- The Largest Experiment On Humans Ever Seen
The Largest Experiment On Humans Ever Seen
Authored by Rob Slane via TheBlogMiore.com,
Which is the more reasonable approach a society might take in the outbreak of epidemic:
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To quarantine the sick, and take reasonable precautions to stop those who are identified as vulnerable from contracting the illness.
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To attempt to “control the virus” by preventing millions of healthy people from having contact with other healthy people.
To any society prior to 2020, it would have been obvious that the first approach is not only logical and proportionate, but the one least likely to have other unintended and highly destructive consequences. However, to my continued astonishment, many in our society not only believe that the answer is the second, but they somehow believe it to be based on established science.
Now I understand that many who support Lockdown will object to my characterisation of their position. They will say that it is deliberately misleading, since it talks about healthy people, and does not mention the sick. Such objections founder, however, on this undeniable fact: Lockdowns are, by their nature, an entirely untargeted and indiscriminate approach to a health issue, and the prohibiting by law of millions of healthy people from having contact with other healthy people is a feature, not a bug of a policy that was untried and untested before it was first implemented by the Chinese Communist Party in January last year, then copied by many Governments around the world thereafter.
For some reason, many Lockdownists seem to think that the onus is on Lockdown opponents to disprove their position. But as Dr Malcolm Kendrick points out in his excellent piece – Does Lockdown Work or Not, this is the opposite of how things are supposed to work:
“The starting point, for any scientific hypothesis, is for the proponents to disprove the null hypothesis. Demanding that those who believe something may not work, to prove that it doesn’t, is to turn the scientific method upside down. You can never prove a negative.”
Even so, he goes on to point out that most of the countries with the highest deaths per million are those which had fairly stringent Lockdowns, and therefore the data so far most certainly does not show that Lockdowns are effective, even on their own terms. Of course, Covidian Logic always has an answer to this, which is that these Lockdowns weren’t real Lockdowns. They were too little, too late, too soft, too lenient, too short, too small, too purple or something like that! But they can never be wrong. Low death rates show they work. High death rates show they would have worked if only people hadn’t been bad.
But the main point I wish to make about them is that they are not something that has been proposed, studied or trialled before, but are an entirely new practice, foisted upon the world for the first time in 2020. Which means what? It means that they are an experiment in real time. It means that our society (along with many others) has for the last year, and continues to be for the foreseeable future, subject to an experiment. In fact, the largest psychological, social and experiment ever conducted.
When I use this sort of language, it tends to meet the following mocking response: “So are you saying it’s all a mass conspiracy? Who’s the puppet-master then?” But this just misses the point. It does not need some Dark Lord sitting over all of it in order to be an experiment, although it has to be said that the likes of Professor Schwab do seem keen on putting themselves forward as pretty good candidates. No, it simply is by definition a psychological, social and economic experiment by the very nature of the fact that the mass quarantining and mass masking of millions of people, which cannot fail to change the psychology, society and economy, are untried, untested methods, based merely on hypothesis, and not on hard data. In fact, the data is still coming in from this enormous experiment, but as Dr Kendrick says, it doesn’t actually look good for the hypothesis:
“…I would conclude that the observational studies had – thus far – failed to disprove the null hypothesis. In fact, the evidence up to this point could suggest that lockdowns may actually increase the death rate. In short, I would look for another idea.”
But the psychological, social and economic experimentation are by no means the end of it. We have now moved on to the medical experimentation, by which I mean the giving of so-called “vaccines” to millions of people (so-called because they don’t actually stop people getting the virus, and it is not yet known whether they prevent transmission).
Incredibly, if you look at the Pfizer BioNTech SE Clinical Study Trial on the US National Library of Medicine Clinical Trials database, you will notice something very odd, which is that the Estimated Study Completion Date is on January 31st 2023. This is:
“the date on which the last participant in a clinical study was examined or received an intervention/treatment to collect final data for the primary outcome measures, secondary outcome measures, and adverse events.”
In other words, the medium to long-term side effects of this product cannot possibly be known, because the study is still ongoing. The long and short of it, as Professor Sucharit Bhakdi points out in this excellent interview (watch it soon before the YouTube Gatekeepers scrub it) is this: every single person now getting these jabs is effectively an unwitting test subject in the largest medical experiment ever carried out, having been asked to give their consent to receive a product injected into their bodies without being properly informed as to the status of the product.
Simply put, neither those administering these jabs nor those receiving them can have any idea of the potential medium to long-term consequences of these things, because the companies producing them have not completed the studies on them. And no, it is not the mark of an anti-vaxxer to be deeply concerned about this (I am not); it is just the mark of having one’s critical faculties in working order and of caring about what is being done to people – it’s called Loving Your Neighbour as Yourself.
In summary, both Lockdowns and the “vaccines” are essentially a mass experiment on humanity. The mid to long-term consequences of both are entirely unknown. Future generations will marvel at how the authorities were able to do this, but they will marvel even more at how millions of people acquiesced without much thought. None of this can possibly bode well. We need to humble ourselves and take a long hard look at what we are doing, or allowing to be done to us, as a matter of the utmost urgency.
Tyler Durden
Mon, 02/01/2021 – 02:00 -
- China Doesn't Have To Lift A Finger To Push Biden Around
China Doesn’t Have To Lift A Finger To Push Biden Around
Authored by Gordon Chang via The Gatestone Institute,
The Biden administration has just endorsed one of China’s most vicious attack lines against the United States.
The new administration’s actions look as if they are setting a pattern for its responses to Beijing on the disease and other matters.
On January 26, Biden signed his executive order titled “Memorandum Condemning and Combating Racism, Xenophobia, and Intolerance Against Asian Americans and Pacific Islanders in the United States.”
The order states that during the coronavirus pandemic “inflammatory and xenophobic rhetoric has put Asian American and Pacific Islander persons, families, communities, and businesses at risk.”
There is nothing wrong with protecting minorities from racism, but racism is not the problem. “Political correctness presages policy incorrectness,” writes the Claremont Institute’s Ben Weingarten on the Newsweek site, commenting on Biden’s executive order. “And when it comes to matters of life and limb, political correctness can kill.”
Weingarten is correct.
“Xenophobia” has been a constant Biden theme. On January 31 of last year, President Trump announced the “travel ban,” prohibitions and restrictions on arrivals from China.
Within moments of the announcement, Biden went on the attack. “This is no time for Donald Trump’s record of hysterical xenophobia and fear mongering to lead the way instead of science,” he said.
Biden’s campaign said the attack was not in response to the travel ban, yet on the following day the candidate expressed the same thoughts in a tweet: “We need to lead the way with science—not Donald Trump’s record of hysteria, xenophobia, and fear-mongering.”
There was nothing “xenophobic” about Trump’s travel ban. It was imposed on arrivals from the country where the disease first appeared. The ban, therefore, saved lives, and it would have saved even more if it had been stricter, announced sooner, and had been more rigorously enforced.
Biden was against the China travel ban, and if he had been president then, the disease would almost certainly have spread faster in America. He was, during the campaign, against all such travel prohibitions.
Then, Biden’s criticisms of the travel ban aligned perfectly with Beijing’s attacks on Trump—and on the United States.
Now, Biden is supporting another Chinese propaganda campaign. “The Federal Government must recognize that it has played a role in furthering these xenophobic sentiments through the actions of political leaders, including references to the COVID-19 pandemic by the geographic location of its origin,” declares the January 26 executive order.
The order is expected to result in a ban, across the federal government, of the use of “China virus,” “Wuhan flu,” and variants.
President Trump emphasized “China virus” early last year, in response to Beijing’s statements. On March 12, the Chinese foreign ministry launched disinformation attacks, accusing the U.S. of being the origin of the coronavirus disease and hiding its source. An official foreign ministry tweet made explicit the claim that official Chinese sources had been hinting for more than a month: The United States was ground zero for COVID-19.
Beijing has not given up on this malicious line of attack. This month, Beijing, with absolutely no evidence, has been pointing to Fort Detrick in Maryland as the source of the disease.
The Chinese regime, which to this day uses geographical names for strains of virus, has been trying to ban any identification of China with the pandemic. Biden, with his executive order, is doing Beijing’s work as Chinese leaders try to deflect blame.
“The Chinese Communist Party would love to see itself delinked from the coronavirus pandemic that originated on its shores, that it sought to cover up, that it helped spread around the world, and that it has cynically sought to exploit at every turn,” writes Weingarten.
“So Beijing must have been cheering when it got word of a gift, in this regard, from President Joe Biden.”
Moreover, Biden, within hours of taking the oath, rejoined the World Health Organization (WHO), something else Beijing wanted because, as a practical matter, it controls the political leadership of that body.
This decision was especially hideous because WHO was complicit in China’s deliberate spread of the disease. WHO disseminated Beijing’s position that the coronavirus was not readily contagious even though the organization’s senior doctors knew it was highly transmissible. Moreover, WHO championed the Chinese campaign against travel bans.
Americans died because of these and other indefensible actions on the part of WHO, and now Biden will go back to legitimizing and supporting that organization.
China’s challenge to America is comprehensive, on every front. So far, Biden has taken steps that certainly encourage Beijing. His rejoining the Paris Agreement, his cancellation of the Keystone XL Pipeline, and his repeal of the ban on Chinese equipment in the American electrical grid, among others, favor, directly or indirectly, Beijing. Also of great concern is the failure of Commerce Secretary nominee Gina Raimondo to confirm that Huawei Technologies will remain on the department’s Entity List.
Analysts say Beijing is testing Biden. Yes, but so far the Chinese do not need to lift a finger. The new president is giving them what they want, and they are not even having to ask.
Tyler Durden
Sun, 01/31/2021 – 23:40 - Visualizing World Leaders In Positions Of Power Since 1970
Visualizing World Leaders In Positions Of Power Since 1970
Who were the world leaders when the Berlin Wall fell? How many women have been heads of state in prominent governments? And who are the newest additions to the list of world leaders?
This graphic, via VisualCapitalist’s Avery Koop, reveals the leaders of the most influential global powers since 1970. Countries were selected based on the 2020 Most Powerful Countries ranking from the U.S. News & World Report.
Note: Switzerland has been omitted due to the swiftly changing nature of their national leadership.
The 1970s: Economic Revolutions
Our graphic starts in 1970, a year in which Leonid Brezhnev ruled the Soviet Union, while on the other side of the Iron Curtain, Willy Brandt was presiding over West Germany.
In the U.S., Richard Nixon implemented a series of economic shocks to stimulate the economy, but resigned in scandal due to the Watergate tapes in 1974. In the same time period, China was undergoing rapid industrialization and economic hardship under the final years of rule of communist revolutionary Mao Zedong, until his death in 1976.
In 1975, the King of Saudi Arabia, Faisal bin Abdulaziz Al Saud was assassinated by his nephew. The decade also marked the end of Park Chung-Hee’s dictatorship in South Korea when he was assassinated in 1979.
To cap off the decade, Margaret Thatcher became the first female prime minister of the United Kingdom in 1979, transforming the British economy using a laissez-faire economic policy that would come to be known as Thatcherism.
The 1980s: Reaganomics and the Fall of the Wall
The 1980s saw Ronald Reagan elected in the U.S., beginning an era of deregulation and economic growth. Reagan would actually meet the Soviet Union’s president, Mikhail Gorbachev in 1985 to discuss human rights and nuclear arms control amid the tensions of the Cold War.
The 1984 assassination of the Indian prime minister, Indira Gandhi was also a defining event of the decade. She was succeeded by her son, Rajiv Gandhi for only seven years before his own assassination in 1991.
The ‘80s were clearly turbulent times for world leaders, especially towards the end of the decade. In 1989, the Berlin Wall fell and Germany was reunified under chancellor Helmut Kohl. 1989 was also the year when the devastating events occurred at the Tiananmen Square protests in China, under president Deng Xiaoping. The event left a lasting mark on China’s history and politics.
The 1990s: War 2.0 and the Promise of the EU
The beginning of a new decade marked the end of the Cold War and the fall of the Soviet Union, leading to Boris Yeltsin’s position as the first president of the Russian Federation. A sense of peace, or at least the knowledge that a finger wasn’t floating above a nuclear launch button at any given moment, brought a sense of global calm.
However, this does not mean the decade was without conflict. The Gulf War began in 1990, led by the U.S. military’s Commander-in-Chief George H.W. Bush. In the mid-90s, prime minister Yitzhak Rabin of Israel was assassinated by Jewish extremists.
In spite of this, the ‘90s were a time of optimism for many. In 1993, the European project began. The European Union was founded with the support European leaders like the UK’s prime minister John Major, France’s president Francois Mitterrand, and chancellor Helmut Kohl of Germany.
The 2000s: Historic Firsts and Power Shifts
The dawn of a new century had people feeling both hopeful and scared. While Y2K didn’t end the world, many transformative events did occur, such as the 9/11 attacks in New York and the subsequent war on terror led by U.S. president George W. Bush.
On the other hand, Angela Merkel made history becoming the first female chancellor of Germany in 2005. A few years later, Barack Obama also achieved a momentous ‘first’ as the first African-American president in the United States.
The 2000s to early 2010s also revealed rapidly changing power shifts in Japan. Shinzō Abe rose to power in 2006, and after five leadership changes in seven years, he eventually circled back, ending up as prime minister again by 2013—a position he held until late 2020.
The 2010s: World Leaders Face Uncertainty
The 2010s were more than eventful. The Hong Kong protests under Chinese president Xi Jinping, and the annexation of Crimea led by Vladimir Putin, uncovered the wavering dominance of democracy and international law.
UK Prime Minister David Cameron’s move to introduce a Brexit referendum, resulted in just over half of the British population voting to leave the EU in 2016. This vote led to a rising feeling of protectionism and a shift away from globalization and multilateral cooperation.
Donald Trump’s U.S. presidential election was a shocking political longshot in the same year. Trump’s stint as president will likely have a longstanding impact on the course of American politics.
Two countries elected their first female leaders in this decade: president Park Geun-Hye in South Korea, and prime minister Julia Gillard in Australia. Here’s a look at which global powers have been led by women in the last 50 years.
2020 to Today
No one can avoid talking about 2020 without talking about COVID-19. Many world leaders have been praised for their positive handling of the pandemic, such as Angela Merkel in Germany. Others on the other hand, like Boris Johnson, have received critiques for slow responses and mismanagement.
The year 2020 packed about as much punch on its own as an entire decade does, from geopolitical tensions to a nail-biting 2020 U.S. election. The world is on high alert as the now twice-impeached Trump prepares his transfer of power following the riot at the U.S. Capitol.
The newest addition to the ranks of world leaders, Joe Biden, has recently taken his place as the 46th president of the United States on January 20, 2021.
Tyler Durden
Sun, 01/31/2021 – 23:15 - America's Trust In The Mainstream Media Hits An All-Time-Low (And "Journalists" Are Shocked)
America’s Trust In The Mainstream Media Hits An All-Time-Low (And “Journalists” Are Shocked)
Authored by Robert Wheeler via The Organic Prepper blog,
Given the 24/7 hysterical propaganda coming from mainstream media, it is easy to see how Americans are clueless about current events’ true nature, whether it be politics, COVID, or foreign policy.
But, there is some good news.
For the first time, most Americans do not trust the mainstream media
According to PR firm Edelman’s Annual Trust-Barometer, fewer than half of all Americans trust the mainstream media despite the constant propaganda onslaught.
Anyone in journalism or media could have told you long ago this would be the case. The dinosaur knowns as Mainstream Media is dying. Before Google conspired with Zuckerberg and other digital giants to crush alternative media, those alternative outlets competed with and beat MSM.
MSM and Big Tech attempted to put a stop to that revolution, but the damage was done. Alternative media gave a large portion of the American people a glimpse of real journalism, and, ever since, MSM has been slowly withering.
Edelman’s “Trust Barometer” shows that Americans’ trust in the media establishment has now hit an all-time low in 2021, falling three more points to 46 percent. For the first time, that figure has dropped below the 50 percent mark.
Social media is taking blows to the chin, with Americans’ trust ranked at only 27% for content found on Facebook, Twitter, and the like.
The lack of faith in the mainstream is not exclusive to America. Across the world, belief in social media is only 35 percent. Globally, only 35 percent of people rank social media as trustworthy for “general news and information.”
Other related information shows that Americans are not happy with journalists or the journalistic profession either. Fifty-six percent of Americans said journalists are “purposely trying to mislead people by saying things they know are false or gross exaggerations.” Fifty-eight percent agreed that most media outlets were “more concerned with supporting an ideology or political position than informing the public.” This website published an article about how the MSM was goading the public back in 2018.
Strange and not so strange statistics regarding politics and Big Business
One unsurprising statistic is that there is a sharp difference between Biden and Trump supporters when breaking up the political party numbers. Only 18 percent of Trump supporters said the mainstream media was trustworthy, while fifty-seven percent of Democrats said MSM was trustworthy. Ironically, though more than half, 57% is far from an overwhelming majority.
With ties to major corporations and particularly Big Oil, Edelman is not “independent.” These connections were quickly called out by many people online, suggesting the general public may be savvier as to who is behind media outlets than they were before.
The one strange statistic that emerged from this poll (possibly due to the polling firm’s connections mentioned) was that out of Government, Media, NGOs, and Big Business, the only group trusted by most Americans was Big Business. One factor that might explain more trust in Big Business than other institutions is the veritable war on the American economy declared by the ruling class due to COVID and climate hysteria.
Journalists respond to Edelman’s report with a plea to help rebuild the infrastructure
Axios and other “journalists” who responded to Edelman’s 2021 report have seized upon this nugget of trust in Big Business to call on those CEOs to “visibly embrace the news media” to help corporate media outlets.
“Now it’s time for [CEOs] to use the trust they’ve built up to help rebuild our civic infrastructure,” Axios stated.
Axios also wanted these CEOs to reach out to Trump supporters who generally have a much more favorable view of Big Business than Biden’s base. Some, however, are wondering if this might hurt the businesses more than help MSM.
Axios also realized that media distrust was not only an American issue but a global one. Therefore, it was not merely a “function of Donald Trump’s war on ‘fake news.’” But that didn’t stop the “news” site from blaming the audience for daring to put their faith in the journalistic profession. The site even posted links to help worried journalists recognize if they’ve overplayed their hands in their propaganda pieces.
Note: Trust in companies headquartered in the United States fell four points to another all-time low of 51 percent.
Many MSM journalists may be shocked at the lack of trust by Americans
It may be a real eye-opener to many journalists working for mainstream outlets that most of America does not trust them or the corporations they work for. Journalists who are shocked by this seem trapped in their own bubble. After four years of the Russia hoax, “everything is racism” reporting, “largely peaceful” protests immediately turning into “terroristic riots,” Trump supporters know full well they cannot trust MSM.
The wave of censorship that has been ongoing in this country for years should confirm that the mainstream media is running scared. Of course, discerning readers already knew mainstream media was nothing more than propaganda, and that’s why, even after Big Tech tried to crush it, the alternative media still survives.
Tyler Durden
Sun, 01/31/2021 – 22:50 - Here's The App Robinhood Investors Are Using To Join Class-Action Lawsuit Over GameStop Quagmire
Here’s The App Robinhood Investors Are Using To Join Class-Action Lawsuit Over GameStop Quagmire
Thousands of pissed off Robinhood investors are using a convenient app to join a class action lawsuit against the trading platform over temporary restrictions placed on GameStop and several other stocks, preventing people from buying securities in a move that artificially suppressed prices.
The service, DoNotPay.com, typically helps streamline the often-confusing process for consumers to get refunds and cancel subscriptions. As of Thursday, it can also help people join the Robinhood lawsuit, according to CEO Joshua Browder, who says he received hundreds of messages from enraged users, according to CNBC.
The lawsuit was filed Thursday in the Southern District of New York after Robinhood temporarily restricted GameStop trading on its platform. That enraged many small investors who were trying to get in on the GameStop trading frenzy of the past few days. –CNBC
“Robinhood is not acting in the consumer’s best interest,” said Browder. “A lot of users who sign up aren’t the most sophisticated investors. They feel betrayed by a platform that has the literal name Robinhood.”
By Friday afternoon, approximately 26,000 people had joined the class action, while 4,000 had filed complaints with the Securities and Exchange Commission (SEC). According to Browder, 400 more had entered arbitration via DoNotPay.
In order to participate, DoNotPay users need to detail their losses, and provide information on when their trades were halted. The law firm handling the class action is then notified of the potential participant’s desire to join.
DoNotPay charges an annual fee of $36 for its services.
“Some people might disagree with that, but we don’t want to have the same business model as Robinhood,” which, Browder said refers to commission-free trades.
“If you don’t pay for the product, you are the product.”
Tyler Durden
Sun, 01/31/2021 – 22:25 - Medical Tyranny: CDC Announces All Travelers Must Wear Two Masks, Threatens Arrest
Medical Tyranny: CDC Announces All Travelers Must Wear Two Masks, Threatens Arrest
Authored by Joseph Jankowski via PlanetFreeWill.news,
The Center for Disease Control has issued a new coronavirus order requiring DOUBLE masks to be worn for all forms of public transportation in the United States.
From CNN:
The CDC announced an order late Friday that will require people to wear a face mask while using any form of public transportation, including buses, trains, taxis, airplanes, boats, subways or ride-share vehicles while traveling into, within and out of the US.
The order goes into effect at 11:59 p.m. Monday.
Masks must be worn while waiting, boarding, traveling and disembarking, it said. The coverings need to be at least two or more layers of breathable fabric secured to the head with ties, ear loops or elastic bands — and scarves and bandanas do not count, the order says.
The CDC said it reserves the right to enforce the order through criminal penalties, but it “strongly encourages and anticipates widespread voluntary compliance” and expects support from other federal agencies to implement the order.
The tyrannical order comes after Joe Biden signed an executive order last week requiring all travelers to wear mask on federal property.
The establishment has been recently pushing double masks despite the ongoing rollout of the COVID-19 vaccines and decline in coronavirus deaths.
White House coronavirus task force leader Dr. Anthony Fauci is now promoting “double masking”, despite saying in March of last year that wearing ANY masks wouldn’t prevent the spread of COVID.
“So, if you have a physical covering with one layer, you put another layer on, it just makes common sense that it likely would be more effective and that’s the reason why you see people either double masking or doing a version of an N95,” Fauci said this week.
“Inside Edition” also lauded Biden, Mitt Romney, and Tom Cruise for double masking recently.
And the New York Times called for Americans to wear a second mask layer earlier this month in an op-ed titled, “One Mask Is Good. Would Two Be Better?“
With “double masking” now being openly pushed, a new slippery slope of mask wearing has been introduced, with some articles beginning to promote TRIPLE masking to prevent the spread of COVID-19.
Sen. Rand Paul (R-Ky.) pushed back against the mask insanity earlier this month, urging Americans, “if you’ve had the disease or you’ve been vaccinated and you’re several weeks out from the second dose, throw your mask away.”
Tyler Durden
Sun, 01/31/2021 – 22:00 - US Corruption Hits Highest Since 2012 Amid COVID Bailouts & Democracy Doubts
US Corruption Hits Highest Since 2012 Amid COVID Bailouts & Democracy Doubts
Transparency International has released its 2020 Corruption Perceptions Index which gauges levels of perceived public sector corruption in 180 countries and territories around the world. The index scores them on a scale of zero (highly corrupt) to 100 (clean) with the average score just 43 out of 100. As Statista’s Niall McCarthy notes, two thirds of countries scored less than 50. The research found that corruption was rampant across the world in 2020 and that it undermined the response to Covid-19, threatened the global recovery and contributed to democratic backsliding.
Transparency International states that 2020 has shown that Covid-19 is not just a health and economic crisis but also a corruption crisis. When it comes to healthcare in particular, corruption takes many forms such as bribery, embezzlement, overpricing and favoritism. Reports of corruption have grown since the pandemic broke out and countless lives were lost due to the issue undermining a fair and equitable global response.
Countries with high investment in healthcare tended to perform better in the index with corruption diverting money away from essential services. Governments that saw higher corruption levels, regardless of economic development, tended to invest less in their health systems.
You will find more infographics at Statista
In 2020, the countries with the lowest perceived level of public sector corruption were Denmark and New Zealand with a score of 88, followed by Finland, Singapore, Sweden and Switzerland. The opposite end of the index saw South Sudan and Somalia scoring just 12, making them the worst offenders. Syria, Yemen and Venezuela were also among the lowest-scoring countries.
The United States only came in 25th with a score of 67, its worst performance since 2012.
You will find more infographics at Statista
Transparency International attributes this to its unprecedented $1 trillion Covid-19 relief package which “raised serious anticorruption concerns and marked a significant retreat from longstanding democratic norms promoting accountable government.”
Tyler Durden
Sun, 01/31/2021 – 21:35 - Hedge Fund CIO: "No One Stress Tests Their Books For A 7.6 Sigma Move"
Hedge Fund CIO: “No One Stress Tests Their Books For A 7.6 Sigma Move”
By Eric Peters, CIO of One River Asset Management
“Hear that scream?” he whispered from one of those multi-manager monstrosities. “That’s the sound of someone’s face being ripped off,” he said, uneasy, flashing me a couple risk reports. “Another quarter, another million-year flood,” he said, exasperated, the cataclysms appearing ever more frequently.
“They’re grossing us down, they got to. No choice.” In the background, a cacophony of sickening howls, grown men begging for mercy, crying like babies, to each his own. “My book is airtight, got my head down,” he said, his factors lightly touched. The wrath of deleverage, passing mercifully by. “What a terrible way to earn a living.”
Temple of Doom
“We waited to hear what Powell thinks about asset bubbles,” said Indiana Jones, our industry’s leading archeologist, explorer. “He admitted markets may be ahead of themselves.” Echoes of irrational exuberance reverberated through the ages. “But he said interest rates aren’t the right weapon for whipping asset bubbles,” he explained. “This then frames the issue as a regulatory matter,” he said. “But they never really define matters of financial stability. Powell passed the problem to Yellen without a clear mechanism for the Treasury or the SEC to respond.”
“So what does Yellen think about financial stability?” asked Indiana. “She doesn’t,” he said, exploring her archives. “In her final Jackson Hole speech, she emphasized the Fed had been on a mission to make banks safe, and they were, so market risks were in the hands of private investors who understood what they were doing.” The Fed obviously changed their minds in March 2020, saving over-leveraged investors from themselves. “So Powell just punted issues of macro stability to Treasury, where Yellen will bury them. And we’re left right back where we started.”
Crazy Ivan“Monday, Short-Interest factor had a 3 standard deviation move higher. Hedge Fund factor fell -1.3 standard deviations,” said CO2, gasping for air. “Tuesday, Short Interest factor jumped 5.9 STD. HF ownership fell 2.4 STD,” he added. “Wednesday, Short Interest jumped 7.6 STD. HF ownership fell 4.5 STD.” Risk managers swung the scythe. “Thursday, Short Interest fell 2.5 STD. HF ownership was up 2.3 STD. That’s when Robinhood restricted trading,” said CO2. “Then Friday felt like any other day, despite the S&P 500 puking 1.9%.”
“Our biggest prime broker said this week was one of the largest gross downs they’ve ever seen,” continued CO2, his position tiddy. “No one stress tests their books for a 7.6 standard deviation move.” Last time things went wrong was when the momentum factor turned abruptly. This time some minuscule retail stock sparked the short squeeze. “Obviously there are too many funds running highly-leveraged factor-neutral books,” said CO2. “The breadth of the blowups is widening, the depth of pain deepening. But will anything change? Nope.”Tyler Durden
Sun, 01/31/2021 – 21:10 - Watch: Cargo Ship Battered By Heavy Seas Snaps In Half
Watch: Cargo Ship Battered By Heavy Seas Snaps In Half
A general cargo ship split in half and sank after it was battered by heavy seas off Turkey’s Black Sea coast, according to Maritime Industry News Agency.
The vessel ARVIN (International Maritime Organization number: 8874316) was en route from Poti, Georgia to Burgas Bulgaria when the captain made the call to anchor at Bartin to protect the vessel from the storm.
Maritime Industry News Agency said, “most probably, the vessel couldn’t stand against strong wind and waves, and either broke in two, or was overwhelmed while being anchored.”
ARVIN is a river-sea cargo vessel that is not designed to handle the impact of rough seas. This is the likely reason the cargo ship split in half.
An alleged video of the incident was uploaded onto YouTube this weekend. It appears ARVIN’s crew, stationed at the bridge of the ship, captured the moment the cargo ship split in half.
Watch: ARVIN Splits In Half
It was noted by Maritime Industry News Agency the vessel sank, with six crew members rescued, four dead, and three missing.
Continuing down the rabbit hole of recent maritime disasters, we noted a California-bound containership lost 750 containers due to “rough seas.”
Last month, another containership headed for California lost a record 1,816 units, of which 64 are believed to be Dangerous Goods containers.
How long until climate change is blamed on these maritime disasters?
Tyler Durden
Sun, 01/31/2021 – 20:45 - Trump Names New Lead Lawyers For Impeachment Defense Team
Trump Names New Lead Lawyers For Impeachment Defense Team
Update (2035ET): Trump has secured new legal counsel
Authored by Janita Kan via The Epoch Times
Former President Donald Trump on Sunday named two attorneys who will lead his impeachment defense legal team.
The two lawyers who will represent the former president in the upcoming Senate trial are David Schoen, an attorney from Alabama, and Bruce Castor Jr., a former prosecutor in Pennsylvania.
This comes a day after media reports, citing anonymous sources, said an earlier group of attorneys from South Carolina were no longer participating in the defense.
South Carolina-based lawyer Butch Bowers had previously been tapped to lead the president’s legal team but parted ways over differing opinions on the direction of the defense arguments, the reports said. Other lawyers on the team who also left were Deborah Barbier and former federal prosecutors Greg Harris, Johnny Gasser, and Josh Howard.
The Epoch Times reached out to the lawyers for confirmation about their departure.
Jason Miller, a Trump adviser, confirmed the reports of a reshuffle on Saturday evening, saying that the “final decision on our legal team” had not yet been made.
On Sunday, Trump’s office released a statement saying that Schoen and Castor would now lead the team, and that Schoen had already been working with Trump and other advisors in preparing for the upcoming trial.
“It is an honor to represent the 45th President, Donald J. Trump, and the United States Constitution,” Schoen said in the statement.
The new team has about one week to strategize what direction it will take in the defense. Opening arguments are scheduled to begin on the week of Feb. 8.
Republicans have begun uniting behind the argument that the Senate impeachment trial of a former president is unconstitutional, a question that has sparked a heated debate among legal scholars and lawmakers.
“Dem. efforts to impeach a pres. who has already left office is unconstitutional & so bad for our country. In fact, 45 Senators have already voted that it is unconstitutional,” Miller said in a statement.
On Jan. 26, Sen. Rand Paul (R-Ky.) raised a point of order on the Senate floor, forcing the chamber to take a stance on the constitutionality of the upcoming proceedings. The Senate ultimately voted 55-45, meaning that the trial will go ahead. But it also revealed that nearly half of the chamber is of the view that the proceedings are unconstitutional.
Castor said the upcoming trial is expected to test the “strength of our Constitution.”
“The strength of our Constitution is about to be tested like never before in our history. It is strong and resilient. A document written for the ages, and it will triumph over partisanship yet again, and always,” he said in the statement.
Castor previously served as a solicitor general and acting attorney general of Pennsylvania.
The Democrat-controlled House on Jan. 13 voted 232–197 to impeach Trump on a single article of impeachment, alleging that the president incited an “insurrection” that caused the U.S. Capitol breach on Jan. 6.
The impeachment was completed in a single seven-hour session and has been criticized by Republicans for its expediency and lack of due process.
Although Senate Majority Leader Chuck Schumer (D-N.Y.) is going ahead with the impeachment trial, the 55-45 vote for Paul’s order could be an indication that a Trump conviction is unlikely as a two-thirds majority is needed to convict.
* * *
Attorneys who had planned on representing President Trump in his upcoming impeachment trial have reportedly quit the case over Trump’s insistence that they present election fraud claims as part of their defense, rather than their recommended strategy of arguing the constitutionality of holding a trial for a former president.
In this Sept. 10, 2009, file photo, attorney Butch Bowers speaks during a news conference at the Statehouse in Columbia, S.C. Bowers is used to defending public officials in ethics cases. (Photo: Mary Ann Chastain, AP) The team, led by South Carolina Lawyer Butch Bowers (recommended by Sen. Lindsay Graham (R-SC)) and which includes South Carolina lawyer Deborah Barbier, left in what was described by Politico as a “mutual decision.” A third attorney, Josh Howard, was reported by CNN as also leaving the team.
In this April 29, 2016, file photo, attorney Debbie Barbier speaks to reporters outside the federal courthouse in Charleston, S.C. (Photo: Bruce Smith, AP) New attorneys are expected to be announced shortly.
The decision by Bowers, Barbier, and Howard to not join the team raised immediate questions, both about what compelled them to part ways and who actually will play the role of lawyer to Trump when the impeachment trial starts in early February.
Trump has had difficulty finding legal help for his second impeachment, with some of the lawyers who worked on his first trial saying they wouldn’t do the same this go around.
Bowers’ hiring was first announced by Trump ally and South Carolina Sen. Lindsey Graham. A longtime Republican attorney, Bowers represented former South Carolina Govs. Mark Sanford and Nikki Haley, and had experience in election law. –Politico
Trump’s first legal filing in the upcoming impeachment is due on Tuesday.
In a statement, Trump spokesperson Jason Miller largely ignored the legal rumblings – telling ABC News “We have done much work, but have not made a final decision on our legal team, which will be made shortly,” while slamming the impeachment itself as a sham.
“The Democrats’ efforts to impeach a president who has already left office is totally unconstitutional and so bad for our country,” said Miller, adding “In fact, 45 Senators have already voted that it is unconstitutional. We have done much work, but have not made a final decision on our legal team, which will be made shortly.”
Trump was impeached by House Democrats on Jan. 13 on a single article for “incitement of insurrection” after a small group of Trump supporters gained access to the US Capitol, where they wreaked havoc throughout Conressional offices and on chamber floors, before being allowed to casually walk out of the complex.
Tyler Durden
Sun, 01/31/2021 – 20:35 - Morgan Stanley Reveals The "Three Rules For The New D.C."
Morgan Stanley Reveals The “Three Rules For The New D.C.”
By Michael Zezas, Head of U.S. Public Policy Research at Morgan Stanley
New presidential administration, same investor hand-wringing: what might come out of DC to push financial markets? If you’re struggling to pull some signal from the noise that is lawmakers hedging statements and debating mundanities like ‘budget reconciliation’, you’re not alone. So here are three shortcuts for making sense of the policy debates in DC that will affect markets in 2021.
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The rule of two Joes: What’s the difference between an aspirational and enacted policy? In our view it is the difference between those espoused by President Joe Biden and those of Senator Joe Manchin, who along with other senators (i.e., Tester, Sinema, Kelly, Warner) represents the Democratic party’s more centrist cohort. With Democrats in control of the White House and Congress, they can pass a lot of legislation…assuming all 50 Democratic senators can agree on its content. The most progressive and most moderate member must agree, as losing either’s support will tank legislation. We think that the legislative power accrues towards the electorally vulnerable center, then, consistent with historical analogues.
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Deficits break deadlocks: Even proposals which appear to have party consensus, like infrastructure and healthcare spending, face a challenge…there’s agreement to spend the money, but not how to finance it. Progressives and moderates appear far apart on their tolerance for tax increases. But we don’t expect that this will prevent policy enactment. Deficits will bridge the gap. Expanding the deficit does not appear to be a political liability, as surveys show that voters may permit such action in exchange for popular policies. This dovetails with the new economic orthodoxy of the party, where progressives’ flirtation with MMT and moderates’ Keynesianism for the moment agree that the US can push deficits further before inflation becomes a challenge. Said differently, we don’t think that Democrats will let tax and deficit disagreements get in the way of their spending agenda.
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Boundaries from budget reconciliation: There are plenty of reasons to not expect Democrats to be able to get enough Senate Republican votes for any of their major initiatives to avoid a filibuster. This actually helps to clarify the policy path for investors, as it means viable legislation is only that which can be passed by a simple majority through a workaround called ‘budget reconciliation’. At the risk of oversimplifying, it helps to think about this process as one where legislators can change the numbers on the federal income statement, but not add or subtract any line items. Because of its painstaking process, reconciliation typically can only be executed once per fiscal year. With those boundaries, investors should expect two major pieces of legislation in 2021 with a focus on reconcilable items: stimulus first and then either infrastructure or healthcare after the October start of the next fiscal year.
In our view, one clear takeaway from these rules is that 2021 will be another year of US fiscal expansion: Applying those rules to the plans of the new administration and its allies in Congress, we think you end up with a policy path that is net supportive to US growth in 2021. Fiscal stimulus can likely get done earlier in the year, though the final number after intra-party negotiation (‘the rule of two Joes’) is likely closer to US$1 trillion than the US$1.9 trillion proposal. An infrastructure or healthcare plan can likely follow, but not until later in the year (‘boundaries from budget reconciliation’) and likely with more moderate tax hikes than progressives espouse (‘the rule of two Joes’) that don’t fully cover the spending (‘deficits break deadlocks’).
Importantly, this policy course reinforces the US growth path and outlook for a multi-year bull market, though it does not preclude a near-term correction: As our economists have pointed out, the economy is increasingly on solid footing, with substantial excess household savings ready to be deployed once vaccines enable the normalization of economic behavior later this year. Further fiscal support only underscores that the US economy is accelerating into a new, sustained growth cycle, which should support a multi-year bull market.
Yet this outlook is not without risk to markets, particularly in the short term. As our equity strategy colleagues have pointed out, there are pockets of the market where excessive optimism is priced in, warranting investor caution. US policy issues are one potential catalyst to watch. In the coming weeks, investors could easily conflate banal headlines about legislative negotiation with the more legitimate risk that Democrats are at an impasse on stimulus. Unless such headlines also reference a shift in view among moderate Democrats that improvement in the COVID-19 outlook has mitigated the need for further action, we would fade such confusion and view any related market weakness as an opportunity.
[ZH: translation – despite the record drop in US hospitalizations and plunge in covid cases, expect the fearmongering to only get worse in order to allow the Dems the green light to pass trillions more in stimulus.]
Tyler Durden
Sun, 01/31/2021 – 20:20 -
- Military Coup Underway In Myanmar As Civilian Leaders Arrested – State TV Off Air, Internet Cut
Military Coup Underway In Myanmar As Civilian Leaders Arrested – State TV Off Air, Internet Cut
It appears a military coup is underway in the Southeast Asian country of Myanmar (formerly Burma), where a state of confusion has descended on the population with soldiers now patrolling major city streets, and given state TV has also been taken off the air, according to Reuters.
The national army says a recent major vote won by the National League for Democracy (NLD) party was “fraudulent,” as a breaking BBC report details:
Aung San Suu Kyi, leader of Myanmar’s governing National League for Democracy (NLD) party, has been arrested, the spokesman for the party said. It comes amid tensions between the civilian government and the military, stoking fears of a coup.
The NLD won enough seats in parliament to form a government in November, but the army says the vote was fraudulent.
The army has called on the government to postpone convening parliament, which was due to take place on Monday.
Image: A rift between Myanmar State Counsellor Aung San Suu Kyi, left, and commander in chief Min Aung Hlaing had been growing over the past week over contested election results.
Additionally President Win Myint and senior party figures have been detained as of early morning (local time).
Reuters is saying the coup was sparked by an overnight raid:
Spokesman Myo Nyunt told Reuters by phone that Suu Kyi, President Win Myint and other leaders had been “taken” in the early hours of the morning.
“I want to tell our people not to respond rashly and I want them to act according to the law,” he said, adding he also expected to be detained.
And Reuters further suggests a state of chaos in the capital given “phone lines to Naypyitaw, the capital, were not reachable in the early hours of Monday,” and with the military initially refusing to speak to international press.
⚠️ Confirmed: Internet disrupted in #Myanmar amid military uprising and reports of detention of civilian leadership; real-time network data show national connectivity falling to 75% of ordinary levels from 3:00 a.m. local time; incident ongoing 📉
📰 https://t.co/Jgc20OBk27 pic.twitter.com/CgBkyamrP6
— NetBlocks (@netblocks) January 31, 2021
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Myanmar National TV just canceled its program today for both broadcasting and Radio. pic.twitter.com/cddl93RRmO
— Wai Wai Nu (@waiwainu) January 31, 2021
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International reports are also saying that the internet has been cut in the capital of Naypyitaw, further with soldiers having taken over the streets.
The situation is incredibly tense not only as a near total information blackout is underway, but also also as supporters of the NLD could hit back at the army with sporadic violence or organized militia activity, potentially sliding the country into civil war.
Tyler Durden
Sun, 01/31/2021 – 19:55 - Yes, Virginia, The System Is Clearly Rigged
Yes, Virginia, The System Is Clearly Rigged
Authored by Omid Malekan via Medium.com,
Before sharing my opinion on the WallStreetBets events of last week, I want to make one thing clear: I believe strategies like the ones used to drive the price of Gamestop stock higher are reckless and dangerous. I would never participate in them. They are likely to end badly for the majority of those who get involved.
With that out of the way, let’s review something important that happened last year, when big cap tech stocks like Tesla and Apple started exhibiting unusual volatility to the upside. It turned out that Softbank, one of the largest institutional investors in the world, had been executing a dangerous strategy of buying record amounts of out of the money call options on those stocks. Their actions forced some of the options trading establishment into something called a gamma squeeze, a positive feedback loop that can be thought of as the options markets’ equivalent of a short squeeze. Here’s the FT:
The surge in purchases of call options — derivatives that give the user the right to buy a stock at a pre-agreed price — has been the talk of Wall Street, as the sheer size of the trades appears to have exacerbated a “melt-up” in many big technology stocks over the past few months. In August alone, Tesla’s share price shot up 74 per cent, while Apple gained 21 per cent, Google’s parent Alphabet rose 10 per cent and Amazon 9 per cent.
One person familiar with SoftBank’s trades said it was “gobbling up” options on a scale that was even making some people within the organization nervous. “People are caught with their pants down, massively short. This can continue. The whale is still hungry.”
As the article also points out, it was generally understood that what Softbank was doing (with billions of dollars, no less) was dangerous. Not only could it end badly for them, but it had painted other players into a corner, creating a dangerous dynamic that could reverse abruptly.
Now, knowing all of that, and having seen the systematic crackdown on retail investors executing a similar strategy last week, we can ask a few simple questions:
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How many of Softbank’s service providers refused to execute their trades? How many banks, prime brokers or options dealers said “sorry, this a dangerous strategy that will end badly, plus it puts the rest of the market at risk. You can no longer buy call options on these particular stocks”?
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How many veteran financial reporters working in TV or print expressed shock and outrage? How many pontificated out loud about the blatant disregard for fundamental analysis?
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How many people at the SEC, Federal Reserve, U.S. Treasury or even the White House actively monitored the situation and worried about the safety of the market?
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How many people within the traditional financial establishment argued that perhaps we need tighter regulations to prevent this sort of thing from happening?
You already know the answer to all of these questions. Even if you don’t understand the technical aspects of how Wall Street works, you know in your heart that so-called institutional investors often do risky, dangerous, and (in retrospect) stupid things, but nobody ever stops them. This despite the fact that every once in a while those same strategies end in disaster and put the rest of the financial system, not to mention the broader economy, in jeopardy.
You know this because in the back of your mind, you remember something about a fund called Long Term Capital, which was run by Nobel prize winners, blowing up in the late 1990s. You lived through the 2008 crisis and may have read a book like Too Big to Fail or seen a movie like The Big Short. You vaguely remember reading about something called a repo crisis in 2019. You recall how just last year, at the start of the Covid crash, central banks like the Federal Reserve had to pump ten times more money into Wall Street than Main Street, even though ordinary people needed the money more.
What you understand intuitively about all of these events is that the pros — the supposedly sophisticated investors who control the vast majority of capital in the world — somehow fucked up. They did things that enriched them, but ended up costing society as a whole. And yet, not only did nobody in a position of power try to stop them, but regulators and government representatives — the people who are supposed to be looking out for your best interests — argued that your tax dollars should be used to bail them out. Their gambling didn’t make you any richer, but their crapping out still cost you.
Despite what the financial media would like you to believe, the most surprising thing about last week wasn’t the fact that a bunch of beaten down stocks went flying. Crazy shit happens in the stock market all of the time, especially in an era of record monetization when the Federal Reserve prints money faster than Taylor Swift releases albums.
Most of the self-righteous hand wringing was an act. Aggressive investors utilizing leverage in herd-like fashion to pursue a risky bet is nothing new. It’s called trading, and that’s what most money mangers do. They don’t invest. There’s a reason why banks and hedge funds have trading desks and people call it the trading day.
No. The real controversy last week was about who was winning and who was losing. Retail people on apps like Robinhood aren’t supposed to stick it to the big boys. They are supposed to be the so-called dumb money, the schools of tiny fish that exist so whales like Softbank and Citadel have something to feast on. People who go to Davos aren’t supposed to lose money to kids from Denver. But last week, they did. That’s why the financial establishment reacted so strongly.
Let me pause here to reiterate my belief that I think this kind of trading is extremely risky and not that far removed from betting at the track, regardless of who is doing it. I strongly advise everyone I know to stay way from margin trading, options and short squeezes. That said, I think people should be free to do whatever they want with their money, especially now that their central bank is doing everything it can to destroy its integrity.
I am outraged by the hypocrisy of the financial services industry. Any doubt that the system is rigged has been eliminated. Why do the rich only ever get richer? Because of what happened last week.
In all my years of working in this industry, I have never heard of brokers pulling the plug on their clients because they were making too much money.
If anyone is to be banned from putting on risky trades, it should be the supposedly sophisticated hedge funds who’ve needed to be bailed again and again, not your cousin who recently bought a few shares of GME in her Robinhood app. Your cousin wasn’t the one who fucked up in 1998 or 2008 or 2019 or 2020. She didn’t drive Lehman Brothers into the ground or destroy MF Global.
But the financial establishment — the same establishment who’s always gone out of its way to celebrate people like John Meriwether, Dick Fuld and John Corzine — decided that your cousin wasn’t allowed to play the same game, and had the audacity to pretend this was for her own protection.
The fact that she was making money off of hedge funds like D1 (one of Robinhood’s biggest investors) and Citadel (one of Robinhood’s biggest sources of revenues) had nothing to do with it. The fact that Ben Bernanke has been a senior advisor to Citadel and Janet Yellen has collected almost a million dollars in speaking fees from the same firm had nothing to do with it.
The issue here isn’t how the aggressive buying of stocks like Gamestop ends, because it’ll probably end badly. The issue is that nobody ever tries to stop hedge fund managers from doing the same exact thing. When they gamble with our futures, it’s called capitalism. But when retail people do it, it’s a menace to society that must be stopped.
Firms like Robinhood are now claiming that they didn’t freeze trading in a handful of stocks because of some nefarious conspiracy. They did it because the back-end clearinghouses like DTCC who process their trades forced them to put up too much capital for those names. Here’s the New York Times:
A more detailed explanation: Brokerages post money with the D.T.C.C. to cover customers’ transactions while they wait for the trades to settle. With such a big surge in trading, the clearing hub wanted more assurance: “It’s the D.T.C.C. saying ‘This stuff is just too risky,’ ” said the Bloomberg Intelligence analyst Larry Tabb.
Other online brokerages also cited the D.T.C.C. as a factor in decisions to impose trading restrictions.
The brilliance of this excuse is that it only proves the skeptics and conspiracy-theory believers right. DTCC is a for-profit monopoly that sits at the heart of America’s financial system. It is controlled by the biggest Wall Street institutions and responsible for all public equity settlement. A subsidiary of it literally owns every single share of publicly traded stock in America. Yes, you read that correctly. You don’t actually own your shares of Apple or Microsoft, they do. You are only allowed to enjoy the financial benefits of being an investor because your corporate overlords let you. Why? Because the government wants it that way (the fact that financial firms like DTCC always donate a lot of money to politicians has nothing to do with it.)
It’s quite possible that the above justification for the crackdown is technically true: clearinghouses and firms like DTCC suddenly jacked up their collateral requirements because they were afraid the short squeeze would reverse and end badly. On the surface, this is plausible.
But why have we never heard of the same thing happening to the institutions who also pursue risky trades, use margin, trade options, and often pile into the same crowded trades? Why didn’t this sort of thing happen last year, at the start of the pandemic? Surely an environment where everything is crashing is more dangerous to the back-end plumbing of Wall Street than one where only a few stocks are going up.
And therein lies the rub. Hedge funds and billionaires didn’t have to be restricted last year because the government intervened and used trillions of dollars of your money to make sure “the system” kept working for them. Just like it had in 2019, 2008 and 1998.
Ordinary people don’t get that kind of protection, so they aren’t allowed to play. The billionaires who build ridiculous mansions too close to the water get free flood insurance, but you are a mere renter, so you don’t qualify.
If our financial system was remotely fair, or at least consistent in its response to unusual developments, then the Fed would have been on the phone with DTCC and Robinhood all week, offering liquidity injections and credit lines to keep the system working. The Treasury department would have begun planning an emergency fund to bail out Gamestop and AMC shareholders if the need arose, and Congress would have begun deliberations on the Troubled Retail Investor Relief Program.
If.
Years from now, when most of the world has moved on to a different kind of financial system, a fully transparent one built on fundamental properties of equality and censorship resistance, we will look back on the events of this past week as a key turning point.
Tyler Durden
Sun, 01/31/2021 – 19:30 -
- Make Standard Oil Great Again: Exxon, Chevron Have Discussed A Merger
Make Standard Oil Great Again: Exxon, Chevron Have Discussed A Merger
Just this past Friday, we lamented that amid the marketwide meltup, one of the very few companies that actually deserves to be higher with or without the help of WSB, oil giant Exxon, simply refuses to do so, and so we begged Melvin Capital to short it (although it now appears that Gabe Plotkin is busy razing a 1930s house to build a tennis court on his Miami mansion).
Can Melvin Capital please short XOM
— zerohedge (@zerohedge) January 29, 2021
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That was, of course a joke, but what isn’t a joke is that the two largest US oil companies clearly believe they are undervalued because as the WSJ reported on Sunday afternoon, the CEOs of Exxon and Chevron “spoke about combining the oil giants after the pandemic shook the world last year, according to people familiar with the talks, testing the waters for what could be one of the largest corporate mergers ever.”
The discussions – which took place after the plunge in oil prices last year – between the Exxon CEO Darren Woods and Cheveron CEO Mike Wirth, “were described as preliminary and aren’t ongoing but could come back in the future” according to the WSJ sources.
And with XOM’s market cap of $190BN and Chevron’s $164BN, a combination would result in a $350BN E&P behemoth, which would be the world’s second largest oil company by market capitalization and production, producing about 7 million barrels of oil and gas a day, based on pre-pandemic levels, second only in both measures to Saudi Aramco.
Such a deal would significantly surpass in size the mega-oil-mergers of the late 1990s and early 2000s, which included the combination of Exxon and Mobil and Chevron and Texaco Inc.
It also could be the largest corporate tie-up ever, depending on its structure. That distinction currently belongs to the roughly $181 billion purchase of German conglomerate Mannesmann AG by Vodafone AirTouch PLC in 2000, according to Dealogic.
If it proceeds, a deal would also reunite the two largest descendants of John D. Rockefeller’s Standard Oil monopoly, which was broken up by U.S. regulators in 1911, and reshape the oil industry. In other words, if this deal happened, it would go a long way to making Standard Oil Great Again:
Which is also why such a merger would likely encounter regulatory and antitrust challenges under the Biden administration. President Biden has said climate change is one of the biggest crises the country faces. In October, he said he would push the country to “transition away from the oil industry” whatever that means (conventional energy is responsible for about 90% of US energy production); Still, a deal is not impossible: Biden hasn’t been as vocal about antitrust matters, and the administration has yet to nominate the Justice Department’s head of that division.
As the Journal adds, in an interview discussing Chevron’s earnings Friday, Wirth, who like his Exxon’s Woods also serves as his company’s board chairman, said that consolidation could make the industry more efficient. He was speaking generally and not about a possible Exxon-Chevron merger.
“As for larger scale things, it’s happened before,” Wirth said, referring to the 1990s and early-2000s megamergers. “Time will tell.”
It now appears that he was explicitly envisioning a merger with Exxon.
According to energy analyst Paul Sankey, who first floated the idea of a merger between Chevron and Exxon last October, a combined company would have a market capitalization of about $300 billion and $100 billion in debt. A merger would allow them to cut a combined $15 billion in administrative expenses and $10 billion in annual capital expenditures, he wrote.
As for the stock price of XOM and CVX, they certainly wouldn’t need a massive short squeeze to soar, which would be welcome news to the activists who have recently circled around Exxon.
Some investors have grown increasingly concerned about Exxon’s direction under Mr. Woods as the company faces a rapidly changing energy industry and growing global consciousness about climate change. Some are also worried that Exxon may have to cut its hefty dividend, which costs it about $15 billion annually, due to its high debt levels. Many individual investors count on the payments as a source of income.
The company’s woes have helped draw the attention of activist investors. One of them, Engine No. 1 LLC, has argued that the company should focus more on investments in clean energy while cutting costs elsewhere to preserve its dividend. The firm nominated four directors to Exxon’s board Wednesday and called for it to make strategic changes to its business plan. Last month it also emerged that Exxon had been in talks with activist hedge fund D.E. Shaw and is preparing to announce one or more new board members, additional spending cuts and investments in new technologies to help it reduce its carbon emissions.
Unlike virtue signaling European peers BP and Shell, both of which would love to be included in some ESG basket, Exxon and Chevron have had the intellectual honesty of staying the course and haven’t invested substantially in renewables, instead choosing to double down on oil and gas. Both companies have argued that the world will need vast amounts of fossil fuels for decades to come, and that they can capitalize on current underinvestment in oil production.
They are of course right, and after the next crash, when the faddish ESG idiocy is long forgotten, shareholders will reward the two companies handsomely for having been honest in a time when every company lies.
Tyler Durden
Sun, 01/31/2021 – 19:05 - Los Angeles County Bans TVs At Bars Just In Time For The Super Bowl
Los Angeles County Bans TVs At Bars Just In Time For The Super Bowl
Authored by Rick Moran via PJMedia.com,
Los Angeles County has decided that bars and restaurants can reopen for outdoor dining only starting on Friday. But there are new draconian restrictions that will kill even more businesses in the end.
One of the new restrictions involves TVs. There will be no viewing TVs in the outdoor dining areas. With the Super Bowl coming up on February 7, county health officials are worried that having the ability to watch the game at a bar would lead to a “superspreader” event for the coronavirus.
Super Bowl watch parties are an American tradition and the Super Bowl is one of the biggest days all year for bars and restaurants. Preventing watch parties may be the coup de grace for some small businesses.
According to the health order issued by the county, televisions or other screens that broadcast programming must remain off. The rule comes a week ahead of the Super Bowl on Feb. 7.
L.A. County Health Director Barbara Ferrer said Wednesday she’s worried that the giant sporting event, which usually drives crowds to bars and restaurants for celebrations and watch-parties, will become a “superspreader” event.
“It will be tragic if the Super Bowl becomes the Super Spreader of coronavirus,” Ferrer said, according to KTLA5. She added that residents should avoid large gatherings and refrain from throwing Super Bowl parties to prevent a situation where the virus can further spread.
I don’t think there are a lot of football fans working at the county health department.
Some restrictions are a part of the micromanagement of people’s lives and others make no sense. There is a limit of 50 percent capacity except if the business has a certificate of occupancy with a specific number of patrons allowed. That number will vary depending on the certificate.
Some of these restrictions make you shake your head in disbelief.
Another big enforcement issue this time around will be the proper use of all personal protective equipment. As before, servers will need to wear both a face mask (can be cloth) and a face shield, and that mandate has now been extended to anyone who interacts with diners, including runners, bussers, and all front of house personnel. Given the more transmissible new strains of coronavirus going around right now, expect this one to receive particular scrutiny from visiting public health officials in the coming weeks.
The county has also said no (again) to any live entertainment (including DJs and bands), and that includes televisions — so no Super Bowl parties. Furthermore: “Restaurants may not host receptions, banquets, or other coordinated, organized or invited events or gatherings.” Oh, and no fun tableside preparations or shows like salad spinning or guacamole making, either.
I guess that means no flaming deserts.
It’s all for our own good, of course, so if you want to watch the game, you’ll have to do it at home.
Tyler Durden
Sun, 01/31/2021 – 18:40 - De Blasio Warns Of "Dangerous" Snowstorm As Two Feet Expected
De Blasio Warns Of “Dangerous” Snowstorm As Two Feet Expected
Update (1830 ET): The National Weather Service reports New York City’s official snowfall forecast could total around two feet. Snow has already begun falling in the metro area, with the heaviest expected on Monday. Meteorologists are predicting the storm could be one of the worst in years. By Tuesday, as much as 21 inches could blanket all five boroughs.
“This is not a storm to underestimate,” NYC Mayor de Blasio said Sunday. “Take it seriously. This is a dangerous storm. Tomorrow is going to be a very tough day. If you do not need to be out and about on Monday, stay home.”
A live shot of Times Square already shows snow is falling as of 1830 ET.
* * *
A powerful snowstorm will impact Mid-Atlantic and Northeast states on Sunday into Tuesday. More than 100 million people are in the path of this “monumental storm,” AccuWeather Chief Broadcast Meteorologist Bernie Rayno said over the weekend.
As we noted last week, the storm already struck parts of California with torrential rain and heavy snow, depending on altitude, due to an atmospheric river emanating from over the Pacific Ocean.
Rayno said “from the western shores of Lake Michigan, including Chicago and Milwaukee, across northern parts of Indiana and Ohio” will see 6-12 inches of snow by Monday.
By Sunday morning, the snow has already begun to fall in the Baltimore–Washington metropolitan area.
The impending Nor’easter could dump “most snowfall to Philly in five years,” said CBS Philly.
Winter storm warnings from Chicago to Richmond to Baltimore–Washington metropolitan area to New York City have already been declared.
As we’ve continued to warn about this system and how impactful it could be, more accurate snow total forecast have been posted for the Northeast.
“Biggest storm in 5 years?! Impending Nor’easter forecast to bring the most snow to Philly since Jan. 23rd, 2016,” tweeted CBS Philly’s Lauren Casey.
Across the Northeast, precipitation will increase in intensity overnight through Monday.
Weather models are pivoting to much colder weather in the week ahead. Meteorologists at BAMWX are forecasting “a legit colder and wintry period is coming.”
… and what does this mean for natural gas prices? Well, BAMWX models are suggesting “16-30 day outlook from Friday AM might turn out to do pretty well. This is the first time this season I’ve seen the NAEFS go cold like this in the 8-14 day. I think a legit cold & wintry pattern looms for much of February esp. from the Plains to Great Lakes to NE.”
With colder weather on the way, US-Lower 48 heating degree days suggests energy demand to heat commercial and residential structures will increase in the first half of February.
Commodity traders could certainly view the shift in cold weather as bullish.
BAMWX also forecasts a “big winter storm to track next weekend too!”
Tyler Durden
Sun, 01/31/2021 – 18:30 - Ray Dalio: Recent Market "Rebellion" Shows Growing "Anger" And "Intolerance" In U.S.
Ray Dalio: Recent Market “Rebellion” Shows Growing “Anger” And “Intolerance” In U.S.
The GameStop controversy has undoubtedly been the “effect” of a much bigger “cause”.
And while some of our contributors have offered their take on what, exactly, is behind the revolt, it wouldn’t be commentary about the “economic machine” without Ray Dalio chiming in.
Dalio weighed in on the recent events involving GameStop and Reddit, which he called a “rebellion”, claiming that last week’s chaos was “another sign of the growing intolerance among those with opposing views”, according to Bloomberg.
“What concerns me more is the general anger — and almost hate — and the view of bringing people down that now is pervasive in almost all aspects of the country,” Dalio said. “That general desire to hurt one another,” Dalio pointed out.
He said recent events show that the everyday trader is “beginning to understand the mechanics of the markets”.
And what would an interview with Ray Dalio be without him eventually turning the conversation back unto himself. “They remind me a lot of me at that age. I started investing at an early age and I was rebellious and wanted to do it my way and bring it down,” he concluded.
And while that’s a lovely anecdote, the truth of the matter is that Dalio may not have any idea of what kind of revolt could actually be on its way.
He is right, of course, that people are angry. But if those people are also part of a group of hundreds of thousands of brokerage clients who all of a sudden find their “winnings” trapped in a bankrupt broker, the current “anger” may wind up looking like a walk in the park.
And as we pointed out days ago, Robinhood’s balance sheet looks all but rock solid, given the circumstances.
$4.9 billion pic.twitter.com/xj6HnFcK86
— zerohedge (@zerohedge) January 30, 2021
Tyler Durden
Sun, 01/31/2021 – 18:15 - Why Hasn't The House Held Hearings To Establish "Incitement To Insurrection"?
Why Hasn’t The House Held Hearings To Establish “Incitement To Insurrection”?
We recently discussed how the Senate will have to decide whether to call witnesses in the second impeachment trial of former President Donald Trump. The use of a snap impeachment raises a basis for some senators to oppose such witnesses on institutional or prudential grounds. Democrats opposed any witnesses in the Clinton impeachment and there were no witnesses in the first Trump impeachment trial. Not surprisingly, the House is demanding witnesses. The initial vote in the trial shows that it is substantially short of the number of senators needed to convict and Trump could be acquitted on a virtual 50-50 vote. So here is my question: why has the House not used the last few weeks to call these witnesses and build the needed case to show intent to incite an insurrection? Weeks have gone by with key witnesses speaking to the press but not to the House. Why?
I raised this possibility weeks ago since such House hearings could influence the Senate trial. Even if the transcripts were barred by the Senate, senators would be aware of the evidence and testimony. There has been limited testimony on the response to the riot but most key witnesses have not been called to public hearings on evidence related to Trump’s conduct or intent. Many are clearly willing to testify since they are speaking openly with the media.
I have no idea if such evidence exists but I, like most Americans, would like to know if it does. I was critical of Trump’s speech while he was giving it. I also opposed the challenge to the electoral votes and criticized the President’s false statements about the authority of Vice President Mike Pence to “send back” these votes. However, I have also said that, without evidence of intent, this case of incitement would fail in the Senate. Indeed, while many legal experts have claimed that this is a strong case for criminal incitement, I believe it would ultimately collapse in the federal courts on free speech grounds.
The House can show intent directly and circumstantial from evidence of the President’s conduct and statements before and after the speech. The National Guard deployment is clearly a place to start. Did Trump delay or obstruct deployment? We still do not know despite this being one of the easier questions to answer. Those questions will not be answered by calling the “Shaman” on whether he felt that Trump wanted him to riot or engage in insurrection. Such testimony will show how Trump’s words were received (which is relevant) but not what he intended.
There is a tendency in Congress to follow the litigation rule not to ask witnesses questions that you do not know the answer to in advance. However, the absence of hearings on Trump’s role is glaring as the House managers claim that many in the Senate do not want to hear the truth. There are two houses of Congress and the Democrats are in total control of the House.
There has clearly been inquiries and limited testimony but very little information has been made publicly, including information that is clearly in the possession or available to the House. Instead reports indicate that the House is building what was described as an “emotionally charged” case before the Senate with cellphone calls and witness testimony rather than evidence focusing on the intent element. I admit that I have the bias of a criminal defense attorney but that is not a case for conviction. It is a case of public appeal.
This question is even more striking given the public statements of key witnesses like former Acting Secretary of Defense Chris Miller and his two closest aides, Kashyap “Kash” Patel and Ezra Cohen. Miller says that Trump told him the day before the riot that “You’re going to need 10,000 people.” Miller added “No, I’m not talking bullshit. He said that. And we’re like, ‘Maybe. But you know, someone’s going to have to ask for it.’” He said Trump responded “You do what you need to do. You do what you need to do. You’re going to need 10,000.’”
That account shows Trump knew that there might be problems with the rally the next day. Many voiced the same concern. However, it also shows Trump warning that troops would be needed. The question is whether he did anything to prepare for such a deployment or interfere or delay with deployment. Witnesses like Miller would know. Yet, they are giving interviews but not public testimony under oath.
The House has held hearings on the riot but those hearings seem weirdly tailored to avoid core issues related to the trial. For example, U.S. Capitol Police chief Yogananda D. Pittman testified but did so in a closed session. She reportedly apologized to Congress “and the American people” for the obvious securing failures on Jan. 6th. She also said that they were aware of the danger of a riot in advance but failed to take adequate steps” “Let me be clear: the Department should have been more prepared for this attack.”
Maj. Gen. William Walker, the commanding general of the D.C. National Guard, has also given interviews and said that deployment of his troops were delayed by over an hour because he needed approval from the Pentagon. He said that he usually has authority to deploy without approval. If that is true, why was he not called for testimony in the House to explain the timeline and whether the authority was removed specifically for that day?
There is a great deal of information in the hands of Congress on the requests for deployment and interaction with the Trump Administration. There are records and other non-witness sources of evidence that could also be used to create a record. Yet, the House has been comparatively passive in calling those witnesses that it wants to hear from in the Senate. Again, why?
This is the same pattern with the first Trump impeachment when the House waited weeks demanding witnesses that it could have called or subpoenaed before the House Judiciary Committee. It did nothing and then denounced the lack of testimony on key issues. Both trials turned on intent and the House could not expect to prevail without such evidence.
It was like a case of planned obsolescence in building a case to collapse.
There are by my count at least ten key witnesses who have already spoken publicly or would be easily attainable including Miller, Walker, Pittman, Patel, Cohen and others. Yet, there is nothing but crickets from the House.
Tyler Durden
Sun, 01/31/2021 – 17:50 - Goldman Warns If The Short Squeeze Continues, The Entire Market Could Crash
Goldman Warns If The Short Squeeze Continues, The Entire Market Could Crash
Last Friday (Jan 22) we advised readers who thought they had missed the move in Gamestop (they hadn’t), to position appropriately in the most shorted Russell 3000 names which included such tickers as FIZZ, DDS, BBBY, AMCX, GOGO and a handful of other names, as it was likely that the short-squeeze was only just starting.
We were right and all of the stocks listed above – and others – exploded higher the coming Monday, and all other days of the week, with results – encapsulated by the WallStreetTips vs Wall Street feud – that have become the only topic of conversation across America (remember the Trump impeachment?), while on WSB the only topic has been the phenomenal gains generated by going long said most shorted stocks. To wit, the basket of top shorts we compiled on Jan 22 has tripled in the past week.
And while some are quick to blame last week’s fireworks on the “dopamine rush” of traders at r/wallstreetbets who seek an outlet to being “copped up with little else to do during the pandemic” (as Bloomberg has done, while also blaming widespread lockdowns and forgetting that it has been Bloomberg that was among the most vocal defenders of the very lockdowns that have given us the short squeeze of the century), the reality is that at the end of the day the strategy unleashed by the subreddit is merely an extension of the bubble dynamics that were made possible by the Federal Reserve (of which Bloomberg is also a very staunch fan) pumping trillions and trillions of shotgunned liquidity into a financial system where there are now bubble visible anywhere one looks. In short, main street finally learned that it too can profit from the lunacy of the money printers at the Marriner Eccles building, and some are very unhappy about that (yes, it will end in tears, but – newsflash – $300 trillion in debt and $120BN in liquidity injections monthly will also end in tears).
That aside, one week later, Goldman has finally caught up with what Zero Hedge readers knew one week ago, and all the way down to a chart showing a basket of the most-shorted Russell 3000 stocks…
… Goldman’s David Kostin has published a post-mortem of what happened last week, writing that “the most heavily-shorted stocks have risen by 98% in the past three months, outstripping major short squeezes in 2000 and 2009.”
He then points out something we discussed in “Hedge Funds Are Puking Longs To Cover Short-Squeeze Losses“, noting that while aggregate short interest levels are remarkably low (imagine what would have happened has shorting been far more aggressive marketwide)…
… “the -4% weekly return of our Hedge Fund VIP list of the most popular hedge fund long positions (GSTHHVIP) showed how excess in one small part of the market can create contagion.”
As an aside, and as we showed previously, as the most shorted stocks soared…
… hedge funds were forced to cover (as well as paying for margin calls), and as part of the broader degrossing they also had to sell some of the favorite hedge fund names across the industry, in this case represented by the Goldman Hedge Fund VIP basket.
Yet what may come as a surprise to some, even as hedge funds deleveraged aggressively and actively cut risk this week, gross and net exposures “remain close to the highest levels on record” (something which may come as a huge surprise to Marko Kolanovic who has been erroneously claiming the opposite), suggesting that if the squeeze continues, hedge funds are set for much more pain.
According to Goldman Sachs Prime Services, this week “represented the largest active hedge fund de-grossing since February 2009. Funds in their coverage sold long positions and covered shorts in every sector” and yet “despite this active deleveraging, hedge fund net and gross exposures on a mark-to-market basis both remain close to the highest levels on record, indicating ongoing risk of positioning-driven sell-offs.”
With that in mind, here are Kostin’s big picture thoughts:
It was a placid week in the US stock market – provided one was a long-only mutual fund manager. US equity mutual funds and ETFs had $2 billion of net inflows last week (+$10 billion YTD). Although the typical large-cap core mutual fund fell by 2% this week, it has generated a return of +1.3% YTD vs. S&P 500 down -1.1%. However, life was very different last week if one managed a hedge fund. The typical US equity long/short fund returned -7% this week and has returned -6% YTD.
With the average WSB portfolio up double digits this past week, one can see why hedge funds are upset. Anyway, moving on:
The past 25 years have witnessed a number of sharp short squeezes in the US equity market, but none as extreme as has occurred recently.In the last three months, a basket containing the 50 Russell 3000 stocks with market caps above $1 billion and the largest short interest as a share of float (GSCBMSAL) has rallied by 98%. This exceeded the 77% return of highly-shorted stocks during 2Q 2020, a 56% rally in mid-2009, and two distinct 72% rallies during the Tech Bubble in 1999 and 2000. This week the basket’s trailing 5-, 10-, and 21-day returns registered as the largest on record.
Thanks Goldman, and yes, your “brisk assessment” would have been more useful to your clients if it had come before the event (like, for example, this) instead of after.
Kostin then goes on to point out that the “mooning” in the most shorted stocks took place even though aggregate short interest was near record low (imagine what would have happened had short interest been higher), which is odd because historically, “major short squeezes have typically taken place as aggregate short interest declined from elevated levels. In contrast, the recent short squeeze has been driven by concentrated short positions in smaller companies, many of which had lagged dramatically and were perceived by most investors to be in secular decline” to wit:
Unusually, the rally of the most heavily-shorted stocks has taken place against a backdrop of very low levels of aggregate short interest. At the start of this year, the median S&P 500 stock had short interest equating to just 1.5% of market cap, matching mid-2000 as the lowest share in at least the last 25 years. In the past, major short squeezes have typically taken place as aggregate short interest declined from elevated levels. In contrast, the recent short squeeze has been driven by concentrated short positions in smaller companies, many of which had lagged dramatically and were perceived by most investors to be in secular decline.
Of course, there is nothing “historical” about what happened last week, because – as we all know – the biggest difference between the typical short squeeze of the past and the recent rally in heavily-shorted stocks “was the degree of involvement of retail traders, who also appear to have catalyzed sharp moves in other parts of the market.” Why thank you WSB, but that’s ok – you will be handsomely rewarded.
Last week we discussed the surging trading activity and share prices of penny stocks, firms with negative earnings, and extremely high-growth, high-multiple stocks. These trends have all accompanied a large increase in online broker trading activity. A basket of retail favorites (ticker: GSXURFAV) has returned +17% YTD and +179% since the March 2020 low, outperforming both the S&P 500 (+72%) and our Hedge Fund VIP list of the most popular hedge fund long positions (GSTHHVIP, +106%).
So why does this matter? One simple reason: contrary to the bizarrely nonchalant optimism spouted earlier this week by JPMorgan’s Marko Kolanovic who said “any market pullback, such as one driven by repositioning by a segment of the long-short community (and related to stocks of insignificant size), is a buying opportunity, in our view,” Goldman has a far more dismal take on recent events, and writes that “this week demonstrated that unsustainable excess in one small part of the market has the potential to tip a row of dominoes and create broader turmoil.”
He then picks up on what he said last weekend when responding to Goldman client concerns about a stock bubble, which we summarized in “Goldman’s Clients Are Freaking Out About A Stock Bubble: Here Is The Bank’s Response“, and which turned out to be 100% warranted, and writes that “most of the bubble-like dynamics we highlighted last week have taken place in stocks constituting very small portions of total US equity market cap. Indeed, many of the shorts dominating headlines this week were (prior to this week) small-cap stocks. But large short squeezes led investors short these stocks to cover their positions and also reduce long positions, leading other holders of common positions to cut exposures in turn.”
As a result, Goldman’s Hedge Fund VIP list declined by 4%. Which is a problem because as Kostin concludes, “in recent years elevated crowding, low turnover, and high concentration have been consistent patterns, boosting the risk that one fund’s unwind could snowball through the market.“
Translation: if WSB continues to push the most shorted stocks higher, the entire market could crash.
And since Kostin admits that “the retail trading boom can continue” as “an abundance of US household cash should continue to fuel the trading boom” with more than 50% of the $5 trillion in money market mutual funds owned by households and is $1 trillion greater than before the pandemic, what happens in the coming week – i.e., if the short squeeze persists – could have profound implications for the future of capital markets.
Tyler Durden
Sun, 01/31/2021 – 17:45
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