- Brigette Macron Takes Legal Action To Suppress Rumor She's Transgender
Brigette Macron Takes Legal Action To Suppress Rumor She’s Transgender
Brigette Macron, the first lady of France, is reportedly taking action to suppress rumors that she was actually born a male – rumors on which we first reported nearly one week ago.
The BBC quoted a lawyer for Mrs. Macron, who confirmed she is taking action.
A lawyer for Mrs Macron – who is the mother of three adult children from her first marriage – confirmed she is taking action.
“She has decided to initiate proceedings, it is in progress,” lawyer Jean Ennochi confirmed to the AFP news agency.
The rumors about the 68-year-old woman and mother have been spread by allegedly “far right” accounts on francophile social media. The BBC blamed “the QAnon Movement”, among other contributors, for spreading it.
The French press corps have reportedly traced the rumor to an article written on a far-right website by a woman going by Natacha Rey before finding wider circulation after being discussed on a popular YouTube channel.
The conspiracy theory is circulating as France is gearing up for a presidential election in the spring 2022.
Of course, with so many other rumors spreading on “far-right” venues – including one particularly virulent rumor about the establishment moving to “fix” the upcoming vote to prevent a victory by the far-right – one can’t help but wonder why Mrs. Macron is taking action on this.
Tyler Durden
Mon, 12/27/2021 – 01:00 - DataTrek: What We Learned This Year
DataTrek: What We Learned This Year
By Nicholas Colas of DataTrek Research
This week’s Story Time is a list of things we learned in 2021. We’ll have a look-ahead piece on predictions for 2022 this week.
I (Nick) will start with my biggest personal “Aha” moment of the year: Marc Andreessen describing what he calls “the original sin of the Internet”. There’s a link to an A16Z podcast/Clubhouse recording below, a conversation between Marc and Ben Horowitz, where he goes into detail on this idea. He’s discussed it before, but this was when it all made sense to me.
The backstory: when Marc was building Mosaic, an early Internet browser, he thought it would be very useful to add payment functionality to the software. He approached banks, credit card companies, anyone he thought might be interested. No one was. Crickets …
That led to an internet built on advertising rather than direct commercial interaction. Online advertising is only as effective as the targeting it employs, so a whole industry sprang up to support user surveillance. Social media copied that ad-based approach as it developed a decade later. That’s how we ended up with a low-privacy online environment that can be easily “hacked” to drive attention.
This also explains why a handful of companies – Apple, Google, Facebook, Amazon, etc. – have grown to such critical mass. Without a “buy now” button native to a browser, platforms become the de facto marketplace for buyers and sellers to find each other. And, since platforms live or die based on network effects, only a few survive.
Marc’s vision for the future is one where new technologies allow for platform-less, direct connectivity between economic agents. Virtual currencies, writ broadly, are the mechanism for this transformation to decentralization. They are just the tip of the iceberg, however, at least in Marc’s mental model because once you unbundle the platforms everything changes.
Takeaway: venture capitalists are funding this vision of a decentralized future with billions of dollars, backing founders that share this very specific view on how technology should evolve. Most of these companies will fail or, best case, only recoup the initial investments made in them. A few will work, however, and those will change how consumers shop, save, invest, and interact with businesses. Yes, just like the last 2 iterations of the Internet. The more things change ….
* * *
Now, 3 other thoughts on “things we learned this year”. To be fair, they are not so much “learnings” as examples of how 2021 was a master class in how capital markets actually function.
#1: Only earnings matter. This was not supposed to be a +20 percent year for the S&P 500. We were supposed to get a choppy, grinding 2021 with pandemic issues interjecting themselves on a regular basis. The single reason we are at 4,668 on the S&P is because what should have been a $167/share in earnings year turned out to be $205/share, 23 percent better. The S&P 500 is up 24 percent YTD. No further explanation required. Not Fed policy, not 10-year yields, not which party controls Congress or the White House. None of that has mattered.
Takeaway: as Hal Holbrooke’s character in the movie Wall Street said, “stick to the fundamentals”. As much as the words “extraordinary” and “unprecedented” have been thrown around this year, 2021 was all about corporate earnings when it came to US large cap stock returns. Just like every other year in our +30-year career on Wall Street. We doubt 2022 will be any different, or any year thereafter.
#2: Fulcrum issues drive relative returns. You’d have thought 2021 would be the year of US small caps and Emerging Markets given that’s how investment cycles usually work off a bottom such as 2020. But no, that was not to be. The Russell 2000 is up 9 percent YTD against that 24 pct gain on the S&P 500. The MSCI Emerging Markets Index is down 6 percent on the year. Even MSCI Italy, a country not known for generating large stock market returns, is up 9 percent on the year.
What went wrong? Two simple things:
- US Small Caps trade with high yield corporate spreads. When spreads fall quickly, the Russell outperforms. When spreads get close to their historical lows, the Russell loses momentum. In 2021, high yield spreads stopped dropping in early April; the Russell has been range bound ever since.
- MSCI Emerging Markets is overweight China (33 percent). MSCI China is down 22 percent YTD, thanks to that country’s crackdown on their local Big Tech companies. EEM, the most widely held emerging markets ETF, lost money this year because of this one fact. MSCI Taiwan is up 21 pct YTD. MSCI South Korea is down 9 percent YTD, but MSCI India is up 11 percent. Those are the other large weights in MSCI EM, so ex-China this asset class would have performed much better in 2021.
Takeaway: regular readers know one of our mantras is “don’t overthink things/make them harder than they have to be”, and these are two good examples of how that works in real life. We have written about the challenges facing small caps and EM since April, and they remain even today.
#3: Inflation is always both a mathematical and psychological phenomenon. Milton Friedman famously said it is “always and everywhere a monetary phenomenon”, but he assumed the US velocity of money was reasonably constant. That was true from 1960 – 1990 (1.6 – 1.9x M2 velocity), but it has not been the case since 2000 (M2 velocity has fallen from 2.1x to 1.1x today). That’s why all the money printing since the Financial Crisis had such little effect on goods and services inflation over the last +10 years.
What we have now is mathematical inflation that should ease in the next year, but inflationary psychology that expects the current rate of price increases to continue for the foreseeable future. Much of the latter is due to food and energy inflation. These are two categories that don’t really respond to monetary policy unless there is a significant economic slowdown or recession. Consumers need to eat and drive, pretty much every day.
Takeaway: this is the one 2021 “learning” that is still evolving as we enter 2022 and therefore has no clear resolution. The Federal Reserve is on the case, true, at least in terms of tapering and communication. How this filters through to inflation psychology, and whatever the inflation math turns out to be next year, remains uncertain. The offsetting positive from an investment perspective is that large cap corporate earnings have little to fear from inflation as long as the US economy continues to expand (point #1 above). So, let’s not overthink things too much (point #2). Yet, anyway.
Sources:
Marc Andreessen/Ben Horowitz conversation (audio): https://a16z.simplecast.com/episodes/one-on-one-with-marc-and-ben-EyXRfTSO
Tyler Durden
Sun, 12/26/2021 – 23:30 - America's White-Collar Workers See Pay Rise At Fastest Pace In More Than 20 Years
America’s White-Collar Workers See Pay Rise At Fastest Pace In More Than 20 Years
It appears burnt-out junior bankers aren’t the only white-collar workers who have seen their compensation improve over the past 12 months. According to a report published in Sunday’s Wall Street Journal, America’s salaried employees are finally seeing wage gains commensurate with those experienced by (often lower-paid) hourly workers.
Citing data from the US Bureau of Labor Statistics, American professionals toward the end of this year saw their compensation jump at the fastest rate in nearly 20 years. Though that’s still slower than the pace of headline inflation, which is running at a YoY rate of nearly 7% according to the latest available CPI data which is the fastest pace in nearly four decades. For a more detailed breakdown of inflation by category, see here.
As WSJ pointed out, these rapidly increasing price pressures will in many cases “decimate” the gains accrued by advancing wages.
Data from Q3 shows American private-sector workers saw their pay improve by 4.6% YoY, however the most serious gains were realized by workers in the hospitality industry, like bartenders and waiters.
Source: WSJ
For those in positions of management, business and financial occupations, wages rose 3.9% in the quarter, the fastest pace since 2003 for this bucket of workers, although it was still slower than their blue-collar peers.
Fortunately for them, it looks like private employers are setting aside money for more pay raises next year. A survey from the Conference Board earlier this month found that employers are setting aside an average 3.9% of total payroll for wage increases next year. That’s the largest amount since 2008.
“Candidates are turning down our offers or wanting to negotiate more aggressively than they did in the past,” said Kathie Patterson, chief human resources officer at Ally Financial, said the Detroit-based lender is raising its salary and bonus pools, while also increasing its contributions to its employee 401(k) plans.
Part of the reason for the increase is the increasing stress due to chronic understaffing across the economy. Workers apparently expect to be well-compensated for the additional stress and work, especially in the financial services industry.
“There’s been so much pressure on pay,” said Alan Johnson, managing director of Johnson Associates, a compensation-consulting firm focused on financial services. “My clients are understaffed. With Covid, they curtailed hiring, and now with a spike in the economy and markets, they’re working people very, very hard,” he added.
While this is good news for workers (even if the gains on average weren’t enough to counter the impact of surging inflationary pressures), economists are growing increasingly worried about the prospects of a “wage-price spiral”. This happens when companies raise pay, passing increased costs along to consumers in the form of higher prices, which in turn prompts workers to demand higher wages to offset their loss in buying power.
We expect the Fed will be keeping an eye out for any signs of this dynamic, issuing any warnings in the form of a verbose central bank research report.
Tyler Durden
Sun, 12/26/2021 – 22:45 - "I Told You So" – Larry Summers Gloats About Being Right On Inflation
“I Told You So” – Larry Summers Gloats About Being Right On Inflation
Nearly one year ago, Larry Summers, the esteemed former Clinton advisor, was met with a flurry of attacks from his fellow Democrats after he warned that the new administration’s plans to massively expand social spending on top of the massive COVID-inspired stimulus programs would cause inflationary pressures to skyrocket.
At the time, the Biden Administration and its allies dismissed Summers’ concerns. But as it turns out, Summers’ predictions that inflation would run hotter than 5% by the end of 2021 were conservative.
Now, he’s having his “I told you so” moment, as economists and politicians acknowledge that Summers’ comments were prescient. The Fed has jettisoned the word “transitory” from its vocabulary, and President Biden’s approval rating is suffering as the nation endures inflation that has already neared 7% (according to one of the most popular indicators).
So, during a recent interview with Bloomberg, Summers – who has apparently avoided having his Democratic Party membership card from being revoked by the virtue of being right – offered an updated view on his outlook for inflation, as well as offering an explanation of how Summers’ came to his conclusions.
Read the full interview below:
Stephanie Flanders: Hello, and welcome to Stephanomics, the podcast that brings the global economy to you. And we have a special episode today in honor of the holiday season, a conversation with the economist Larry Summers—professor at Harvard, former Treasury secretary and frequent participant in the public debate about all things economic. Also my friend and former boss. Larry, I mean, it is the end of the year. I guess we can start with a little gloating. I mean, in any given year economists get a lot wrong. And this year, an especially large number of them wrongly assumed inflation was going to be a fleeting phenomenon. But you sounded the alarm early in the year and were considered a bit of a crank for doing so initially. But not anymore. What did you see that others didn’t see?
Larry Summers: Stephanie, you know, I’ve been right this year, but there have been plenty of years when I’ve been wrong. I did what I thought was a straightforward analysis of the situation. I looked at how short incomes were of trend. And I saw that they were about $25 billion or $30 billion short of trend each month. And that that number was declining. And then I saw that the proposed transfer payments and other stimulus represented close to $200 billion a month. And so I thought if you were filling a $30 billion hole with $200 billion of spending, there was likely to be some overflow and that overflow would translate into inflation. I did the same calculation essentially, looking at GDP, and I saw a 2% or 3% GDP gap, met with about 15% of stimulus. I had thought.
Indeed, I expressed them at the time, that that stimulus was too small. That stimulus in its first year was perhaps half of the GDP gap. This proposed stimulus was a significant multiple of the GDP gap. I thought there was a case that the Obama stimulus might have been low by 50%. It might have been low by 60%. It surely was not low by a factor of five to 10. So it seemed to me that we were overstimulating the economy and that people had not seen inflation in 40 years. So they assumed it was something you didn’t need to worry about, but that if you just did a straightforward analysis, demand was gonna run ahead of supply. And I have to say, I think that’s pretty much what we’ve seen. I don’t think that the analyses suggesting that this is all bottlenecks are right, 90% of CPI components show inflation above 3%, more than 50% above the Fed’s target. If I look at what’s happening in the labor market, it looks to me like we’ve got substantial labor shortages that push wages up, but only with a lag because wages aren’t reset constantly. We’ve got substantial pressures in the housing market that have not manifested themselves at all, really, in the official price indices yet. So I think we’ve got a fairly serious inflationary situation that’s been growing for quite some time.
Flanders: If wages do go up, and it’s true that we haven’t seen as much as you might have expected in the last few months. But if they, if they do go up—the last 20 years we haven’t seen a follow through from higher wages to higher inflation. Even the Fed’s own model doesn’t include much response from inflation. So why do you think this time will be different?
Summers: Well, there’s two different questions. One is the response of prices to wages, and the other is the response of wages to unemployment. With respect to wages to prices, we just haven’t seen very much variation in the level of wage growth, and therefore it would be hard to find a relationship with prices. I’m much more influenced by the experience of my own talking to businesses and even more people like those Bloomberg employees who spend their lives talking to companies, and they all say more or less the same thing. “We’re gonna have to push up wages because of labor shortages. And when we do, we have plenty of pricing power.” And I guess I trust those anecdotes more than I trust econometric relationships estimated over periods when there’s been very little variation. We did have some months in 2019 with low unemployment and not extremely rapid wage pressure, but that’s one several-month experience in 20 years. I don’t think there’s any support in the data for the view the Fed took that the economy can enjoy 3.5% unemployment for multiple years with significantly declining inflation. Indeed, the Fed’s forecasts call for unemployment below its estimates of the normal level, interest rates never reaching in the next few years its concept of the normal level and, nonetheless, continuous deceleration of inflation. That might happen. But it doesn’t seem to me that it is the most intuitive reading of our macroeconomic history.
Flanders: Just to follow up briefly on the, on the wages and prices thing. You’re obviously right that companies have been complaining about labor shortages, have been talking archly about rising costs, meaning they were gonna have to push up prices. And they clearly do have pricing power. All the data that we’ve looked at, and we discussed it on the podcast a few weeks ago, suggested that they’ve already used that power to raise profit margins this year well beyond any increase in costs. And, it’s not obvious that they couldn’t absorb some of these increased wages in profit margins. I mean, inherently that wouldn’t be such a bad thing, right, if you had more wages for workers and companies absorb some of it in profit margins, which in some cases are historically high?
Summers: Certainly if you look at analysts’ forecasts of profits over the next year, the last time I looked the forecast was for 2022 profits to rise 18% relative to 2021 profits, which suggests as a predictive matter that that’s not mostly what is going to happen. You know, Stephanie, prices are set by supply and demand, and we are seeing in a very wide range of sectors rising demand. For example, retailers are engaged apparently, as best one can tell from the anecdotes, in much less promotional activity this Christmas than they have been in previous Christmases. That’s showing up in higher margins for them and for their suppliers. I don’t think there’s anything nefarious about that. That’s just what goes with an economy where stores are full. I think the diagnosis that you are implicitly offering is the one that the Nixon administration rather unsuccessfully offered, that rising prices necessitate price controls so as to contain profits and reduce inflation. That worked out rather spectacularly badly. And fortunately, that’s not an idea we’ve heard this time around. I think trying to restrict prices would be the best way I could imagine to lengthen the period of shortages, bottlenecks and disillusionment. We tried that strategy with respect to gasoline in the late 1970s. I don’t know why businesses would not be pushing on prices when they had shortages of goods and supply.
Flanders: I guess what I’m tripping over is that you’ve written quite a lot in the past in important academic papers, actually, about the decline in labor bargaining power and the impact that this had had. And that particularly how the scales had shifted in favor of employers in many parts of the labor market. I don’t recall you accused me of proposing price controls. I don’t recall ever saying that, but I’ll check the transcript. But the description you’re giving suggests there is no way to reset that balance or perhaps even in the sort of macro terms, start having a higher share of national income going to labor relative to capital. You know, a reversal of what we’ve had in the last few years. Because if wages go up faster than productivity, you’re saying the Fed should definitely put on the brakes in response to that. And if it doesn’t, companies will inevitably just pass on any wage increase and it’ll just result in more and more inflation. It doesn’t feel like there’s any way to reverse that cycle we’ve seen over the last few decades.
Summers: That’s really not what I’m saying, Stephanie. I mean, first just on the facts, this period of high inflation has coincided with more rapid, real wage reduction than we had seen previously. So for the majority of workers it’s working out badly so far, not working out well. That’s a political response to inflation that we’re observing. Second, I am a strong supporter of the type of labor law reforms that the administration has worked on. My colleague in the labor power paper that you referred to, Anna Stansbury, has done very important work showing that when you put reasonable penalties on, it influences behavior and allows union organizing to take place. I am a strong supporter of measures to strengthen labor through the labor movement in unions, through a range of innovations that would encourage labor power. What I don’t agree with is the idea that simply running the economy hot on an unlimited basis can do it.
If I thought we could sustainably run the economy in a red-hot way, that would be a wonderful thing. But the consequence, and this is the excruciating lesson we learned in the 1970s, the consequence of an overheating economy is not merely elevated inflation, but constantly rising inflation. And that’s why my fear is that we are already reaching a point where it will be challenging to reduce inflation without giving rise to recession. Should we do all kinds of things? Should we raise the minimum wage? Absolutely. Should we empower unions? Yes. But this kind of policy—there are no examples of successful inflationary policy that has worked out to the benefit of workers. And there are dozens of examples from the Labor Party in Britain in the 1970s to multiple Latin American experiences to our own experience in the ‘60s and ‘70s where it backfired with respect to the very people it was trying to help.
Flanders: Do you think Bidenomics deserves a dictionary entry or will deserve a dictionary entry when the dictionaries get rewritten or revised? Does it amount to anything in your view? I mean, we’ve had nearly 12 months.
Summers: I think we’ll have to see what happens down the road. The hope would be that it represents a kind of progressive supply side economics that emphasizes supply and does so through public investment. Unfortunately, the share of the spending that represents transfer payments rather than public investments has been sufficiently high that I’m not sure how great the benefits will be. And I’m concerned that there’s been insufficient impulse to making the public investments cost effective, streamlining infrastructure investment, for example. On the other hand, Stephanie, I think that the recognition that we have—on the one hand, on your flight you can now watch television in the seat in front of you in a way that would’ve been inconceivable 30 years ago. On the other hand, it takes half an hour more to get from Boston to Washington than it did 30 years ago, just because of the decaying infrastructure. That’s a kind of misplaced priority and it’s a metaphor for what’s gone wrong in important parts of the way our economic system has functioned.
Flanders: I’ve known you for a long time and through a lot of that time, and certainly when you and I were at the Treasury Department in the late ’90s, the kind of default view of most governments was that governments should meddle as little as possible in markets—set the rules for markets, but then let the chips fall where they may, especially on trade and potentially the environment, industrial policy, all those things where the sort of default was to be suspicious of these things. Have you had a change of heart on those things? I mean, I noticed that Janet Yellen recently talked about needing to be less reliant on other countries for critical goods. And I’ve seen, you have talked a bit about in the environment of wanting a more sort of muscular approach to government. Are you, are you rethinking your view of government?
Summers: I think that there’s been this extraordinary change in relative prices, Stephanie. If you look at the relative price of a day in a hospital and a television set, it’s changed by a factor of 100 since the ‘80s. That means we’re in a very different economy and a much larger share of the economy, a much larger share of the people working are in sectors that have a range of market failures. And certainly there’s a case for government involvement in those. But I think what needs to be very, very careful about how government will carry out any kind of industrial policy intervention. And I have to say that when I hear about industrial policy in the name of achieving green objectives, I’m much more sympathetic, for example, than when I hear about it in the name of preserving a job. I think the available evidence on protectionist strategies is that they mostly cost $1 million a job saved or more once you work through their full impacts. Take, for example, steel protection. Steel protection operates to save potentially 50,000 jobs of steel workers, one-sixth as many as we have manicurists in the U.S. But it makes industries with 5 million people that use steel less competitive than they otherwise would be.
Flanders: Going back with the Janet Yellen comments, a lot of people look at the supply chain, snarl ups, the lines of container ships outside Long Beach, California, and other big ports and say, “Donald Trump was right. We should be less reliant on all these foreign manufacturers.”
Summers: It’s important to understand why we have those supply, why we have those long lines. It is not because of anything that China is doing. It is because our demand for goods surged and I would much rather see us be better at expanding port capacity quickly. Do we need to pay attention to rare earths and other goods that are highly concentrated in the world for our national security? Yes, we do. Should we institute some broader program of non-reliance on trade? I suspect there would be very substantial inefficiencies from doing that. I do think we need to manage the global economy much more than we have. That’s why I was such a strong supporter of the initiatives that Secretary Yellen brought to completion to harmonize corporate taxes around the world so capital could run, but it couldn’t hide and would be taxed in reasonable ways.
Summers: That’s why I think the right trade agreements pay attention also to the context in which trade takes place. What kinds of regulations there are. What kinds of rules there are for workers. What kind of exchange rate arrangements there are. But I think a strategy of actively pursuing disintegration is not likely to make us more secure. And certainly the first order effect of stopping us from buying goods from abroad when they are cheapest will be to exacerbate inflation rather than to reduce inflation. So the idea of cutting off cheap supply as a strategy for reducing inflation at a moment when that’s our principle economic problem seems to short run economic problem seems to me bizarre.
* * *
Source: Bloomberg
Tyler Durden
Sun, 12/26/2021 – 22:05 - Dam Collapse Sends Wall Of Water Into Brazilian Town
Dam Collapse Sends Wall Of Water Into Brazilian Town
After weeks of heavy rain, a dam in the northeastern Brazilian state of Bahia collapsed, sending a massive wall of water into populated areas.
The dam in focus is the Igua dam, located near the city of Vitoria da Conquista in southern Bahia. It reportedly collapsed on Saturday evening and resulted in flooding of towns, including Itambe. Officials in the city warned people to evacuate immediately.
“A dam with a high volume of water has broken and a strong flash flood is expected to affect the municipality of Itambe in a few moments. All residents should evacuate from the banks of the river Verruga urgently,” said an Instagram post by the city.
Local all-news radio network, BandNews FM, tweeted a video that shows the devastation in Itambe.
CHUVAS • A prefeitura de Itambé, município do Sul da Bahia, alerta sobre o rompimento da barragem de Iguá devido às fortes chuvas na região, e disse que uma forte enxurrada poderia atingir áreas da cidade.
Confira:https://t.co/c2jpQCNg70 pic.twitter.com/ztHykbAut7— Rádio BandNews FM (@radiobandnewsfm) December 26, 2021
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Other areas have been affected by the flooding.
Itororó-Bahia #Bahia #SOSsuldabahia #SOSBahia pic.twitter.com/f1qWY4hiBt
— oxigenada (@iaeceros) December 26, 2021
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BAIRRO DA MANGABINHA, EM ITABUNA, DEBAIXO D’ÁGUA. ⚠️🌧
Registro foi feito por voluntários da cidade que estão utilizando jetski para resgatar as pessoas de suas casas. As imagens mostram que o nível da água chega no teto das residências
#chuva #bahia #itabuna pic.twitter.com/8nGgfHrFgM
— DEUS ME LIVRE DE FOFOCA (@DeusmelivreFofo) December 26, 2021
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Se cenas como está não te chocam ou despertam em vc sentimentos de angústia ou aflição, vc já morreu a tempos.
O Extremo Sul da Bahia pede ajuda, contribua de alguma forma com as várias formas que estão disponíveis.
Contribua p/ comunidades Indígenas: 7399198-2962 Tiara A Santos. pic.twitter.com/3BqVlDosWO— Thyara #SOSpovopataxo 🏹 (@PataxoThyara) December 26, 2021
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MELLOS COM SUL DA BAHIA
— FABI 🍷 (@Fabyana_braz) December 26, 2021
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Since early November, the Bahia state government said torrential rains had caused major floods across 72 cities and killed at least 18 people, with 4,000 households displaced. There was no word on how many people were displaced are killed in the latest flooding incident.
“At this first moment, we’re acting to save people, to get people off the top of their houses, out of isolation, with boats,” Bahia Gov. Rui Costa said Sunday. He said first responders are distributing emergency aid to affected residents.
Other towns in Bahia monitor the deteriorating situation as more heavy rains mean other dams in the state could be at risk of collapse.
Tyler Durden
Sun, 12/26/2021 – 21:20 - LNG Shipping's Wild Ride: Record, Plunge, New Record, New Plunge
LNG Shipping’s Wild Ride: Record, Plunge, New Record, New Plunge
By Greg Miller of FreightWaves
Shippers of containerized goods were caught off guard this year. Never before had container spot rates risen so far, so fast. But shippers of liquid and dry bulk commodities know such cost swings all too well.
When bulk commodity transport demand exceeds supply, shipping spot rates can keep rising until cargo shippers’ profit margins are erased. The spectacular rise and fall of liquefied natural gas shipping rates is the latest example.
LNG carriers boast the highest day rates of any cargo vessel type. Shippers can afford to pay eye-wateringly high freight because the profit on moving a cargo can be enormous: In mid-November, a cargo could be bought for $20 million in the U.S. and sold for $120 million in Asia.
The wild ride for spot rates began early this year as cold temperatures pushed up commodity pricing in Asia. An LNG carrier was chartered for $350,000 per day in January, a new all-time high for any cargo vessel.
Then rates crashed. U.S. Gulf-Japan rates were down to just $16,800 in mid-March.
Rates rebounded to a new record high last month. The Baltic Exchange assessment for the Australia-Japan route for a tri-fuel, diesel-engine (TFDE) LNG carrier peaked at $366,700 per day in late November. Lloyd’s List reported that one vessel was chartered for $424,000 per day.
Shippers of containerized goods were caught off guard this year. Never before had container spot rates risen so far, so fast. But shippers of liquid and dry bulk commodities know such cost swings all too well.
When bulk commodity transport demand exceeds supply, shipping spot rates can keep rising until cargo shippers’ profit margins are erased. The spectacular rise and fall of liquefied natural gas shipping rates is the latest example.
LNG carriers boast the highest day rates of any cargo vessel type. Shippers can afford to pay eye-wateringly high freight because the profit on moving a cargo can be enormous: In mid-November, a cargo could be bought for $20 million in the U.S. and sold for $120 million in Asia.
The wild ride for spot rates began early this year as cold temperatures pushed up commodity pricing in Asia. An LNG carrier was chartered for $350,000 per day in January, a new all-time high for any cargo vessel.
Then rates crashed. U.S. Gulf-Japan rates were down to just $16,800 in mid-March.
Rates rebounded to a new record high last month. The Baltic Exchange assessment for the Australia-Japan route for a tri-fuel, diesel-engine (TFDE) LNG carrier peaked at $366,700 per day in late November. Lloyd’s List reported that one vessel was chartered for $424,000 per day.
LNG prices in Asia averaged $5 per metric million British thermal unit (MMBtu) higher than in Europe in October and November, which “instigated a significant amount of reexport trading opportunities from West to East” that “catapulted spot rates,” explained Mørkedal. In contrast, the European gas price was $6 per MMBtu above Asia’s on Monday, “the widest [spread] we have observed on record” and one that has “reduced West-East trading,” he said.
LNG shipping still ‘very healthy’
LNG shipping remains profitable despite the collapse in spot rates. “Even at these lower rates, companies are printing money,” noted Nolan.
Also, spot business is less important to LNG shipowners than to owners or operators in any other ocean segment. Spot rates make the headlines, but the overwhelming majority of LNG shipping revenues derive from time charters.
Chartering activity “has been plentiful of late with several newbuilding deals concluded for delivery in 2024-25 with charters in the seven- to 10-year time frame,” Mørkedal said last week.
Regarding on-the-water LNG carriers, “term charters continue to be discussed in the one- to three-year time frame,” he said. One-year TFDE charters are going for $90,000 per day and MEGI-propulsion carriers for $115,000 per day.
“The LNG shipping market remains very healthy even with spot rates easing from their extreme highs as time-charter activity remains robust,” the Clarksons analyst affirmed.
Tyler Durden
Sun, 12/26/2021 – 20:45 - The $1 Pizza Slice Is Rapidly Vanishing From Manhattan
The $1 Pizza Slice Is Rapidly Vanishing From Manhattan
Just like when Dollar Tree was forced to ‘Break the Buck’ by raising prices on some goods past the titular $1 mark, another “milestone” has been reached as inflationary pressures drive prices of everything – but especially food – higher.
The NY Times reported Tuesday that a growing number of Manhattan’s $1 cheese pizza slice vendors. For many, that price has held for two decades due to the fiercely competitive nature of the Manhattan market, even where the economics have long since put a stop to $1 slices.
Because of its durability over the years, the dollar slice has – for some – become a symbol of the strangely egalitarian life of being a New Yorker, where billionaires, homeless men, students and construction workers are all thrown in together, and where almost everybody at times resorts to a cheap slice on the go.
The owner of the 2 Bros’ chain, Mohammad Abdul, is now reportedly agonizing over whether to raise prices for the first time since opening in 2001. For those who are unfamiliar with 2 Bros’, it’s the biggest player in the $1 slice market, and its shops are visible across the borough. Interestingly, the city’s dollar-slice culture really “took off” after the 2008 financial crisis.
The situation for the dollar-slice joints is further complicated by the fact that pizza-related businesses have been hugely successful during the pandemic. But the inflation situation has created problems in the lowest-cost vendors, some of whom have closed up shop.
As we reported, the pace of inflation was the fastest in November than it has been in decades, with the headline CPI number surpassing 6%. And restaurant prices in the New York area last month saw prices rise at the fastest rate since 1987.
The NYT goes on to explain that inflationary pressures have fallen especially hard on pizza vendors. A severe drought in parts of the US and Canada decimated wheat crops, driving up flour prices. And worker shortages at meat-processing plants led to higher prices for pepperoni. Pizzeria owners buying canned tomatoes from Italy or red chile flakes from India also face higher shipping costs, in many cases being passed on by wholesalers.
A surge in demand for packaging materials, plus a lapse in production from the winter freeze in Texas early this year, has also caused prices on packaging materials, napkins, paper plates and plastic cutlery to surge.
A winter freeze in Texas earlier this year curtailed the production of resin, a raw ingredient in plastic straws and packaging materials like shrink wrap. And in perhaps the biggest shortage of all for pizzerias, reliance on food delivery during the pandemic prompted a surge in demand and increased prices for pizza boxes, paper plates and takeout containers.
One point of relief is that prices for processed cheese, typically the biggest food cost for any pizzeria, have actually fallen. The average block cheese prices are down from last year’s unusually high peaks. Cheese prices have been for years propped up by government subsidies to help dairy producers. But the Department of Agriculture is already forecasting that prices will rise next year.
Because of the stable cheese prices, 2 Bros is still charging $1 for a cheese slice at six of its nine locations. But newer stores have raised prices to $1.50.
So far, these businesses have survived during the pandemic largely due to discounted rents from landlords.
Rents for residential properties have come roaring back already this year. Commercial rents (like those needed by $1 slice businesses) have been the hardest hit.
How much longer until these pressures finally make the $1 slice extinct?
Tyler Durden
Sun, 12/26/2021 – 20:00 - A Colossal Theft In Pain Sight
A Colossal Theft In Pain Sight
Submitted by Larry McDonald, author of The Bear Traps Report
What have we done with the $11 Trillion?
We have clients in 23 different countries, but most reside within the continental United States – in recent weeks, we keep hearing countless stories of self-proclaimed 24-hour turnaround testing centers to do a PCR test, then taking more than 80 hours to get the results back. Friends in New Jersey tell us not one pharmacy or walk-in clinic in a 100-mile radius has appointments available in the next week. Home testing has improved but for those traveling overseas – it is a PCR test that is needed.
The question that haunts us now is that, almost two years into this crisis and an $11 Trillion U.S. Fiscal and Monetary spending deluge, we still don’t have an adequate testing infrastructure? It blows us away – we are still dealing with endless waiting lines, no availability of testing appointments, shortages of at-home tests and overwhelmed testing labs scrambling to process vials. Where did all that money go?
State and Federal Debts Add Up
In the US, the corona crisis started on January 29, 2020, when the White House initiated its coronavirus task force. Since then, the US has gone from crisis to crisis and the media and our politicians have been obsessed with this epidemic and its consequences ever since. Amidst all the turmoil, the US government has left no stone unturned to throw money at this disaster. The Fed kicked off in early March by lowering interest rates to zero and shortly after began rolled out an alphabet soup of emergency programs. From buying high yield debt to bankrolling bailout checks (PPP loans), nothing was left on the table for our adroit stewards at the Fed. The byzantine maze of fiscal stimuli has left everyone confused. Nevertheless, the total amount of support the Fed has pumped into the economy is best measured by the expansion of its balance sheet. When the Fed finishes its asset tapering program in March of 2022, its balance sheet will have expanded by $5 Trillion. In less than two years the Fed deployed more money than during, and in the 10 years after, the great financial crisis ($3.5TR). This monetary support alone is also more than that of the entire GDP of Japan, the third-largest economy in the world.
Not to be outdone, the Federal government opened the floodgates by quickly passing spending bill after spending bill. After less than two years, the total amount of fiscal stimulus, as measured by the fiscal deficit spending, has reached a mind-blowing $6 Trillion. U.S. Federal debt has reached $29 Trillion and $32 Trillion if you add State and Local debt. At this point, US debt is a whopping 134% of GDP, giving the U.S. the dubious honor of being among top ten most indebted countries worldwide. This is a spot the erstwhile creditor to the world shares with the likes of Italy and Venezuela.
Where did all the money go?
And what did we, the American people, get for this colossal $11 Trillion in a monetary and fiscal deluge? As we find ourselves in the midst of yet another massive outbreak is case count, this seems like a valid question. You would think that the priority for these funds is to bolster essential healthcare needs to address this medical crisis. But even now, the US is still woefully ill-equipped with testing capabilities, almost two years into this crisis. Our friends in Europe tell us testing is quickly done there. They live in urban areas such as Paris where testing is still readily available. France is also in the midst of another outbreak but seems to have no problem providing its citizens with ample testing facilities.
In hospitals, there has apparently been no improvement in available capacity in the critical ICUs, judged by the Johns Hopkins weekly hospitalization trends.
Hospitalizations
Incredulously, ICU beds-in-use compared to overall availability is almost higher now than it was a year ago.
So Where did the Money Go?
According to the Congressional Research Service, $25 Billion was appropriated for “selected domestic COVID-19 vaccine-related activities”. That sounds like a lot, but it’s a mere 0.5% of the federal emergency spending in the last two years. It turns out that the department of health and human services wasn’t even the biggest recipient of all the emergency spending. It was fourth on the list, which was topped by the Treasury Department, the small business administration, and the department of labor. Other major recipients were the department of education and the agriculture department. Why farmers needed a $160 Billion windfall during the pandemic is incomprehensible, especially since most crop commodities have been at record highs for a year now.
Reasonable people can agree that small businesses needed support during this crisis, especially during the lockdown. But the Fed’s Term Asset-Backed security Loan Facility (TALF), Primary and Secondary Market Corporate Credit Facilities ((P/S) MCCF), and Municipal Liquidity Facility (MLF) had absolutely nothing to do with small business assistance. These programs, together with the $5 Trillion purchases of Treasuries and agency debt, helped to foster an explosion in debt issuance by big business. Fueling stock buybacks – Investment-grade debt issued in this year and last year was a total of $3.1 Trillion, almost half the size of the total IG market. High yield issuance was even more baffling, setting issuance records two years in a row amidst a debilitating epidemic.
Junk Bond Bonanza Fueling Stock Buybacks
The effect of all this government largesse has had a profound impact on the stock market. The total market value of all stocks has risen from $34 Trillion to $53 Trillion; a whopping $19 Trillion (50%) increase from pre-pandemic levels. The IPO market has been red hot this year, with 1000 deals for the first time in history. Rock bottom interest rates and epic multiple expansion have driven investors into IPOs, as they clamor for excess returns in the most unsavory deals. U.S. junk bonds, we see new supply to plunge as much as 30% in 2022 as refinancings, the driver for almost 60% of issuance this year, will shrink because companies already capitalized on low yields and lengthened maturities. Likewise, a Fed in a hiking cycle should tighten financial conditions – shrink issuance.
Buybacks Driving S&P and Nasdaq Higher – On Leverage
Congress wants to tax stock buybacks – the implications are sky-high as a colossal equity market bid comes from Fed-induced corporate bond sales- See above with @SamRo – he notes just 20 companies are responsible for half the stock buybacks – this is one enormous – central bank fueled – leveraged Ponzi is driving stock indexes (S&P 500 and Nasdaq) higher. Of course in Q1 – Q2 2020 when stocks were on sale – few companies were buying back stock. Per Fitch – U.S. dollar-denominated, investment-grade (IG), corporate bond volume, excluding financial institutions, supranationals, sovereigns, and agencies, tallied $705 billion through Dec. 16, 2021. We saw the second-highest issuance through the first 10 months of the year and are up 27% and 13%, from 2018’s and 2019’s respective levels. Volume is down 36% versus the record 2020 amount; though that gap could shrink by year’s end as the final two months of 2020’s issuance was well below 2021’s monthly average. The volume disparity between 2020 and 2021 relates to deal size. Last year, there were double the number of transactions done for $4 billion or more compared with this year (60 in 2020 versus 29 in 2021). Both years featured at least two $20 billion issuances, with AT&T Inc. and The Boeing Company driving 2020 while Verizon Communications Inc. and AT&T led 2021.
Several prominent companies tapped the IG market in 2021, including Verizon, AT&T, Amazon.com Inc., Oracle Corp., Comcast Corp. and Apple Inc. These six issuers comprised 21% of the year’s total volume, with all completing bond transactions of $15 billion or more. In fact, the 10 largest issuers make up 29% of 2021’s volume, highlighting the market’s concentration.
The problem is – central banks are fueling unsustainable inequality.
Share of Total Net Worth held by the Top 1%
- 2021: 32.5%
- 2010s: 31.2%
- 2000s: 27.2%
- 1990s: 26.7%
- 1980s: 23.2%
Source: Zerohedge *Since 2003, the Bottom 50% total net worth held has plunged from 39% to 30%. Federal Reserve data. For 20 years 1990-2010, the top 1% net worth held was range-bound 26-27% – since central bank aggression in balance sheet expansion in 2009, inequality has exploded higher.
The Great Heist at the Taxpayers Expense
This is all great if you own stocks, or when you are a Fortune 500 company issuing debt to repurchase your own stock, but neither the deluge in debt nor the record number of buybacks (at a run-rate of $1 Trillion this year) have done anything to bolster our country’s medical care or Americans’ health. More troubling even is reports showing outright theft of funds earmarked for pandemic emergency spending. The Wall Street Journal quoted the U.S. Secret Service who said that “some $100 billion has potentially been stolen from Covid-19 relief programs designed to help individuals and businesses harmed by the pandemic.” The main culprits are worldwide organized crime networks, who defrauded primarily the pandemic unemployment insurance program. On top of that, as much as 15% of the PPP loans ($76 billion out of $800 billion total) may have been fraudulent, according to the New York Times.
The Middle Class is in Pain
After $11 Trillion of emergency spending and support, the US healthcare system is just as inadequate as it was before the crisis, violent crime is rampant, drug overdoses have never been higher and the economy is showing signs of stagflation, as illustrated by the record spread between Treasury breakevens and TIPS yields¹. What these bond market metrics suggest is that the potential growth rate of the US economy has structurally declined since the pandemic (it already declined a lot since the “great financial crisis”) and that any growth future growth is coming from price increases. The bond market is telling us – all future GDP growth is coming from price increases, but there is little real growth in the economy, that is why TIPS yields are -1%.
Consumers in Pain
Since August – we have had THREE sub-80 readings from the University of Michigan Consumer Economic Confidence Data. Looking back over the last 30 years – it is HIGHLY unusual for the Fed to hike rates with consumers in this kind of pain. Inflation´s taxing powers over the consumer have already hiked rates 100bps for the Fed in our view – colossal demand destruction has taken place. These stagflationary conditions erode people’s real disposable income, making them worse off. Ultimately, most of the $11 Trillion ended up benefiting the top wealthiest Americans, by inflating the prices of assets such as bonds and stocks and lowering interest rates for borrowers with the highest credit rating. For the average citizen, this has been a very raw deal.
Loud Covid Narrative Hides Inconvenient Truths
We must look at the big picture. The number one killer of Americans aged 18 to 45 is now fentanyl overdoses, with nearly 79,000 victims in the age range dying to them between 2020 and 2021.
Inflation is a Regressive Tax on the Middle Class
TIPS: Treasury Inflation-Protected Securities: The principal of a TIPS increases with inflation and decreases with deflation, as measured by the Consumer Price Index. When a TIPS matures, you are paid the adjusted principal or original principal, whichever is greater. Breakeven yield is calculated by deducting TIPS yields from real yields. Breakeven rates derive the rate of inflation priced in by the bond market for applicable maturity (such as 10-year breakevens express the implied rate of inflation in the next 10 years).
Trillions of Fiscal and Monetary Support
What is so painful is that not only is there no discernable improvement in the healthcare infrastructure to deal with the corona crisis, but other facets of America’s healthcare are now even worse off. The CDC reported this week that fentanyl is now the leading cause of death among teenagers. These drugs have killed more people between the ages of 18 to 45 than corona, car accidents, and suicides. Data from Families Against Fentanyl suggests that now one person dies from an overdose every 8.5 minutes. The pandemic has pushed drug abuse into overdrive as “the stress of the pandemic has led more people to use these types of drugs, according to experts.” The Census Bureau this week reported that America’s population grew at the lowest rate in history. In the year that ended July 1, the U.S. recorded only 148,000 more births than deaths, with the balance coming from net immigration.
America’s life expectancy last year declined by an unprecedented 1.8 years to 77 years. Besides corona, increases in mortality from drug overdoses, heart disease, homicide and diabetes also decreased life expectancy. Violent crime especially has seen a dramatic increase in the last two years. CDC’s National Center for Health Statistics reported that homicide rates rose 30% between 2019 and 2020 and they continue to go up this year. At least 12 major U.S. cities have broken annual homicide records in 2021 — and there’s still three weeks to go in the year.
US Annual Population Growth
- 2021: 0.1%
- 2011: 0.8%
- 2001: 1.0%
- 1991: 1.2%
America is dying – and it’s NOT just a Covid narrative. From 1999–2019, nearly 500,000 people died from an overdose involving any opioid, including prescription and illicit opioids -CDC data.
Tyler Durden
Sun, 12/26/2021 – 19:15 - Oregon Man Who Told Biden "Let's Go Brandon" Speaks Out
Oregon Man Who Told Biden “Let’s Go Brandon” Speaks Out
By Jack Phillips of Epoch Times
The Oregon man who drew international headlines when he told President Joe Biden, “Let’s go Brandon” over the weekend said the comment was made in “jest” and revealed he’s received threats after the stunt.
Jared Schmeck, a father of four, told the Oregonian Saturday that he is “being attacked for utilizing my freedom of speech” and is now receiving threatening phone calls.
The call, which was streamed online, drew media attention, in part, because of Biden’s response. He told Schmeck, “’Let’s go Brandon,’ I agree.” Biden did not appear to be impacted by Schmeck’s quip at all.
“I understand there is a vulgar meaning to ‘Let’s go, Brandon,’ but I’m not that simple-minded, no matter how I feel about him,” Schmeck told the outlet, adding that he has no ill feelings toward Biden. But, he argued, Biden could be “doing a better job” as president.
“[Biden] seems like he’s a cordial guy,” he added. “There’s no animosity or anything like that. It was merely just an innocent jest to also express my God-given right to express my frustrations in a joking manner. … I love him just like I love any brother or sister.”
Schmeck said that he is not a supporter of former President Donald Trump, but is a “free-thinking American and follower of Jesus Christ.”
The man, a former police officer who works for a power company, said his family typically calls into the NORAD Tracker on Christmas Eve every year and didn’t know it would be live-streamed.
The meme started earlier this year after an NBC Sports reporter noted the crowd’s loud chant at a NASCAR race as she interviewed driver Brandon Brown, who had just won the race. She told the driver that they were chanting “let’s go Brandon.” The crowd was actually chanting “[expletive] Joe Biden.”
With his name now firmly stuck in the public lexicon, Brown, in an opinion article for Newsweek on Dec. 20, wrote that because of his profession, he doesn’t have “time to think about politics.”
“My job is to run the next lap faster than the last one. Politics has never been that interesting to me,” he added. “Though, like most, I have always had the impression that politicians were likely the cause of more problems than they were the solutions.”
“I have zero desire to be involved in politics,” Brown also told The New York Times on Sunday.
He also recently told Sports Business Journal that he’s struggled to obtain corporate sponsorship deals due to the phrase.
Tyler Durden
Sun, 12/26/2021 – 18:30 - Inflation In 2021 Far Different From What We Had In 1979
Inflation In 2021 Far Different From What We Had In 1979
Authored by Bruce Wilds via Advancing Time blog,
The inflation of today is a starkly different creature than what we faced in 1979. The world is massively different and presenting us with a strain of inflation that will most likely be stronger and more difficult to combat without major disruptions to our economy. This article is an attempt to highlight the differences and why today the position we find ourselves in is much more precarious.
New data released by the Bureau of Labor Statistics showed price inflation in November rose to the highest in forty years. Allianz Chief Economic Advisor Mohamed El-Erian warned the Federal Reserve is losing credibility by not tapering its balance sheet to rein in inflation. Appearing on CBS’ “Face the Nation” he stated the most significant miscalculation in decades is the Fed’s inability to characterize inflation correctly. It was only on November 30th that Fed Chair Jerome Powell finally retired the term “transitory” and opted to label inflation as persistent.
President Biden response to rising inflation has been to call upon Congress to pass his Build Back Better plan. Biden claims this will lower how much families pay for health care, prescription drugs, child care, and more.” In reality, of course, the passage of BBB would increase inflationary pressure throughout the economy and only transfer these soaring costs from the individual to the government.
The idea the economy of 2021 is strong enough to allow a rapid and huge surge in interest rates such as those imposed upon America in 1981 is false. During America’s prior bout with inflation 40 years ago the economy was able to withstand the shock. Yes, we did have a recession, but it was short-lived because the foundation of our economy was much stronger. America was not bleeding from huge trade deficits and people had real jobs.
Debt And The Money Supply Are Rising Much Faster Than The GDP
Today, after years of trade deficits, America’s economic foundation has grown much weaker. We have created the illusion of economic growth by blowing the lid off government spending. This has created a false economy and should not be confused with real growth. The chart above has been circulated in many forms. It reveals the GDP lagging the growth in the money supply and debt. We are living in a completely different era and facing a far more serious problem.
The cause of inflation during the 1970s is blamed on several events specific to that time in our history. Part of it was due to rising oil prices (oil prices tripled in the 1970s). There was also inflation due to rising wages. Unions were relatively powerful and their bargaining for higher wages to keep up with the rising cost of living created a wage-inflationary spiral. Yous should also throw in spending on the Vietnam War and Nixon cutting the tie of the dollar to gold. The result was an inflationary mindset that exploded as investors and waves of people started investing in ways that would protect them from being ravished by a falling dollar.
Fast forward to the end of 2021. Today, many people are busy blaming the recent inflation on supply chain disruptions resulting from the global pandemic. In truth, much more focus should be turned to the surge in money supply, government spending, and Fed policies. The result from the combination of these toxic paths forward has created a slew of new problems. Surging inequality, more reliance on government.
Lock-downs initiated by governments to halt the spread of what turned out to be a “not so deadly” virus also have added to our woes. This is evident as small and mid-size businesses struggle to stay afloat in a world where huge companies have access to cash and many options not afforded to their smaller competitors. Today the “Amazon effect” is continuing to ravage America while its full impact has yet to be felt in most communities. It seems that only after Amazon has wrecked communities leaving many Americans jobless and retail stores sitting as giant empty shells might short-sighted consumers finally realize Amazon is bad for America and its distribution system an affront to the environment.
The idea anyone can predict how creating trillions, upon trillions, upon trillions of dollars worth of demand and debt over just a few years will tilt inflation is a reach. Now that inflation has taken hold how to stop it will be the real test. This calls for a bunch of clumsy idiots to thread an economic needle. A great deal of the problem we currently face is rooted in the lack of faith many people have come to hold in those that direct the policies that affect us.
This extends to how Central Banks and politicians want to bend and manipulate the economy to rapidly address what they call climate change and a rash of other issues. We are even being told while the planet is about to undergo food and energy shortages the answer is to have more children because we need more workers. Ironically, this is being touted as an answer at the same time we are giving people less incentive to work and rapidly moving to erase millions of jobs through automation.
As for the Fed, it has become “the great enabler” by allowing this to go on for so long. Many economic watchers have come to the conclusion the Fed has totally lost control of the situation. The big question is whether it will taper and risk a major recession or keep pumping out money. Continuing down its current path is viewed as a recipe that will allow inflation to run rampant.
Years ago we saw more of a balancing act with Central Banks concerned that bond vigilantes would descend upon them if they stepped out of line. Before the days of Modern Monetary Theory, investors voted on government budget deficits and debt management each day by buying or selling bonds. This is no longer seems the case due to massive Central Bank intervention. With each “crisis” has come excuse after excuse which has allowed the Central Banks to rewrite the rule governing the global financial system.
Going forward other calamities and crises await society, these will also affect inflation. Whether they come in the form of energy shortages, food shortages, or devastation caused by war, each will leave its mark. While creating the illusion this time is different has allowed those in charge to postpone facing serious questions only time will tell. It is clear the currency is being debased, the big questions now are where it will be most prevalent and how we as individuals can protect ourselves from its fury.
Tyler Durden
Sun, 12/26/2021 – 18:00 - TikTok Wins Internet's Most Visited Site 2021
TikTok Wins Internet’s Most Visited Site 2021
TikTok overtook Google as the most popular website in 2021, according to web security company Cloudflare’s 2021 Year in Review for internet traffic.
The video-sharing app, owned by Beijing-based ByteDance Ltd., was everywhere this year. Its secretive algorithm has hooked more than one billion monthly users, contributing to its popularity. Last year, the app “only ranked #7 or #8” on Cloudflare’s list, quickly climbed the ladder to nab the top spot, according to the company.
“It was on February 17, 2021, that TikTok got the top spot for a day,” Cloudflare wrote in the report. “Back in March, TikTok got a few more days and also in May, but it was after August 10, 2021, that TikTok took the lead on most days. There were some days when Google was #1, but October and November were mostly TikTok’s days, including on Thanksgiving (November 25) and Black Friday (November 26).”
Behind TikTok this year, Cloudflare ranked Google, Facebook, Microsoft, Apple, Amazon, Netflix, YouTube, Twitter, and WhatsApp, in that order.
Here’s TikTok’s rank that accelerated to the number one spot by late year.
TikTok has also displaced Facebook as the most popular social media website.
TikTok’s dominance is changing how social media works and has become a threat to US Big Tech.
Tyler Durden
Sun, 12/26/2021 – 17:30 - USA Swimming Official Quits Over Trans Swimmer Competing Against Women
USA Swimming Official Quits Over Trans Swimmer Competing Against Women
Authored by Tom Ozimek via The Epoch Times,
USA Swimming official Cynthia Millen has resigned in protest over the participation of transgender swimmer Lia Thomas in women’s competitions, saying in the resignation letter she can’t back a sport that allows “biological men to compete against women.”
The resignation letter to USA Swimming indicates that Millen, who has been involved in the sport for some 30 years, resigned on Dec. 17.
“I told my fellow officials that I can no longer participate in a sport which allows biological men to compete against women,” Millen wrote in the resignation letter, Swimming World reported.
“Everything fair about swimming is being destroyed,” Millen’s letter continued.
“If Lia came on my deck as a referee, I would pull the coach aside and say, ‘Lia can swim, but Lia can swim exhibition or a time trial. Lia cannot compete against those women because that’s not fair.’”
USA Swimming did not immediately respond to a request for comment from The Epoch Times.
Thomas, a 22-year-old University of Pennsylvania women’s swim team member who recently broke three women’s records in freestyle swimming, could be a women’s National Collegiate Athletic Association (NCAA) title contender in a few months.
“Lia Thomas had another strong day in the pool for the Red and Blue,” Penn athletics wrote on their website on Dec. 3.
“During the prelims, she set a new pool and meet record in the 500 free. In the finals she swam more than 12 seconds faster, finishing in first place with a time of 4:34.06. That time is currently the best in the country in the event.”
Formerly a member of the men’s swimming program, Thomas underwent hormone suppression and is in line with NCAA rules that allow the athlete to compete on the women’s team, according to Swimming World.
Thomas submitted hormone tests and doctor’s medical notes to the NCAA and “they approved everything,” the athlete said in a Dec. 9 interview on the SwimSwam podcast. Thomas continues to take estrogen and a testosterone blocker and has “experienced a lot of muscle loss and strength loss.”
Asked about the pushback Thomas has received to competing against women, the swimmer said it was “expected” but added that the extent to which the issue has “blown up” was something of a surprise.
“I just don’t engage with it,” Thomas said of the criticism, adding that, “it’s not healthy for me to read it and engage with it at all and so I don’t.”
Among the pushback was a blunt Dec. 19 editorial penned by John Lohn, editor-in-chief of Swimming World, America’s most prestigious swimming magazine. Lohn wrote that Thomas qualified for the women’s team after taking testosterone suppressants for barely one year, which is the NCAA’s minimum for allowing biologically male transgender athletes to compete as women.
That rule “is not nearly stringent enough to create a level playing field between Thomas and the biological females against whom she is racing,” Lohn wrote.
“Thomas’ male-puberty advantage has not been rolled back an adequate amount,” Lohn continued.
“The fact is, for nearly 20 years, she built muscle and benefited from the testosterone naturally produced by her body. That strength does not disappear overnight, nor with a year’s worth of suppressants.”
“Consequently, Thomas dives into the water with an inherent advantage over those on the surrounding blocks,” Lohn wrote.
Swimming World editorial staff said on Dec. 24 that Thomas’s performances demonstrate “a competitive advantage due to male puberty and years of testosterone production.”
Tyler Durden
Sun, 12/26/2021 – 17:00 - Pentagon Plans For "Actionable" Intelligence Sharing With Ukraine If Russians Attack
Pentagon Plans For “Actionable” Intelligence Sharing With Ukraine If Russians Attack
Pentagon officials claim it’s all about “avoiding escalation” – but surely the Kremlin will see the revelations in this recent New York Times report very differently: “The Pentagon is working on a plan to provide Ukraine with battlefield intelligence that could help the country more quickly respond to a possible Russian invasion, senior administration officials said.”
This weekend Russia’s military announced the withdrawal of some 10,000 troops from near the Ukrainian border at the conclusion of what it dubbed “training drills”. But Kiev and Washington officials have been asking about the some 100,000 additional forces said to be mustered in the region. Contrary to claims that an “invasion” is set for some point in January, there are significant signs this is the beginning of de-escalation.
The NY Times report frames the currently in the works Pentagon planning as a contingency that would enable Washington to help thwart any Russian incursion into Donbass “in real time”. But to most common sense outside observers, it appears a recipe for ensuring the US would get directly sucked into to any Russia-Ukraine shooting war.
AP file image This further follows on the heels of Ukraine’s army showing off its guided anti-tank Javelin missiles, last week week deployed in ‘live-fire’ exercises near a pro-Russia separatist region. But by all accounts a robust intelligence sharing plan would marks a huge escalation in US military and intelligence involvement. NY Times writes:
But the proposal at the Pentagon for “actionable” intelligence is potentially more significant, two U.S. officials said. The information would include images of whether Russian troops were moving to cross the border. Such information, if shared in time, could enable the Ukrainian military to head off an attack.
The real-time nature of the sharing would also be clearly geared toward ensuring that Washington doesn’t hear about a sudden “Russian annexation of Eastern Ukraine” in the newspapers the next day. While it’s not explicitly stated in the report, any authorization of such a program would more than likely involve a covert US intelligence presence on the ground in the region (of course, this very likely has already long been the case).
As described by one top former Obama admin official, Evelyn Farkas, who served as deputy assistant secretary of defense for Russia, Ukraine and Eurasia, “The number one thing we can do is real time actionable intelligence that says, ‘The Russians are coming over the berm,'”. She added: “We tell them, and they use that to target the Russians.”
But if the Russian military knew such US targeting assistance were the case, it would immediately deem the US a direct party and aggressor in the conflict, opening up the possibility of a rapidly internationalized regional war centered on Ukraine.
Meanwhile, the list of Pentagon “options” being drawn up doesn’t stop there:
The list of ideas being drawn up at the Pentagon, the State Department and the White House include redirecting helicopters and other military equipment once allocated for the Afghan military to Ukraine, officials said. The administration is also considering sending additional cyberwarfare experts to Ukraine. The United States and Britain have sent some experts to shore up defenses in case Mr. Putin launches a cyberstrike on Ukraine either in advance or instead of a ground invasion.
The delay in actually implementing the US plan is tied precisely to fears that Putin would see it as enough of a serious provocation to set invasion plans in motion…
New from @helenecooper (with a small assist from me) the US is mulling providing more battlefield intelligence to Ukraine to prepare for anything Russia might do. The delay? No one wants to give Putin an excuse to claim the moral high ground. https://t.co/Bv6e0fI8rJ
— Julian E. Barnes (@julianbarnes) December 23, 2021
https://platform.twitter.com/widgets.js
A lot if this will likely depend on whether Russia and US-NATO talks planned for next month actually materialize. Last week the Russian side made public what it says are agreed upon talks for “security guarantees” related to NATO eastward expansion, to be held in Geneva.
However, the White House has been much more vague so far on its level of commitment to the talks, with Jen Psaki days ago being unable to confirm where or when the talks would take place.
Tyler Durden
Sun, 12/26/2021 – 16:15 - "Outpacing 2019 Levels": All Of A Sudden, There Is A Rental Car Supply Crisis
“Outpacing 2019 Levels”: All Of A Sudden, There Is A Rental Car Supply Crisis
Supply chain issues aren’t just showing up for consumer staples, they’re also starting to rear their head in rental cars.
There has been a shortage in the rental car industry since earlier this year and while travelers are “encountering higher rates and few choices,” according to a new Wall Street Journal article, companies like Hertz are “struggling” to re-stock fleets after downsizing due to Covid.
For customers lucky enough to even find a car, many are being forced to downsize or book vehicles they didn’t originally intend.
At the same time, rental rates are skyrocketing. The daily rate is now $81, which is up 31% from a year prior, WSJ reported. Hasn’t someone told Hertz the “official” CPI number is just 6.7%?
This figure is up from about $46 per day, prior to the pandemic.
In winter destinations like Maui, Salt Lake City and Bozeman, Mont., rates are over $100 per day, WSJ reported.
The omicron variant has also caused some travelers to switch from flying to driving, further depleting supply of rental cars. One traveler who chose to drive to North Carolina from Chicago told the Journal: “It was overall a high-stress situation.”
The same traveler was limited to just two car choices, a Dodge muscle car and a Chevy Spark subcompact, and paid $725 for a 9 day trip.
“I couldn’t think too much about budget or anything like that because if we didn’t get it all figured out in a matter of hours, we were going to be out of luck,” she said.
Another potential traveler, 24 year old Cassie Clark from New York City, told the WSJ: “I’m not going to see my family for Christmas at all, all because of the rental car situation.”
Meanwhile, rental car companies, like everyone else, are citing the semiconductor shortage as a reason for lack of supply.
Avis Chief Executive Joseph Ferraro recently said that a large part of the company’s great prior quarter was due to higher prices. “The Americas booking patterns for the fourth quarter and holiday seasons appear robust and are currently outpacing 2019 levels,” he said on an earnings call.
The supply crunch partially comes as a result of names like Hertz downsizing their fleets after Covid. But rental-fleet utilization rates have risen recently. Avis’ fleet utilization was up to 71% from 50% in the first nine months of the year.
Henry Harteveldt, a travel industry analyst, concluded: “The car-rental situation will only get better if the car-manufacturing landscape improves. Until then, it’s going to be one of the bleakest times to be renting a car.”
Tyler Durden
Sun, 12/26/2021 – 15:45 - Canada Admits To Secretly Tracking 33 Million Phones During Covid-19 Lockdown
Canada Admits To Secretly Tracking 33 Million Phones During Covid-19 Lockdown
Canada – which has a population of 38 million – has admitted to secretly tracking 33 million phones during the Covid-19 lockown, according to the National Post, citing Blacklock’s Reporter which first noted the disclosure.
The country’s Public Health Agency (PHAC) did so to assess “the public’s responsiveness during lockdown measures,” according to the report.
In March, the Agency awarded a contract to the Telus Data For Good program to provide “de-identified and aggregated data” of movement trends in Canada. The contract expired in October, and PHAC no longer has access to the location data, the spokesperson said. -National Post
“Evidence is coming in from many sources, from countries around the world, that what was seen as a huge surveillance surge — post 9/11 — is now completely upstaged by pandemic surveillance,” according to “Pandemic Surveillance” author David Lyon, the former director of the Surveillance Studies Centre and Queen’s University in Ontario. “I think that the Canadian public will find out about many other such unauthorized surveillance initiatives before the pandemic is over—and afterwards.”
Location and movement data was purchased from Canadian telecom giant Telus in order to “understand possible links between the movement of populations within Canada and the spread of COVID-19,” according to an agency spokesperson, who said that the mobility data analysis “helps to advance public health objectives.”
Privacy advocates say public health monitoring jeopradizes user privacy. (via National Post) Meanwhile, PHAC intends to continue tracking population movement for at least the next five years to monitor behavior concerning “other infectious diseases, chronic disease prevention and mental health,” the spokesperson added.
In a notice posted earlier this week, the agency called for contractors with access to “cell-tower/operator location data in the response to the COVID-19 pandemic and for other public health applications.” It asks for “de-identified cell-tower based location data from across Canada” beginning from from Jan. 2019 until the end of the contract period on May 31, 2023, with possibility of three one-year extensions.
The contractor must provide anonymized data to PHAC and ensure its users have the ability to easily opt-out of mobility data sharing programs, the agency says.
PHAC’s privacy management division conducted an assessment and “determined that since no personal information is being acquired through this contract, there are no concerns under the Privacy Act,” the spokesperson said. -National Post
According to Lyon, PHAC is using “the same kinds of ‘reassuring’ language as national security agencies use, for instance not mentioning possibilities for re-identifying data that has been ‘de-identified.'”
“In principle, of course, cell data can be used for tracking,” he added.
“The pandemic has created opportunities for a massive surveillance surge on many levels—not only for public health, but also for monitoring those working, shopping and learning from home.”
Tyler Durden
Sun, 12/26/2021 – 15:15 - The Crypto Trading Cycle: Asian Weak Hands Selling To US Whales
The Crypto Trading Cycle: Asian Weak Hands Selling To US Whales
It has been a rather testing time for the latest and newest cohort of crypto owners (especially those expecting quick and easy gains), because aside for major breakout at the start of the year, and a second one in the middle of 2021, bitcoin is where it was in February and ether, is at levels first hit in May. In its latest Crypto Compass note, UBS writes that extending weakness in major coin prices can be blamed on many things including Fed chair Powell’s latest hawkish pivot and options market fragilities.
But the single best and most reliable relationship remains with inflation expectations, which in US 10y break-even terms has fallen back to late-September levels of just over 2.4% (Figure 4).
This is roughly one standard deviation above its post-2000 average of 2.0%, so mildly elevated but by no means as alarming as end-October when they were approaching 2.8%. That would have constituted a 20+-year breakout.
And while over the longer-term cryptos are clearly an inflation hedge – and with China about to push their credit impulse into overdrive (we will discuss this shortly), we expect much more inflation in the coming months – a different pattern emerges in the daily trading cycle.
As UBS notes, in the past month hourly price action has been characterized by lurches lower at times of relatively thin liquidity through APAC trading hours, almost as if some Asian central bank (coughpbocough) is doing everything it can to crash and discredit cryptos during times of lease resistance, but the dip gets immediately bought by crypto-native whales in North America.
And while so far the whales have been clearly correct to bid every dip, UBS points out that insofar as such appetite rests on the logic of cornering supply ahead of TradFi market entry now that 90% of all bitcoins there will ever be have been mined, the Swiss bank cautions that whale dip-buying may be vulnerable to timing inconsistencies which could be set back further by regulatory rulings in 2022. On the other hand, should the US regulatory regime seek to take the opposite track of the scroched earth crackdown approach used by China, we may see a prompt doubling in price, especially since many have pointed out that bitcoin is now late for its traditional havening surge…
… while ETH’s eventual transition to ethereum 2.0 will catalyze dramatic inflows into the web3-backing token.
Tyler Durden
Sun, 12/26/2021 – 14:42 - UK Mulls Door-To-Door Vaccination Squads
UK Mulls Door-To-Door Vaccination Squads
The UK is considering a plan to send door-to-door vaccinations squads to the homes of unvaccinated Britons in an effort to reach an estimated five million people who haven’t taken the jab, according to the Daily Mail.
(Gareth Fuller/PA) The initiative has been discussed by the Department of Health, NHS England and No. 10 over the past week as part of a nationwide drive to send vaccine teams into areas which have the lowest vaccination rates – and are floating it as an alternative to lockdowns and other restrictions, as well as a solution to ‘encourage’ vaccination in rural areas or households where people cannot easily travel to a vax center.
“I think anything that encourages the vaccine-hesitant is sensible,” said one Cabinet Minister, who then warned: “The mood in the country is hardening against people who refuse to be vaccinated.“
In other words, get vaxxed despite the fact that Omicron laughs at the vaccine, and hardly anyone has died of it.
This comes as SAGE warned the UK is about to be hit by a large wave of Covid hospitalisations and the peak could be even higher than last winter despite the reduced severity of Omicron.
In minutes from a meeting on December 23 published last night, the Government’s Scientific Advisory Group for Emergencies warned that the peak on hospital admissions ‘may be comparable to or higher than previous peaks’ – including the second wave in January.
But MPs and hospitality bosses have warned Boris Johnson not to bring in new restrictions before New Year’s Eve or risk ‘devastating’ businesses. -Daily Mail
While Boris Johnson and crew have said there are no plans to close schools in January, there has been pushback at any hint of lockdowns or other restrictions.
“I am all in favour of free choice but there comes a point when you cannot lock up 90 per cent of the country who are vaccinated for the ten per cent who refuse to be.”
NHS England‘s vaccination push continued throughout Christmas day – while over 220,000 first doses of the vaccine administered in the week leading up to Dec. 21, a 46% jump over the previous week. First doses jumped in the 18-24 year-old age bracket by 85%, and 71% in 25 to 30-year-olds – which Health Secretary Sajid Javid called ‘excellent.’
Tyler Durden
Sun, 12/26/2021 – 13:45 - 2,400 Flights Canceled Since Christmas Eve On Crew Shortage
2,400 Flights Canceled Since Christmas Eve On Crew Shortage
As the holiday weekend draws to a close, it has been anything but merry for tens of thousands of stranded airline passengers who had their flight canceled due to a flare-up of the omicron variant that resulted in staffing shortages of pilots and crew for several major airline carriers. Data tracker FlightAware.com shows US flight cancellations exceeded 2,400 in just the past 48 hours.
The situation has yet to ease on Sunday as total cancellations within, into, or out of the U.S. topped 754 flights as of 1300 ET. On Christmas day, U.S. cancellations topped nearly 1,000.
Henry Harteveldt, president of travel consulting firm Atmosphere Research Group, told Bloomberg that air travel disruptions might extend into the next week.
Flight cancellations are a “concern at a time when people are traveling to spend time with family and friends for the holidays,” Harteveldt said. “No airline wants to be viewed as the Grinch who stole Christmas.”
In our reporting of the travel chaos that began on Christmas Eve and continued through the weekend (read: here & here), we noted Delta Air Lines Inc. and United Airlines Holdings Inc. were the carriers most affected by labor shortages. Both airlines acknowledged cancellations were due to an outbreak of the omicron variant.
Flight cancellations due to staffing shortages have been nothing new for airlines.
- “People Slept In Airports” – Spirit, American Cancel Hundreds of Flights Amid Staffing Shortage
- “Get Your Sh*t Together” – Angry American Airline Customers Hit With Travel Delays Due To Labor Shortage
- Southwest Blames Cancellations On Worker Shortage, Union Denies ‘Sick-Out’ Over Vaccine Mandate
Many travelers who had their flights canceled or delayed vented on social media this weekend.
Let’s hope Harteveldt isn’t right that travel disruptions could persist through New Year’s Eve because that would officially make this holiday travel season one of the worst in years.
Tyler Durden
Sun, 12/26/2021 – 13:01 - Russia Withdraws 10,000 Troops From "Drills" Near Ukraine In Christmas De-escalation
Russia Withdraws 10,000 Troops From “Drills” Near Ukraine In Christmas De-escalation
For weeks Kiev officials and many corners of Western media and the Washington national security establishment have hyped the Russian troop build-up in regions of Russia that are within 400km of Ukraine’s border, accusing the Kremlin of planning an invasion of Donbass sometime in January. This month started, for example, with The Washington Post citing US intelligence to claim this would involve a whopping 175,000 Russian troops mustered near the border.
But like with prior similar instances (such as failed predictions last spring that never materialized), it’s looking like the opposite is set to happen, with on Saturday Reuters reporting a draw down of at least 10,000 troops back to their permanent bases. It’s being widely perceived as the clearest sign yet that the “invasion” being talked about for the past nearly two months is not going to happen. Maybe we could chalk it up to a “Christmas miracle” – or perhaps from the start it was all about Putin using the maneuvers to get what he’s wanted all along: security and legal guarantees from NATO pledging no more Eastward expansion. And Putin got his talks, which are planned for next month, likely in Geneva.
“A stage of combat coordination of divisions, combat crews, squads at motorized units… has been completed. More than 10,000 military servicemen… will march to their permanent deployment from the territory of the combined arms’ area of drills,” the Russian army announced this weekend, according to Interfax. The Kremlin has been describing extra troop movements as “drills” and “training exercises” throughout the heightened standoff.
Image source: AP The defense ministry described this as the conclusion of large-scale drills which took place among Southern Military District forces, in regions that included Crimea, Rostov, and Krasnodar – and additionally in Stavropol, Astrakhan, and some in North Caucasus republics. “The defense ministry said the troops were returning to their permanent bases and that stand-by units would be readied for the New Year’s holidays,” European media reports indicated further.
There are additional signs that de-escalation is in the air, as we reported on Christmas Day based on Reuters that according to a German government source, senior German and Russian government officials agreed to a rare in-person meeting next month in an effort to ease political tensions over Ukraine. German Chancellor Olaf Scholz’s foreign policy adviser Jens Ploetner and Russia’s Ukraine negotiator Dmitry Kozak agreed to meet after a lengthy phone conversation on Thursday.
The Reuters sources added that “Berlin doubts more than Washington whether Russia actually wants to attack Ukraine” and is keen to de-escalate tensions. This much should have been obvious the whole time, in what’s been largely a manufactured crisis which Western media was eager to hype, also as the Pentagon repeatedly demanded that Moscow explain the presence of Russian troops… on Russia’s own soil.
Meanwhile, on Sunday Anadolu Agency is reporting that NATO Secretary General Jens Stoltenberg is convening a meeting of the NATO-Russia Council (NRC) on January 12. The Russian draw down of 10,000 troops from near the Ukraine border region is perhaps a Kremlin good faith action to ensure the continued momentum of the recent flurry of diplomatic activity geared toward deconfliction. Russia’s TASS news agency details as follows:
The source noted that NATO was in talks with Russia on this issue. Earlier, the NATO press service said that on January 12-13, Brussels would host a meeting of the NATO Military Committee at the level of the Chiefs of Defense of the member states.
On Tuesday, Stoltenberg stated that NATO offered Moscow to hold a meeting of the NATO-Russia Council in early 2022 to address the developments in Ukraine. Meanwhile, he emphasized that NATO would never compromise on Ukraine’s right to choose its own path and apply for joining the alliance as well as on the right of NATO states to defend their allies.
Likely none of this is still to satisfy Ukraine’s leaders or pro-Kiev media, which is already suggesting any limited draw down is but a ruse…
#Russia announces withdrawal of 10K troops from Crimea and Ukrainian border. What about 112K troops that remain near #Ukraine? | EMPR https://t.co/Fu6LNOGOXg #russiaukrainewar pic.twitter.com/kCT9L9gx9r
— Euromaidan PR (@EuromaidanPR) December 25, 2021
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Of course, this current chapter of the rise in Russia-Ukraine tensions, which drew vague threats issued from President Biden two weeks ago, is far from closed. President Putin in his latest weekend comments said that if NATO and the US didn’t agree to the required security guarantees halting further NATO expansion near Russia, then the Kremlin has a range of “options” in terms of a serious response.
“It may vary,” he said in an interview with state sources. “It will depend on the proposals that our military experts will make to me.” He said that while he remains hopeful of a peaceful and positive resolution, Russia will not accept anything that stops short of reaching “a legally binding outcome of diplomatic talks on the documents,” he said referencing last week’s draft proposals submitted to Brussels and Washington. “That’s what we will strive for.”
But without doubt the situation is still dangerous, given that at any moment a provocation on the ground could unravel any positive traction toward an agreement. Both sides have been busy over the past week accusing the other of allowing mercenaries to pour into war-torn Eastern Ukraine, complete with warnings over ‘false flag’ scenarios.
Tyler Durden
Sun, 12/26/2021 – 12:00
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