Oct 26

Today’s News 26th October 2023

  • Washington Isn't Alone In Flooding The Market With Government Bonds: Beijing Is Doing It Too
    Washington Isn’t Alone In Flooding The Market With Government Bonds: Beijing Is Doing It Too

    By Ye Xie Bloomberg markets live reporter and analyst

    Washington isn’t the only capital that is flooding the market with government bonds. Beijing is doing it too. A more-proactive fiscal expansion signals that Beijing isn’t entirely complacent about its current economic stability.

    Inevitably, bond sales will suck up liquidity from the banking system. That may required the PBOC to offset the liquidity drain by lowering the reserve requirement ratio. If so, it would put a ceiling on the recent rise in bond yields.  

    US bond yields resumed their surge Wednesday after a five-year note auction met with poor demand. It underscored investors’ anxiety toward the anticipated increase of bond sales by the Treasury next week.

    China’s bond market has also been pressured by supply lately, with 10-year yields rising to a five-month high. In a rare move, Beijing announced on Tuesday plans to issue additional sovereign debt worth 1 trillion yuan ($137 billion) to support disaster relief and construction.

    The signaling effect of the move — which will send China’s budget deficit to a three-decade high — is more significant than the actual impact. Bloomberg Economics estimated the fiscal spending will only add 0.5 percentage point to GDP growth in 2024. Still, it shows that Beijing is concerned about the economic outlook amid the property crisis that’s claimed Country Garden as its latest victim.

    For the central bank, the immediate concern is to offer more funding to accommodate bond issuance. According to Nomura’s estimate, government issuance will amount to 5.9 trillion yuan in the fourth quarter, well above the 4.3 trillion in 2022 and an average of 2.8 trillion in three years through 2021.

    Liquidity conditions have already been tight. In recent weeks, the seven-day repo rate has been persistently trading well above the PBOC’s benchmark of 1.8%. Bloomberg also reported that one-year bank funding costs shot up above the PBOC’s MLF lending rate, an unusual occurrence since 2019.

    So the consensus is looking for the PBOC to lower the RRR, unleashing more cash into the banking system, and potentially lower interest rates. Standard Chartered’s economists now call for 50bp cut in RRR by year-end, versus no reduction seen previously. Economists at Goldman Sachs expect a 25bp cut in RRR and a 10bp reduction in the policy rate in the fourth quarter.

    Yields on 10-year bonds have increased 16 basis points since the PBOC’s last rate cut in August. If the PBOC pumps more liquidity into the market, it may put a lid on rising yields.

    So the consensus is looking for the PBOC to lower the RRR, unleashing more cash into the banking system, and potentially lower interest rates. Standard Chartered’s economists now call for 50bp cut in RRR by year-end, versus no reduction seen previously. Economists at Goldman Sachs expect a 25bp cut in RRR and a 10bp reduction in the policy rate in the fourth quarter.

    Yields on 10-year bonds have increased 16 basis points since the PBOC’s last rate cut in August. If the PBOC pumps more liquidity into the market, it may put a lid on rising yields.

    Tyler Durden
    Wed, 10/25/2023 – 21:40

  • Attention Military-Industrial Complex: Gen-Zers Don't Want To Fight Your Endless Wars
    Attention Military-Industrial Complex: Gen-Zers Don’t Want To Fight Your Endless Wars

    “Why is everyone saying Gen-Z is going to get drafted? Like – no – the f*ck we are not – and you know why I know that – because we’re just going to say No. Like how are they going to actually force us to get up and go to war,” a Gen-Zer on TikTok said in a recent video. 

    Besides war, he said, “We [Gen-Z] have things to do nowadays, like work and be bisexual.” 

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    Another young TikToker revealed he is headed for the hills when a draft occurs.

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    And another Gen-Zer interrupted boomer Hillary Clinton during a speech at Columbia University. He called on Clinton to make a statement about President Biden’s recent “warmongering speech” as a regional conflict in the Middle East could spark World War 3. 

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    Observing Gen-Z’s reactions to the risk of being drafted, many of them supported Democrats. The Biden administration is currently managing two conflicts: One in Ukraine and the other involving Israel and Hamas. 

    Corporate progressive media and woke universities have brainwashed this hopeless generation into believing Democrats are the ‘party of love’ – but it’s far from that. 

    Just remember, Gen-Z, The US Army recently changed its gender policies… 

    Enjoy basic training.

    … and internet search term “military draft age” surges.

    As well as “military draft.” 

    As for the Military-Industrial Complex, good luck rounding up Gen-Zers for a draft. Many are no longer willing to fight your endless wars. It seems the propaganda isn’t working anymore. 

    Tyler Durden
    Wed, 10/25/2023 – 21:20

  • At Least 16 Dead, 50 Injured In Multiple Mass Shootings In Maine Town, Suspect At Large
    At Least 16 Dead, 50 Injured In Multiple Mass Shootings In Maine Town, Suspect At Large

    Authorities in Maine are investigating three active shooter events and a suspect remains at large, the Androscoggin County Sheriff’s Office said in a post on Facebook.

    “We are encouraging all businesses to lock down and or close while we investigate,” the sheriff’s office said.

    As The Sun Journal reports, police, fire and rescue personnel descended on Sparetime Recreation on Mollison Way about 7:15 p.m. after a report of an active shooter.

    Shortly after, reports came in that there was another shooting at Schemengees Bar & Grille Restaurant on Lincoln Street.

    Lewiston public information officer Derrick St. Laurent told the Sun Journal at about 8:15 p.m. that another shooting was reported at the Walmart Distribution Center on Alfred A Plourde Parkway.

    CNN reports that at least 16 people are dead, according to multiple law enforcement sources, and 50-60 people are injured in the incidents, though it’s unclear how many are injured due to gunfire.

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    The Sheriff’s office released this image of the alleged suspect….

    Maine State Police also said they are responding to an active shooter situation in Lewiston in a post on Facebook.

    “Please stay inside your home with the doors locked,” state police said.

    “If you see any suspicious activity or individuals please call 911.”

    Developing…

    Tyler Durden
    Wed, 10/25/2023 – 20:51

  • Watch: Hillary Clinton Snaps At Heckler Who Blasts Her Support For "War-Mongering" Joe Biden
    Watch: Hillary Clinton Snaps At Heckler Who Blasts Her Support For “War-Mongering” Joe Biden

    With international headlines once again floating the possibility of WW3, this time connected with Israel-Gaza events and not Ukraine, the White House is coming under growing criticism for Biden’s mishandling of world events and major geopolitical flashpoints. Many pundits have of late observed that Democrats have become the “war party” – having escalated the situation in both Ukraine and the Middle East, given the billions in US weaponry being poured into hot wars but with no sense or plans for an “off ramp”. 

    These tensions spilled out into the open during an even featuring Hillary Clinton, herself a Democratic hawk who oversaw ‘dirty wars’ in Libya and Syria as then Secretary of State. She weighed in on foreign conflicts as part of a panel for the Institute of Global Politics at Columbia University on Monday. A heated back-and-forth at one point erupted as an activist stood up to challenge Clinton over her support for “war-mongering” President Joe Biden.

    It happened at about 30-minutes into the event, but lasted a number of minutes. Clinton snapped and yelled for the man to “sit down”. During the charged exchange Clinton, who clearly lost patience, pleaded with the man, “Well, then sit down. We’ve heard your opinion, thank you very much,” and additionally tried to respond to his criticisms by saying during the tense situation, “I’m sorry, but some of us are on Team America despite our flaws.” The man was later identified as Robert Castle of the Schiller Institute, a group set up by the late Lyndon LaRouche, which often shows up to high profile speaking events to loudly protest. “She’s trying to push us to WW3!” the man shouted as security tried to usher him out of the room. Clinton immediately responded, “Oh please!” Watch below:

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    Tyler Durden
    Wed, 10/25/2023 – 20:40

  • Commodity Traders And Energy Giants Are Shockingly Detached From The Unfolding Middle Eastern Crisis
    Commodity Traders And Energy Giants Are Shockingly Detached From The Unfolding Middle Eastern Crisis

    By Cyril Widdershoven of OilPrice.com

    Israel is on the brink of a full invasion of the Gaza Strip, with the Israeli Armed Forces (IDF) prepared to implement a range of military strategies. While regional tensions are escalating, a full-scale war has not yet erupted on Israel’s northern borders with Lebanon and Syria, involving Hezbollah, a Shia terrorist organization, and its supporters. Diplomatic pressure from the USA and Arab nations is currently preventing Hezbollah from launching a large-scale offensive. This ongoing ‘stalemate’ is precarious, as it has the potential to trigger a regional conflict and create significant instability in Arab countries, such as Egypt, Jordan, and Saudi Arabia, which could face public backlash. Despite the concerns within the oil and gas market about the ongoing conflict and its potential impact on energy supplies and operations, the expected oil price risk premium remains relatively low. The situation appears uncertain, but even Saudi Crown Prince Mohammed bin Salman’s Davos in the Desert FII2023 conference proceeds as if the crisis is not occurring. Energy industry leaders are mingling in opulent settings at Riyadh’s Ritz Carlton, seemingly disconnected from the reality on the ground.

    Just as political leaders in the West often struggle to understand the sentiments of their constituents, leading to the rise of populism, it appears that energy giants, OPEC leaders, and commodity traders are similarly detached from the unfolding crisis. The situation bears a striking resemblance to the Russian military buildup on Ukraine’s borders in 2022 when most believed that nothing significant would happen.

    From a military geopolitical perspective, the current alertness of Western forces, including the USA and Israel, is unparalleled. While all eyes are on the IDF and its neighbors, the significant buildup of US forces in the region is being concealed from public view. The only noticeable change in posture is the preparations made by Washington to safeguard US civilians and diplomats from becoming embroiled in the conflict. However, the hidden buildup of US Navy force projection capabilities, the deployment of advanced anti-missile systems, fighter squadrons, and an offensive capacity to target any regional adversary is unprecedented. Officially, Washington attributes these military moves and preparations to protecting US troops in the Middle East, given the increased attacks on their assets by Iran-backed militants in Iraq and Syria. However, it is evident that the focus extends beyond force protection.

    Since the Hamas terrorist attack on Israel, US forces in the Middle East have been repeatedly targeted by missiles, drones, and rockets in Iraq, Syria, and even in response to Yemen-based missile launches in the Red Sea region. All these attacks have been linked to Iranian-backed operations. Washington’s recent call for US citizens to evacuate Lebanon and other Arab capitals should not be underestimated. There are clear signs that a direct military confrontation between the USA and Hezbollah, Syria, and Iran is imminent. The positioning of two US aircraft carriers off the coast of Israel, alongside the existing US fleet in and around the Arabian/Persian Gulf, underscores the seriousness of the situation. A ground assault by Israel on Gaza or heightened Hezbollah activity in northern Israel could easily trigger a larger conflict.

    Oil markets, commodity traders, investment funds, and maritime companies should reevaluate their strategies promptly. While building a military capability to project power is generally a defensive move that should be welcomed, the current actions indicate a shift from defensive to offensive postures. Unless a miracle occurs in the coming hours or days, a higher level of volatility and confrontation than what the mainstream media or analysts are portraying seems imminent. One significant incident, even initiated by a minor player like Hezbollah or Iranian-backed militias resulting in US casualties, could trigger a major crisis. Iran’s military capabilities, especially its missiles and proxy forces, are formidable, and the outcome of a full-scale confrontation would be definitive.

    In such a multifaceted conflict, the implications are extensive, encompassing the Eastern Mediterranean, the Suez Canal, the Red Sea, and the Persian Gulf. These regions are vital maritime transport routes for energy, commodities, and nearly half of global maritime trade. The costs of such a conflict would be staggering, jeopardizing future assessments and investments. History provides valuable lessons, even for algorithm-based commodity traders and investors, and the situation evokes memories of the Ukrainian crisis, but this time, the involved powers possess far greater capacity and reach. It is essential not to underestimate the global influence of Iran, which has a presence around the world, including in the USA, UK, and EU, in addition to its significant naval and IRGC capabilities. Moscow, while not overtly involved, should not be overlooked as a silent partner in the unfolding events.

    Tyler Durden
    Wed, 10/25/2023 – 20:20

  • UAW Nears Deal With Ford That Could End Six-Week Strike, Report Says
    UAW Nears Deal With Ford That Could End Six-Week Strike, Report Says

    One week after United Auto Workers boss Shaw Fain targeted Ford Motor Company’s largest and most profitable plant in Kentucky, sources tell AP News that the union appears to be inching closer to a tentative contract agreement with the automaker that could end the six-week strike. 

    Two people familiar with discussions said UAW made a counter-offer to Ford of a 25% general wage increase over the new four-year contract. They said Tuesday talks between the union and automaker extended well into Wednesday morning. Ford has previously offered UAW a 23% pay hike. 

    They added that Ford would include cost-of-living pay adjustments that could send pay increases above 30%, and workers would receive annual profit-sharing checks. 

    It’s still possible that contract talks could sour, and UAW boss Fain could hit Ford with a ‘surprise‘ labor action, sort of like what happened last week when Ford’s Louisville plant, which makes Ford Super Duty pickups, the Ford Expedition, and the Lincoln Navigator SUVs, was hit with an 8,700-member UAW strike. 

    The progress with Ford comes a day after the UAW hit General Motors’ largest and most profitable SUV plant in Arlington, Virginia, with a 5,000-member strike on Tuesday. Sources say there has been some progress in labor talks with GM. 

    As of Wednesday, 46,000 UAW workers are striking across all three automakers, or about 32% of the union’s 146,000 members. 

    “I think that Shawn Fain struck these plants at this particular time over the past week because he thought they would be near a deal and this would be the extra nudge to get something cemented,” Marick Masters, a business professor at Wayne State University in Detroit, told AP. 

    Masters continued, “When you look at the movement and the concessions, they’re getting smaller but moving closer to what the union wanted.”

    During GM’s earnings report on Tuesday, CFO Paul Jacobson said, “We can’t get ourselves in a situation of signing a deal that we can’t afford to pay or that doesn’t allow us to compete in the global marketplace.”

    And this. 

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    Thanks UAW. 

    Tyler Durden
    Wed, 10/25/2023 – 20:00

  • Kirby Shrugs Off Soaring Gaza Death Toll, Says "Innocent Civilians Are Going To Be Hurt"
    Kirby Shrugs Off Soaring Gaza Death Toll, Says “Innocent Civilians Are Going To Be Hurt”

    Authored by Dave DeCamp via AntiWar.com,

    White House National Security Council spokesman John Kirby said Tuesday that Israel will continue to hurt “innocent civilians” in its onslaught on Gaza.

    “This is war. It is combat. It is bloody, ugly and it’s going to be messy and innocent civilians are going to be hurt going forward,” Kirby said when asked if the US thought Israel’s bombardment was a disproportionate response to the Hamas attack on southern Israel.

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    “I wish I could tell you something different and wish that there wasn’t going to happen, but it is going to happen. And that doesn’t make it right, doesn’t make it dismissible,” Kirby added.

    He also reiterated the US’s opposition to a ceasefire in Gaza, claiming it would only benefit Hamas. Both Kirby and Secretary of State Antony Blinken said they were open to the idea of a “humanitarian pause” to allow more aid to enter Gaza.

    Kirby insisted the US would continue to urge Israel to minimize civilian casualties, but Israel has only increased its bombardment of Gaza. Israeli Prime Minister Benjamin Netanyahu said Tuesday that airstrikes launched the day before were the hardest yet.

    While Kirby framed civilian casualties as a fact of modern war, Israel’s bombardment has been particularly brutal, as attacks have been leveling entire neighborhoods. According to Gaza’s Health Ministry, after 18 days of bombing, at least 5,791 Palestinians have been killed in Gaza, including 2,360 children (and which has risen to at least 6,546 on Wednesday). 

    Kirby cast doubt on the casualty numbers coming out of Gaza since the enclave is ruled by Hamas. But the casualty rate is believable as the Israeli side has boasted about the scope of its bombardment.

    In just the first six days of its onslaught, Israeli forces dropped 6,000 bombs on Gaza, one of the most densely populated places on earth. In comparison, the US dropped 7,423 bombs on Afghanistan in 2019, the most since the US started keeping a tally in 2006.

    Tyler Durden
    Wed, 10/25/2023 – 19:40

  • Oklahoma Lawmaker Wants ATF Agents Arrested, Prosecuted After Raid On Gun Dealer
    Oklahoma Lawmaker Wants ATF Agents Arrested, Prosecuted After Raid On Gun Dealer

    Oklahoma state Rep. Justin Humphrey (R) says he’s filed a probable cause affidavit with the state Attorney General, and has demanded that agents with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) be arrested and prosecuted following a June 16 raid on a gun dealer which resulted in the confiscation of more than 50 firearms.

    Russell Fincher stands in front of one of his gun safes emptied by the Bureau of Alcohol, Tobacco, Firearms and Explosives during a June 16, 2023 raid on his home in Tuskahoma, Okla., in this Sept. 1, 2023 photo. (Michael Clements/The Epoch Times)

    Humphrey says that the document he filed – which he collaborated on with the Pushmataha County Sheriff’s office – focuses on the agents who raided the home of FFL holder Russell Fincher.

    According to the affidavit, the ATF agents should be investigated for extortion, terroristic threats and misuse of their authority as law enforcement officials, among other charges.

    What’s more, weeks after the raid the ATF sent Fincher a list of the 50 confiscated firearms, marked each one down to $10, and allegedly offered him the option of forfeitting them in exchange for a check.

    “When you abuse your law enforcement position, I think you ought to be arrested,” Humphrey told the Epoch Times.

    Fincher told the outlet: “I just want them to really investigate it,” adding “I feel like there’s no accountability for the ATF.”

    An ATF spokesman, Ashley Stephens, told the outlet that the assertion that the ATF is confiscating guns for no reason or offering to sell them back to owners for pennies on the dollar is “a mischaracterization of what happened.”

    More via The Epoch Times;

    Handcuffed in Front of Son

    Mr. Humphrey worked for the Oklahoma Department of Corrections for 20 years as a probation officer. He said that as a former law enforcement officer, he believes the ATF agents abused their power to intimidate and coerce Mr. Fincher into giving up his property and federal firearms license.

    He is accusing the ATF of not clearly stating what crime, if any, Mr. Fincher is accused of and of pressuring him to give up guns and his FFL by handcuffing him and searching his property in front of his 13-year-old son.

    “I’ve looked up all the statutes that I believe were violated,” Mr. Humphrey said.

    Russell Fincher stands in front of his house in Tuskahoma, Okla., on Sept. 1, 2023. (Michael Clements/The Epoch Times)

    In an interview with The Epoch Times last September, Mr. Fincher said he was shocked by the raid. He said his relationship with the ATF before that day had an air of professional courtesy.

    When agents called and told him to stay home that day because they needed to talk to him, he expected the same type of official visit that he’d always had.

    But when Mr. Fincher looked out his window, he saw vehicles come up his driveway, spread across his front yard, and disgorge armed men in tactical gear.

    “I didn’t know what to think,” Mr. Fincher said. He stepped out to talk with the agents, was placed in handcuffs, and led away from the house.

    “They said, ‘You’re not being arrested, you’re being detained,’” Mr. Fincher said.

    The agents asked him about a gun he had legally traded at a gun show years before. A trade that Mr. Fincher said he barely remembers.

    The gun had turned up at a crime scene in California years after he had traded it. The ATF traced the gun back to him as the original purchaser. Mr. Fincher said the agents badgered him about the trade, which was legal.

    ATF agents arrive on Russel Fincher’s property in Tuskahoma, Okla., on June 16, 2023. (Courtesy Russell Fincher)

    “They said, ‘You sold this gun to a criminal.’ I asked them, ‘Do you have a criminal telling you that Russell Fincher sold me a gun?’” Mr. Fincher said.

    Mr. Stephens said that under the ATF’s administrative guidelines, agents only seize guns they’ve been authorized by the court to seize. This is why some guns may be taken while others would be left.

    “We can only seize what the court tells us we can seize,” he said.

    The owner is provided forms to contest the seizure and petition for the return of the property. Those forms will contain an estimated value for the property.

    In the weeks after the raid, the ATF sent Mr. Fincher a list of the 50 confiscated firearms that set a value for each gun at $10. While stressing he was not addressing Mr. Fincher’s case, Mr. Stephens said the ATF doesn’t offer to purchase seized guns.

    “That sounds like nothing I’ve ever heard of in 20 years with the ATF,” Mr. Stephens told The Epoch Times.

    He added that the agents who seize the property don’t set the value.

    ATF agents inventory firearms they confiscated from Russell Fincher of Tuskahoma, Okla., on June 16, 2023. (Courtesy of Russell Fincher)

    Taking Issue With ATF

    The documents provided by Mr. Fincher to The Epoch Times outline the procedure for petitioning to have the property returned.

    Speaking with The Epoch Times for this story, Mr. Fincher took issue with Mr. Stephens’s assertion.

    “My attorney told me that if I agreed to forfeit, they would send me a check for each gun,” he said.

    Mr. Stephens said that the ATF would comment on the case as soon as possible. However, he said he is prohibited from commenting on ongoing investigations.

    “We’re just not allowed to talk about ongoing investigations,” he said.

    Tyler Durden
    Wed, 10/25/2023 – 19:20

  • McMaken: Derek Chauvin Is Guilty Of Manslaughter, Not Murder
    McMaken: Derek Chauvin Is Guilty Of Manslaughter, Not Murder

    Authored by Ryan McMaken via The Mises Institute,

    As far as the corporate media narratives are concerned, we are only allowed to hold one of two possible opinions about the George Floyd killing in 2020.

    On the one hand, there is the position that George Floyd was a saintly man who died as a result of a racism-inspired attack by police officer Derek Chauvin. Moreover, Chauvin deliberately killed Floyd, and is thus guilty of murder.

    On the other side is the position that George Floyd was a monster who only died because he was a drug user. Chauvin, a saintly public servant, was merely trying to restrain a dangerous criminal—i.e., Floyd—who was in the process of stealing from a local merchant. Chauvin was merely in the wrong place at the wrong time since Floyd just happened to die while Chauvin was kneeling on this neck. This was bad luck for Chauvin who did absolutely nothing wrong. 

    Those are your two media-approved choices.

    • The first narrative, of course, is the standard leftwing position promoted by the likes of CNN pundits.

    • On the other side are FoxNews pundits like Tucker Carlson. 

    Neither narrative describes the actual situation, however. 

    This is important again because Carlson has recently taken to claiming that “the whole George Floyd story was a lie.” 

    This claim is based on Carlson’s theory that Floyd could not have been killed by Chauvin because Floyd had various illegal drugs in his system. 

    But is the whole George Floyd story a lie? Certainly some parts of the story are undeniably true. It is well established that Chauvin chose to use a neck restraint defined as “deadly force” by the police themselves. It is well established that Chauvin did this in spite of the fact that Floyd was already handcuffed and the police had no reason to interpret Floyd’s lack of cooperation as a threat to the police or the public. These facts were attested to by police personnel during Chauvin’s trial. 

    In other words, it is a fact that Chauvin saw fit to apply deadly force to a handcuffed man, and while using that deadly force, the subject died. 

    So, no, Carlson’s claim that the whole story is a “lie” is demonstrably false. Yes, parts of the story probably are lies.

    The idea that Chauvin was animated primarily by racism appears to be completely made up.

    The claim that Chauvin intended to murder Floyd is probably a total fabrication as well. 

    But the facts point strongly to the claim that Chauvin is indeed guilty of involuntary manslaughter. After all, manslaughter is generally defined—depending on what state you are in—as accidental homicide that occurs during the commission of some other illegal activity. 

    In Chauvin’s case, it was established during the trial that he applied deadly force to Floyd contrary to law, police policy, and Chauvin’s training. In other words, Chauvin was breaking the law by assaulting Floyd who was already restrained. While Chauvin was committing this assault, Floyd died. 

    There are, however, reasons to think Chauvin did not intend to kill Floyd.

    Chauvin committed his assault right out in the open in front of at least a dozen witnesses. Because of his disregard for policy and common sense, Chauvin apparently believed his use of deadly force would not result in death. We also know that Chauvin is a generally incompetent person. He failed at every job he had in the private sector, and only managed to meet some level of success when he stumbled upon government jobs in which it was nearly impossible to be fired. Chauvin is the poster boy for people we might describe as “shiftless government employee.” It’s entirely plausible it didn’t occur to Chauvin—as it would occur to an intelligent or competent person—that kneeling on a handcuffed person’s neck for nine minutes might result in unfortunate consequences. 

    As Carlson points out, Floyd was in poor health due to drug use and hard living. Yet, this does not mean Chauvin is not guilty of manslaughter. After all, people go to jail regularly for manslaughter as a result of assaults that might seem unlikely to kill a healthy person. Lauren Pazienza can tell you all about it. Pazienza is now serving a prison sentence for manslaughter after shoving an 87-year-old woman who fell down, hit her dead, and died. The same shove would have likely brought no harm to a younger, healthier person.  Pazienza now has eight years in prison to think about it.  

    This is why we don’t assault people unless that person poses a real risk to us. One can’t predict what might happen. Chauvin, however, who had a long record of dim-witted and aggressive behavior as a police officer, chose to use deadly force on a handcuffed subject. According to the medical examiner, this was a key factor in Floyd’s death. That is, Floyd’s death was ruled a “homicide” by reason of “law enforcement subdual, restraint, and neck compression.” The use of the term “homicide” here doesn’t mean Chauvin committed deliberate murder. But it is fairly clear that Chauvin is guilty of manslaughter because Chauvin’s illegal actions brought about Floyd’s “cardiopulmonary arrest” that resulted in death. 

    Does Chauvin deserve decades in prison for this? Probably not, but he could have also easily avoided the entire situation, had he not thought himself above the law. 

    Tyler Durden
    Wed, 10/25/2023 – 19:00

  • As Mitsubishi Exits China, Other Japanese Automakers Consider Following Suit
    As Mitsubishi Exits China, Other Japanese Automakers Consider Following Suit

    Mitsubishi has officially made it way out of the Chinese auto market and now other Japanese automakers are considering doing the same.

    According to research by MarkLines cited by Nikkei this week, Japanese car manufacturers such as Toyota, Honda, and Nissan are lagging in the Chinese market this year. In the first three quarters of 2023, the trio’s combined new vehicle sales were 1.29 million, a 26% year-on-year decrease. Both Toyota and Nissan experienced declines in the ballpark of 30%.

    The rise in China’s EV adoption and the dominance of local brands like BYD and Great Wall Motor are challenging Japanese automakers. Electric vehicle sales in China soared 80% to 5.36 million last year, capturing about 20% of the new car market.

    Japanese companies, traditionally strong in gas-fueled cars, are falling behind in the fast-paced EV sector led by Chinese firms.

    Facing challenges, Japanese automakers are reorganizing their Chinese operations. Mazda plans to cut its dealership network by about 10% from 2022 levels, while Toyota terminated contracts for roughly 1,000 workers at a joint venture.

    Honda and Nissan have reduced local production, with Nissan’s output reportedly at half its peak. Estimates suggest Toyota, Nissan, and Honda have a combined 40% excess capacity in China, based on current sales forecasts.

    Nikkei writes that:

    “Japanese automakers’ market share in the Association of Southeast Asian Nations region this year came to 73% as of Oct. 19, down four percentage points from 2019, according to MarkLines and other data sources.”

    Mitsubishi, meanwhile, is expecting to take a 24.3 billion yen ($162 million) loss from pulling out of the country in the FY that ends next March. 

    Recall, we noted weeks ago that Mitsubishi was calling it quits in China. The company had been suffering from “sluggish sales”, a September report said, noting that other Japanese automakers are also reassessing their viability in the Asian country. 

    GAC Mitsubishi Motors shuttered its manufacturing operations in Hunan province indefinitely in late September, marking the end of Mitsubishi’s sole factory in China. GAC, which holds a 50% share in the joint venture, plans to repurpose the Hunan facility for electric vehicle (EV) production while aiming to retain some level of its workforce, the report says. 

    Mitsubishi Motors and Mitsubishi Corp., owning 30% and 20% stakes respectively, would pull their investments, although GAC Mitsubishi will continue to exist as a business entity, we wrote.

    Nikkei noted that in 2022, Mitsubishi’s car sales in China plummeted by 60% to 38,550 vehicles. An attempt to revive sales with the launch of the hybrid Outlander SUV last autumn failed to meet expectations. Mitsubishi now plans to reallocate resources to Southeast Asia and Oceania, areas responsible for about one-third of the company’s consolidated sales.

    Meanwhile, the electric vehicle market in China is booming, with a report from the China Association of Automobile Manufacturers indicating an 80% surge in EV sales in 2022 to 5.36 million units. Mitsubishi has lagged in this segment, relying on GAC for EV supplies in China.

    Tyler Durden
    Wed, 10/25/2023 – 18:40

  • Are We Closing In On Capitulation Levels For Chinese Stocks?
    Are We Closing In On Capitulation Levels For Chinese Stocks?

    Authored by Simon White, Bloomberg macro strategist,

    Equities in China are getting closer to a tradeable bottom, based on internal measures of breadth, improving liquidity conditions, and tentative signs the property market may be troughing.

    Stocks in China continue to lag their global peers, with the MSCI China the third-worst performing index year to date, beating only the MSCI Hong Kong and Thailand indices.

    There have been several false dawns since China lifted Covid restrictions, and we’re likely not quite there yet, but breadth in the country’s stocks is approaching the point where typically they have bottomed. That’s on top of further easing measures announced today, including a cut in stamp duty for Hong Kong stock trading.

    The percentage of stocks in the CSI 300 trading above their 200-day moving average is now about 20%, and dropping fast.

    Levels between 0% and 10% have often marked reversals in the index. The index itself is also well below its 200-day moving average.

    The advance-decline ratio is flat-lining, showing that on net very few stocks are advancing. Similarly the net number of stocks making new 52-week lows is markedly negative. It also not yet at capitulatory levels, but is approaching them.

    That also applies to the percentage of stocks whose 14-day RSI is below 30. This is at over 40%; previously when it has been more than 50% it has often marked at least a short-term bounce in price.

    China is incrementally adding more liquidity, with PBOC net-repo injections at a series high on a 3-month summed basis.

    Medium-term lending is also picking up, with one-year policy loans on track to make an all-time high.

    Monetary loosening is being joined by increased fiscal easing, with the central government — less encumbered than local governments — stepping up issuance (as speculated previously). It was announced today that the budget deficit ratio will be raised (from 3% to about 3.8% of GDP), and additional sovereign debt of one trillion yuan is to be issued in the fourth quarter.

    Crucial to a sustainable recovery in China is the real-estate market. Property developers continue to struggle with debt problems, most prominently Country Garden, which has been deemed to be in default on a dollar bond for the first time.

    Stress will persist until the property market can be reanimated. There is a hint of an early recovery, with the growth rate of floor space on new houses steadily rising through this year.

    Tyler Durden
    Wed, 10/25/2023 – 18:20

  • Wall Street Vol Legend "50 Cent" Unveils His Top 2024 Trade With "Extraordinary Upside"
    Wall Street Vol Legend “50 Cent” Unveils His Top 2024 Trade With “Extraordinary Upside”

    Jonathan ’50 cent’ Ruffer – infamous for his scooping up massive profits in front of the options market steamroller over the past few years – is back with a new trade for 2024: Japanic!

    Jonathan ’50 cent’ Ruffer

    Instead of snapping up VIX options priced at 50 cents (hence his nickname), he explains in his latest letter to investors that he has a “big position” in the Japanese Yen – betting that the currency will collapse “violently” some time soon (as a reminder, The BoJ meets next week).

    “The yen has been moving lower for a long while. With currencies, it is always dangerous to try to anticipate a change of direction, even when the fundamentals cry out for it, and our performance has suffered accordingly. We believe the yen is oversold for technical reasons and that, when these dissipate, it is likely to move sharply higher. Moreover, when it does, it is likely to be concertinaed into a brisk uncontrollable move upwards. This happened, to our advantage, in 2008, and we believe that today’s backcloth will cause a repetition of that dynamic.”

    Ruffer sees two factors working simultaneously to reinforce his trade: forced sellers of foreign currencies, and simultaneously, forced buyers of yen.

    “The compulsion to buy yen will come from two diametrically opposite sources – one domestic, one international.

    Local demand for yen will come about in the aftermath of Bank of Japan Governor Ueda’s increasing isolation in trying to hold the yields of the government bonds well below the international rate. The most likely way out of this impasse is for the authorities to compel domestic institutions to acquire such bonds at their current (anomalously expensive) prices. To do this, those institutions will have to sell down big holdings of foreign government bonds, denominated, of course, in foreign currencies. Many of those holdings have already been hedged into yen, but much of it will still be held in local currencies, with the conversion into yen telescoped into a short time window.

    The international constituency of forced sellers are those foreigners who have borrowed in yen to enjoy a lower interest rate regime than the one in which the assets are purchased. That constituency is more aware of the double advantage of a low interest rate and a steadily diminishing value of their borrowings than they are of the dangers of a currency mismatch which, at the key moment, moves sharply against them.”

    If these events occur in the course of a market dislocation, Ruffer says “the exchange rate could move as violently as it did in 2008 (up by 50% against sterling in short order).”

    USDJPY has been battling with 150/USD for a while now, prompting various interventions…

    However, nothing lasts forever, and as Ruffer explains, the market’s stability is an illusion, and everyone’s about to take the red pill…

    “At the heart of our investment strategy is the belief that 2023 has seen fundamental truths – with their gravitational pulls on valuations – momentarily overwhelmed by market forces.

    These forces can, in the short term, be very much stronger than a mere ‘gravitational pull’, but in the long term gravity always beats a good party.“

    So, never bet against gravity, as armchair philosopher Ruffer concludes:

    “In summary, the world has more than a tinge of aurora borealis.

    It is a dystopian world where everyone is a victim, the central authorities in the West buy off every dissatisfaction with money they haven’t got, and a new order awaits its time, still to come.

    If you know where to look, there are eternal truths that are observable by eternal pieces of evidence.

    In the field, it is rheumatism in the knee which heralds the change from father to son; in the West, it’s the day that the cost of paying the interest on a nation’s borrowings overtakes the (sharply rising) defence budget.

    Just as with the yen, we’ve seen this all before, and we know how it ends, but that doesn’t mean the journey won’t be bumpy along the way.”

    Ruffer’s view is not that out-of-consensus, but there is something unique:

    “In my experience, it is unusual to find two separate constituencies of forced buyers – to find a single one is enough. It is the strong possibility of an extraordinary upward move in the Japanese currency which provides us with the stamina to withstand the general day-to-day attrition of the yen. If the net result produces merely a satisfactory ultimate return, we will be disappointed.”

    His timing could be perfect as we noted earlier in the week, there is a sense of immediacy coming out of the Bank of Japan with regards to its curve-control experiment, just hours after the central bank intervened in the bond market, including:

    Bank of Japan officials “are likely to monitor bond yield movements until the last minute before making a decision on whether to adjust the yield curve control program.”

    Implicit in that wording is the suggestion that the central bank may be ready to adjust its curve control before next week’s decision, should push come to a shove.

    That may be especially so should the functioning of the bond market worsen.

    There comes a point in any intervention where the tipping point is determined not by the amount of money spent in defense of a policy but by the dislocations that it spawns.

    And the BOJ sources story suggests that the pain threshold is near, if not already reached.

    While an end to negative rates may still be away, a shift in curve control may come sooner than markets reckon, especially given Ruffer’s “firm conviction that inflation is in an inexorable up-cycle. We do not put timings on it, but two factors will prove more powerful at stoking rising prices than the single force pulling the other way – the impact of central bank tightening.”

    With vols so low…

    …maybe it’s to jump on the Japanic trade!

    Read Ruffer’s full letter to investors here…

    Tyler Durden
    Wed, 10/25/2023 – 18:00

  • Rep. Bowman Issued Criminal Summons For Pulling Fire Alarm
    Rep. Bowman Issued Criminal Summons For Pulling Fire Alarm

    Democratic lawmaker Rep. Jamaal Bowman was issued a criminal summons by the DC Superior Court, after he was caught on CCTV pulling the fire alarm in the House office building on Oct. 1 while Democrats were trying to delay a House vote on the stopgap bill (which eventually passed at the 11th hour).

    Bowman – who founded a school that would have held several fire drills per year, wants us to believe he mistook this fire alarm…

    …for an automatic door opener that he was trying to use to open a clearly marked emergency exit.

    Bowman wanted us to believe that he “came to a door that is usually open for votes but today would not open,” and that he’s “embarrassed to admit that I activated the fire alarm, mistakenly thinking it would open the door. I regret this and sincerely apologize for any confusion this caused.”

    And now, Bowman has to appear before the court on Oct. 26 at 9:30 a.m. on the charge of a “fire false alarm.”

    In response, Bowman said on Wednesday: “I’m thankful for the quick resolution from the District of Columbia Attorney General’s office on this issue and grateful that the United States Capitol Police General Counsel’s office agreed I did not obstruct nor intend to obstruct any House vote or proceedings,” adding “I am responsible for activating a fire alarm, I will be paying the fine issued, and look forward to these charges being ultimately dropped. I think we all know that Republicans will attempt to use this to distract everyone from their mess.”

    As the Epoch Times noted at the time; The fire alarm in the Cannon House Office Building, often called the “Old House Office Building,” was triggered around noon, leading to an evacuation of the entire building while the House was in session. The building was reopened an hour later, after Capitol Police determined the situation was not a threat.

    Capitol Police said in a statement late Saturday that an “investigation into what happened and why continues.”

    The fire alarms in the Old House Office Building are pull down triggers encased in bright red boxes that read “FIRE.”

    At the time of the evacuation, Democrat lawmakers in the House were working to delay a vote on a 45-day funding bill to keep federal agencies open. They said they needed time to review the 71-page bill that Republicans had just released to avoid a shutdown.

    ‘The law for thee, but not for me…’

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    Tyler Durden
    Wed, 10/25/2023 – 17:40

  • Blinken Told Qatar To 'Tone Down' Al Jazeera's Biased Anti-Israel Coverage
    Blinken Told Qatar To ‘Tone Down’ Al Jazeera’s Biased Anti-Israel Coverage

    In a moment that hearkens back to the Bush administration’s spat with the Arab media network’s coverage of the start of the Iraq War, the Biden White House is bring pressure to bear against Al Jazeera, as it’s not happy with its coverage of Gaza

    US Secretary of State Antony Blinken has sought the mediation of the Qatari government to get the Doha-based channel to “tone down” its perceived anti-Israel coverage and rhetoric.

    Image via Al Jazeera

    According to an exclusive in Axios, Blinken on Monday said before a closed-door group of Jewish leaders that he “asked the Qatari prime minister less than two weeks ago to tone down Al Jazeera’s rhetoric about the war in Gaza, according to three people who attended the meeting.”

    Axios underscores that Blinken’s remarks “suggest the administration, which has asserted its support for the independent press globally, is concerned Al Jazeera’s framing of the conflict could escalate tensions in the region.” According to more:

    Blinken said he gave toning down Al Jazeera coverage of the war in Gaza as an example of steps the Qatari government can take to do this. Blinken said he asked the Qataris to “turn down the volume on Al Jazeera’s coverage because it is full of anti-Israel incitement,” according to one source.

    Blinken didn’t given any specific examples of what constitutes problematic coverage, according to the people who attended the meeting, but Israel has long accused the channel of being “a propaganda mouthpiece” for Hamas. The US administration has not gone so far as to verbalize this, but likely quietly agrees.

    Some of the White House’s own spokespersons have recently dismissed or downplayed the soaring civilian death toll in the Gaza Strip as it’s being daily pummeled by Israeli airstrikes. 

    On Tuesday national security official John Kirby in a briefing said that more innocent people will inevitably die but he did not criticize Israel’s seeming indiscriminate bombing campaign which has also killed thousands of women and children. Kirby was aske about the disproportionate response to Oct. 7, and he answered:

    “This is war. It is combat. It is bloody. It is ugly, and it’s going to be messy. And innocent civilians are going to be hurt going forward,” Kirby told reporters. “I wish I could tell you something different. I wish that that wasn’t going to happen, but it is going to happen.”

    And then on Wednesday, President Biden himself asserted, “I have no notion that Palestinians are telling the truth about how many people are killed.” He added: “I’m sure innocents have been killed. And that’s the price of waging a war. I have no confidence in the number that the Palestinians are using.”

    On Wednesday, Gaza-based Al Jazeera journalist Wael Dahdouh was informed his own family was killed in an Israeli airstrike…

    https://platform.twitter.com/widgets.js

    Al Jazeera is also a main global source which reports directly from Palestinian and Gaza sources and ministries. At this point, the Gaza death toll has reached 6,500 – which has included an Al Jazeera correspondent’s own family.

    Washington has a bit of a love-hate view and relationship with Al Jazeera. The Bush White House was actually accused of targeting Al Jazeera offices in Baghdad during the 2003 “shock and awe” bombing that kicked off the invasion. But in the decade after 2010, Al Jazeera was a big promoter of the “Arab Spring” narrative which the West used to topple Libya’s Gaddafi, and which was key to regime change attempts in Syria. During those years, the D.C. establishment heaped praise on the channel as it advanced the narrative of “moderate rebels” in places like Syria.

    Tyler Durden
    Wed, 10/25/2023 – 17:20

  • Mega-Jolt: The Costs & Logistics Of Plugging In EVs Are About To Become Supercharged
    Mega-Jolt: The Costs & Logistics Of Plugging In EVs Are About To Become Supercharged

    Authored by John Murkowski via RealClear Wire,

    U.S. Energy Secretary Jennifer Granholm gave Americans an unintended glimpse of the future during her road trip this summer touting the wonders of electric vehicles. Far from spotlighting the promise of EVs, her public relations misadventure in Georgia involved one of her staff in a gasoline-powered vehicle blocking off a coveted charger in advance of her arrival, leading to frayed tempers and a local EV owner calling the cops. It was an illustration of the challenges drivers could face as governments push the public to embrace plug-in vehicles.

    Hyped as technological marvels, EVs are boobytrapped with a host of inconveniences and tradeoffs. By now many people have heard about range anxiety, exploding lithium-ion batteries, and the environmental destruction caused by global mining for battery minerals.

    But another wave of challenges is in the offing as the federal government and state officials pump in billions of dollars to build out a massive national infrastructure of charging stations to power the EVs.

    The sheer scale of a charging infrastructure means recruiting retailers and businesses to install and maintain chargers that are expected to lose money in the near future, with some likely to be written off as economic losses.

    In California, which is slated to ban sales of new gasoline-powered cars in just 12 years, government estimates indicate the state may need to install at least 20 electric chargers for every gas pump now in service to create a reliable, seamless network.

    Massive public subsidies will be a crucial part of this effort because private industry is not willing to take the financial risks of betting on an uncertain future. Government subsidies mean complying with recordkeeping and reporting mandates and making sure chargers are online 97% of the time, while bearing the financial risk of vandalism, mechanical malfunctions, daily fluctuations in electricity pricing, and cashflow unpredictability.

    A “net zero” society inherently favors the haves over the have-nots. Renters and low-income families aren’t as likely to own private chargers, and electricity purchased from public chargers can cost five to 10 times as much as charging privately in a garage at home. To avoid penalizing the little guy, federal EV mandates require that 40% of benefits pay for public chargers in disadvantaged areas, while California requires that at least half go to such “equity” communities, where relatively few people currently drive EVs.

    The rapid transition from a reliable legacy energy infrastructure that’s more than a century old to emerging technologies in just a few decades will require the buy-in of virtually every American, including relearning driving habits and adopting charging patterns that right now constitute the leisurely prerogative of early adopters and trend-setters.

    “We need to make sure the infrastructure is overbuilt, oversupplied and over-capacity so that nobody as a driver gets stranded,” said John Eichberger, executive director of the Transportation Energy Institute, a nonprofit research organization. “When you point out the challenges to a believer or a staunch advocate, well now you’re just being negative, you’re just trying to impede progress.”

    The energy secretary’s imbroglio this summer encapsulates the logistical, financial and social challenges that get glossed over in a bid to win public support for creating a carbon-neutral society that could not happen without massive government underwriting. It’s a familiar pattern of selling complicated policies as simple fixes, where the cultural gatekeepers misrepresent EVs as a “net zero” technology, lowball the total land area needed to build out solar and wind farms, and make it difficult if not impossible for critics to question the apocalyptic assumptions and dystopian predictions of climate action advocates.

    To curb greenhouse gas emissions, California, New Jersey, New York, Massachusetts, Maryland, and other states have outlawed the sale of new gasoline cars starting in 2035, and similar EV mandates have been adopted by nearly 60 countries. The Biden administration is spending $7.5 billion on 500,000 EV charging ports as part of the 2021 Infrastructure Investment and Jobs Act to boost EV sales targets to 50% of all new vehicle purchases by 2030.

    EV sales are creeping up, but nowhere near the ambitious targets set by the policy experts, accounting for under 8% of new car sales in the third quarter, and rising to nearly 10% in September. California is at the vanguard of the nation’s EV transition, with more than 1 million electric vehicles among the state’s 31-million-plus registered vehicles, and EVs accounting for about 25% of new car sales in the second quarter.

    California’s forecasts, investments, and challenges show the EV transition in a fuller light. To date, the state has committed at least $14 billion for EV infrastructure development and clean transportation, the money coming mostly from taxpayers. Other contributors include that state’s electric utilities, the National Electric Vehicle Infrastructure program, as well as the state’s share of the $14.7 billion settlement with Volkswagen over the Dieselgate emissions cheating scandal. 

    “With so much money swishing around, especially government subsidy monies, why would anyone really want to sit back and say, ‘hold on a minute’?” said Robert Charette, President of the ITABHI Corporation, a management consulting firm based in Spotsylvania, Va., who writes about EV charging challenges. “The EV transition party is just starting, and no one wants the punchbowl to be taken away anytime soon.”

    At some point, EV experts promise, the kinks will get worked out, and EVs will become as convenient as smartphones. But at the present, the EV industry has a classic chicken-and-egg problem on its hands. The current demand for EV charging does not economically justify rapidly expanding the nation’s charging infrastructure, but without an expanded charging infrastructure in place, most people won’t buy EVs for fear of being stranded.

    Despite California’s massive infrastructure investment, now totaling nearly 94,000 public chargers, the state has fallen behind its goal of 250,000 public chargers by 2025 – and potentially 10 times that number by 2035, when the ban on new gasoline-powered cars takes effect. 

    Transition on a Massive Scale

    The sweeping societal transition decreed by government fiat puts the onus on government officials to finance the buildout of a charging infrastructure as reliable as a utility service.

    “Rarely has a government, at least the U.S. government, banned specific products or behaviors that are so widely used or undertaken,” the conservative Manhattan Institute said in a recent EV report. The report points out that EVs are unlike other emerging technologies that people buy willingly: More than a century ago, “to encourage adoption of the newly invented gasoline-powered cars, governments didn’t have to ban horses.”

    The scale of the transition is so immense and involves such uncharted waters that there’s no consensus on the amount of public chargers that will be needed.

    According to a California Energy Commission assessment, California will need more than 2.4 million public chargers to accommodate about 15.5 million electric cars, trucks, and buses by 2035. That breaks down to 2.11 million chargers (including 83,000 fast chargers) to support 15.2 million electric cars, as well as 256,000 depot chargers and 8,500 public chargers for 377,000 trucks and buses.

    The 2.4 million chargers would serve only half the registered vehicles in the state. Many more will be necessary to complete the second half of the transition, from 15.5 million EVs to more than 31 million EVs by mid-century.

    Those chargers will have to be installed at curbsides, parking lots, parking decks, grocery stores, restaurants, convenience stores, big box stores, office buildings, strip malls, shopping centers, movie theaters, and a host of other locations so that drivers always have ready access to plug-in.

    By comparison, California now has about 11,000 gas stations, convenience stores, and other businesses that sell gasoline, which roughly converts to about 110,000 individual gas nozzles, according to an estimate by Jeff Lenard, vice president of Strategic Industry Initiatives at the National Association of Convenience Stores. That means the transition from fossil fuels to electrons will require California to install at least 20 EV charging ports for every gas nozzle by 2035.

    Not all chargers are equal, so the new EV infrastructure will require significant changes in driving habits. While so-called fast chargers can bring a battery to 80% of capacity in under an hour, most of the new public chargers will be cheaper, Level 2 technology, which provides between 5 miles and 60 miles of range for each hour of charging, and isn’t practical for charging up quickly on a road trip.

    What’s more, some of these Level 2 chargers will be “shared private” chargers, meaning that they are available at workplaces and housing complexes, and limited to employees, tenants, and visitors. Today, for example, more than half of California’s 94,000 chargers are “shared private.” As a result, many Americans will likely have to coordinate other activities with publicly charging their plug-in cars, such as shopping or eating out, which becomes more involved than a quick stop at the pump to fill it up.

    (The state doesn’t keep track of the estimated hundreds of thousands of private chargers that are typically housed in someone’s garage and operate at 120 volts to provide between 3 miles and 5 miles of range for every hour of overnight charging.)

    A High-Risk, Low-Margin Business

    For the foreseeable future, chargers are expected to lose money until there are enough EVs on the road to justify the investment.

    The cost of building a fast-charging station with four or more charging ports can range from several hundred thousand dollars to more than $1 million, depending on the cost of labor, trenching, and power grid upgrades.

    Unlike gas prices, which are relatively stable, electricity prices vary during the day, so that fast chargers are subject to complicated peak demand price fluctuations and unpredictable monthly “demand charges” for the highest level of electricity needed from the local power company. Charging companies, utility regulators, and power companies around the country are trying out various solutions to help charging companies predict their costs in advance, such as variable pricing for customers, so they can manage their risk and set prices accordingly. Future strategies could include on-site battery backup and storage, combined with solar power generation, to shift load and even out demand during the day.

    Electric utilities and charging companies are not always allied. Private charging companies sometimes refuse to compete directly against regulated utilities that have guaranteed profit. Last year, in a move to encourage charging companies to invest in the state, the California Public Utilities Commission barred the state’s utilities from participating a statewide five-year, $1 billion EV charging rebate program.

    Wyoming officials commissioned consultants to assess the financial viability of chargers in their state, and the consultants said that seven remote sites would be used so infrequently they would lose from $285,000 to $372,000 per site over five years. EV industry analyst Loren McDonald, who is CEO of the consulting firm EVAdoption, wrote an analysis concluding that remote highway sites in states such as Wyoming, North Dakota, South Dakota, Montana, Idaho, and others are not likely to break even for at least five years and possibly 10 years, even with 80% of the costs covered by federal subsidies.

    McDonald and Charette both said this calculus is not limited to sparsely populated states, but also applies to “charging deserts” in larger states with large urban areas.

    “I think it isn’t just an isolated issue but a larger national problem that is not being fully acknowledged,” Charette said. “Once outside the major travel corridors and urban/suburban areas, independent EV charging stations are not going to be economically viable for quite some time.”

    California officials say that chargers operating at convenience stores and other retailers will have to depend on selling other amenities to make money, basically operating as loss-leaders. A 2022 report from the California Energy Commission notes: “Revenue from electricity sales alone is often not enough today for chargers to be profitable, especially for stations with lower utilization.”

    The California Energy Commission describes other potential risks, such as state-subsidized, money-losing chargers being decommissioned.

    “It is also a risk that chargers are not operated beyond the required term of the agreement if utilization is not high enough,” the report advises. “These risks are higher in areas with lower population density and travel demand.”

    In response to questions from RealClearInvestigations, the California Energy Commission said by email that not every charger has to be profitable in order to have a profitable network.

    “In addition, profitability of charging in and of itself may not be the primary goal of an installation,” the agency said. “For example, charging installed at a workplace, retail establishment, or apartment or condo building may be part of an attractive package of benefits and to drive customers to shopping centers and restaurants or local residents to parks.”

    Among the major charging companies, Electrify America does not publicly report its finances, but EVgo and ChargePoint have consistently reported operating losses and negative cashflows since their founding in 2010 and 2007, respectively, according to financial disclosures filed with the Securities and Exchange Commission.

    “This partly fuels my hunch on why station operators have historically been slow to repair non-working stations,” blogged Chris Kaiser, who leads the EV charging practice for Sona Energy Solutions, a consulting and contracting firm. “If they don’t make money on station operations they are better off having a broke station!”

    Undependable, Unavailable

    Reliability remains a persistent problem, one that will shadow the industry as chargers are built out in remote areas, low-income areas, and other out-of-the-way places.

    Tesla’s proprietary charging network, which has operated as a walled garden for Tesla owners, is the notable exception, consistently yielding high satisfaction scores. Tesla’s proprietary super chargers, which number 21,789 ports at 1,968 locations nationwide, are being opened up to non-Tesla owners around the country as the charger industry inches toward standardization. Currently different cars use different apps and networks, creating a replay of the VHS/BetaMax problem.

    The federal National Electric Vehicle Infrastructure program, approved as part of the Infrastructure Investment and Jobs Act, requires federally funded chargers to operate at a 97% reliability standard for at least five years. And California’s state-funded chargers would have to operate at the same standard for six years.

    As a stand-alone number, 97% sounds near-perfect, until one reads the small print. Downtime doesn’t count if the malfunction is caused by vandalism, natural disasters, power outages, scheduled maintenance or limited hours of operation. Downtime begins when a driver or someone else reports the nonoperational status, not when the charger breaks down. And it’s not clear what the consequence would be for failing to meet the standard, as there is no penalty, likely because imposing additional costs would only increase risks and deter private investment.

    Reviewing the public documents on EV chargers evokes memories of neglected and abused public payphones that stood exposed to harsh weather conditions and didn’t produce a dial tone. According to a California Energy Commission report issued in September: “EV charging stations are typically uncovered and unprotected from the elements. Connectors can be bent or run over by vehicles. Cables can be cut as acts of vandalism or stolen for copper. EV charging stations frequently incorporate screens that are necessary for operation, but screens can fade in sunlight, break, or be smashed.”

    There’s a huge perception gap on this issue. When EV service providers were surveyed about reliability, they said their equipment works 95%-98% of the time. “The data from the two surveys suggest there may be a disconnect between what drivers are experiencing and what the EVSPs are reporting,” the CARB report drolly stated.

    What drivers are experiencing has been abundantly documented. The analytics firm J.D. Power said this year that 20% of all EV drivers reported visiting a charger that did not or could not charge because it wasn’t working or there were long lines. The dissatisfaction rates ranged from 12% in the Cleveland-Akron-Canton area to 35% in South Florida. The firm said the trend is moving in the wrong direction: As more people buy EVs, “overall satisfaction continues to decline.”

    A University of California, Berkeley, study last year found similar results: only 72.5% of chargers in the Bay Area were functional. A newspaper columnist in California described the charging experience as miserable. “The misery was meted out in several ways,” he documented. “Charging stations were hard to find. Maps that locate stations were not reliable. Paying for a charge with a credit card often proved troublesome, sometimes impossible. Worst of all, way too many chargers were broken or otherwise out of order.”

    He warned of a public backlash against the state’s mandate banning the sale of non-electric cars in 2035 if the situation doesn’t improve.

    This year, an exasperated Los Angeles Times columnist declared she’s ready to trade in her EV because charging is such a hassle. She wrote that chargers are sometimes blocked by cars that aren’t charging, exposed to blistering sunlight, charging at lower levels than advertised, or “it may shut off mid-charge with no warning or reason.”

    The frustration seems to have no expiration date. As Jonathan Levy, EVgo chief commercial officer, told the New York Times last year: “Where there’s a screen, there’s a baseball bat.”

    jmurawski@realclearinvestigations.com
    Twitter: @johnmurawski  

    Tyler Durden
    Wed, 10/25/2023 – 17:00

  • Facebook Jumps After Beating Estimates, Cuts Expense & CapEx Guidance, Sees Metaverse Losses Rising "Meaningfully"
    Facebook Jumps After Beating Estimates, Cuts Expense & CapEx Guidance, Sees Metaverse Losses Rising “Meaningfully”

    Following up on our preview of hedge-fund darling Meta’s Q3 earnings, we note that the last few months have been quite positive for the company: last quarter Meta rebounded from a digital ad slump, beating expectations and hitting double-digit revenue growth for the first time in 18 months. Expectations will be high after the company forecast revenue growth of as much as 20% for the quarter and after Snap and Alphabet both topped expectations for ad revenue.

    Meanwhile, as Bloomberg notes, Meta – like all gigatech peers – has been all in on AI since last quarter, introducing AI chatbots for Instagram, Facebook and WhatsApp; launching new tools for marketers to create ads using AI; and releasing a free version of coding software similar to Microsoft GitHub. Meta is betting that AI-recommended content will help keep users on Facebook and Instagram. The company is especially focused on Reels, short-form videos that are similar to TikTok’s. I’ll be listening for how much time users spent on Reels videos and whether that translated into more ad dollars.

    Additionally, Bloomberg Intelligence analyst Mandeep Singh says Meta’s continuation of high-teens growth for 3Q and into 2024 may hinge on a sharp positive inflection in ad pricing, which has been declining the past six quarters: “Though the company’s Reels momentum has aided above-consensus impressions growth across its Instagram and Blue apps, we think ad loads and engagement growth are likely to plateau in the near term,” Singh said in a recent note. On the other end, Reality Labs segment losses for 2024 will be a primary focus, given the company’s recent launch of Quest 3 and Ray-Ban AR glasses.

    And so, as we get the numbers of Q3, here is a snapshot of where we stand: Meta shares fell 4.2% Wednesday, its worst daily performance since July; that said, the company is still up nearly 150% in 2023 although it is expected to be volatile: as noted earlier, the options market is signaling that Meta shares should move 8% in either direction, that’s less than the average 15% move over the past two years, suggesting that post-earnings volatility may be subdued this quarter.

    With all that in mind, moments ago Meta reported Q3 earnings which beat on the top and bottom line, and guided to Q4 revenues whose midline is right on top of the consensus estimate:

    • EPS $4.39 vs. beating exp. $3.63 and more than 100% higher YoY vs $1.64 a year ago
    • Revenue $34.15 billion, +23% y/y, beating estimate $33.51 billion
      • Advertising rev. $33.64 billion, +24% y/y, beating estimates $32.94 billion
      • Family of Apps revenue $33.94 billion, +24% y/y, beating estimates $33.08 billion
      • Reality Labs revenue $210 million, -26% y/y, missing estimates $313.4 million
      • Other revenue $293 million, +53% y/y, beating estimates $212.7 million
    • Facebook daily active users 2.09 billion, +5.6% y/y, beating estimate 2.07 billion
    • Facebook monthly active users 3.05 billion, +3% y/y, in line with estimate 3.05 billion
    • Ad impressions +31% vs. +17% y/y, beating estimates +29.6%
      • Average price per ad -6% vs. -18% y/y, beating estimates -8.94%
    • Operating margin 40% vs. 20% y/y, beating estimates 33.9%
    • Family of Apps operating income $17.49 billion, +87% y/y, beating estimate $15.23 billion
    • Reality Labs operating loss $3.74 billion, +1.9% y/y, beating estimate loss $3.94 billion
    • Average Family service users per day 3.14 billion, +7.2% y/y, beating estimate 3.09 billion
    • Average Family service users per month 3.96 billion, +6.7% y/y, beating estimate 3.88 billion

    Some more details on the company’s ad business:

    • Family daily active people (DAP) – DAP was 3.14 billion on average for September 2023, an increase of 7% year-over-year.
    • Family monthly active people (MAP) – MAP was 3.96 billion as of September 30, 2023, an increase of 7% year-over-year.
    • Facebook daily active users (DAUs) – DAUs were 2.09 billion on average for September 2023, an increase of 5% year-over-year.
    • Facebook monthly active users (MAUs) – MAUs were 3.05 billion as of September 30, 2023, an increase of 3% year-over-year.
    • Ad impressions and price per ad – In the third quarter of 2023, ad impressions delivered across our Family of Apps increased by 31% year-over-year and the average price per ad decreased by 6% year-over-year.
    • Revenue – Revenue was $34.15 billion, an increase of 23% year-over-year, and an increase of 21% year- over-year on a constant currency basis.

    Some key charts:

    And the funniest chart of all: according to FB, 203 million Americans and Canadians are on Facebook daily.

    And the punchline: 75% of Americans and Canadians are on Facebook every month. Sure they are.

    Looking ahead, the company forecast Q4 revenue in the range of $36.5-40 billion, whose midline is smack on top of the Wall Street consensus of $38.76BN. The guidance assumes currency tailwind of approximately 2% to year-over-year total revenue growth in the fourth quarter, based on current exchange rates

    Also from its guidance, Facebook slashed its total expenses by $2 billion for the full year 2023, which it now sees in the range of $87-89 billion, lowered from the prior range of $88-91 billion. This outlook includes approximately $3.5 billion of restructuring costs related to facilities consolidation charges and severance and other personnel costs. The company also expects Reality Labs operating losses to increase year-over-year in 2023.

    And in a move which AI peers like NVDA and ANET are hardly excited about, Meta also trimmed its CapEx guidance, which it now expects to be in the range of $27-29 billion, updated from the prior estimate of $27-30 billion. Which means less spending on AI chips and chatGPT algos. In kneejerk response, both NVidia and Arista slumped on the capex guidance cut, although that may be premature since META noted that CapEx growth will be “driven by investments in servers, including both non-articial intelligence (AI) and AI hardware, and data centers as we ramp up construction on sites with the new data center architecture we announced late last year.”

    In the earnings release, Chief Executive Officer Mark Zuckerberg called out the company’s work in AI and its new virtual reality headset, the Quest 3, and Ray-Ban smart glasses.

    Meanwhile, two years after its ridiculous rebranding, Meta still plans to lose money in Reality Labs, the division that builds metaverse tech:  “we expect operating losses to increase meaningfully year-over-year due to our ongoing product development eorts in augmented reality/virtual reality and our investments to further scale our ecosystem”

    Bloomberg Intel’s Mandeep Singh tells Bloomberg TV that the flagship Blue app is almost half of revenue, and “that revenue is sort of flat. Instagram is the growing portion.”

    “They have spent $50 billion on Reality Labs. We still don’t have a product that is margin-accretive. they are losing money on every headset they are selling. We don’t know what ecosystem they can create.”

    In kneejerk response META stock jumped as much as 3% but has since eased back erasing much of its after hour gains, and ensuring that anyone who expected an outsized move using options is about to see a total loss.

    Earnings presentation below:

    Tyler Durden
    Wed, 10/25/2023 – 16:43

  • The Toxic Brew That Is Going To Create Endless Chaos In The Streets Of America
    The Toxic Brew That Is Going To Create Endless Chaos In The Streets Of America

    Authored by Michael Snyder via TheMostImportantNews.com,

    Really bad policies lead to really bad consequences, and our leaders have been making absolutely disastrous decisions for decades. 

    As a result, the streets of America are now teeming with thieves, drug addicts, prostitutes, violent criminals and sexual predators.  We have raised an entire generation of young Americans that has no moral foundation whatsoever, and every day we are adding even more immigrants from third world countries to the mix.  Many of those immigrants have no intention of following our laws, and they are fueling the explosive growth of criminal gangs all over the nation.  On top of everything else, the war in the Middle East threatens to spark an unprecedented wave of domestic terror attacks here in the United States.  Millions of radical Muslims now live in this country, and when the time comes many of them will not hesitate to commit acts of violence.

    I have been writing about the social decay in our major cities for many years, but in all that time I have never come across a story quite like this one…

    We all know that San Francisco has a terrible, awful, horrible, homeless problem with homeless people sleeping everywhere. One homeless man set up camp across from a Catholic grade school. It would have been a curiosity except for the signs he hung outside of his tent.

    “Free fentanyl 4 new users” and “Meth for stolen items.”

    Joseph Adam Moore served six years for unlawful sex with a 12-year-old girl and was accused of having sex with a 15-year-old girl just a month after getting out of prison. But his probation deal did not include staying away from schools. So he camped directly across from Stella Maris Academy and began to host parties of stoners — much to the neighborhood’s dismay.

    https://platform.twitter.com/widgets.js

    This young man checks almost all of the boxes.

    He is a convicted felon, he is a drug addict, and he is a sexual predator.

    And there are countless others just like him all over the country.

    For example, the other day parents attacked a naked man inside a JCPenney store near Seattle after that naked man “attempted to inappropriately touch their children”…

    A shocking video shows a naked man being attacked by parents at a JCPenney store near Seattle after he allegedly attempted to inappropriately touch their children.

    The person recording the clip explains that they’re on the first floor of the kids’ department of the location, as the man is attempting to evade people chasing him wearing nothing but socks.

    ‘He’s like, holding the kid,’ the recorder claims, suggesting that the unidentified man was trying to touch two kids that he had with him in the store.

    Good for those parents.

    If I had been there, I would have gone after him too.

    Unfortunately, our entire society is now descending into an abyss of sexual degradation.

    Thanks to a new law that was recently signed by California Governor Gavin Newsom, the city of Los Angeles has essentially been transformed into a giant brothel at this point…

    Emboldened by new California laws that make it nearly impossible for cops to bust prostitutes, sex workers in Los Angeles’ red light district stalk for business wearing no more than thongs, G-strings and high heels in broad daylight.

    A 40-block area of Figueroa Boulevard in South LA sees hundreds of prostitutes, some barely out of their teens, plying their trade since Gov. Gavin Newsom passed the controversial Safer Streets for All Act, which decriminalized loitering with the intent to work as a prostitute in January.

    “Before, this type of activity only happened at night where most citizens wouldn’t see it, but now it’s 24/7,” one source told The Post.

    Needless to say, the enormous tsunami of migration that we have been experiencing during the Biden administration has greatly contributed to our social problems.

    According to brand new numbers that have just been released, the number of migrants that our border patrol officers encountered during the month of September set a brand new all-time record high for a single month…

    United States Customs and Border Protection reported the final month of southwest border encounters for fiscal year 2023, revealing yet another record-setting month and year under the Biden administration.

    Official numbers totaled 269,735 encounters for September 2023, a new monthly record, which sets fiscal year 2023 at a record-setting 2,475,669.

    The yearly total eclipses 2022’s record encounters by nearly 100,000, marking yet another terrible year for President Biden’s border control.

    How many others were able to enter this country successfully without being encountered by border patrol officers at all?

    Protecting our borders is one of the very few things that the federal government is actually required to do, and under the leadership of Joe Biden the federal government is failing at that task spectacularly.

    And now we are being warned that members of Hamas and Hezbollah may try to come over our southern border…

    The San Diego Field Office Intelligence Division of Customs and Border Protection (CBP) has warned in a memo that members of terrorist groups — namely Hamas, Hezbollah, and Palestinian Islamic Jihad (PIJ) — could be encountered at the porous southern border. The warning comes weeks after the Palestinian terrorist group Hamas attacked Israel, murdering 1,400 individuals and taking many more hostage on October 7.

    The Daily Caller News Foundation first obtained and shared the October 20 memo, which warned that “individuals inspired by, or reacting to, the current Israel-Hamas conflict may attempt to travel to or from the area of hostilities in the Middle East via circuitous transit across the Southwest border.”

    I have a message for whoever wrote that memo.

    Hezbollah is already here.

    In fact, Hezbollah has been very active in North America for a long time.

    Of course those that have ties to Hezbollah are just a small subset of the rapidly growing population of radical Muslims in this country.

    And now that war has erupted in the Middle East, many of those radical Muslims are protesting in the streets.

    On Sunday, a pro-Hamas mob took over an entire section of the city of Minneapolis…

    A pro-Palestine mob on Sunday took over a street in Minneapolis, swarmed an elderly driver, chased after him, and harassed him.

    The mob blocked traffic for several hours on Hennepin Avenue near the Walker Art Center, according to Crime Watch Minneapolis.

    The militants surrounded an elderly man in a white sedan, beat on his car, and chased him down.

    https://platform.twitter.com/widgets.js

    Once upon a time, Minneapolis was such a nice city.

    But now those days are long gone.

    Eventually, the radical Muslims may completely take over Minneapolis just like they have done in Dearborn, Michigan.

    For a long time, I have been warning my readers that our immigration policies will lead to complete and utter madness in the streets of America.

    Once the war in the Middle East really gets going, we are going to see things happen in this nation that many people thought that they would never see in their entire lifetimes.

    But things didn’t have to turn out this way.

    If we would have protected our borders and would have implemented common sense immigration policies, much of the coming chaos in our streets could have been prevented.

    *  *  *

    Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

    Tyler Durden
    Wed, 10/25/2023 – 16:20

  • Nukes & Pukes: Bullion, Black Gold, & Bitcoin Jump As Bonds & Big-Tech Dump
    Nukes & Pukes: Bullion, Black Gold, & Bitcoin Jump As Bonds & Big-Tech Dump

    Delayed invasions in Gaza (in order to move more US air defense hardware into place) and Russia training for nuclear strikes were not a great background for buying stocks (even after MSFT’s earnings, and despite GOOGL’s disappointment) and ‘strong’ housing data didn’t help any dovish cases.

    No safe-haven bid in bonds as the dollar, gold, and crypto rallied and oil jumped after some early weakness on the nuke sabre-rattling.

    Treasuries puked hard with yields higher across the curve with the long-end significantly underperforming (30Y +15bps, 2Y +5bps). All yields are now higher on the week…

    Source: Bloomberg

    30Y yield ramped back above 5.00%

    Source: Bloomberg

    Stocks were nuked as even a better than expected new home sales print (which means homebuilder margins must be getting monkeyhammered) did not help. Higher rates hammered the longest duration equities with Nasdaq the biggest loser. The Dow was the prettiest horse in today’s glue factory with S&P and Small Caps ending down around 1-1.5%…

    Worst day for Nasdaq since Dec 2022.

    As Goldman’s Chris Hussey noted, unfortunately for stocks today, the strong housing market is likely contributing to a higher rate environment. Yields on 10-year Treasuries are up 13bp to 4.95%. While yields rose much more steeply a year ago (when 10-year Treasuries rose to 4.2% from 1.4% in 2022), the latest move up in yields is coming alongside a growing assumption that yields are unlikely to return to the ultra-low post-GFC levels that markets enjoyed for over a decade leading up through the pandemic. Today’s housing report, for example, is unlikely to provide any reason for the Fed to think that it has raised rates too high. And this higher-for-longer yields environment is weighing on a host of stock valuations.

    The S&P 500 broke below its 200DMA to its lowest close since May…

    After yesterday’s big squeeze higher, today saw ‘most shorted’ stocks clubbed like a baby seal…

    And 0-DTE Put-buyers piled on all day (as Call-Deltas remained relatively flat)…

    Consumer Discretionary and Tech tankled today as Energy, Staples, and Utes rallied. Bank stocks dumped and pumped…

    5 of the 7 Mega Cap tech stocks (MSFT, TSLA, META, AMZN, GOOGL) will have reported earnings by the end of this week, and we note that while the group’s valuation is well off its high, mega-cap Tech still trades at a significant premium to the other 493 stocks in the S&P 500…

    VIX surged back up to a 20 handle…

    Oil rallied hard off earlier spike lows to close green as Russian nuke test headlines helped…

    …and those same headlines lifted gold (futures) back up towards $2000…

    …and Bitcoin back to $35,000…

    Source: Bloomberg

    And that all happened as the Dollar Index rallied (Loonie and JPY weakness)…

    Source: Bloomberg

    Finally, we note that USA Sovereign credit risk continues to push higher…

    Source: Bloomberg

    It seems clear what ‘Bidenomics’ was really about after all.

    Tyler Durden
    Wed, 10/25/2023 – 16:00

  • Jim Grant: The Fed Needs Some Grounding In Financial History & Common Sense
    Jim Grant: The Fed Needs Some Grounding In Financial History & Common Sense

    Via SchiffGold.com,

    Will the Federal Reserve raise interest rates again? Or is this hiking cycle over? Will it really hold rates higher longer, or will it cut in the near future? Everybody in the financial world is trying to predict the central bank’s next move.

    Fed members insist they are data-dependent and will go where the numbers lead them. But in an interview on CNBC, financial analyst Jim Grant said data alone isn’t enough. You need to put the data into context.

    The whole “data-dependent” canard is questionable to begin with. How long did Jerome Powell and other central bankers insist that inflation was “transitory” despite the data indicating otherwise?

    When the Federal Reserve could no longer pretend price inflation was “transitory,” finally launched a war on inflation and rapidly hiked interest rates. Currently, rates are at between 5.25 and 5.5%. Many people in the mainstream think the hiking cycle is over. Paul Krugman even went so far as to say the war was over, and he declared, “We won.”

    But if you believe the data, price inflation might be down, but it isn’t out.

    So, has the Fed done enough?

    Jerome Powell delivered a speech last week at the Economic Club of New York. Grant said like every “Delphic prophet,” the Fed chair was “just ambiguous enough.”

    During the speech, Powell claimed that interest rates are currently restrictive. Grant said this “isn’t born out by what the Fed likes to call the data.”

    There are four or five indices of financial conditions, and four of the five say that notwithstanding this rise in rates and QT and the like, conditions in finance are generally accommodative. It makes you wonder what stringency would feel like because certainly on kind of a tactile basis it does feel as if things are rather taut.”

    Grant noted that these indices were flashing “tight” when the Fed went to battle with the inflation of the 1970s.

    Peter Schiff recently said the real problem isn’t the 5% interest rates of today. It was the zero percent interest rates the Fed maintained for more than a decade. That precipitated a “decade of reckless spending financed by debt.” Not only has the federal government run up a massive debt, so have corporations and American households.

    “Everybody has gorged themselves on this debt fest that was served by the Federal Reserve,” Schiff said.

    Grant put it another way, saying the long run of artificially low interest rates “introduced a fragility in the economy that 5% is now testing,” and he said we’re now seeing the characteristic consequences of very low, “money grows on trees” interest rates.

    As an example, Grant pointed out the Bezos/Gates-backed trucking company Convoy that shuttered operations. In April 2022, Convoy was valued at over $3.5 billion. The Convoy CEO Dan Lewis cited contractionary credit markets as one of the reasons for the shutdown.

    Grant said we’re not seeing this kind of situation far and wide, “but it is beginning to happen.”

    I think as time goes on, you’ll see much more of it.”

    Meanwhile, the Fed keeps insisting that it is “data dependent.” But the data is always backward-looking. And as Grant pointed out, it is also subject to revision.

    One shouldn’t be utterly dependent on them [data]. Jay Powell at his summertime speech in Jackson Hole said something like, ‘The Fed is navigating by the stars under cloudy skies,” which I think is most apt.”

    Data alone isn’t sufficient without a framework or a theory in which to contextualize it.

    I would submit to you that a common sense approach might be helpful. For example, you can reason that if you’ve been repressing interest rates, you being the central banks collectively worldwide, but suppressing them for the better part of 10 years, and if at one point, an extreme point, some $16 trillion of securities were priced to yield less than nothing – the lowest rates in 4,000 years of recorded rate history – in those circumstances, you’d expect that the proverbial beach ball held underwater would pop up again and not just stop at the surface, but rather shoot a little bit up in the air.”

    Grant concluded that one can’t be a prisoner to data.

    You have to have some grounding in financial history and some grounding in common sense.”

    Tyler Durden
    Wed, 10/25/2023 – 15:40

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