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Boston Dynamics's robot dog has generally been used for corporate applications, such as surveying a Ford Motor Co. factory or working on a BP plc oil rig. Now it appears "Spot" is one step close to becoming a killer robot as it trains with the French Army.

Last Tuesday, the Saint-Cyr Military Academy, a top French military academy, published pictures of a field training exercise between Mar. 30-31 on their Twitter account. There were several robots tested during the training session, including Boston Dynamics' Spot. 

The field training exercise was a two-day session with the aim of "measuring the added value of robots in combat action," said school commandant Jean-Baptiste Cavalier.

Local newspaper Ouest-France provided more details on the usefulness of the robot on the modern battlefield. 

Quand robots et élèves officiers s’entraînent ensemble sur le camp militaire de Coëtquidan ?? ??

Pendant deux jours, 80 élèves officiers de l’EMIA ont manœuvré avec des alliés inattendus : les robots Spot, Nerva, Barracuda, Optio 20 et Ultro ?? https://t.co/avGjTaNYkc pic.twitter.com/t8xVoofRtC

— Ouest-France (@OuestFrance) April 3, 2021

Boston Dynamics' vice president of business development Michael Perry told The Verge that a European distributor, Shark Robotics, had given Spot to the military and that the US-based firm had not been informed about the training exercise.

"We're learning about it as you are," said Perry. "We're not clear on the exact scope of this engagement." The company said it had some information on its robots being used by the French government, including the military. 

The two-day exercise was offensive and defensive field training exercises. Each exercise was with and without Spot and other robots. The idea is that the French government wanted to collect data on the impact robots would have on the modern battlefield. 

It's still not entirely clear what role Spot played during the exercise as there was no evidence in the pictures within this note that the robot had any special optical sensors mounted on it. 

Besides Spot, the French military included OPTIO-X20, a remote-controlled vehicle with tracks and autocannon built by Estonian firm Milrem Robotics; ULTRO, a wheeled "robot mule" made for transporting equipment manufactured by French state military firm Nexter; and Barakuda, a multipurpose wheeled drone that can shield soldiers for direct enemy fire. 

Spot's terms and conditions prohibit the use of weaponizing the robot "to harm or intimidate any person or animal, as a weapon, or to enable any weapon." One could argue that if Spot is used as a reconnaissance robot, it would indirectly harm a human being (a gray area). 

Boston Dynamics' told The Verge that the company had policies prohibiting suppliers or customers from weaponizing the robot.

A few months ago, a company called MSCHF who is responsible for the most absurd viral stunts and products on the internet. Strapped a paintball gun to Spot and let online users shoot random objects in a staged museum. 

MSCHF said the only "losers" of the event would be the "human race when remote-operated dogs of war become commonplace. As these war dogs become fixtures of militaries and militarized police, we will all learn a new meaning of fear: an oppressor who can pull the trigger without even needing to be physically present." 

Elon Musk's "futuristic" subterranean transit system under Las Vegas is like a boring amusement park ride.

Musk's The Boring Company has spent months drilling, digging, paving, lining, and electrifying tunnels under Las Vegas with a promise to whisk passengers in driverless Tesla vehicles at speeds of 155mph. But late last week, a handful of reporters were able to experience the tunnel in a far less exciting way. 

Instead of futuristic vehicles zooming through the tunnels, Tesla vehicles hit a maximum speed of about 35 mph, far less than was initially promised. 

The first section of the much-touted Vegas tunnel from one end of the Las Vegas Convention Center to the other is 4,475 feet. It's the first of four sections, making a total of about 1.7 miles of tunnel. 

According to tweets from Las Vegas Review-Journal's Mick Akers, the media was invited to the tunnel last Thursday. 

Footage of what it looks like when a @Tesla is traveling through the @boringcompany’s Convention Center Loop. #vegas #boringcompany pic.twitter.com/ph1DJoTYBi

— Mick Akers (@mickakers) April 9, 2021

The latest unveiling of the underground transit system, hidden 40 feet beneath the Las Vegas Convention center, was "about as exciting as a sheet of unpainted drywall discarded in a closed office park," wrote Jalopnik's Jason Torchinsky. He called the tunnel "dumb" and said it was the "lamest thing in Vegas." Watching Tesla Model 3s drive slowly through the tunnel was not exactly what Musk promised. But anyone who has followed the billionaire salesman over the years shouldn't be surprised. 

Remember when Musk tweeted this in December 2019? 

"Boring Co is completing its first commercial tunnel in Vegas, going from Convention Center to Strip, then will work on other projects," Musk tweeted. 

Well, it's 2021... 

More on the disappointment: 

Gizmodo wrote: "Elon Musk's 'Public Transit' in Las Vegas still just humans driving cars slowly in a tunnel."

CNET's Sean Szymkowski also concluded the tunnel was "lame." He said: 

"It seems like this project is quickly turning into Tesla cars driving people underground, rather than some sort of futuristic transport system."

Hopefully, the Boring Company remains in a testing phase, and the colorful, hyped-up tunnel can one day reach faster speeds. 

"Unfortunately, for now, it looks sort of disappointing," Szymkowski said.

Americans' faith in organized religion continues to trend down at an accelerated pace. A new poll from Gallup shows for the first time since the public opinion polling company began asking questions in 1937, the number of Americans who view themselves as members of a church, synagogue, or mosque has plunged below 50%. Keep in mind, in 1937, when Gallup first asked the question, 73% went to church, synagogue, or mosque. 

America is losing its religion, and this trend of a more secular state has been accelerating since the Dot Com Bust (the early 2000s). The poll found 47% of Americans said they were a part of a church, synagogue, or mosque, down from 50% in 2018 and 70% in 1999.

The gradual decline of Americans losing their religion began in the 1950s and rapidly accelerated in the early 2000s. America's unique combination of wealth (status quo power) and worship during the 20th century appears to be unraveling in the 21st century. 

The obvious question that comes to mind is what the hell happened around the Dot Com Bust? 

Perhaps, the shift away from organized religion is due to millennials. Polling data found membership at a house of worship correlations with age, with older Americans more likely to attend church, synagogue, or mosque than younger generations. 

Since the early 2000s, the percentage of Americans who don't associate themselves with religion has increased from 8% in 1998-2000 to 13% in 2008-2010 and 21% since 2017. 

As millennials come to age and in the next couple of years will dominate the workforce, the loss of religion will undoubtedly continue, triggering a "religion crisis" for organized religious institutions. 

Indeed, as the society-wide shifts in ideals and beliefs occur as the millennial generation takes power, their taste for organized religion sours. 

There are a couple of major trends driving the plunge in faith in organized religion - millennials with no religious preference are soaring above all other generations, and religious membership is plunging among the youth. In fact, membership continues to decline across all generations, but millennials are increasing faster. 

America is losing its religion. 

So the next question: Why are millennials losing faith faster than all other generations?

Well, maybe the American Dream of getting married, buying a home with a white picket fence, having kids, attending church or temple, and having a stable career is unattainable for the young generation as they're bound by ball and chain to insurmountable student loans, credit card debt, auto loans, and crappy jobs.

As America's youth slips away from organized religion and past traditions, maybe this is a symptom of a dying country. 

The much larger question of the sudden loss of religion is the social ramifications this may have for the country as a secular state could be in the making. 

Submitted by Ronan Manly, BullionStar.com

The London Bullion Market Association (LBMA) has just published a new report titled “Silver Investment 2021: Report” which looks at recent developments in the investment silver sector.

While it’s not clear who actually wrote the report, as no author is specified, the LBMA states that it “acknowledges Metals Focus' contribution to this report” so we can assume Metals Focus actually wrote it or was heavily involved. Metals Focus is a precious metals consultancy based in London, which also at times, writes the Silver Institute’s annual World Silver Survey.

That the LBMA has decided to publish a specific report on investment silver at this time is notable in itself (as it hasn’t published this type of distinct report in the past), but beyond this, the report itself is worth reviewing for what it says, as much as what it leaves out.

Pitched as a “Spotlight on Silver Investment, a report which explores the key developments in silver investment over the last 12-18 months”, the LBMA report (which is quite short at 15 pages) focuses on recent trends in demand for silver Exchange-Traded Products (ETPs), silver coins and bars, and the in silver futures market. It also surprisingly mentions the #Silver Squeeze in great detail, which is refers to the “much-publicised social media campaigns” and a “social media buying frenzy” of silver bars and coins, and silver ETPs.

The report begins by commenting that “the past 12-18 months have witnessed some incredible developments in the silver investment market, including a dramatic improvement in investor activity”, and that the combined demand from silver bars, coins, ETPs and futures positioning rose by about 20% in 2020, with the growth in this trend carrying over into the first quarter of 2021.

It was only a Matter of Weeks - The ETFs

In chapter 2 on silver ETPs (more commonly called ETFs), the LBMA report notes that silver ETF holdings reached a record high on 1.2 billion ozs in early February 2021, and that London is the world’s largest storage centre for ETF silver, calculating that 725 million ozs is held on behalf of silver ETF’s such as the iShares Silver Trust (SLV) by LBMA custodians in London (the custodians being JP Morgan and HSBC and their sub-custodians Brinks, Malca-Amit and Loomis).

Surprisingly, the LBMA report acknowledges that strong inflows into silver-backed ETFs in late January and early February, if they had persisted, could have led to the LBMA London vaults running out of acceptable (good delivery) silver bars for the ETFs. The LBMA report states that:

“Early 2021 saw an unprecedented 110Moz added in just three days. Although some liquidations emerged, there were concerns that London would run out of silver if ETP demand remained at a high level.”

and

“this year, the location of the custodial vaults has come into sharper focus as ETP demand has jumped, leading to concerns about the potential availability of metal.”

This is something I had highlighted in a BullionStar article on 8 February titled “Houston, we have a Problem”: 85% of Silver in London already held by ETFs” which concluded that:

“A few more days of inflows like the ones seen over 29 January to 2 February would be a major emergency for these ETF providers, particularly the iShares SLV. Because there is just not that much physical silver left in the vaults of JP Morgan, Brinks, Malca-Amit, Loomis and HSBC, which is not already reported as being in these ETFs.”

Back to the LBMA report, which continues:

“As the social media frenzy gathered pace in late January, demand for coins, bars and ETPs all jumped. For the latter, global holdings surged by 119 mn ozs in just three days. This was concentrated in the iShares fund (SLV), where holdings rose by 110 mn ozs. Given that most of this metal was allocated in London, fears emerged as to whether there was enough silver should demand continue at this pace.”

What the LBMA report fails to mention though is that this extra silver (3,416.11 tonnes in the form of 113,501 Good Delivery silver bars) could only be added to SLV over those 3 days by SLV’s custodian JP Morgan frantically tapping into silver bars which it claimed to have secured in 5 vaults all over London, namely Brinks vault in Premier Park London, Loomis London vault near Heathrow, Brinks Unit 7 vault Radius Park near Heathrow, Malca Amit London vault, and JP Morgan’s own London vault.

More importantly, the LBMA / Metals Focus report also fails to mention that concerns about a lack of silver in London were so great that the iShares Silver Trust (SLV) actually changed its prospectus in early February, adding the wording that:

“The demand for silver may temporarily exceed available supply that is acceptable for delivery to the Trust, which may adversely affect an investment in the Shares.

… It is possible that Authorized Participants may be unable to acquire sufficient silver that is acceptable for delivery to the Trust” 

Luckily, I did mention the SLV prospectus amendment it in an article titled “#SilverSqueeze hits London as SLV warns of Limited Available Silver Supply” from 14 February.

The LBMA / Metals Focus report goes on to say that:

“had demand in iShares continued at the frenetic rate of late-January/early February it would only have been a matter of weeks before London’s existing stock was used up.

While it would have been surprising to see ETP demand maintain this pace of buying, the concerns were still very real.

This reflects both the time required for a refinery to convert non-Good Delivery (GDL) material into 1,000oz bars approved by LBMA as Good Delivery and then delivery of this by sea freight into London.”

If the above sounds like too much honesty from the bullion bank LBMA, you are not alone in thinking so. Perhaps no one from the LBMA read the Metals Focus draft of the report before they hit publish. Its a far cry from the bullion bank apologists of the silver market, for example see here and here. who said that there was no shortage of silver in the London market.

Its also interesting to see from the above quote, that silver, since it is bulky, is not transported by air but by container truck when moving within a Continent such as Europe, and by sea, when moving between continents or to an island nation such as Britain. Silver enters London via container ports located in  the terminal ports to the east of London.

Above Ground Stocks - Not So Much

A section of the LBMA report also looks at identifiable global above ground silver stocks, commenting that “the recent jump in ETP demand has led to fears as to whether there are sufficient above-ground bullion stocks, should ETP holdings see a further sharp increase”

But, are there sufficient above-ground bullion stocks, that could be called upon by the ETFs?

LBMA / Metals Focus more or less say no, stating that:

• “there is a gulf between the total of silver above-ground stocks and the portion which can be quickly allocated against ETPs.”
• “Even though above-ground stocks are difficult to pin down, there is no doubt that bullion stocks account for a small share of the total.”
• The biggest identifiable silver holdings are held in London, COMEX [New York] and Chinese approved vaults, which at the end of 2020, stood at a combined 1.694 bn ozs of silver.

It’s interesting that the point about the 1000 oz silver bar market being far smaller than the above ground stock of silver is a point which exactly concurs with what was described by David Morgan in an interview which he recently did for BullionStar Perspectives. See relevant section of that interview video here.

But how much of these identifiable silver holdings in London, COMEX [New York] and Chinese vaults are actually available to ETFs? The LBMA report would have you believe that the answer is ‘a lot’. But is this really the case?

Regarding identifiable silver holdings held in London, the LBMA has just published its latest London vault holdings data, claiming that at the end of March there were 1.249 bn ozs (38,859 tonnes) of silver held in the London LBMA vaults. This data is then referenced in the new LBMA / Metals Focus report.

Putting aside the fact that this was a massive 11% increase on the amount of silver that the LBMA claimed was stored in the London vaults as of the end of February, and that none of these claims are verifiable and none of the claimed silver is independently physically audited in real time, Metals Focus calculates that 725 mn ozs (or 58%) of this London silver was held by ETFs at that time.

The LBMA report says that this ETF silver in London is held by “ten ETP funds”. Its unclear how LBMA / Metals Focus arrived at the figure of 10 ETFs, since there are actually 14 of these ETFs. See here for details. These ETFs are iShares SLV and SSLN, Wisdomtree PHAG and PHPP, Invesco SSLV, Aberdeen Standard SIVR and GLTR, ETF Securities‘ PMAG and PMPM, and five Deutsche Bank XTrackers ETFs. Perhaps they are counting all the XTrackers as one.

LBMA / Metals Focus also fail to account for the silver held in London LBMA vaults by GoldMoney and Bullion Vault, which together store about 690 tonnes in total. This silver is not available to ETFs. Nor is the allocated silver holdings held in LBMA London vaults by investment institutions, family offices and High Net Worth individuals. And finally, the elephant in the room, the LBMA report does not acknowledge the massive outstanding unallocated silver positions which are claims against the bullion banks for silver which they have not got but would have to try to allocate from stocks of silver that are in the LBMA London vaults, if unallocated silver holders requested allocation.

Regarding the COMEX approved silver inventories in New York (combined registered and eligible categories), the LBMA report says that there was a total of 393 mn ozs of silver in those vaults at the end of February, but concedes that of this total, over a quarter represents silver bars held by the SLV in JP Morgan’s vault in New York. This is something I first explained in the “Houston, we have a Problem” article in early February. See section 'A Note about SLV and COMEX' here.

LBMA also fails to mention that a lot of other eligible silver in the COMEX vaults in New York may have nothing to do with COMEX trading. The CME have already gone on record to explain to the CFTC regulator that in the case of 'Eligible Gold" in COMEX vaults, this is the case. It is also the case with silver to some extent.

Regarding China, the LBMA report says that as of the end of 2020, the Shanghai Gold Exchange (SGE) held 130 mn ozs of silver bullion stocks, and the Shanghai Futures Exchange (SHFE) held 89 mn ozs. None of these SGE and SHFE silver stocks are related to ETP holdings, but they are stocks which are used in SGE and SHFE trading and can be quickly withdrawn into the Chinese silver market.

Excluding LBMA London, COMEX and China, the report says that “silver bullion stocks that exist elsewhere and are in a deliverable form (specifically LBMA or COMEX Good Delivery compliant) appear extremely modest.”

These other locations would be, according to the LBMA report a) India, where some bonded warehouses hold good delivery silver bars, but these are for the local market, and rarely flow back to London, and b) Switzerland, which apart from silver allocated to Swiss silver ETFs, stores little other silver holdings.

LBMA / Metals Focus go on to suggest that it’s possible to add both the silver in the London LBMA vaults to all the silver held in COMEX, and view them as a combined pool of available silver for the ETFs. The report says:

“Another way to view this is to look at combined Comex/LBMA holdings, which at end-February were 1,518 mn ozs. ETPs vaulted in these locations stood at 880 mn ozs, which meant that 42%, or 638 mn ozs was in theory immediately available to meet new silver ETP demand.”

But this is wrong. Why? Because silver not currently in ETFs is not necessarily available to ETFs, and besides, ETFs which hold their silver in London cannot hold silver in New York (apart from SLV). Its against their prospectus rules.

This, however, doesn’t stop the LBMA report from sweeping the problem under the carpet by concluding that “the pool of available metal should be sufficient, for the foreseeable future at least, to meet new ETP demand.”

Although in the next sentence they seem concerned about the potential lack of supply as they continue that “this also pre-supposes there is no repeat of the social media frenzy.” Note to LBMA - the social media frenzy is still on, and by being worried about it, it will now only get more frenzied.

There then follows a bizarre line in the report which says – “Should this occur [repeated frenzy], higher prices would almost certainly be triggered, which would be met by heavy selling.” We therefore have to ask, “heavy selling” from who? The bullion bank members of the LBMA no doubt?

Under the Radar - The Retail Market

Chapter 3 of the LBMA report discusses the retail silver market. Briefly, some highlights from Chapter 3 are as follows (quotes from the report are in italics):

• Retail investment in silver (coins and bar demand) recovered in 2020 and into 2021
• The [retail] sector then burst into life this year, initially as a social media buying frenzy emerged
• The industry was quickly beset with product shortages, in part due to logistical restrictions
• While social media discussions have abated, silver coin and bar demand has remained extremely strong, especially in the US
• Ongoing strength in the US coin and bar market, which also reflects some supply issues, extended product delivery lead times and premiums

First some corrections to the above. Product shortages primarily arose due to huge demand, not logistical restrictions. And, if the LBMA / Metals Focus is not aware of it, ‘social media discussions have not abated.' Far from it. Just look at Twitter and Reddit.

This doesn’t stop the report condescendingly referring to ”the recent, if short-lived, social media phenomenon surrounding silver that emerged in the US in late-January this year and what legacy, if any, it leaves behind.”

• Global retail investment in silver coins and bars in 2020 is estimated to have exceeded 200 mn ozs for the first time in four years. This was the result of higher demand in the US and Germany, while purchases in India weakened sharply.
• Over the past decade, the US has been the largest retail investment market in all but two years (2018-19), when purchases fell sharply
• During 2018-19, India occupied top spot, with retail investment in each year exceeding 50 mn ozs. ..In general, Indian demand has typically benefited from strong silver price expectations, with many viewing silver as being undervalued. This has often led to a surge in investment when prices have fallen.
• In India, high net worth individuals tend to purchase large silver bars, such as 5kg, 15kg and 30kg bars. Others are consumers and investors who buy small-minted bars
• Germany completes the top-three listing and has only emerged as a prominent market for silver bars and coins over the past two years.

Social Media Storm becomes Folklore

There then follows an entire section of the LBMA report titled ‘The Social Media Storm”, which begins:

“The events of late January/early February this year have almost become folklore in the silver market. It is worth recalling how this emerged and its impact on retail buying even after the social media storm faded.”

For obvious reasons, the LBMA would like to have people believe that the #silverSqueeze has faded. If anyone wants to check on Twitter and Reddit, they will, however, see that this is not the case. The LBMA / Metals Focus then show their hand by dismissing the existence of a bullion bank short position in silver.

"Buoyed by this success, social media discussions soon focused on silver, and in particular longheld conspiracies that financial institutions were holding significant short positions."

Not content with hurling conspiracy theory accusations against anyone mentioning the Wall St silver short position, while trying to pretend the frenzy has faded, the LBMA report then doubles down, referring again to both in the same sentence:

"Although the silver price achieved a six-year high of $30.10, the social media frenzy quickly faded – dynamics in the silver market are quite different to those behind the GameStop trade. In essence, there were no massive short positions in silver to force out.

But then the social media frenzy was seemingly back:

“As the social media frenzy was picked up by the mainstream media, silver benefited from widespread news coverage, particularly in the US.”

“As dealer inventories were depleted the emphasis shifted to silver coin and bar manufacturers. Although many fabricators quickly ramped up production, three issues emerged –

a) lockdown restrictions affected how much the manufacturers could respond to the jump in demand, c) the increase in retail sales was so great that delivery lead times grew, ..added to concerns about a shortage of silver, which further boosted sales, c) US Mint gold and silver Eagle coin minting scaled back due to switch of production to new design.”

“As a result, February and March 2021 have seen retail silver investment demand remain exceptionally strong in the US.”

Finally, the LBMA / Metals Focus report also notes it does not see recent inflows into silver ETPs as competing with the demand for silver bars and silver coins, as the retail investors are new buyers with a different profile to physical silver stackers:

“[Silver] ETPs have attracted a large swathe of new buyers, including those active in the stock market who might not have previously bought precious metals. As a result, there appears to be little sign of an adverse impact on physical investment by the success of silver ETPs.

Conclusion

This new silver report published by the LBMA is indeed a strange report, discussing as it does the fact that if inflows into SLV and the other ETFs had continued , "it would only have been a matter of weeks before London’s existing [silver] stock was used up". And its a far cry from LBMA CEO Ruth Crowell on 8 February, telling NASDAQ that there were 'healthy' silver stocks in London.

Equally strange is the LBMA acknowledging the power of the social media buying frenzy in silver (cue memes of silver back Ape 'frenzy'). Which would make a good story that the  report was written by Metals Focus, and published by the LBMA intern when the rest of the LBMA staff was out to lunch. Stranger things have happened.

On a serious note, it's increasingly obvious that those few days in late January and early February when there were huge inflows into SLV and when the silver price hit $30, terrified the powers that be within the bullion banks and within the central banks that the silver market was about to explode. Which is why the silver price was not allowed to rise any further and which is why the CFTC and US Treasury was monitoring the action closely.

It should also give hope to the #SilverSqueeze movement that the LBMA thinks they have 'faded' and gone away. Because, as Sun Tzu once said on the art of war,  "Appear weak when you are strong, and strong when you are weak".

For those who want to read the report, it can be downloaded here.

This article was originally published on the BullionStar.com website under the same title "LBMA acknowledges “Buying Frenzy” in Silver Market and silver shortage Fears". 

Major cities like New York City and San Francisco experienced an exodus of residents, leaving the pandemic-plagued metro areas for more quiet areas in smaller towns, suburbs, and rural communities. As city dwellers fled, median rents in more affluent metro areas fell. In contrast, rents in less affluent areas surged, according to a new report via Zumper, an online apartment rental services company. 

Zumper explained when the virus-pandemic triggered socio-economic turmoil across major cities, many urbanites fled to "cheaper, less-urban, neighboring locations". These less affluent areas saw booming housing markets as demand surged, pushing up housing costs. Meanwhile, housing costs in urban areas plunged as urbanites exited. 

"In the rental market, the more expensive a city's pre-pandemic rent was, the more likely it was to decrease. Inversely, the cheaper a city was pre-pandemic, the more likely rents went up. This relationship can be visualized by comparing median rent prices in each city right before the pandemic (February 2020) to the growth in those median prices since the pandemic," Zumper said. 

Zumper shows this relationship below in its National Rent Report, which tracks rents for US cities. 

"This is, at its heart, a migration story," said Neil Gerstein, an analyst at Zumper and the author of the study, who Bloomberg quoted. "These prices are shifting because the pandemic caused a lot of people to move."

The chart below shows rents in many lower-income areas surged while rents in wealthier metro areas plunged. 

Here's another view of rents increasing in less affluent areas. 

"Things will maybe get back to how they were pre-pandemic, but it will take a while," Gerstein said. "At least for the near-term, people who live in these counties have to live with these price shifts."

The next chart shows rents in urban areas were flat while rents in suburbs and rural areas increased. 

The takeaway here is clear: "rents grew substantially in suburban and rural regions while rents stagnated in urban areas. This largely also explains the inverse relationship between income and rents in 2020. Rural areas experienced substantially more rental growth than urban areas, but also are substantially less affluent," Zumper said.

The data is yet another example of how the virus pandemic deepened inequality over the last year. People who fled expensive large metro areas pushed up prices of rents and homes in small towns that were less affluent. 

For example, we noted how city dwellers from New York City fled to a tiny town called Poughkeepsie, in New York State's Hudson Valley. The town is small, with a population of about 30,000. Realtor.com shows homes in Poughkeepsieare are up 13.3% year-over-year.

It's becoming clear that one of the unintended consequences of urban flight is creating housing affordability issues in rural America. 

Quietly, one bank after another is telling its clients that the music is about to end.

It started with Morgan Stanley, whose chief equity strategist Michael Wilson over the weekend said that while the S&P 500 has continued to make new all-time highs, "underneath the surface, there has been a noticeable shift in leadership which could be telling us something about the reopening that may not be obvious." More specifically, the Russell 2000 small cap index has underperformed the S&P 500 by 8% since peaking on March 12. While this follows a period of historically strong outperformance, when relative strength like this breaks down, Wilson said that he has taken notice. Furthermore, some of the cyclical parts of the equity market we have been recommending for over a year are starting to underperform, while defensives are doing a bit better. If that weren’t enough, indices of IPOs and SPACs have underperformed by 20% and are both down for the year.

But wait, there's more: as the once most bullish Wall Street analyst warned, the breakdown of small caps and cyclicals is "a potential early warning sign that the actual reopening of the economy will be more difficult than dreaming about it" as small caps and cyclicals have been stellar outperformers over the past year. In essence, they were discounting the recovery and reopening that we are about to experience. However, "now we must actually do it and with that comes execution risk and potential surprises that aren’t priced."

And here a big problem emerges: while policymakers have provided tremendous support for the economy with both monetary accommodation and fiscal stimulus, the lockdowns have reduced supply, destroying it in some cases, and sending prices soaring while hammering profit margins.

As a result, we are now seeing evidence of supply shortages in everything from materials and logistical support to labor. The punchline is that 1Q earnings season may bring bad news on costs and margins, particularly with respect to 2Q outlooks. We’ve been writing about this risk for weeks and believe it will be idiosyncratic in how it plays out, with some companies executing well while others don’t.

Meanwhile, the underperformance in IPOs and SPACs is to Wilson "a signal that the excessive liquidity provided by the Fed is finally being overwhelmed by supply" who ominously notes that his experience is that "when new issues underperform this much, it’s generally a leading indicator that equity markets will struggle more broadly." When combined with the fact that leverage in the system is very high, it could spell more trouble for riskier, more speculative investments, he concludes.

Morgan Stanley's concern was repeated by Bank of America whose chief quant and equity strategist Savita Subramanian today published a piece titled "Five Reasons To Curb Your Enthusiasm" (which we discussed earlier today) in which she said that "amid increasingly euphoric sentiment, lofty valuations, and peak stimulus, we continue to believe the market has overly priced in the good news. We remain bullish the economy but not the S&P 500."

She then listed 5 reasons why stocks are priced to absolute perfection and reality will most likely disappoint, including: i) the bank's sell side Indicator < 1ppt away from euphoria; ii) S&P 500 valuation indicates paltry (2%) returns over the next decade; iii) Outsized (2+ std dev) returns precede losses 75% of the time; iv) BofA's Fair Value model spits out S&P 500 at 3635, v) the Equity Risk Premium dropping below 400bps – this is only the third time since the global financial crisis that the ERP dropped below 400bps, and the two prior instances were Jan 2018 (399bps) and Sep 2018 (394bps), after which the S&P 500 posted -10% and -20% peak-to-trough declines, respectively.

Bottom line: while an amused Subramanian jokingly notes that in another measure of Wall Street bullishness: "we’re tied for last place among strategists’ forecast for the S&P 500", she is quite happy with her year-end S&P500 target of 3,800, some 9% below today's closing price.

And now a third bank has joined the ominous chorus. In a recent note from Deutsche Bank's chief equity strategist Binky Chadha, "When Growth Peaks", he writes that historically, qquities have traded closely with indicators of cyclical macro growth such as the ISMs (correlation 73%), and growth (ISM) typically peaks around a year (10-11 months) after recession ends, "right at the point we would appear to be."

As a result, "very near term", Deutsche Bank expects equities to continue to be well supported by the acceleration in macro growth, and see buying by systematic strategies and buybacks driving a grind higher, however, the bank also now expects a "significant consolidation (-6% to -10%) as growth peaks over the next 3 months."

The chart below shows a strong correlation between the ISM and equities and the simplified view is that when the ISM peaks a correction is likely. As noted above, Binky’s team has identified 36 peaks in the ISM in the post-WWII period. Two-thirds of these peaks (24) were an inverted-V shape, while the rest (8) saw the ISM stop rising and flatten out at an elevated level.

Excluding episodes of a declining ISM that eventually ended in recessions, which currently appears unlikely and which led to far lower stock prices anyway, the S&P 500 sold off around these growth peaks by a median of -8.4%. But even episodes which saw the ISM flatten out rather than fall, saw a median -5.9% sell-off.

Finally, and perhaps most importantly, in terms of timing the sell-off began a median 2 weeks after the peak in the ISM and lasted for a median of 6 weeks.

Although using historical experience as a guide argues for a near -6% pullback if growth flattens out near the peak, given positioning is unusually elevated so early in this expansion, Binky thinks the correction could be materially larger than average and in the 6-10% range.

The good news is that with that hiccup out of the way, things return back to normal, and after this correction, the DB strategist says that "the ongoing strong growth means that equities will rally back" and later in the year the risks are mostly based around inflation and the Fed’s response. 

A forensic pathologist testified on Wednesday that George Floyd died of a sudden heart rhythm disturbance due to his advanced heart disease, and not from lack of oxygen from the way he was restrained by former Minneapolis police officer Derek Chauvin, according to the Associated Press. Chauvin, 45, is charged with murder and manslaughter in Floyd's death.

Former Maryland chief medical examiner Dr. David Fowler said that the combination of fentanyl and methamphetamine in Floyd's system, heart disease, and potential carbon monoxide poisoning from automotive exhaust were contributing factors in the 46-year-old Floyd's death last May.

"All of those combined to cause Mr. Floyd’s death," said Fowler, who also said that he would have classified the manner of death as "undetermined," not homicide as the county's chief medical officer ruled. He added that some of the contributing factors could be ruled homicide and others could be ruled accidental.

Chauvin attorney Eric Nelson is trying to prove that the 19-year Minneapolis police veteran did what he was trained to do and that Floyd died because of his illegal drug use and underlying health problems.

Prosecutors say Floyd died because the white officer’s knee was pressed against Floyd’s neck or neck area for 9 1/2 minutes as he lay pinned to the pavement on his stomach, his hands cuffed behind him and his face jammed against the ground. -AP

Potential factors listed by Fowler included: "Floyd’s narrowed arteries, his enlarged heart, his high blood pressure, his drug use, the stress of his restraint, the vehicle exhaust, and a tumor or growth in his lower abdomen that can sometimes play a role in high blood pressure by releasing “fight-or-flight” hormones" per the report, all of which could have acted together to make Floyd's heart work harder and/or go into arrhythmia before it suddenly stopped.

On cross-examination, prosecutor Jerry Blackwell attacked Fowler's findings, getting the former chief medical examiner to admit that he didn't take into account the weight of Chauvin's gear when he analyzed the pressure on Floyd's body, or that anyone who dies after being deprived of oxygen technically dies of arrhythmia.

"And if a person dies as a result of low oxygen, that person is also going to die ultimately of a fatal arrhythmia, right?" asked Blackwell, to which Fowler responded: "Correct. Every one of us in this room will have a fatal arrhythmia at some point."

Blackwell also attacked the carbon monoxide claim.

"You haven’t seen any data or test results that showed Mr. Floyd had a single injury from carbon monoxide. Is that true?" Blackwell asked. "That is correct, because it was never sent," Fowler replied.

Blackwell then countered by noting that Chauvin's squad car was a gas-electric hybrid, and Fowler had no data on how much carbon monoxide was actually released - or if the engine was running at the time.

While several medical experts called by the prosecution have concluded that Floyd died from lack of oxygen due to the way Chauvin restrained him, Fowler said that the knee on Floyd was "nowhere close to his airway," and that Floyd's ability to speak and groan showed that the airway was still open. He also said that there wasn't enough pressure to cause bruises or scrapes on Floyd's neck or back - and that Floyd did not complain of vision changes or other symptoms which would indicate insufficient oxygen to the brain.

"The bottom line is, moving air in and out, and speaking and making noise is very good evidence that the airway was not closed," said Fowler.

Submitted by South Front,

Iran’s Natanz nuclear facility is an incredibly important piece of infrastructure for Tehran’s interests.

One of its most important roles is that of providing leverage when the Islamic Republic is on the Nuclear Deal negotiating table. Natanz was largely built underground to withstand enemy airstrikes.

Back in 2002, when it was established it became a focal point of Western fears regarding the potential of Tehran acquiring nuclear weapons. Despite many accusations, mostly from Israel, Iran maintains that it develops its enriched uranium for peaceful purposes.

The fact that it also applies pressure on the other signatories on the Joint Comprehensive Plan of Action (known as the Iranian Nuclear Deal) is an added, and needed bonus.

The Natanz facility was subject to an alleged cyber-attack on April 11th. This led to a large blackout, and was considered a significant strike against Tehran. Iran’s nuclear program spokesman, Ali Akbar Salehi, confirmed that the electrical disruption at Natanz was a deliberate act of sabotage, calling it “nuclear terrorism.”

Israel’s officials refused to provide any comment, and disregarded the incident. Israeli media, however, continue citing anonymous sources, claiming that it had been a Mossad operation, and that it had achieved great success.

The timing of the attack was also said to not be incidental, coming the day after Iran celebrated its National Nuclear Technology Day.

Iran itself didn’t blame Israel, but in statements, officials said that the attack came from those who oppose Tehran’s negotiations with  the West. The United States and the Islamic Republic have been involved in indirect negotiations in rescuing the Nuclear Deal.

Anything conclusive is still far off.

For any real progress to occur, Iran requires from the Biden Administration to lift all sanctions against it, related to the Nuclear Deal or otherwise.

The result is a standstill, in which Iran refuses to accept the US back into the deal with significant concessions, and Washington not in a hurry to fulfill any demands.

Tehran then continues incrementing various reductions of its commitments to the Iran Nuclear Deal, in loosely permitted margins.

In this way, it not only attempts to gain leverage over the US, but also tries to push the EU signatories into entering into discussions with Washington to salvage the deal.

The United States has admitted, without specifying clearly, that some sanctions that are inconsistent with the Nuclear Deal and could be lifted. Iran likely did not appreciate such a concession.

Tehran, still, shouldn’t hold its breath, since the enemies of any such progress are many, and it is not put out of the question that if Israel was actually behind the incident in Natanz, that some from Washington’s fold were also present in the plot.

Still, Israel and also many in the US oppose any form of normalization between Tehran and Washington, and the continuous MSM reports that attempt to stir the pot stand testament to that.