offered a hypothetical example in which TikTok was using an algorithm that favored pro-Palestinian posts over pro-Israel posts.

“If you have an algorithm do it, is it not speech?” the justice asked.

Justice Elena Kagan said platforms allow most posts but still draw the line at some kind of misinformation, bullying, or so-called hate speech.

“Why isn’t that a classic First Amendment violation?” Justice Kagan said.

Justices Alito and Sonia Sotomayor said they were leaning toward vacating the injunction against the Florida law and sending the case back to the 11th Circuit.

Justice Sotomayor noted that she may vote to affirm the injunction while also remanding the case to the circuit court.

She also suggested that the Florida statute was too broadly written and could cover online marketplaces such as Etsy.

“This is so, so broad. It’s covering almost everything,” the justice said. “The one thing I know about the internet is that its variety is infinite.”

Justice Ketanji Brown Jackson questioned why the prohibition in the Florida statute against deplatforming political candidates didn’t qualify as “enforcing anti-discrimination principles?”

Mr. Clement replied that “it doesn’t take much to register in Florida.” The law allows minor candidates to “post anything they want” because they know they can “cause us to fundamentally change our editorial policies.”

Texas Solicitor General Aaron Nielson said the social media platforms cannot be left to their own devices because they favor some speech over other speech.

“This is not the first time that new technology has been used to stifle speech. Telegraphs also discriminated based on viewpoint, prompting … a national scandal,” he said.

“Yet, under the platforms’ theory, Western Union was just making editorial choices not to transmit pro-union views. Today, millions of Americans don’t visit friends or family or even go to work … [in] person. Everybody is online. The modern public square.

“Yet, if platforms that passively host the speech of billions of people are themselves the speakers and can discriminate, there will be no public square to speak of.”

The US Federal Aviation Administration has completed its investigation into the second flight of SpaceX’s Starship rocket, which ended in an explosion in late 2023. Following the investigation, the space exploration company and the FAA agreed on new procedures before the next launch. 

SpaceX pinpointed the root causes of the explosion, which were then acknowledged and accepted by the FAA. These corrective measures include hardware redesigns, updated control system modeling, re-evaluation of engine analyses, updated engine control algorithms, operational changes, flammability analysis updates, and installation of additional fire protection. 

“Prior to the next launch, SpaceX must implement all corrective actions and receive a license modification from the FAA that addresses all safety, environmental and other applicable regulatory requirements,” regulators wrote in an emailed statement. 

“The FAA is evaluating SpaceX’s license modification request and expects SpaceX to submit additional required information before a final determination can be made,” they added.

To recap on the Starship mishap during the mid-November launch that prompted an FAA investigation, Houston Chronicle explains here: 

During the launch on Nov. 18 that sparked the review, all 33 of the Super Heavy rocket engines ignited and burned for their full duration. Then the rocket separated from the Starship spacecraft using a new hot-stage technique that fired Starship’s engines while it was still attached to the rocket.

Super Heavy was supposed to land in the Gulf of Mexico. It ignited 13 of its 33 engines to return for the landing, but several engines began shutting down and one engine “failed energetically,” SpaceX said. The booster ultimately blew up more than three and a half minutes into the flight when the rocket was about 55 miles above the Gulf of Mexico, SpaceX said in an update released Monday.

Meanwhile, the Starship spacecraft successfully lit its six engines and began traveling toward its intended landing site off the coast of Hawaii. It began venting liquid oxygen propellant as planned, but a leak developed that led to a fire. Communications were lost between the spacecraft’s flight computers. 

The onboard flight termination system blew up the spacecraft when it was roughly 93 miles above the Earth, according to SpaceX.

Before the next launch, SpaceX must implement corrective actions and receive a license modification from the FAA. 

“More Starships are ready to fly, putting flight hardware in a flight environment to learn as quickly as possible,” the company said. 

Some X users speculate the next Starship launch could happen as soon as next month. As noted above, SpaceX would have to receive the launch license first. 

NEWS: SpaceX mishap investigation has been closed by the FAA today. This means Starship 3 is most likely happening in March! pic.twitter.com/EOl6Lp87GE

— Teslaconomics (@Teslaconomics) February 27, 2024

Earlier this month, Elon Musk posted an image of the Starship stack at SpaceX facilities in Boca Chica, Texas. 

Is Jeff Bezos still in the rocket game? There is very little news coming from Blue Origin.

SpotGamma invites readers to please join them tonight at 8pm EST for a free webinar on the VIX and the coming March option expiration, to learn how the fear gauge actually works – click here for the Free VIX Webinar

The S&P500 looks like it is entering into a digestion phase into the key March OPEX, which could result in the VIX breaking back down to year-to-date lows. 

Into Thursday’s (2/22) record SPX close near 5,100, 1-month SPX skew showed that upside strikes (i.e. calls) had relatively higher IV’s than at any time vs last several months, as shown by the skew plot (below, green line) being above the shaded cone (red box). 

However, the IV’s for upside strikes did not increase into Thursday’s 2% SPX rally, which is shown by the current skew (green line) staying flat to Tuesday’s close (gray line). This signals that S&P call buyers didn’t chase strikes >5,100 into Thursday’s record move.

Clearly Wednesday nights NVDA’s earnings bolstered concerns about right tail risk, and trader’s feared missing upside. To this point the magnitude of yesterday’s move held up ATM vols (i.e stock up/vol up & the VIX didn’t really “crush”), but the left tail (OTM puts) – we’ll that is getting crushed.

You can see this in “indexified” measures like VVIX, or SDEX, shown below. The SDEX measures the relative IV of a put 1 standard deviation move lower in the SPY, which is now back near all-time lows.

We think that SPX call skews are now likely to flatten, with the VIX likely to start sinking as the pace of higher S&P500 prices slow down. 

To this point, both Monday & Tuesday’s 0DTE ATM SPX straddle was just $20, or a scant 39bps! We can’t recall having seen the 0DTE straddle priced at such tight levels in the recent past, and it suggests a broad level of complacency and trust in the current market paradigm. 

In regards to a 39 bps straddle, we refer to this as “priced for perfection”, as there is nearly no edge for a straddle seller. Any slight market movement, in either direction, can force the seller offsides and cause a cover trade that exacerbates local, jumpy volatility. Jumpy volatility works both ways, and so if traders were still worried about upside SPX performance its not reflecting in short dated straddle prices.

Despite these low 0DTE prices, and to the concept of “stocks up, vol up”, the VIX has only recently pushed back below 14, after holding higher into all time SPX prices.

This relatively higher VIX has been supported by 13.8% 1-month SPX realized vol (green) and 15% 5-day SPX realized vol (red) which are up near highs last seen in November.

Recall that over the last month the SPX is ~4.5% higher, and so volatility is increasing as a result of higher SPX prices. 

What is now interesting about this dynamic is that a VIX of ~14 implies ~88bps daily SPX moves, which is a stark contrast to the 39bps priced into the 0DTE SPX straddle.

This divide between the SPX implied move (88bps) from the VIX and the 0DTE pricing “perfection” (39bps) is likely the result of Thursday AM’s PCE reading, which is the big data point this week. The 0DTE crowd does not have to worry about that print for 3 more sessions, whereas the VIX is pricing in some higher volatility. Assuming the PCE is not some type of hot tail print, we think the VIX and SPX volatility will now likely start to move lower into March OPEX (3/15).

We can get a sense of volatility shifts via the SPX term structure, which shows relatively higher short term IV’s due too both Thursdays PCE print, and Friday’s ISM print (red box). However, following this print, at-the-money SPX IV’s sink to ~9.5% (red arrow).

Assuming that PCE and ISM do not produce tail prints, we think that options positioning will likely build around the 5,100 level, which will constrict realized volatility. This will in turn serve to drag down forward volatility measures, like the VIX.

Accordingly, we highlight the 3/15 OPEX time frame as a potential place for volatility to tick back up due to large options positions expiring and rolling across both the index/equity landscape, but also the VIX. 

The plot below highlights the current size of call delta notional (orange) and put delta (blue) for the S&P500 – and as you can see the positions are quite substantial.

To hear more of SpotGamma’s thoughts on upcoming volatility – join us tonight at 8pm EST for a webinar on the VIX – Free VIX Webinar

Update(1440ET): The Houthi military spokesman has explicitly denied any intention to knock out undersea regional internet cables in a fresh Tuesday statement, however, he reiterated that the Iran-linked group’s top goal is to block commercial shipping and supplies to Israel. 

The full statement is as follows, cited in Al Mayadeen news: “We are keen to spare all cables and their services from any risks and to provide the necessary facilities for their maintenance. The decision to prevent the passage of Israeli ships does not include ships belonging to international companies licensed to carry out marine cable work.”

Over the past two days there were widespread reports that up to four undersea telecoms cables in the Red Sea area between the Saudi city of Jeddah and the state of Djibouti were damaged. As we reported below, the operator Seacom reported connectivity problems, following reports which originated in Israeli media sources. Sky News Arabia had also picked up on the reports Monday.

For months there has been speculation that Red Sea waters, which has been scene of daily Houthi attacks on international shipping as well as Western coalition warships, could be subject to sabotage of global fiber optics lines. However, such a sabotage campaign would be difficult to carry out, given it would likely require submarine or deep water equipment and capabilities, which the Houthis likely lack.

Israeli media such as the Jerusalem Post – which was among the first to report the alleged sabotage of several cables – could also be anticipating such an Iran-backed covert campaign. The reports quickly spread to US media, including in the New York Post.

* * * 

There are new reports saying Yemen’s Houthis have knocked out several underwater telecommunications cables linking Europe and Asia, however, some of the accounts of the extent of damage remain conflicting.

Multiple Israeli publications are reporting Monday that four underwater communications cables between Saudi Arabia and Djibouti have been damaged in recent months – the result of Houthi sabotage. The reporting appears to have originated in Israel’s financial daily outlet Globes.

But one industry publication cautions, “One cable operator has confirmed damage to a cable in the region, but said it didn’t know the cause yet.” Reportedly only the Seacom operator has issued confirmation that it has had cable issues at Djibouti.

According to the Israeli media report:

Three months after the Houthis began attacking merchant ships, the Yemenite rebels have carried out another one of their threats. “Globes” has learned that four submarine communication cables have been damaged in the Red Sea between Jeddah in Saudi Arabia and Djibouti in East Africa.

According to the reports, these are cables from the companies AAE-1, Seacom, EIG and TGN. This is causing serious disruption of Internet communications between Europe and Asia, with the main damage being felt in the Gulf countries and India.

Other impacted cables are operated by the companies Tata, Ooredoo, Bharti Airtel, and Telecom Egypt, but these did not issue immediate comment or confirmation as to the reported damage or outages.

But the Seacom outage is now being confirmed by NetBlocks…

⚠️ Confirmed: Metrics show a disruption to network connectivity at the Djibouti Data Center which connects the country’s landing stations; the incident comes as Israeli media report four submarine cables across the Red Sea including SEACOM have been targeted by Houthi rebels ✂️ pic.twitter.com/tjlBLAgYd4

— NetBlocks (@netblocks) February 26, 2024

Israel’s Globes says repairs could take up to eight weeks, but the waters in the region remain high risk due to what are now daily Houthi attacks on Red Sea shipping. The Houthis have lately made veiled threats they could take out the underwater fiber optic cables.

“The repair of such a large number of underwater cables may take at least eight weeks according to estimates and involve exposure to risk from the Houthi terror organization,” the report says. “The telecommunications companies will be forced to look for companies that will agree to carry out the repair work and probably pay them a high risk premium.”

Analyst Alberto Rizzi has explained that “at low depths, trained divers/ship anchors are enough to damage them” and that “Bab-el-Mandeb/Aden is a chokepoint where damage can impact multiple cables at once.”

The fact that Google’s Gemini AI is a complete woke mess comes as no surprise to anyone who’s been paying attention.

Between Google’s internal culture, and the fact that large language models (LLMs) are largely a reflection of their creators, Gemini is was the predictable digital poster-child for racist, anti-white, anti-conservative, historical revisionist culture – as opposed to the neutral purveyors of information they claim to be.

Mask-off, as they say.

In fact, we couldn’t sum it up better than Mario Juric, director of the DiRAC Institute at the University of Washington, Seattle.

In a lengthy post on X, Juric says that despite known “many good individuals working there,” he’s “done with @Google.”

I’m done with @Google. I know many good individuals working there, but as a company they’ve irrevocably lost my trust. I’m “moving out”. Here’s why:

I’ve been reading Google’s Gemini damage control posts. I think they’re simply not telling the truth. For one, their text-only… https://t.co/dMbKLf6fV1

— Mario Juric (@mjuric) February 26, 2024

The whole thing is worth reading below (emphasis ours):

I’ve been reading Google’s Gemini damage control posts. I think they’re simply not telling the truth. For one, their text-only product has the same (if not worse) issues. And second, if you know a bit about how these models are built, you know you don’t get these “incorrect” answers through one-off innocent mistakes. Gemini’s outputs reflect the many, many, FTE-years of labeling efforts, training, fine-tuning, prompt design, QA/verification — all iteratively guided by the team who built it. You can also be certain that before releasing it, many people have tried the product internally, that many demos were given to senior PMs and VPs, that they all thought it was fine, and that they all ultimately signed off on the release. With that prior, the balance of probabilities is strongly against the outputs being an innocent bug — as @googlepubpolicy is now trying to spin it: Gemini is a product that functions exactly as designed, and an accurate reflection of the values people who built it.

Those values appear to include a desire to reshape the world in a specific way that is so strong that it allowed the people involved to rationalize to themselves that it’s not just acceptable but desirable to train their AI to prioritize ideology ahead of giving user the facts. To revise history, to obfuscate the present, and to outright hide information that doesn’t align with the company’s (staff’s) impression of what is “good”. I don’t care if some of that ideology may or may not align with your or my thinking about what would make the world a better place: for anyone with a shred of awareness of human history it should be clear how unbelievably irresponsible it is to build a system that aims to become an authoritative compendium of human knowledge (remember Google’s mission statement?), but which actually prioritizes ideology over facts. History is littered with many who have tried this sort of moral flexibility “for the greater good”; rather than helping, they typically resulted in decades of setbacks (and tens of millions of victims).

Setting social irresponsibility aside, in a purely business sense, it is beyond stupid to build a product which will explicitly put your company’s social agenda before the customer’s needs. Think about it: G’s Search — for all its issues — has been perceived as a good tool, because it focused on providing accurate and useful information. Its mission was aligned with the users’ goals (“get me to the correct answer for the stuff I need, and fast!”). That’s why we all use(d) it. I always assumed Google’s AI efforts would follow the pattern, which would transfer over the user base & lock in another 1-2 decade of dominance.

But they’ve done the opposite. After Gemini, rather than as a user-centric company, Google will be perceived as an activist organization first — ready to lie to the user to advance their (staff’s) social agenda. That’s huge. Would you hire a personal assistant who openly has an unaligned (and secret — they hide the system prompts) agenda, who you fundamentally can’t trust? Who strongly believes they know better than you? Who you suspect will covertly lie to you (directly or through omission) when your interests diverge? Forget the cookies, ads, privacy issues, or YouTube content moderation; Google just made 50%+ of the population run through this scenario and question the trustworthiness of the core business and the people running it. And not at the typical financial (“they’re fleecing me!”) level, but ideological level (“they hate people like me!”). That’ll be hard to reset, IMHO.

What about the future? Take a look at Google’s AI Responsibility Principles (https://ai.google/responsibility/principles/) and ask yourself what would Search look like if the staff who brought you Gemini was tasked to interpret them & rebuild it accordingly? Would you trust that product? Would you use it? Well, with Google’s promise to include Gemini everywhere, that’s what we’ll be getting (https://technologyreview.com/2024/02/08/1087911/googles-gemini-is-now-i…). In this brave new world, every time you run a search you’ll be asking yourself “did it tell me the truth, or did it lie, or hide something?”. That’s lethal for a company built around organizing information.

And that’s why, as of this weekend, I’ve started divorcing my personal life and taking my information out of the Google ecosystem. It will probably take a ~year (having invested in nearly everything, from Search to Pixel to Assistant to more obscure things like Voice), but has to be done. Still, really, really sad…

Meanwhile, Gavin Baker – managing partner / CIO at Atreides Management, LP, channels the spice to point out that ‘being apolitical or centrist is becoming a significant competitive advantage for companies.’

Being apolitical or centrist is becoming a significant competitive advantage for companies.

Gemini is the first time GPT-4 has been surpassed, yet the launch has been an unmitigated disaster and the product will likely be pulled off the market because of the ideology that was…

— Gavin Baker (@GavinSBaker) February 26, 2024

Read the entirety of his excellent post on X below (emphasis ours):

Being apolitical or centrist is becoming a significant competitive advantage for companies.

Gemini is the first time GPT-4 has been surpassed, yet the launch has been an unmitigated disaster and the product will likely be pulled off the market because of the ideology that was built into it.

When that ideology isn’t deeply racist or ahistorical it is simply absurd: microaggressions are comparable to a thermonuclear explosion in terms of harm, etc.

Ironic that if Google had simply followed its mission statement of “organizing the world’s information to make it universally accessible and useful” they would have had a triumphant product launch.

Instead they will almost certainly have to pull the product in the same way that Microsoft had to pull Tay long ago.  Their PR focus thus far has been on image generation, but the text generation product is much worse in terms of racism and absurdity.  Nothing about the ideology built into Gemini is “useful.”

Gemini 1.5 Pro showed that Google has the technological capability to protect their search franchise; only ideology is standing in the way of a long, slow, embarrassing decline.

There is real “Bud Light” risk here absent swift and decisive action.

Many days have passed since the debut of Google’s insanely racist and sexist Gemini product debut and yet not one person has been fired. Not one.

— Elon Musk (@elonmusk) February 27, 2024

Authored by Nathan Worcester via The Epoch Times (emphasis ours),

Michigan is holding its Republican and Democratic presidential primaries today.

The primary comes after early voting, which lasted from Feb. 17 until Feb. 25. Early voting is now enshrined in Michigan’s constitution thanks to Proposal 2, a ballot measure that passed during the 2022 general election.

Michigan’s presidential primary is an open one per the National Conference of State Legislatures. Voters need not be registered with a specific party to get that party’s ballot.

On Feb. 27, polls open at 7 a.m. and close at 8 p.m.

Even as incumbent President Joe Biden competes in the Democratic presidential primary, more eyes are trained on the Republican presidential contest in the state.

Although that race is more competitive than its Democratic counterpart, it is still expected to end with another big win for former President Donald Trump, after a streak of support put him well ahead of former South Carolina Gov. Nikki Haley in delegates, including in her home state Feb. 24 primary. Polling also shows President Trump with a commanding lead in Michigan.

Sandy Sikorski, an early voter for President Trump who spoke with The Epoch Times in Southgate in Michigan’s Wayne County, had a simple message for Ms. Haley.

“Go back home,” she said. Her husband, Douglas, made a goodbye gesture to drive the point home.

The national press has been particularly interested in the dueling Republican caucuses on March 2 that will follow the Republican primary, threatening the perception of Republican unity at a point when the party has begun to consolidate around President Trump as a likely presumptive nominee.

Meanwhile, tension over the Israel-Hamas war has led to a campaign from the left wing of the Democratic Party that could prove a challenge to President Biden.

GOP’s Dueling Conventions, Democrats’ Protest Vote

More of Michigan’s 55 delegates to the Republican National Convention (RNC) will be awarded through the caucus process than through the primary vote—39 as opposed to just 16.

State Republicans’ use of caucusing is downstream of a 2023 vote by the state’s Democrat-dominated Legislature that rescheduled the state’s primary in line with Democratic National Committee (DNC) priorities.

That conflicted with the RNC’s calendar, leading to objections from Michigan state legislators at the time, who worried that the scheduling would disempower voters by stripping them of delegates.

“If this becomes law, no Republican candidate for president is going to come to Michigan to campaign,” Republican State Rep. Andy Beeler predicted at the time.

Ms. Haley campaigned in Troy, Michigan, on Feb. 25 and Grand Rapids, Michigan, on Feb. 26. President Trump was in the state for a rally in Waterford Township on Feb. 17.

President Biden visited Michigan in early February with a view to the general election. The United States’ backing for Israel in its war with Hamas has undermined the president’s relations with Democratic and other leaders of Arab and Muslim communities, key blocs in what could prove to be a crucial battleground state. He faced protests over U.S. support of the war during the trip.

Some ceasefire activists, including the sister of Rep. Rashida Tlaib (D-Mich.), are campaigning for Democratic voters to vote “uncommitted” over President Biden in the Democratic presidential primary, as a protest against the administration’s Gaza policy.

Michigan Gov. Gretchen Whitmer, a Democrat, predicted that the number of protest votes against President Biden will be “sizable.”

The Republican plan to hold a caucus at their March 2 convention marks a compromise over its calendar. The lack of such a conflict is why Democrats in the state aren’t staging their own caucus. All 139 delegates to the Democratic National Convention will be awarded based on the results of that primary.

But, confusingly, the official state convention in Grand Rapids will be competing with a convention in Detroit.

Former Michigan GOP Chairwoman has maintained that she still leads the party even after an RNC vote affirmed that former Rep. Pete Hoekstra (R-Mich.), the man endorsed by President Trump, is in charge.

She contends that an earlier Jan. 6 vote that initially stripped her of her title was illegal and not organized under official auspices.

A lawsuit by Ms. Karamo’s opponents to enforce her removal is ongoing.

Early Voters Share Thoughts

“This is the first statewide election in Michigan’s history in which voters have had the option to cast a ballot in person at an early voting site,” the Michigan Department of State website notes.

On the afternoon of Feb. 25, citizens weren’t exactly storming the Southgate Senior Center to take advantage of their last chance for early voting before Feb. 27.

Southgate City Clerk Jan Ferencz told The Epoch Times there had been 178 early voters at the site thus far.

Ms. Ferencz said that while she was at first opposed to the idea of early voting, she is now starting to appreciate it.

“I think it’s going to catch on, I really do,” she said.

The few early voters who showed up included members of the Kessler family, three of whom planned to assist the vote as precinct workers on Feb. 27. Like the other election workers who spoke with The Epoch Times in Southgate, they’ll get what Scott Kessler, the family father, described as “a stipend.”

He and his son Jude, another election worker, told The Epoch Times they voted in the Democratic primary. While Jude declined to share his choice, Scott explained that he chose President Biden.

“I believe he’s a much better candidate than other choices,” he said.

He agreed that some Democratic-leaning Michiganders could end up participating in the Republican primary as spoilers. His son, Jude, defended the openness of Michigan’s presidential primary.

“I just don’t think the system should cater to the two parties, because I think we should have a multi-party system or no parties at all, ideally,” he told The Epoch Times.

Entrenched, team-like parties are “bad for democracy,” Scott added.

“I played a political game with my vote just now. I took a Republican ballot and voted for the least likely Republican candidate to try to keep Donald Trump off the ballot,” Jane Kessler, Scott’s wife and another future election worker, told The Epoch Times.

In her view, that was Vivek Ramaswamy, who suspended his campaign after losing in the Iowa Republican caucus and is now campaigning for President Trump.

Mr. and Ms. Sikorski, the early voters for President Trump at Southgate, were more concerned about crossover voting in the primaries.

“It’s concerning for sure,” Mr. Sikorski said.

Haley Rallies Then Heads to Minnesota

Ms. Haley’s rallies in Michigan come amid a whirlwind schedule following her South Carolina defeat.

Her plans after that contest encompass ten private fundraising events as well as public rallies.

Ms. Haley’s Grand Rapids stop was at the Amway Grand Plaza, the same hotel where the state GOP will hold its official convention March 2. That was followed by a rally in Minnesota. On Feb. 27, the day of Michigan’s primary, she is scheduled to speak in Colorado. An event in Utah follows the day after.

One attendee of her Grand Rapids speech, economics instructor Ron Cipcic, was under no illusions about the likely outcome of the upcoming Republican presidential primary.

“The probability is low that Nikki’s going to be elected,” he told The Epoch Times while standing beside his wife, Kim.

“From a conscience stance, we need to vote our conscience, and so, my wife Kim and I did vote,” he said.

Moses Milan was holding a sign for Ms. Haley when he spoke with The Epoch Times. But he isn’t a supporter of Ms. Haley—“not at all.”

“They handed this to me. I didn’t really have a choice,” he told The Epoch Times.

Mr. Milan works on political campaigns for Turning Point USA’s Campus Victory Project.

After clarifying that he was speaking for himself and not on behalf of Turning Point, he said, “Trump is not just running against the Democrats. He’s running against the uniparty in Washington, who are backing Nikki Haley.”

“They try to keep real estate in both parties, and Nikki Haley is real estate within the Republican Party. Is she going to win? Not likely. But I sense there’s a need to at least keep an avenue open so that it’s not completely up in the air should something happen to Trump,” he said of the challenges President Trump is facing from actors within the DOJ.

The Associated Press contributed to this report.