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Thu, 25 Feb 2021 22:20:33 +0000 Olympic Gymnastics Coach Dies By Suicide Following Accusations Of Human Trafficking, Sexual Assault
Olympic Gymnastics Coach Dies By Suicide Following Accusations Of Human Trafficking, Sexual Assault
Former Olympic gymnastics coach John Geddert is dead of a self-inflicted gunshot wound Thursday afternoon, just hours after he was c
Read more.....
Olympic Gymnastics Coach Dies By Suicide Following Accusations Of Human Trafficking, Sexual Assault
Former Olympic gymnastics coach John Geddert is dead of a self-inflicted gunshot wound Thursday afternoon, just hours after he was charged in Michigan with 20 counts of human trafficking , sexual assault, lying to a peace officer and racketeering .
Geddert's death was confirmed by his attorney's office as well as Michigan Attorney General Dana Nessel.
"My office has been notified that the body of John Geddert was found late this afternoon after taking his own life. This is a tragic end to a tragic story for everyone involved," said Nessel.
Geddert, the head coach of the 2012 US women's gymnastics team at the London games, was a close ally of disgraced former team doctor, Larry Nassar - whose sexual assault of young gymnasts was ignored by Geddert, according to the Wall Street Journal .
The coach faced two sexual assault charges - one of first-degree sexual conduct and one of second-degree criminal sexual conduct, along with charges that he led a criminal enterprise, which Nessel said "applicable to the set of circumstances you’ll be hearing about when all of the evidence is produced in court."
Press conference from before Geddert's suicide :
"It is alleged that John Geddert used force, fraud and coercion against the young athletes that came to him for gymnastics training, for financial benefit to him," she said.
Some of those athletes subsequently attempted suicide and suffered from eating disorders and self-harm as a result of abuse including excessive physical conditioning in training, repeatedly being pushed to perform when injured, extreme emotional abuse and sexual assault, she added.
In written responses to The Wall Street Journal in 2017, Mr. Geddert denied any knowledge of assaults on gymnasts by Nassar or anyone else, saying “I would have immediately acted on any suggestion that any of our gymnasts were being – or had been – abused by anyone.” - Wall Street Journal
Geddert's charges all carried sentences ranging between 15 years and life imprisonment.
Tyler Durden
Thu, 02/25/2021 - 17:20 Close
Thu, 25 Feb 2021 22:01:50 +0000 Illinois' Latest Use Of Taxpayer Money As Anti-Republican Political Club
Illinois' Latest Use Of Taxpayer Money As Anti-Republican Political Club
Illinois' Latest Use Of Taxpayer Money As Anti-Republican Political Club
Submitted by Mark Glennon of Wirepoints
Illinois Treasurer Michael Frerichs and a group of 29 other state financial officials recently sent letters to six of the nation’s largest private sector money managers in a transparently partisan attempt to bully them out of supporting Republicans.
The effort is a misuse of the power that adheres to managing billions of dollars of taxpayer money and sets a dangerous precedent that might well invite retaliation in the same form by Republicans holding similar offices or from a Republican successor to Frerichs. It’s an attempt by incumbent officeholders to control much of the money that controls politics.
Unfortunately, the effort got no scrutiny and only a few articles in the national media, including these in The Washington Post and Bloomberg .
Frerichs oversees the investment of some $35 billion of Illinoisan’s money. Together with the other treasurers, public fiduciaries and pension trustees who signed the letter, over a trillion dollars of public money is represented.
Treasurer Michael Frerichs
Their letter went in substantially identical form, one of which is here , to BlackRock Inc., Vanguard Group, JPMorgan Chase & Co., Fidelity Investments, State Street Corp. and Bank of New York Mellon Corp.
The letter purports to be mainly about transparency and political contributions to members of Congress who voted against certification of election results that came in from the states. On January 6, 147 Congressional Republicans voted against certification, which was well over half of the Republican members of Congress.
That, the letter says, made its writers worried about returns on their investments. “A functioning democracy is foundational to a stable economy,” the letter says, “and we rely on economic and political stability in order to generate consistent investment returns on behalf of our beneficiaries.”
Nothing political at all, the officials are claiming, they are just doing their best to maximize financial returns.
Take a closer look to see if that’s believable.
One implicit threat about contributions to those candidates is clear in the first sentence of the letters. “[With] assets under management of over $1 trillion,” Frerichs and the others wrote, “we are frequently asked to evaluate asset allocations to asset managers.”
And they ask in the letter, “Will [you] forswear corporate political spending (direct or indirect) to the 147 members of Congress who voted to overturn the results of a free and fair democratic election on January 6th, 2021?”
In other words, change your political contributions or, well, they didn’t need to spell it out.
There’s much more to it. The letters are a broad attempt to bully the money managers into partisan changes in their political activity.
You can’t even get past the letterhead, shown here, to see that broader, partisan agenda. It’s brazen, carrying the names of Service Employees International Union and Majority Action.
It’s so brazen you have to wonder what they were thinking.
SEIU is one of the largest public unions in the nation and huge Democratic benefactor. It is listed among Frerichs’ ten biggest campaign contributors in 2018, the last time he ran.
Majority Action , which spearheaded the effort behind the letter, is a progressive outfit focused on publicly shaming corporations into supporting like-minded causes, particularly on global warming.
Why are SEIU and Majority Action on the letterhead if not to signal general support for them as well?
As you would expect, it’s an entirely partisan group that signed the letter. Every one of the elected officials who signed it are Democrats. And each of the unelected officials who signed it are, from all I could find, active progressives and presumably also Democrats.
Are the letter writers sincere when claiming they are only concerned about their investment returns and election certification?
Objections to presidential vote certifications are not uncommon. Democrats have objected to all three certifications of Republican wins since 2000 – Donald Trump in 2016 and George W. Bush in both 2000 and 2004. When Sen. Barbara Boxer objected to certification of Bush’s Ohio certification in 2004, Illinois Sen. Dick Durbin said on the Senate floor, “I thank her for doing that because it gives members an opportunity once again on a bipartisan basis to look at a challenge that we face not just in the last election in one State but in many States.”
Durbin’s point was fair, and Democrats had every right to make those objections. The letter writers undoubtedly didn’t object, nor are we aware of any objections they had to any of countless elected officials who stood silent and sometimes encouraged the political violence we saw over the summer.
There’s another oddity about the letter. Among its signers is Aaron Ammons as trustee of SURS, one of Illinois’ pensions, the State University Retirement System.
SURS, like most Illinois pensions, is among the walking dead in actuarial terms, being only 39% funded. Does anybody really think that saving democracy from insurrectionists is what SURS trustees should be focused on?
Ammons, too, is a progressive Democrat. He’s a former chapter president of SEIU. Appointed by Gov. JB Pritzker, he was elected Champaign County Clerk in 2018 and co-founded the Champaign Urbana Citizens for Peace & Justice. He is married to Democratic State Representative Carol Ammons.
The letter isn’t entirely focused on campaign contributions to those who voted against the vote certification. It addresses campaign donations in general and asks what broader reforms the letter’s recipients will undertake to rigorously reassess their “corporate political spending and evaluate whether payments serve to advance the company’s business objectives and a stable democracy.”
But that’s an entirely political judgement that neither Frerichs, Ammons nor the other signers are charged with imposing. Even if they are sincere in their claims about what’s good for rates of return in the long run, suffice it to say that opinions vary.
Those broader topics and questions belie the letter’s real purpose, which is to tell the big money folks to toe the party line — or else. From the letterhead down, its recipients would be fools to miss that full message. It’s not about maximizing returns, it’s about telling them where to use their financial clout politically.
We are fortunate that, at least so far, public officials with different political views than the letter writers haven’t tried the same tactic. They well might, as might a Republican successor to Frerichs.
A bad precedent has been set. Money, unfortunately, already controls much of government. But if this precedent is followed, we would have incumbent politicians effectively controlling much of the money that controls politics, pushing and pulling in different directions.
The letter is the most recent on a list of ways Frerichs has misused the public’s money for partisan purposes. Those stories and some on Frerichs’ other doings are in our articles linked below.
Tyler Durden
Thu, 02/25/2021 - 17:01 Close
Thu, 25 Feb 2021 21:40:00 +0000 Billionaire Charitable Giving A "Capitalist PR Scam", Says CEO Who Slashed His Own Pay By $1 Million
Billionaire Charitable Giving A "Capitalist PR Scam", Says CEO Who Slashed His Own Pay By $1 Million
The CEO of credit-card processing company Gravity Payments, Dan Price, has not only cut his own pay by $1 million and raised his em
Read more.....
Billionaire Charitable Giving A "Capitalist PR Scam", Says CEO Who Slashed His Own Pay By $1 Million
The CEO of credit-card processing company Gravity Payments, Dan Price, has not only cut his own pay by $1 million and raised his employees minimum salary to $70,000 per year, but he's also blowing the whistle on "charitable" giving by billionaires.
Billionaire philanthropy is "one of capitalism's biggest PR scams", Price proclaimed, according to the Daily Mail. He noted that the average billionaire donates only 1% of their worth to charity each year. Another estimate from Giving USA has put that number closer to 2%.
His comments come in the midst of supporting a bill that would increase taxes on wealthy business owners like him. HB 1406 proposes a net worth tax that would apply a 1% levy to anyone with a net worth over $1 billion. Price thinks the bill could help the state's budget shortfalls and correct a broken tax system where low income households pay too much.
Charitable giving "helps them avoid having to face steeper bills," 36 year old Price said. Price became a millionaire at the age of 31.
"The average billionaire donates 1% of their fortune to charity yearly - less than non-billionaires. But when you donate $200 you don't get glowing articles, a hospital named after you and a massive tax write off," Price wrote on Twitter this week.
"In reality, the amount they donate is a fraction of what they would pay if their tax rates were in line with the working class," Price said.
He also shares a link to an article showing the top charitable contributions of 2020. The name at the top of that list was Amazon founder Jeff Bezos, but alas, his "increase in donations did not correspond with his increase in wealth," the Daily Mail reported. Bezos' net worth is now approaching $200 billion and the new proposed tax could cost him $2 billion per year.
In 2020, he pledged $10 billion to the Bezos Earth Fund - his fund to combat climate change. He also donated $100 million to Feeding America.
Price become a celebrity in 2015 when he announced that he was raising the minimum wage at his Seattle headquarters to $70,000 per year and taking a nearly million dollar pay cut so that his salary could match his staff's.
Tyler Durden
Thu, 02/25/2021 - 16:40 Close
Thu, 25 Feb 2021 21:21:03 +0000 Beyond Meat Tumbles On Big Miss, Then Surges On Strategic Partnerships With McDonalds, Yum!
Beyond Meat Tumbles On Big Miss, Then Surges On Strategic Partnerships With McDonalds, Yum!
After a painful day for everyone in the markets, Beyond Meat investors, both longs and shorts, suffered a rollercoaster ride after hours whe
Read more.....
Beyond Meat Tumbles On Big Miss, Then Surges On Strategic Partnerships With McDonalds, Yum!
After a painful day for everyone in the markets, Beyond Meat investors, both longs and shorts, suffered a rollercoaster ride after hours when first BYND tumbled after the company's latest disappointing results spooked bulls, only to see the stock reverse and spike when the company announced a strategic partnership with both McDonalds and Yum Brands.
First, here are the disappointing numbers the company reported for Q4:
Net revenue $101.9 million, missing the estimate of $103.6 million (of this U.S. net revenue was $77.4 million, and international revenue $24.5 million)
Adjusted loss per share 34c, missing the estimate loss/share 14c (range loss/share 28c to EPS 2.0c)
Adjusted Ebitda loss $9.5 million, missing the estimate profit $0.87 million
Gross margin 24.9%, missing estimate 31.0%
Cash and cash equivalents $159.1 million, missing the estimate $223.6 million
And then, the proverbial cherry on top, the company advised investors that "given that the ongoing evolution of consumer demand patterns across retail and foodservice channels has significantly increased the difficulty in forecasting the Company's customer demand levels, management will not be providing 2021 guidance until further notice."
The initial news of the company' ghaslty earnings - and guidance pull - sent the stock plunging as much as $20, down to $127.5 after hours. However, the stock then promptly reversed when the company surprised bears with two new strategic partnerships moments after reporting earnings, one with McDonalds and another with Yum! Brands. Here are some more details on the McDonalds deal :
Beyond Meat today announced the establishment of a three-year global strategic agreement with McDonald’s Corporation. As part of the agreement, Beyond Meat® will be McDonald’s preferred supplier for the patty in the McPlant®, a new plant-based burger being tested in select McDonald’s markets globally. In addition, Beyond Meat and McDonald’s will explore co-developing other plant-based menu items – like plant-based options for chicken, pork and egg – as part of McDonald’s broader McPlant platform.
The agreement will bring together McDonald’s iconic global brand with Beyond Meat's leading expertise in plant-based protein development to create and market innovative new plant-based menu offerings. This announcement further solidifies the relationship between McDonald’s and Beyond Meat, which began in 2019 with the Canadian test of a sandwich made with Beyond Meat’s plant-based patty.
“Our new McPlant platform is all about giving customers more choices when they visit McDonald’s,” said Francesca DeBiase, McDonald’s Executive Vice President and Chief Supply Chain Officer. “We’re excited to work with Beyond Meat to drive innovation in this space, and entering into this strategic agreement is an important step on our journey to bring delicious, high quality, plant-based menu items to our customers.”
... and then just to make sure everyone is sufficiently distracted from its dismal earnings and guidance pull, BYND also announced a new global partnership with Yum! Brands (i.e., KFC, Pizza Hut and Taco Bell), "to co-create and offer craveable and innovative plant-based protein menu items":
Beyond Meat, Inc. today announced a global strategic partnership with Yum! Brands (NYSE: YUM) to co-create and offer craveable and innovative plant-based protein menu items that can only be found at KFC, Pizza Hut and Taco Bell over the next several years. Beyond Meat® and Yum! Brands expect to leverage their industry-leading research and development capabilities to meet the evolving tastes of the consumers of today and tomorrow.
“We are honored to enter into a global strategic partnership with Yum! Brands, one of the world's largest restaurant companies. We look forward to expanding our work with the teams at Yum's iconic KFC, Pizza Hut and Taco Bell brands to together bring truly delicious plant-based product innovation to consumers," said Ethan Brown, Beyond Meat Founder & CEO.
Beyond Meat’s strategic partnership with Yum! Brands will be an expansion of the companies’ growing track record of collaborations to offer delicious and sustainable plant-based products. KFC was the first national U.S. quick-service restaurant to introduce plant-based chicken when it tested Beyond Fried Chicken™ at an Atlanta-area restaurant in 2019. Since the initial rollout, KFC has expanded testing of Beyond Fried Chicken in other U.S. cities. In 2020, Pizza Hut U.S. launched the Beyond Italian Sausage Pizza and the Great Beyond Pizza nationwide, becoming the first national pizza chain to introduce a plant-based meat pizza coast-to-coast.
Through this collaboration, Yum! Brands will build on its tradition of food innovation and creating new consumer markets for industry-defining items and increase the number of plant-based options that appeal to flexitarians, those looking to incorporate plant-based meat or more diverse protein options into their diets.
The result, as shown below, was a whiplash which first stopped out longs, only to hammer shorts moments later as virtually everyone lost money.
Tyler Durden
Thu, 02/25/2021 - 16:21 Close
Thu, 25 Feb 2021 21:20:00 +0000 Oil And Debt: Why Our Financial System Is Unsustainable
Oil And Debt: Why Our Financial System Is Unsustainable
Oil And Debt: Why Our Financial System Is Unsustainable
Authored by Charles Hugh Smith via OfTwoMinds blog,
How much energy, water and food will the "money" created out of thin air in the future buy?
Finance is often cloaked in arcane terminology and math, but the one dynamic that governs the future is actually very simple.
Here it is: all debt is borrowed against future supplies of affordable hydrocarbons (oil, coal and natural gas). Since global economic activity is ultimately dependent on a continued abundance of affordable energy, it follows that all money borrowed against future income is actually being borrowed against future supplies of affordable energy.
Many people believe that alternative "green" energy will soon replace most or all hydrocarbon energy sources, but the chart below shows why this belief is not realistic: all the "renewable" energy sources are about 3% of all energy consumed, with hydropower providing another few percent.
There are unavoidable headwinds to this appealing fantasy:
1. All "renewable" energy is actually "replaceable" energy, per analyst Nate Hagens: every 15-25 years (or less) much or all of the alt-energy systems and structures have to be replaced, and little of the necessary mining, manufacturing and transport can be performed with the "renewable" electricity these sources generate. Virtually all the heavy lifting of these processes require hydrocarbons and especially oil.
2. Wind and solar "renewable" energy is intermittent and therefore requires changes in behavior (no clothes dryers or electric ovens used after dark, etc.) or battery storage on a scale that isn't practical in terms of the materials required.
3. Batteries are also "replaceable" and don't last very long. The percentage of lithium-ion batteries being recycled globally is near-zero, so all batteries end up as costly, toxic landfill.
4. Battery technologies are limited by the physics of energy storage and materials. Moving whiz-bang exotic technologies from the lab to global scales of production is non-trivial.
5. The material and energy resources required to build alt-energy sources that replace hydrocarbon energy and replace all the alt-energy which has broken down or reached the end of its life exceeds the affordable reserves of materials and energy available on the planet.
6. Externalized costs of alt-energy are not being included in the cost. Nobody's adding the immense cost of the environmental damage caused by lithium mines to the price of the lithium batteries. Once the full external costs are included, the cost is no longer as affordable as promoters claim.
7. None of the so-called "green" "replaceable" energy has actually replaced hydrocarbons; all the alt-energy has done is increase total energy consumption. This is Jevons Paradox: every increase in efficiency or energy production only increases consumption.
Here's a real-world example: building another freeway doesn't actually reduce congestion in the old freeway; it simply encourages people to drive more, so both freeways are soon congested.
Setting aside the impracticalities of replacing most or all hydrocarbons with "replaceable" energy, the real issue is all debt service / repayment is ultimately funded by future energy.
On the face of it, future income is used to pay back borrowed money, but all future income is nothing more than a claim on future energy.
"Money" without access to affordable energy is worthless.
Imagine being air-dropped into the Sahara desert with a backpack of gold and $100 bills. You're wealthy in terms of "money" but if there's no water, food and transport to buy with your money, you'll die. The point is that "money" is only valuable if the essentials of life are available at affordable prices.
Right now the average fulltime wage in the U.S. is about $19/hour, and the average cost of a gallon of gasoline is $2.25. So a mere 7 minutes of (pretax) labor will buy a gallon of gasoline.
But what happens if inflation increases the cost of oil but wages continue stagnating? What happens to the economy if it takes one hour of labor to buy a gallon of gasoline instead of 7 minutes?
Economics claims that cheaper substitutes will appear to replace whatever is expensive, so cheap electricity will replace costly oil, or transport will switch to cheap natural gas, etc.
But these proposed transitions are not cost-free. The cost of replacing 100 million internal combustion engine (ICE) vehicles is non-trivial, as is building the "replaceable" energy infrastructure needed to power all these vehicles.
The true costs of "replaceable" energy have been fudged by not counting external costs or replacement costs; the full lifecycle costs of "replaceable" energy are much higher than promoters are claiming.
There are supply constraints that are also not included. For example, all the plastic in the world is still derived from oil, not electricity. (Note that each electric vehicle contains hundreds of pounds of plastic.)
As I explained in a previous post, energy in any form is not magically pliable. Just as we can't turn electricity into jet fuel, we can't turn a barrel of oil into only diesel fuel. Coal can be turned into liquid fuel but the process is non-trivial.
All of which is to say that the cost of energy in hours of labor is likely to increase, possibly by more than the global economy can afford.
There may also be supply constraints, situations where the energy people want and need is not available in sufficient quantities to meet demand at any price.
As "software eats the world" and automation replaces costly human labor, it's also likely that the erosion in the purchasing power of labor that's been a trend for 20 years will continue and accelerate.
Analyst Gail Tverberg has done an excellent job of explaining that it's not just the availability of energy that matters, it's the affordability of that energy to the bottom 90% of consumers. 2021: More troubles likely .
"Money" is nothing but a claim on future energy, because energy is the foundation of the global economy. Without energy, we're all stranded in the desert and all our "money" is worthless because it can no longer buy what we need to live.
Central banks can print infinite amounts of currency but they can't print energy, and so all central banks can do is add zeroes to the currency. They can't make energy more affordable, or guarantee that a day's labor will buy more than a fraction of the energy that labor can buy today.
The global financial system has played a game in which "money" is either printed or borrowed into existence, on the theory that energy will be more abundant and more affordable in the future. If this theory turns out to be incorrect, the "money" used in the future to pay back debts incurred today will have near-zero value.
The question is: how much energy, water and food will the "money" created out of thin air in the future buy?
If the lender can only buy a tiny sliver of the energy, water and food that the "money" could have bought at the time the "money" was borrowed, then it won't really matter how many zeroes the "money" will have. What matters is how much purchasing power of essentials the "money" retains.
Borrowing trillions of dollars euros, yen and yuan every year expands the claims on future energy at a rate that far exceeds the actual expansion of energy in any form.
This has created an illusion that we can always create money out of thin air and it will magically hold its current purchasing power for ever greater amounts of energy, food and water.
The monumental asymmetry between the staggering rate of expansion of "money"--claims on future energy-- and the stagnant supply of energy means this illusion is only temporary.
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Tyler Durden
Thu, 02/25/2021 - 16:20 Close
Thu, 25 Feb 2021 21:01:02 +0000 Bond Bloodbath Blows Up Stocks As Redditors-Revenge Hammers Hedgies (Again)
Bond Bloodbath Blows Up Stocks As Redditors-Revenge Hammers Hedgies (Again)
Bond Bloodbath Blows Up Stocks As Redditors-Revenge Hammers Hedgies (Again)
Bonds and stocks were both battered today...
Source: Bloomberg
Which is why we wheeled out the deer!
Today was the worst day for equity/bond investors since March 2020...
Source: Bloomberg
Investors puked bonds today as several critical levels were breached...
“This is analogous to a flash crash in Treasuries,” said Arthur Hogan, chief market strategist at National Securities Corp.
“We’re finally seeing yields react to what’s likely to be better economic activity.”
"That really got out of hand..."
VIDEO
And that surge in yields sparked chaos in stocks. The initial puke saw a modest dead cat bounce but that stalled at 1430ET (margin call time) and stocks chundered into the close led by Small Caps and Nasdaq...
And there was no Powell to save the day as we saw the biggest sell-program sine October...
Source: Bloomberg
All sectors were deep in the red today - even financials!...
Source: Bloomberg
But The Fed desperately tried to talk things down...
*FED'S BOSTIC SAYS "I AM NOT WORRIED" ABOUT MOVE IN YIELDS
*BOSTIC: FED DOESN'T NEED TO RESPOND TO YIELDS AT THIS POINT
*BOSTIC SAYS YIELDS STILL `VERY LOW' FROM HISTORIC PERSPECTIVE
Roughly translated: "nothing to see here..."
VIDEO
Except that investors now have "an alternative" as 10Y yields have equilibrated with equity dividends (and stocks trading at record valuations by a country mile)...
Source: Bloomberg
Both growth and value stocks were clobbered today (but the former lagged)...
Source: Bloomberg
But, the relative underperformance broke a critical support level for growth/value...
Source: Bloomberg
GME ripped...
On another gamma squeeze (major super-short-dated OTM Call buying)...
Source: Bloomberg
Sparking hedge fund liquidations...
Source: Bloomberg
As the Meme Stocks soared...
Source: Bloomberg
ARKK was crushed again...
Along with TSLA...
FANG Stocks tumbled...
Source: Bloomberg
Treasuries were a bloodbath today as CNBC's Rick Santelli called the 7Y auction the "worst auction ever" and it was th ebelly that massively underperformed...
Source: Bloomberg
YES - that is a 22bps spike in the 5y/7y segment! Pushing 5Y above the March spike highs...
Source: Bloomberg
10Y Yields also exploded higher as the auction debacle struck (surging from 1.47% to 1.61%) before 'someone' stepped in. Late day saw yields pushing back out...
Source: Bloomberg
Real yields continued to surge - to their highest since June 2020...
Source: Bloomberg
Risk Parity was hammered today. This was the worst day for RP funds since March 2020 ...
As equity-bond correlation surged unusually positive...
And VIX screamed back above 30...
So a quick summary - WSB'rs squeezed the hell out of hedge funds - causing chaos - and now they are back and this time it is Risk-Parity funds, which are must more intrinsic to the overall levels of markets..
The dollar surged higher as bonds and stocks dumped...
Source: Bloomberg
And crypto was surprisingly stable...
Source: Bloomberg
Bitcoin continues to oscillate around $50k...
Source: Bloomberg
Gold fell back below $1800...
But oil tracked bond yields higher (or vice versa) with WTI back above $63...
Finally, we note that one side of the market is pricing in some serious Fed hawkishness going forward (especially relative to The Fed's own forecasts)...
Source: Bloomberg
Trade accordingly.
Tyler Durden
Thu, 02/25/2021 - 16:01 Close
Thu, 25 Feb 2021 20:46:59 +0000 Israeli COVID Vaccinations Top 50%; US Daily Cases Drop Below 70K For First Time Since October
Israeli COVID Vaccinations Top 50%; US Daily Cases Drop Below 70K For First Time Since October
Israel has just crossed a major vaccination threshold on Thursday, with health authorities claiming that more than 50% of Israelis have b
Read more.....
Israeli COVID Vaccinations Top 50%; US Daily Cases Drop Below 70K For First Time Since October
Israel has just crossed a major vaccination threshold on Thursday, with health authorities claiming that more than 50% of Israelis have been vaccinated.
"As we speak we are crossing the line of 50% of the general Israeli population getting at least a first jab ," Health Minister Yuli Edelstein said in a Bloomberg Television interview on Thursday. "We all have to understand that we still have a long way to go, right now we are cautiously opening the Israeli economy,” he said. “There’s this kind of sigh of relief that comes a little bit I would say prematurely."
Still, many questions remain about vaccines. After a setback with the AstraZeneca jab - it was found to be only minimally effective against a mutant strain that first emerged in the country - South Africa said it will take about three months to register and approve a different vaccine for general use. The country, home to Africa's largest economy, has started inoculations of health workers as part of a study using the JNJ vaccine, which was reportedly found to be more effective against the South African strain.
Circling back to the US, the number of new COVID cases is averaging fewer than 70K per day for the first time since October. As for virus-linked mortality, deaths have fallen from their peak, but about 2K continue to be announced nationwide on most days. The US surpassed 500K total deaths earlier this week, while daily deaths topped 3K on Wednesday for the first time in a couple of weeks.
On the vaccine front, millions of people are being vaccinated every week, and about 13% of the US population has received at least one dose. Case numbers remain stubbornly high in New York and New Jersey. By contrast, infection numbers have plummeted in the Great Lakes states, including Indiana, which is now averaging fewer than 1K new cases per day, Illinois, Wisconsin and Ohio have also reported declines of more than 30% over the last two weeks.
Source: NYT
Source: NYT
Most notably, the 72% plunge in COVID-19 hospital admissions in a month in the U.S. was dominated by the oldest Americans as it appears vaccinations are starting to help...
As a reminder, age is a critical factor in Covid-19 risk, with the chances of dying from the virus about 7,900 times greater for the oldest Americans than for those 5 to 17 years old. It’s 1,100 times greater for those 65-74 and 2,800 more for those 75-84.
* * *
Elsewhere, Zimbabwe has become the latest country to strike a deal with a major Chinese vaccine-maker (in this case, China's Sinopharm) agreeing to buy 1.8MM Sinopharm jabs.
Cases are falling across Europe, but some countries are faring more poorly than others. Finland’s government is preparing to invoke emergency powers, including a lockdown from March 8 to 28, as infection rates rise, it said on Thursday. Among the planned measures are closing restaurants and bars except for takeout, and moving students in junior high and above to remote learning. The government is also considering whether municipal elections can be held in April as planned. Hungary, which just posted its highest number of daily cases yet, is mulling an extension of restrictions until the middle of March. Authorities reported 4,385 new cases on Thursday, the highest daily total since Dec. 18, in what officials described as the ascending part of the next wave. Even in Germany, cases jumped 10.7K over the past 24 hours through Thursday, the highest one-day tally since Feb. 6.
Germany’s seven-day incidence rate inched up to 61.7, while the pace of vaccinations remains slow, like the rest of Europe. Merkel has set a rate of 50 as the minimum for lifting certain restrictions, and 35 as the threshold for lifting even more restrictions. In the Mediterranean, Cyprus will ease some of its restrictions after the number of new cases has dropped over the past 14 days. Starting on March 1, some high-school classes will re-open, as well as gyms, dance schools and swimming pools under certain conditions. The Cypriot government also plans to open restaurants, cafes and bars on March 16 as long as the situation keeps improving. Conversely, Finland's government is preparing to invoke another emergency lockdown, set for March 8 through the 28, as infections rise. Bulgaria's coronavirus deaths surpassed 10,000 as the EU country with the lowest vaccinated share of the population is preparing to ease restrictions. The government said it will allow bars and restaurants to reopen on March 1 despite the rising number of new virus cases.
Finally, India reported 16.7K new cases on Thursday (the highest one-day addition this month) pushing the total past 11MM and stoking fears of another wave in the world's second-most populous nation. Deaths rose too, taking the total casualties to more than 156.7K, according to data from the Indian government.
Tyler Durden
Thu, 02/25/2021 - 15:46 Close
Thu, 25 Feb 2021 20:30:32 +0000 Biden's Corporate Tax Hike Would Cut Jobs, Reduce Wages, Depress Growth: Think Tank
Biden's Corporate Tax Hike Would Cut Jobs, Reduce Wages, Depress Growth: Think Tank
Biden's Corporate Tax Hike Would Cut Jobs, Reduce Wages, Depress Growth: Think Tank
Authored by Tom Ozimek via The Epoch Times,
President Joe Biden ’s plans to raise the corporate tax rate would have a chilling effect on economic growth, depress wages, and lead to job losses, according to the Tax Foundation, a tax policy nonprofit.
Biden and congressional lawmakers have proposed several changes to the tax code, including raising the corporate tax rate to 28 percent from the current 21 percent - the level that the Trump administration brought it down to from 35 percent.
The Tax Foundation said in a new report released Feb. 24 that the Biden administration’s plans to hike the tax rate for corporations would eliminate 159,000 jobs, depress wages by 0.7 percent, and reduce long-run economic output by 0.8 percent.
A more modest corporate tax increase to 25 percent would lead to 84,200 job losses, see wages fall by 0.4 percent, and squeeze gross domestic product by 0.4 percent, the report found.
On the campaign trail, Biden also said he would seek a new 15 percent minimum book tax on corporations with more than $100 million in book income, in addition to imposing tax penalties for some types of offshoring activity.
Tax Foundation Senior Policy Analyst Garrett Watson and Vice President of Federal Tax and Economic Policy William McBride argued in the report that the minimum book tax would complicate and distort the tax code while generating little revenue.
McBride and Watson estimated that the minimum tax—in combination with all of Biden’s other tax proposals—would reduce long-run economic output by about 0.21 percent.
“President Biden’s proposed tax hike would reduce American economic output during a time when we need to maximize economic growth to reach our country’s pre-pandemic growth trend and return to full employment,” McBride and Watson said in the report.
Prior to 2017, when then-President Donald Trump enacted the Tax Cuts and Jobs Act (TCJA), the United States was suffering a slowdown in economic growth, including historically low growth in wages and productivity, and new business formation in retreat. Meanwhile, a significant body of research suggested that the pre-2017 corporate tax level of 35 percent was a drag on growth.
“Lowering the corporate tax rate to 21 percent brought the U.S. closer to the OECD average, reduced the incentive for corporations to invert or shift profits, and increased investment incentives that lead to a higher growth rate,” McBride and Watson said in their report.
“Increasing the corporate income tax would undermine the progress policymakers made four years ago,” the pair argued, noting that raising the corporate tax rate to 28 percent would raise the federal-state combined corporate tax rate in the United States to 32.34 percent, the highest such rate out of all 37 member countries of the Organization for Economic Cooperation and Development (OECD).
McBride and Watson argued that a high corporate tax rate relative to other OECD countries would encourage profit shifting abroad and, more generally, out of the U.S. corporate sector.
“As the U.S. bounces back from intertwined public health and economic crises in 2021, avoiding harmful tax increases and pursuing reform opportunities in corporate taxation should be the areas of focus ,” McBride and Watson argued.
The call to avoid raising the corporate tax rate was also made by the U.S. Chamber of Commerce, which hailed the TCJA for driving job growth and other benefits.
“We worked for 31 years before finally achieving tax reform that, among other things, lowered the corporate tax rate to a level that made us not only competitive in the global economy, but made it attractive to do business here,” said Caroline Harris, vice president of tax policy and economic development at the Chamber of Commerce, in a recent statement .
“It is imperative that we preserve this competitive rate, which was enacted to enable American businesses to compete successfully in the global economy, to attract foreign investment to the United States, to increase capital for investment, and to drive job creation in the United States.”
Tyler Durden
Thu, 02/25/2021 - 15:30 Close
Thu, 25 Feb 2021 20:10:00 +0000 Texas Grid Operator Warns Of Defaults As Credit Crisis Develops
Texas Grid Operator Warns Of Defaults As Credit Crisis Develops
Texas Grid Operator Warns Of Defaults As Credit Crisis Develops
The Texas energy crisis has morphed from a power grid failure to a humanitarian emergency to a credit crisis as billions of dollars in power bills come due.
According to FT , electricity retailers, municipal utilities, and power generation companies were purchasing wholesale energy during the crisis when rates surged to a cap of $9,000 a megawatt-hour last week, owe a whopping $50 billion.
ERCOT, the state's grid operator, warns that some market participants have yet to post collateral to cover some of the bills as defaults begin.
Kenan Ogelman, ERCOT's vice-president of commercial operations, said market participants who buy power from them have to post collateral as a down payment on energy purchases. He said some entities have "failed to deliver it."
"Defaults are possible, and some have already happened," Ogelman warned.
Due to surging energy prices last week and the week before, collateral requirements jumped for power buyers. At the beginning of February, ERCOT held around $600 million in total collateral.
On Wednesday, Exelon Corporation posted $1.4 billion of collateral with the Texas power company. Exelon said it might record losses between $560 million to $710 million due to power rate volatility when three of its gas generating plants went offline.
Ogelman said collateral requirements would peak by the end of the week and add "financial stress" to market participants.
The Public Utility Commission of Texas ordered the grid operator on Monday to use "discretion" on settlements, collateral obligations, and payments.
Ogelman said there are consequences for halting payments that would cascade into problems for energy futures markets operated by Intercontinental Exchange.
"There are consequences to any pause," Ogelman said. "I think it's important to understand that there's a train of dominoes, essentially, that flow through ERCOT and into other markets."
Sean Taylor, ERCOT chief financial officer, said there are "several billions of dollars of invoices outstanding, then it's a matter of how much of those get paid relative to the collateral we have."
Taylor warned: "The next couple of days will really determine where we stand."
"To cover shortfalls from defaulting parties, the non-profit had begun to tap an almost $1bn fund supported by electric transmission contracts," Taylor said.
Additional stress is developing for individual customers (such as households or companies) who were socked with huge power bills . Residential customers who had variable-rate electricity plans experienced steep increases in their monthly bills; one customer's bill went from $660 on average to more than $17,000 this month.
... and earlier this week, it appears the first casualty of the Texas power grid crisis is Just Energy who warned the "financial impact of the Weather Event on the Company once known, could be materially adverse to the Company's liquidity and its ability to continue as a going concern."
Tyler Durden
Thu, 02/25/2021 - 15:10 Close
Thu, 25 Feb 2021 19:50:00 +0000 COVID Will Fade, But...
COVID Will Fade, But...
COVID Will Fade, But...
Authored by James Howard Kunstler via The Daily Reckoning blog,
The absence of the big orange You-Know-Who at center stage of American life has changed the mood of the scene from a five-alarm fire to just another day in a collapsing civilization.
As long as he remains healthy, and evades assassin’s bullets, Mr. Trump will go after his antagonists in Congress like a mad dog toward the 2022 midterm. But now he can only watch from the sidelines and throw stink bombs.
About that collapsing civilization I mentioned a second ago…
Texas went medieval after an ice storm took the power down for millions, with ramifications building by the hour — especially the countless burst water pipes that will take forever to repair. (How many plumbers are there in San Antonio?)
Food went scarce overnight. People died in their cars. The political blowback has barely registered yet, except for Senator Ted Cruz slinking back home from a luxury resort in Cancun, whoops, and Beto O’Rourke shooting his mouth off like a cholo with a Saturday night special at a low-rider parade on Cinco de Mayo.
Meanwhile, Covid-19 cases are going down fast across the country. If it actually goes away, imagine the giant hole left in the national narrative. No more arguments over lockdowns, kids could go back to school, and Americans could see each other’s faces again.
The “progressives” in power would have to hunt up some new reasons to cancel the bill of rights. That shouldn’t be too difficult for a party adept at making things up. Right wing extremism would be my bet, even if Antifa and BLM go back to partying in the streets like it’s 2020 when the weather warms up.
The Stock Market’s Based on Bitcoin
What won’t go away is the nation’s fantastic economic mess. In just a few months since Thanksgiving, the financial system has gone through an epic shift, barely noticed by citizens preoccupied with unpaid bills, skipped rents, and empty refrigerators: the stock markets are now based on Bitcoin, which is to say, on less than nothing.
A whole new dynamic has emerged with publicly-held companies buying the stuff hand-over-fist. An outfit like Tesla, rumored to manufacture electric cars, invested $1.5 billion in the crypto-currency, which has shot up to over $50,000-a-coin in recent weeks.
The move was so splendidly shrewd that Tesla’s stock price also shot up, though they don’t make a profit on those cool cars. Of course, $1.5 billion is chump change for the charismatic Elon Musk, whose share of the American GDP can be seen from outer space, like the Great Wall of China.
Other companies are buying Bitcoin on margin, taking advantage of super-low interest rates to make a fast killing. What a great idea! Even better than borrowing to buy back your own company’s stock to jack-up the share value.
Don’t be surprised if half of the S&P jumps into the Bitcoin frenzy, bidding it up to six figures. Won’t that do wonders for US productivity and working-class wages? None of that will escape the attention of a “progressive” Congress, which will see a great opportunity to try to compensate for its fiscal profligacy by passing new taxes on “excess wealth” or “windfall profits.”
Then, watch the rush-to-the-exits by shareholders in those companies that loaded up on Bitcoin, aggravated by the margin calls on the dough they borrowed to buy the stuff… as well as Bitcoin itself plummeting back to its actual true value: around zero.
Guaranteed Basic Income
Meanwhile, Covid or no Covid, there is now a very large class of people across this land who either can’t or won’t earn a living, and we are seeing last year’s idle chat about “guaranteed basic income” (GBI) rapidly congeal into solid policy proposals to supply just that.
It’s insane, you know, having nothing to do with producing things of value, but such is the new faith in monetary techno-magic — of which Bitcoin is the exemplar — that the reigning grand princes and princesses of economics are unanimous that it’s actually possible to get something for nothing now.
I’m sure enough Republicans would go along with it - in terror of their broke and wrathful voters - to pass GBI.
The wild card, though, is how quickly we will destroy the value of the dollar as all this occurs, that is, provoke a king-hell inflation, so the people will get their GBI in worthless money.
Nobody believes it can happen after ten years of quantitative easing and other shucks-and-jives that seemed to hardly move the inflation needle (as officially measured), except on Wall Street.
But anyone who sets foot in a supermarket these days must feel a little shocked at food prices.
A dollar for one measly onion... eight bucks for a little flat of ground beef...? How do people with no jobs or lost businesses feed their families? Do they get a warm tingly feeling knowing that Tesla shares are also up? Or are they out in the old tool shed at midnight, sharpening the pitchforks and soaking rags in kerosene?
Unity?
Perhaps Ol’ Woke Joe Biden will explain where all this is going in his upcoming State of the Union Address scheduled for next Tuesday , according to the Associated Press. Oh, you didn’t know about that? I wouldn’t blame you. There is absolutely no buzz about it in the mainstream media, like, they’d rather not think about it.
Mr. Biden has been proclaiming the wish to “unite” the warring tribes of America. He may say so, but he doesn’t really mean it, not one little bit, and everybody knows it. His calls for unity are a dodge. Unity requires broad consensus.
Biden’s been signing executive orders like Pete Rose signing baseballs in a room full of fans. Every executive order he’s issued his first month on-the-job is designed as much as a slap in the face to more than half the country as it is an actual policy goal.
But going forward, the brutal facts of America’s crippled economy are crashing down on Biden and his Woke managers like the wrath of history. All the executive orders in the world won’t change that.
How long will it be before he just gets the hook?
Tyler Durden
Thu, 02/25/2021 - 14:50 Close