Today’s News 5th April 2021

• Why US Troops Will Never Be Pulled Out Of Syria
  Why US Troops Will Never Be Pulled Out Of Syria

  Authored by “Ehsani” – a Middle East expert, Syrian-American banker and financial analyst who visits the region frequently and writes for the influential geopolitical analysis blog, Syria Comment. 

  A friend recently asked: “Surely, the American Army is not staying in Syria forever and sooner or later they will leave, no?” To his surprise, my answer was: “No, I don’t think they would leave. Why would they? It costs very little and they incur hardly any casualties.”

  Moreover of all past military interventions in the region, the US presence in Syria is unique in a number of ways. It is relatively small in scope, yet it does achieve a seemingly broad set of objectives both geopolitically and even domestically.

  

  Remember that the initial [ostensible] objective for entering Syria was to fight ISIS. Following the group’s attack on Mosul in June 2014, it only took only 8 weeks for the US to to begin air strikes against them in Iraq. A month later, these strikes were expanded into Syria.

  By December 2017, ISIS had effectively lost 95% of its territory. Even though Iraq’s PM publicly declared victory against the group early that month, US strikes on Syria’s side of the border continued. It took another year till Dec 2018 for Trump to declare the defeat of ISIS.

  You would have thought that Trump would get his way and that he would pull out of Syria after his mission of defeating ISIS was accomplished….But, you would be wrong. Many in the Washington establishment as well regional “allies” would quickly join forces to stop Trump.

  Not surprisingly, the “system’ was able to reverse Trump’s decision. Think Tank and Op-ed pieces were quickly warning about the calamity that would soon follow any troop pull out of Syria. America’s prestige and her national interests were all at stake here, Trump was told.

  Heartbreaking story of a Syrian child killed by US sanctions.

  “Can Biden, Congress, and EU leaders sleep at night while an entire people die of hunger, oppression, and marginalization just because politicians want to be seen as doing something tough?”

  https://t.co/xDABsjuKpZ

  — Aaron Maté (@aaronjmate) April 2, 2021

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

  Bottom line… NO U.S. President will pull out of Syria. In Washington’s thinking:

  1) It costs little in lives or money

  2) For a change, local terrain is friendly, i.e. the Kurds

  3) It controls the oil & reinforces sanctions

  4) It shows you are tough on Iran 

  5) It satisfies Israel and other allies

  6) It leaves you at the negotiation table

  * * *

  Welcome to America’s next forever occupation, apparently, from which it will never willingly extricate itself, akin to Afghanistan or Iraq.

  Tyler Durden
  Sun, 04/04/2021 – 23:30

• FBI Raids Business Renting Anonymous Safety Deposit Boxes, Forces Customers To Reveal Identity To Get Stuff Back
  FBI Raids Business Renting Anonymous Safety Deposit Boxes, Forces Customers To Reveal Identity To Get Stuff Back

  In a case that’s already sparked one lawsuit, a Beverly Hills strip mall business which rents private, anonymous safe deposit boxes was raided by the FBI last month – at which time the agency conducted a blanket seizure of hundreds of customers’ belongings.

  

  To retrieve their valuables, customers will need to “identify themselves and subject themselves to an investigation to verify their legal ownership,” according to the Los Angeles Times, which noted that one customer has already gone to court claiming that the government overreached by confiscating the contents of every security box.

  The company, U.S. Private Vaults, has been accused of laundering money for drug dealers – who anonymously stashed guns, drugs and cash.

  In an indictment against U.S. Private Vaults, Inc., the U.S. attorney for Los Angeles accused the company of marketing itself deliberately to attract criminals, saying it brazenly promoted itself as a place customers could store valuables with confidence that tax authorities would be hard-pressed to learn their identities or what was stored in their locked boxes. To access the facility, customers needed no identification; it took just an eye and hand scan to unlock the door.

  “We don’t even want to know your name,” it advertised, according to prosecutors.  –Los Angeles Times

  The feds used “multiple informants and at least one undercover police officer who posed as customers” to surveil the store and gather information about its customers.

  One of the company’s owners and several employees are accused of being involved in drug sales that took place at the business, as well as helping customers to convert cash into gold in a way that would avoid suspicion. Of note, U.S. Private Vaults shared a storefront with Gold Business – named as a co-conspirator in the indictment – which is accused of helping customers convert cash into gold to avoid having to report currency transactions which exceed $10,000.

  

  In the March 9 indictment that was unsealed Friday, a federal grand jury charged U.S. Private Vaults with three counts of conspiracy — to launder money, distribute narcotics and structure cash transactions to dodge detection. None of the people who are allegedly behind the operation were named in the court records. It is was not immediately clear whether any individuals will face criminal charges as well. –Los Angeles Times

  The FBI and Drug Enforcement Agency took five days to go through and process all the boxes after the raid began on March 22, according to court documents. US prosecutors argued on Friday that while the original warrant remains under seal, the magistrate judge who approved it thought that the sweeping seizures were appropriate.

  “The government seized the nests of safety deposit boxes because there was overwhelming evidence that USPV was a criminal business that conspired with its criminal clients to distribute drugs, launder money, and structure transactions to avoid currency reporting requirements, among other offenses,” prosecutors claimed in papers filed in Los Angeles federal court.

  According to prosecutors, the raid produced an unspecified number of weapons, fentanyl, OxyContin, and “huge stacks of $100 bills” which were flagged by drug-sniffing dogs. One box reportedly had $1 million in cash.

  The indictment was unsealed on Friday – just one hour before a court-issued deadline to respond to a lawsuit brought by a US Private Vaults customers who alleged that the blanket seizure was unconstitutional.

  The unnamed customer, listed in court papers as John Doe, said the search warrant should not have authorized seizure of the jewelry, currency and bullion that he kept in his three boxes at U.S. Private Vaults, because there was no probable cause to suspect the person committed a crime.

  “Just as the tenant of each apartment controls that space and therefore has a reasonable expectation of privacy in it, each of the hundreds of renters of safety deposit boxes … has a separate reasonable expectation of privacy in his or her separately controlled box or boxes,” the person’s attorney, Benjamin N. Gluck, wrote in the complaint. –Los Angeles Times

  The customer seeks to stop the FBI from requiring anonymous customers to reveal themselves and undergo an investigation to verify legal ownership of their valuables – with attorney Benjamin Gluck arguing that the government is holding his  client’s goods “hostage” until he identifies himself. Gluck pointed to a statement by assistant US Attorney Andrew Brown describing the procedure for retrieving valuables.

  “Though Mr. Brown perhaps deserves credit for his candor, his announced plan is grossly improper and manifestly unconstitutional,” wrote Gluck, noting that Brown had previously conceded in court papers that some US Private Vaults customers were “honest citizens to whom the government wishes to return their property.”

  “But the majority of the box holders are criminals who used USPV’s anonymity to hide their ill-gotten wealth,” he wrote. “To distinguish between honest and criminal customers, the government must examine the specific facts of each box and each claim, precisely what the anonymous plaintiff wants to prevent by refusing to disclose not only his identity, but even the specific boxes he claims are his.”

  

  Beverly Hills attorney Nina Marino, who represents several US Private Vaults clients, said that even if there were some criminal customers, “that does not authorize the government’s conduct in this sweeping action of not only seizing innocent box owners’ property, but viewing that property.”

  “Every single person that paid money on a monthly basis did that with the expectation of maintaining their anonymity, and it’s just outrageous that the government has such low regard for the 4th Amendment and for an individual’s expectation of privacy,” she added.

  UCLA law professor Beth Colgan called the issue “fascinating,” adding that the big question is whether the search warrant was based on sufficient probable cause to believe that evidence of criminal wrongdoing would be found in virtually all of the safe deposit boxes.

  “I would just be very surprised if a judge had approved a warrant that would allow the FBI to go through every single box absent evidence that the entire system was corrupt,” said Colgan. “Maybe they have the evidence, and that’s the thing we don’t know.”

  Tyler Durden
  Sun, 04/04/2021 – 23:00

• Senators Push To End MLB Antitrust Status After League Pulls Georgia All-Star Game
  Senators Push To End MLB Antitrust Status After League Pulls Georgia All-Star Game

  Authored by Jack Phillips via The Epoch Times,

  Several Republican senators joined calls to end Major League Baseball’s (MLB) antitrust exemption after it pulled the 2021 All-Star Game out of Atlanta, Georgia, saying that it was because of the recent voter integrity bill that has been lambasted by other major corporations and Democratic officials.

  MLB announced the decision to move the game on April 2, saying it would do to protest against the voting law that it claimed would restrict the ability of people to vote. Republicans, in criticizing the MLB and other major corporations, have accused them of bowing to Democratic-led and celebrity-led pressure. Democrats, without providing evidence, have said the new laws will make it harder for African-American voters to cast their ballots.

  The measure, which was passed last month and signed into law by Georgia’s governor, implements identification requirements for mail-in ballots and places restrictions on the number of drop boxes across the state.

  “Why does @MLB still have antitrust immunity? It’s time for the federal government to stop granting special privileges to specific, favored corporations – especially those that punish their political opponents,” Sen. Mike Lee (R-Utah) wrote on Twitter.

  Added Sen. Ted Cruz (R-Texas):

  “EXACTLY right. And @SenMikeLee & I will be working hard to END MLB’s antitrust immunity,” accusing the organization of becoming “woke,” a pejorative used by conservatives to describe left-wing activism that focuses on identity politics while using censorship and pressure campaigns to silence opposing viewpoints.

  Later on April 2, Cruz posted a link to MLB’s corporate sponsors, which Cruz said pressured the league “to pull the All Star game out of Atlanta. Do all of them oppose voter ID? Are all of them willing to be the woke enforcers of the corrupt Democratic Party? And do all hate the 75m who voted for Trump?”

  “Why are we still listening to these woke corporate hypocrites on taxes, regulations & anti-trust?” Sen. Marco Rubio (R-Fla.) wrote.

  

  Meanwhile, Chinese state media reported on April 1 that MLB will continue to be aired on the streaming platform operated by Chinese tech giant Tencent, which has significant ties to the Chinese Communist Party (CCP). Tencent is one of the Chinese companies that had temporarily dropped NBA games as a form of censorship after former Houston Rockets general manager Daryl Morey spoke out in support of the pro-democracy protests in Hong Kong.

  MLB Commissioner Rob Manfred defended the move to pull the game out.

  “Major League Baseball fundamentally supports voting rights for all Americans and opposes restrictions to the ballot box,” he added, saying it is “the best way to demonstrate our values as a sport.”

  But Gov. Brian Kemp, a Republican, said that Democrats and corporations have deliberately mischaracterized the law.

  “Here’s the truth,” Kemp said in a statement last week.

  The measure “expands access to voting, secures ballot drop boxes around the clock in every county, expands weekend voting, protects no-excuse absentee voting. It levels the playing field on voter I.D. requirements as well as streamlining election procedures,” Kemp said.

  Kemp said that Democrats, meanwhile, have spread misinformation about a provision that would not allow groups to give voters waiting in line water.

  Kemp said that it is just political organizations and “anyone else” who are not allowed to “harass or electioneer voters who are waiting in line to vote, within the 150-foot buffer.”

  Tyler Durden
  Sun, 04/04/2021 – 22:30

• CDC Investigating Salmonella Outbreak Linked To Wild Songbirds
  CDC Investigating Salmonella Outbreak Linked To Wild Songbirds

  As epidemiologists chide Americans for abandoning their fight against the coronavirus with new cases on the rise, and a dangerous new variant from Brazil making headway in several states, the CDC on Sunday issued a warning about an outbreak of a different kind: wild songbirds have caused an outbreak of salmonella in the Pacific Northwest.

  Health authorities have identified 19 cases nationwide, including three in California, six in Washington and five in Oregon, and they’re expanding their investigation to focus on a handful of states where they fear wild finches that have been dying from salmonella-causing bacteria might have spread the disease. Other states where the CDC is investigating include Kentucky, Mississippi, New Hampshire, Oklahoma and Tennessee.

  

  Although it’s commonly associated with eating undercooked chicken and raw eggs, salmonella can infect humans in other ways. Nearly all of the cases tied to wild birds were linked to families with bird feeders. The thinking goes that one of the homeowners touched an infected dead bird, or contracted the virus while cleaning a bird feeder where an infected bird had made contact. The bacteria can then spread if the individual then touches their face or mouth.

  Of the 13 people interviewed as part of the investigation, nine said they owned a bird feeder. Two others reported that they had come into contact with a sick or dead wild bird.

  No deaths have been reported, but 8 people have been hospitalized due to the outbreak. Patients have ranged from 2 months to 89 years old, with 16 years being the median age.

  However, officials believe the number of cases in the outbreak is “likely much higher than the number reported because many people recover without medical care and are not tested for Salmonella,” according to a statement on the CDC’s website. “In addition, recent illnesses may not yet be reported as it usually takes 2 to 4 weeks to determine if a sick person is part of an outbreak.”

  The outbreak may have started months ago, according to the Associated Press, which reported that California’s Department of Fish and Wildlife was inundated with calls back in December about a rash of dead of dying finches at bird feeders across the state.

  For those who haven’t encountered salmonella, the symptoms can show up between six hours and six days following exposure to the bacteria, and they can include: bloody or prolonged diarrhea, a fever higher than 102 degrees, excessive vomiting and signs of dehydration. The infection typically lasts four days to a week, and people usually recover without treatment. But patients with weakened immune systems, or who are under the age of 5 (or older than 65) are at particularly high risk.

  Tyler Durden
  Sun, 04/04/2021 – 22:00

• "It's Work-To-Live, Not Live-To-Work" – San Francisco Expats Say They Have No Regrets About Moving To Austin
  “It’s Work-To-Live, Not Live-To-Work” – San Francisco Expats Say They Have No Regrets About Moving To Austin

  Elon Musk has said he plans to move there. Late last year, Oracle, one of the biggest tech companies in the US, announced plans to move its headquarters to Austin from Silicon Valley. And since the start of the new year, others have followed suit.

  As moe and more Silicon Valley tech workers decamp for Austin, more are finding that they appreciate the capital of the Lone Star State more than the City by the Bay. As Austin comes to represent a “land of opportunity” for tech bros tired of the Silicon Valley ultra-liberal monoculture, the Houston Chronicle interviewed five “tech industry professionals” including Salesforce alums who have worked in both places, to the CEO of Austin’s premier tech incubator. The consensus is that Austin is preferable to the Bay Area, both in terms of the labor market for tech jobs (employees feel like bigger fish in a smaller pond), the housing market, and the general culture of the city. 

  

  The consensus: the grass is definitely a different color – and for now, at least, it appears “very green.”

  Vivek Sodera, co-founder of email client Superhuman, who recently moved to Austin, told the Chronicle that he appreciates that tech doesn’t dominate all other industries in Austin like it does in San Francisco.

  “Tech is an industry [in S.F.], wherein other parts of the country, tech is a subset of other existing industries,” says Vivek Sodera, co-founder of email client Superhuman, who recently moved to Austin. “I think we’re going to start to see Austin not just be a subset of existing industries itself.”

  Like San Francisco, Austin has plenty of issues of diversity, but on a professional level, you’re much less likely to find yourself at a bar surrounded entirely by tech workers.

  “It was just everywhere in San Francisco, you’re running into somebody from Snowflake or Uber or whatever. In Austin, you’re free from that a little bit,” says Holly Firestone, who worked in Salesforce for several years in both cities, and now is the vice president of community for Venafi in Austin. “I have tons of friends that aren’t in tech, which is just not something you experienced in San Francisco at all.”

  Anthony Brown, co-founder and CEO of music platform Breakr, moved to Austin in the fall and says the city allows talented tech workers the opportunity to build an even larger network.

  “There’s less of the tech community here. So I feel like you can get connected to the right infrastructure faster in Austin. So I think that’s actually a competitive advantage for Austin; there’s enough high quality people here in the city that if you do come and you are in the tech ecosystem, that you can actually build a really powerful kind of network.”

  A small pond, or what some tech investors have described as a “tier two city,” also has its drawbacks. For some (especially those working outside the tech world), the ubiquity of hoodie-wearing coders in San Francisco can be a negative, but that density is part of what’s allowed Silicon Valley companies to flourish. Some of that simply comes down to a matter of geography and the fact that not everyone is driving to work.

  Joah Spearman, an Austin-based tech founder who launched travel recommendation site Localeur, said he has struggled to recruit “director- and VP-level talent”, though others say this “skills gap” is starting to close.

  One Austin tech founder and CEO, Joah Spearman of travel recommendation site Localeur, has noticed that Austin does have a talent gap.

  “There is not this deep bench of director- and VP-level tech talent in Austin. And there’s this belief that if there was that here, the companies that get to $200 million evaluations would get to a billion,” says Spearman.

  Joshua Baer, CEO of Austin’s biggest incubators, explained that this gap is rapidly closing for one important reason: workers enjoy life more in Austin. As he explained, workers living in the city can still do “big things” professionally, but they can evade getting sucked into the “work to live” mindset that plagues the Bay Area.

  And while Austin’s housing market has boomed in recent years (while the pandemic has hit the overstretched San Francisco property market extremely hard), it’s still much more affordable than the Bay Area.

  But according to Joshua Baer, CEO of one of Austin’s biggest incubators, Capital Factory, that gap is getting smaller.

  “The type of people that we’re attracting, certainly from my own personal experience and somewhat logically, are educated entrepreneurial people who can live anywhere and they’re choosing to come here and that’s a good thing. That’s going to fuel our talent. It’s bringing in people who have Silicon Valley ethos, you know, who think big and want to go do big things,” says Baer.

  What makes Austin so appealing to many tech workers is that although you’ll still be able to do big things professionally, there’s opportunity for a richer personal life. To state the obvious, home ownership is much more achievable for transplants, however that’s caused a ripple effect that’s made it harder for many Austinites to own real estate (the average home price rose 10.1% in the past year to $433,493). It has also amplified long-running issues of racial diversity.

  Instead of feeling like they are “property of their job”, Austinites can enjoy “a closer relationship with the city,” Baer added.

  The rising cost of living in Austin is worthy of a story of its own, but the difference in culture between Austin and San Francisco is broader than just affordability. According to Spearman, much of it simply comes down to mindset, describing Austin as a “work to live” city, compared to the nonstop pace of San Francisco’s “live to work” culture.

  “In more rigid tech cultures, from the moment you leave your house, to get in a bus or a van to go to Silicon Valley to work at Apple or Google or et cetera, you’re kind of like property of your job until you get back to your house,” he says. “There are people that live like that in S.F. Austin doesn’t have that.”

  […]

  “I think there’s just something about the Texas vibe that makes people chill out and be a little bit more relaxed,” he says.

  Quality of life and affordability may be the largest factors driving San Francisco tech workers to Austin, but it begs the question what will happen once they arrive. Many Austinites were already priced out of one of the nation’s hottest real estate markets years ago, but another issue is the effect on Austin culture at large. The exodus out of San Francisco can’t just be about leaving the problems of the city behind, but rather an active desire to become a part of something new.

  “Being an Austinite is an experience. It’s about showing up and participating, being part of what’s happening in Austin,” says Baer.

  “If you want to move to Austin, the thing that you should be expecting is that you’re going to have a closer relationship with the city that you’re living in, not a more distant relationship,” says Spearman. “I think for a lot of people who are in S.F. and work in tech, their closest relationship in S.F. is with their job. Whereas in Austin, your job should be secondary to your relationship with the place that you live in.”

  Of course, as more people from Silicon Valley migrate to Austin, some worry that this could have a harmful impact on the city’s culture (as well as erode the relative affordability of real-estate). In the end, the only thing that might keep hordes of progressives from flooding into the Lone Star State might be fears about being caught in another deep-freeze.

  Then again, with taxes set to rise in blue states like California and New York, tech workers might soon be making room for finance workers as financial firms expand their footprint in the southern US.

  Tyler Durden
  Sun, 04/04/2021 – 22:00

• Largest Meth Seizure In Miami History Brings Cartel Arrests
  Largest Meth Seizure In Miami History Brings Cartel Arrests

  By Noi Mahoney of FreightWaves,

  More than 1,100 pounds of methamphetamine hidden in shipments of concrete tiles were intercepted in March by federal agents in Miami, leading to the arrests of six alleged Mexican cartel traffickers, officials said.

  

  The Drug Enforcement Administration’s (DEA) seizure of the crystal meth is the largest in Miami-Dade County history, according to the U.S. Attorney’s Office. The methamphetamine was shipped by truck in two loads from Mexico through Texas to South Florida, according to a criminal complaint filed Thursday.

  “As the threat of methamphetamine continues to grow in Florida, this was yet another brazen attempt by a highly organized and dangerous foreign criminal group to set up a significant methamphetamine pipeline from Mexico directly into the Miami metro area,” Keith Weis, DEA’s Miami field division special agent in charge, said in a release.   

  Officials did not give a dollar amount to the methamphetamine seized in Miami. In December 2020, border officials in Pharr, Texas, discovered 1,853 pounds of meth, which had a street value of $37 million. 

  Authorities have charged Adalberto Fructuoso Comparan-Rodriguez, whose nickname is “Fruto,” the former mayor of Aguililla, Mexico, and the reported leader of the United Cartels in Michoacán, Mexico, with drug trafficking crimes, according to the indictment.

  Alfonso Rustrian, of Mexico, has also been charged as a co-conspirator. Another four defendants were charged for their roles in the alleged methamphetamine scheme.

  According to court filings, Comparan-Rodriguez and Rustrian met in Cali, Colombia, with whom they believed were members of Hezbollah but were actually undercover DEA agents. Comparan-Rodriguez and Rustrian agreed to send 1,100 pounds of methamphetamine from Mexico through Texas to the Miami area, according to the charges.

  Once the meth arrived in Miami, Comparan-Rodriguez and Rustrian allegedly cracked open the concrete tiles and dissolved the meth inside 5-gallon buckets of house paint. The men are alleged to have extracted the pure crystal meth from the paint.  

  The Miami case reflects a resurgence of meth shipments pouring over the southern border of the U.S., authorities said.

  Tyler Durden
  Sun, 04/04/2021 – 21:30

• Meet The Michigan Telecom CEO Who Led A Second Life As A Cocaine Kingpin
  Meet The Michigan Telecom CEO Who Led A Second Life As A Cocaine Kingpin

  A Michigan telecom executive who died in 2018 has now been revealed to have had a “double life” running a “sprawling international drug ring”. 

  Former CEO of Clementine Live Answering Service Marty Tibbitts was known as a successful executive. But details of his “second life” emerged this year as part of a federal indictment against alleged 43 year old drug kingpin Ylli Didani, according to Yahoo/The Daily Beast. Didani was arrested this week, with regulators alleging his cartel sold cocaine in 15 different countries. He faces charges of conspiracy to distribute controlled substances on a boat in U.S. jurisdiction, conspiracy to distribute controlled substances, and money laundering. 

  Tibbitts was found – under a pseudonym of “Dale Johnson” – to have worked together with Didiani on trying to develop something called “The Torpedo”, which would be a “parasitic submarine meant to haul clandestine cocaine across the globe.”

  The sub would be remote controlled, via GPS and would attach to the hulls of cargo ships using magnets. The two hoped to be able to “stuff the sub with cocaine” before tracking it using GPS and regaining control of it 100 miles off European shores. At that point, a fishing boat would retrieve it. 

  

  Didani and Tibbitts allegedly paid $12,000 via cryptocurrency and wires from an Albanian bank account to develop the sub. The company developing it said it was unaware of what the “underwater hull scrubber device” was meant for, according to the report.

  Tibbitts bankrolled Didani’s operation, the report says, giving him more than $1.8 million in total. At one point, he cut a check for $864,000 for the cartel that was “cashed at a pawn shop or gold exchange business.”

  When Tibbitts died in 2018 as a result of his plane crashing in Wisconsin, plans for “The Torpedo” were scrapped and the cartel wound up spiraling into descent. Didani sought new funding in the UAE, but by that time, investigators had already closed in on him.  

  As for Tibbitts’ double life, his neighbors were shocked to hear the news. “I think anybody who would hear something like this would be shocked,” one of his neighbors told The Detroit News. 

  Tyler Durden
  Sun, 04/04/2021 – 21:00

• Drone Whistleblower Case Will Be First Espionage Act Conviction Of Biden Presidency
  Drone Whistleblower Case Will Be First Espionage Act Conviction Of Biden Presidency

  Authored by Brett Wilkins via via CommonDreams.org,

  Press freedom, peace, and human rights advocates are rallying behind Daniel Hale, the former intelligence analyst who blew the whistle on the US government’s drone assassination program, and who pleaded guilty Wednesday in federal court to violating the Espionage Act.

  The Washington Post reports Hale, who was set to go on trial next week, pleaded guilty to a single count of violating the 1917 law that has been used to target whistleblowers including Julian Assange, John Kiriakou, Chelsea Manning, Edward Snowden, Jeffrey Sterling, Reality Winner, and others. 

  

  Hale was charged in 2019 during the Trump administration after he leaked classified information on the US government’s targeted assassination program to a reporter, who according to court documents, matches the description of The Intercept founding editor Jeremy Scahill. He is the first person to face sentencing for an Espionage Act offense during the admnistration of President Joe Biden. 

  As vice president under President Barack Obama, Biden contributed to the creation of whistleblower protections in the Dodd-Frank Wall Street Reform and Consumer Protection Act, while simultaneously serving in an administration that, while promising “a new era of open government,” relentlessly targeted individuals who revealed US war crimes and other classified information. 

  Kiriakou—a former CIA agent who under Obama was sentenced to 30 months’ imprisonment for exposing US torture—told Kevin Gosztola that he is “dissappointed that Daniel Hale’s case was continued in the Biden Justice Department.”

  “I had hopes that Biden’s Justice Department appointee would recognize the public service that Daniel Hale provided when he revealed illegality and abuse in the drone program,” said Kiriakou. 

  Hale, who was an intelligence analyst for the US Air Force before moving on to the National Security Agency and then the National Geospatial-Intelligence Agency, “knowingly took highly classified documents and disclosed them without authorization, thereby violating his solemn obligations to our country,” according to a statement from Raj Parekh, the acting U.S. attorney for the Eastern District of Virginia.

  

  According to Gosztola, Hale’s whistleblowing led to the revelation by The Intercept that “nearly half of the people on the U.S. government’s widely shared database of terrorist suspects are not connected to any known terrorist group,” details on how the Obama administration approved targeted assassinations, and information about Bilal el-Berjawi, a Briton “who was stripped of his citizenship before being killed in a U.S. drone strike in 2012.” 

  The Post reports that Hale admitted in court to writing an anonymous chapter in Scahill’s 2016 book, The Assassination Complex: Inside the Government’s Secret Drone Warfare Program, which divulged information taken from top-secret documents about drone strike protocols, civilian casualties, and Pentagon officials’ debate about the accuracy of intelligence.

  “These documents detailed a secret, unaccountable process for targeting and killing people around the world, including US citizens, through drone strikes,” Betsy Reed, editor-in-chief of The Intercept, said after Hale’s indictment. “They are of vital public importance, and activity related to their disclosure is protected by the First Amendment.”

  Hale had initially centered his defense on First Amendment grounds, and his numerous defenders condemned his prosecution as a violation of press freedom and freedom of speech. His lawyer, Jesselyn Radack, issued a statement saying “the U.S. government’s policy of punishing people who provide journalists with information in the public interest is a profound threat to free speech, free press, and a healthy democracy.”

  Daniel Hale was my roommate when we were in the Air Force. A kind and caring person who promised his life in defense of this nation and its values.

  The people conducting secret illegal killings in other countries are criminals.

  Standing up for human rights makes Daniel a hero. https://t.co/8tBN4uA7oP

  — Jon Ivy （艾森） (@jonivy) April 2, 2021

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  “Classified information is published in the press every day; in fact, the biggest leaker of classified information is the US government,” wrote Radack. “However, the Espionage Act is used uniquely to punish those sources who give journalists information that embarrasses the government or exposes its lies.”

  “Every whistleblower jailed under the Espionage Act is a threat to the work of national security journalists and the sources they rely upon to hold the government accountable,” she added. 

  Medea Benjamin, co-founder of the women-led peace group CodePink, tweeted that it’s “outrageous that drone whistleblower Daniel Hale will be going to prison for exposing the drone murders by the U.S. military. Why don’t the murderers go to jail? Or the ones who ok the murders? Or the ones who make the killer drones and profit from murder?”

  Hale’s sentencing is scheduled for July 13. He faces up to 10 years behind bars. Kiriakou told Gosztola that he hopes the judge “recognizes the good in what Daniel Hale has done and gives him the lightest possible sentence.”

  Tyler Durden
  Sun, 04/04/2021 – 20:30

• One Step Away From "ESG": Why Uranium Stocks Are About To Soar
  One Step Away From “ESG”: Why Uranium Stocks Are About To Soar

  For the past three months, we have been especially constructive on the uranium sector (and its handful of beaten down stocks), which we believe are set to benefit tremendously as the sector gets swept up in the upcoming flurry of Biden’s various multi-trillion infrastructure deals and the concurrent ESG euphoria. Some of our recent observations can be found at the following links:

  • Uranium Stocks Soar: Is This The Beginning Of The Next ESG Craze

  • Uranium Stocks Soar After World’s Highest-Grade Uranium Mine Suspends Operation Due To COVID

  • As Wall Street’s Love For Uranium Returns, One Analyst Lists 4 Reasons To Buy The Biggest Miner

  Then, as uranium stocks did move significantly higher in recent months as investors rekindled their love affair with a sector that had been left for dead for much of the past decade, at the start of February an TD Securities analyst said that the reddit short squeeze crowd had started to buy into the sector as well, shortly after a BofA analyst laid out an even more bullish fundamental case, on the assumption that the US could delay the closure of its aging nuclear fleet, boosting demand over the next few decades.

  

  Next, the bullish uranium case was further bolstered by a lengthy tweetstorm by former hedge fund manager Hugh Hendry who said “A lot of you are invested in uranium. I commend you. I wish I was. Uranium is the rockstar of commodities. It doesn’t mess around – bull and bear markets are of epic proportions.”

  Hendry was followed by yet another iconic hedge fund manager, who also jumped on the uranium bandwagon. In a tweet from Michael “the Big Short” Burry (who communicates with the outside world almost exclusively by twitter with tweets that are spontaneously deleted after a few days), the hedge fund manager said that “If the government is going to spend $2 trillion, there is no better use than converting the US to nuclear.  Dems can do it! Jobs +”potentially limitless electricity…no greenhouse gas emissions” #greenfuture NOW!”

  Then, after a few weeks of rangebound price moves for equities in the sector, it appears that we are now set to see the next surge for uranium stocks, for two main reasons.

  The first reason is a mix of regulatory and market developments.

  As we reported earlier today, the spot price for U3O8 moved above $30 per pound for the first time this year as uranium producers and mine developers hoovered up above-ground inventories and reactor construction continues apace. Two new research notes from BMO Capital Markets and Morgan Stanley say today’s price marks a floor and predict a rally in prices over the next few years to the ~$50 level by 2024, which – all else equal – would translate into soaring stock prices for names such as CCJ, UEC, URA and URNM.

  Indeed, as Mining.com said, the stars seem to be aligning for a new phase of nuclear energy investment with the US, China and Europe bolstering the bull case for the fuel this month.

  And while nuclear energy was not (yet) mentioned explicitly in the $2 trillion Biden infrastructure proposal released today, its federally mandated “energy efficiency and clean electricity standard” is hardly achievable without it. 

  Curiously, the big regulatory move may be coming out of Europe, where – as we expected – Uranium is now officially part of the cool ESG crowd as over the weekend leaked documents showed a panel of experts advising the EU is set to designate nuclear as a sustainable source of electricity which opens the door for new investment under the continent’s ambitious green energy program.

  

  Then there is China – as Mining.com notes, China’s 14th five-year plan released a fortnight ago also buoyed the uranium market with Beijing planning to up the country’s nuclear energy capacity by 46% – from 48GW in 2020 to 70GW by 2025. There are several factors working in uranium’s favor, not least the fact that annual uranium demand is now above the level that existed before the 2011 Fukushima disaster when Japan shut off all its reactors:

  • Uranium miners, developers and investment funds like Yellow Cake (13m lbs inventory build up so far) are buying material on the spot market bringing to more normal levels government and utility inventories built up over the last decade

  • Major mines are idled including Cameco’s Cigar Lake (due to covid-19) which accounts for 18m lbs or 13% of annual mine supply.  The world’s largest uranium operation McArthur River was suspended in July 2018 taking 25m lbs off the market

  • Permanent closures so far this year include Rio Tinto’s Ranger operation in Australia (3m lbs) and Niger’s Cominak mine (2.6m lbs) which had been in operation since 1978. Rio is exiting the market entirely following the sale of Rössing Uranium in Namibia

  • Like Cameco, top producer Kazatomprom, which mined 15% less material last year due to covid restrictions has committed to below capacity production (–20% for the state-owned Kazakh miner) for the foreseeable future

  • Price reporting agency and research company UxC estimates that utilities’ uncovered requirements would balloon to some 500m lbs by 2026 and 1.4 billion lbs by 2035  

  • Roughly 390m lbs are already locked up in the long term market while 815m lbs have been consumed in reactors over the last five years, according to UxC

  • There are 444 nuclear reactors in operation worldwide and another 50 under construction – 2 new connections to the grid and one construction start so far in  2021

  • Much cheaper and safer, small modular nuclear power reactors which can readily slot into brownfield sites like decommissioned coal-fired plants (or even underground or underwater) are expected to become a significant source of additional demand.

  The last bullet brings us to reason number 2: the coming “small modular reactor” frenzy:

  As Nikkei Asia reports today, one of Japan’s top industrial engineering companies will join a US-led project to build a new type of nuclear power plant designed with added precautions against meltdowns. These plants will be built in the US, where they will propel the uranium sector to level it hasn’t seen in decades (indicatively CCJ traded roughly double where it is today as just before the 2008 financial crisis).

  According to the Nikkei, Japan’s JGC Holdings will help build a plant in the state of Idaho designed by NuScale Power, an American company whose proposal for a small modular reactor (SMR) involves immersing the containment units in a pool of water.

  Small nuclear reactors have been hailed as an option for replacing fossil fuel power plants as nations commit to cutting carbon dioxide emissions in the coming decade

  And here, we get one step closer to Uranium becoming part of ESG: when Joe Biden meets Japanese Prime Minister Yoshihide Suga for a summit in the U.S. later this month, fighting climate change will be on the agenda and “small nuclear” – and uranium – will be high on the agenda.

  JGC has invested $40 million for a roughly 3% stake in NuScale, one player in the emerging field of SMRs. The Japanese group will work with NuScale’s parent, U.S.-based engineering company Fluor, on construction management and other aspects of the Idaho project.

  One thing is clear: as the SMR strategy takes off, much more uranium will be needed, as the partners eventually could set their sights on similar projects in the Middle East – where JGC boasts a long track record in oil and petrochemical infrastructure – and Southeast Asia. In fact, the entire world could soon be covered in small, safe nukes which will lead to an unprecedented renaissance for the uranium sector.

  Why the scramble for SMR?

  The first reason is simple: price. Nuclear plants on the scale of 1,000 megawatts cost around $10 billion to build using established reactor designs. NuScale’s SMR design – which completed a technical review by the U.S. Nuclear Regulatory Commission in August 2020, ahead of rival proposals – reportedly costs around $3 billion for more than 900 MW. The Idaho plant will have a capacity between 600 MW and more than 700 MW, according to announced plans. NuScale also has a strategic partnership with South Korea’s Doosan Heavy Industries and Construction, which will supply components for the plant.

  The second, and far more important reason, is safety. Japan’s Fukushima nuclear disaster a decade ago shows what happens when reactor cooling systems break down. The loss of emergency power after a devastating 2011 tsunami led to reactor meltdowns at the Fukushima Daiichi plant operated by Tokyo Electric Power Co. Holdings. Well, NuScale’s SMR design seeks to remove this risk, as the water in the pool takes a month to evaporate and helps keep the reactor’s temperature down.

  The U.S. government supports research and development in small-scale reactors. A Green Growth Strategy announced by Japan last year calls for “providing active support” to Japanese companies participating in experimental overseas projects in this field. Many existing nuclear plants in Japan, the U.S. and other advanced economies have been in operation for decades and require upgrades or decommissioning.

  In short, between recent bullish market dynamics, and a sector that is on the cusp of becoming the next ESG craze, the promise of new SMR technologies could ensure uranium demand is stable for decades, leading to a new golden age for uranium stocks.

  * * *

  Finally, if that’s not enough, courtesy of Larry McDonald, author of the Bear Traps report, here is a March 25 report published by ACG Analytics, titled “Energy: Uranium Gateway to Net Zero Emissions?“

  Executive Summary

  The Biden Administration is at a potential pivot point regarding future U.S. nuclear energy policy. How the Administration grapples with long-standing issues, deploys investment, and who Biden selects to head the Nuclear Regulatory Commission (NRC) will indicate the future of the sector.

  Issue

  In the most recent Democratic Party Platform (which the Biden campaign helped shape), the Democratic Party committed to advancing nuclear power as part of a “technology-neutral” means of decreasing fossil fuel emissions. In the Biden campaign’s “Plan for A Clean Energy Revolution and Environmental Justice” (“Climate Plan”), the campaign also committed itself to identifying the future of nuclear energy, identifying nuclear waste disposal as a “challenge with nuclear power today” while promising to focus on “small modular nuclear reactors at half the construction cost of today’s reactors.” The question now for the Biden Administration is how to proceed.

  Impact

  By rejoining the Paris Agreement and committing to more ambitious emissions targets, the Biden Administration may utilize nuclear energy as a bridge until other renewable energy sources are more viable and battery storage technology improves. The Administration faces several immediate political challenges regarding the greater adoption of nuclear power including the planned closure of several existing plants, the aversion many Democrats have towards new mining projects which stem from environmental concerns, the related but distinct concerns of many Native American tribes located where U.S. uranium mining might occur, and the aforementioned long-standing question of longer-term spent nuclear material storage. On the other hand, if nuclear plants continue to close early, decreasing the U.S. zero emissions base-load capacity, demand for dependable carbon emitting sources will increase.

  Next Steps

  President Biden is likely to address some of these challenges in upcoming infrastructure legislation, which will incorporate much of the Administration’s environmental agenda and potentially include incentives for maintaining the existing U.S. nuclear fleet. President Biden is expected to outline his infrastructure plan publicly on March 31st. Another key decision will be who President Biden nominates to the Nuclear Regulatory Commission (NRC) which comprises 2 Democrats and 2 Republicans, stymying the decision-making process at an agency integral to the future of U.S. nuclear energy policy.

  More details

  Uranium itself will benefit from increased demand in the United States, but U.S. and Canadian miners also stand to benefit from efforts to secure safe and reliable uranium supply chains, ending U.S. reliance on adversarial countries for imports. Republicans have emphasized that U.S. foreign reliance represents a national security threat and believe the Administration should loosen mining requirements while also committing itself to completing the U.S. uranium reserve established by law late last year. House Minority Leader Kevin McCarthy (R-CA) is also attempting to get House Republicans to coalesce around an environmental agenda that includes investments in nuclear energy and regulatory changes to speed up permitting and environmental reviews. Many Progressives, however, do not support these moves. Senator Bernie Sanders (I-VT), who challenged Biden to be the 2020 Democratic nominee, would ban nuclear energy.

  Biden’s Cabinet appointments come from both sides of the spectrum on nuclear energy. Interior Secretary Deb Haaland has opposed uranium mining on public lands and fought for compensation for communities exposed to radiation. She won the Nuclear-Free Future Award last year from the German Nuclear Free Future Foundation while a Representative from New Mexico. Former Michigan Governor and current Energy Secretary Jennifer Granholm has less experience with nuclear policy, arguing during her Senate confirmation hearing that the disposal of used nuclear fuel is a “sticky situation” and that “We have to maybe look at what the Blue Ribbon Commission [An Obama Administration panel tasked with developing policy options for nuclear waste] did on this, which was to engage in some consensus-based strategies that allow us to determine where that waste should go.”

  The Biden Administration, however, is expected to devote additional resources to research and development (R&D) in the nuclear space, particularly R&D regarding the development and adoption of small modular nuclear reactors, among other promising technologies. The Department of Energy (DOE) Loan Programs Office, with $40 billion in loan authority, will prioritize renewable and net-zero emission technologies.

  While the Obama-era Blue Ribbon Commission on America’s Nuclear Future was tasked with developing policy options for current and future nuclear waste, it was not tasked with identifying alternative waste disposal sites after work on completing Nevada’s Yucca Mountain Nuclear Waste Repository ceased in 2011, arguably for political reasons. After the completion of its work in January 2012, the Blue Ribbon Commission’s recommendations went largely ignored during the remainder of the Obama Administration and during the Trump Administration.

  Waste storage continues to be the largest risk to greater adoption of nuclear power in the United States. The Federal government has tried for decades to create a central repository for spent nuclear waste and since work began in 1987 on Yucca Mountain (which is unlikely to re-commence under President Biden), no other long-term waste disposal site has been identified in what would likely be a several decades-long process if the selection of another site or sites were to occur.

  Currently, existing nuclear plants typically store most of their waste on site. Proponents believe such storage is relatively safe and disaggregates the risks associated with the long- term care of radioactive waste in centralized locations. Transporting large quantities of waste along thousands of miles of highways to a central repository increases the risk of an accident and contamination. However, at least 7 states (California, Connecticut, Illinois, Kentucky, Maine, Oregon and West Virginia) have laws prohibiting additional nuclear reactors in the state until longer-term waste disposal issues have been solved by the Federal government. Massachusetts, Montana, and Oregon require voter approval, while other states have varying degrees of prohibitions.

  This week, Rep. Doris Matsui (D-CA) introduced “The Storage and Transportation of Residual and Excess Nuclear Fuel (STORE) Act,” which aims to create interim waste storage facilities. It remains unclear if this legislation could be folded into President Biden’s infrastructure package (it would not meet rules if passed in its current form under Reconciliation). Currently, the legislation has no-cosponsors and appears tied to a specific issue affecting her district Matsui does, however, sit on the House Energy & Commerce Committee and her legislation comports with the recommendation of the Blue Ribbon Commission and the Administration’s goals that nuclear waste disposal citing be consent-based in the future.

  Tyler Durden
  Sun, 04/04/2021 – 20:00

• UBI And The Road To Serfdom
  UBI And The Road To Serfdom

  Authored by David Gordon via The Mises Institute,

  Many people think that a universal basic income (UBI) would be a good substitute for the welfare state. Under this proposal, each person resident in a country would receive a guaranteed income, sufficient to live at a modest level. People would get the money unconditionally. Unlike welfare payments, the UBI would not be lessened if people earned money in addition to the amount it provided, and, because it is not means tested—absolutely everyone gets it, even billionaires—it requires no complex bureaucracy to administer.

  

  The UBI would cost a great deal of money, but its defenders claim that since it is a substitute for the welfare state, we would also save the vast amounts of money now required for financing welfare programs. Further, if our economy continues to grow, at some point the UBI will become affordable. Charles Murray, for example, in a short book published a number of years ago, says of his version of the UBI, “I began this thought experiment by asking you to ignore that the Plan was politically impossible today. I end proposing that something like the Plan is politically inevitable—not next year, but sometime…. Real per capita GNP has grown with remarkable fidelity to an exponential growth equation for more than a century” (In Our Hands, AEI Press, 2006, p. 125).

  The critics of the UBI aren’t convinced and still claim the program would be too costly to implement. In a recent book, Universal Basic Income – For and Against (Rational Rise Press, 2019). Antony Sammeroff offers a very able account of this controversy and many other issues connected with the UBI. He gives an especially good analysis of the argument that automation is liable to make so many people unemployable that a UBI will be needed to provide for them. But what I’d like to discuss this week is another argument that Sammeroff deploys to great effect against the UBI.

  The UBI, Sammeroff reminds us, is a government program, and we ought always to view the state as an enemy of liberty. It is precisely the feature of the UBI that its supporters emphasize, its universal coverage, which would enable to state to exercise tyrannical control. Sammeroff says,

  Now a Basic Income Guarantee may begin universal, but as the years wear on and it proves expensive to grant, corners may be cut to ensure its continuance. Hardly anyone will object to the UBI being withdrawn from criminals, for example. And then perhaps for anti-social behavior. Petty crimes, like littering the street, might lead people to receive a penalty against their UBI. A few might moan that this is the beginning of a government social-engineering program, but to most people it will seem like quite a sensible and reasonable measure…. Clipping people’s Basic Income will soon seem the most sensible and appropriate response to many crimes and misdemeanors. (p.148–49)

  Not only could the state use the UBI as an instrument of social control; we have every reason to think those in charge of the state would exercise their power for bad motives.

  This is the same class of people [who] launched a permanent war in the Middle East wasting trillions of dollars and destroying millions of lives. They bailed out the banks from the public purse and gave themselves raises after telling the rest of the nation that we had to tighten our belts. They have robbed the young of the opportunity to own a home by sending house prices through the roof, and mean to leave them a nation in ruinous debt. (p.147)

  Sammeroff’s argument here is consistent with the contention of Hayek’s Road to Serfdom, summarized in the title of chapter 10, “Why the Worst Get on Top,” but it is not quite the same. Hayek argues that rulers will very likely be bad, but Sammeroff’s point is not dependent on this thesis. His claim is rather that the evidence shows that our present rulers are bad and will remain so. Thus they can be expected to abuse the UBI program.

  

  Sammeroff strengthens his case that the UBI poses a threat of tyranny by using an admission from Charles Murray, who, as mentioned above, is a pioneering advocate of the program. He acknowledges that the UBI would require people to have a “universal passport” and “known bank account.” Making the most of these admissions, Sameroff says,

  I don’t think it’s unrealistic to imagine that people may soon be forced to accept a mandatory Government ID Card in order to claim their Basic Income. Before long they will be asked to show it in order to get into government buildings. Then at the airport to get on a plane. Then simply to board a train or a bus. Then to post a package. Then to get into a bar. Then a restaurant. Before long every public place will ask you to show your ID card…. you will be expected to produce it in order to vote, and before long not voting may result in a fine as well…. Just as states freeze the assets of suspected fraudsters, they will soon be freezing the “known bank account” of political dissenters. By the time they come for those with radical ideas about freedom from government tyranny there will be precious few left to speak out for us. (pp. 151–52)

  One might object to this that the state is capable of demanding a government ID card and controlling people’s bank accounts without the UBI, but why give the government an excuse to perpetrate such horrors on us? Sammeroff notes that it is the poor, supposedly those who would gain the most from the UBI, who would be most vulnerable to its abuse:

  Certainly, the poor, who depend solely on their handouts to survive, will quickly become very cautious of what they say and do. But even reasonably affluent people will think twice before risking the money. The UBI institutionalizes the state as patron, and citizen as ward. Before long we may arrive in a frightening era where payments and penalties are used to mould us into compliant little drones. The utopian dream will have descended into a tyrannical nightmare. (p. 152)

  Tyler Durden
  Sun, 04/04/2021 – 19:30

• Someone Just Paid $660,000 For An Unopened 1986 Copy Of Super Mario Bros.
  Someone Just Paid $660,000 For An Unopened 1986 Copy Of Super Mario Bros.

  Today in “where’s the inflation?” news…

  An unopened copy of a Nintendo game, that was originally purchased in 1986, has just sold at auction for $660,000. 

  The copy of Super Mario Brothers had been “forgotten in a desk drawer” for nearly 3 decades, AP reported, before being sold by Heritage Auctions in Dallas. It sold on Friday of last week. 

  

  The game was originally purchased as a Christmas gift more than 25 years ago, but was instead placed into a desk drawer where it remained “sealed in plastic with its hang tab in tact”.

  Valarie McLeckie, Heritage’s video game specialist, told AP: “Since the production window for this copy and others like it was so short, finding another copy from this same production run in similar condition would be akin to looking for single drop of water in an ocean.”

  The copy of the game is being called the “finest” to ever have been professionally graded for auction. A similar copy last sold for $114,000 only last summer. While that copy was produced a year later in 1987, it still marks a nearly 6x rise in the price of a game that once cost less than $100 under 3 decades ago.

  Tyler Durden
  Sun, 04/04/2021 – 19:00

• Goldman, JPM Expect Econ Activity In April, May To Top "Anything We'll See In Our Careers"
  Goldman, JPM Expect Econ Activity In April, May To Top “Anything We’ll See In Our Careers”

  Last week, ahead of both the March payrolls and a burst of closely watched economic data in the coming weeks, we warned readers that we are about to experience the craziest base effect since the great depression, as the US economy laps the 1-year anniversary of the Covid shutdowns which ground the US economy to a halt virtually overnight last March, and which now mean that when looked at on a year-over-year basis, March (and onward) data will looks like this.

  

  But while it’s true that the base effect will lead to some impressive if mostly meaningless Y/Y charts, the reality is that the US economy is about to ramp even higher not just on the simple accounting of calendar effects, but because of the continued flood of fiscal stimulus that is about to send the US economy overheating to never before seen levels.

  First consider the latest observation from JPMorgan economist Jesse Edgerton, who looks at the latest credit card/high frequency data contained in JPM’s Quant Econ Dashboard and notes that a meaningful portion of the US never fully shutdown or had minimal restrictions. So as we approach April 19, the date when Biden says that 90% of all US adults will have vaccine access within 5 miles of their home, JPMorgan urges its clients to consider the magnitude of what could happen: the combined population of California, Illinois, Massachusetts, and New York is ~78.5mm people.

  These are states that had some of the more stringent lockdowns and are poised to reopen. In the chart below you can see the differential in perhaps the most popular reopening activity, dining out, in some of those states relative to Florida and Texas. Florida and Texas did not have the same magnitude of restrictions as the states mentioned.

  

  In short, in just two weeks, the US could experience a spending spree the likes of which have never been seen before.

  But wait, there’s more… and for that we go to Goldman head of hedge fund sales Tony Pasquariello who – as we noted earlier – is becoming concerned about “fat tail” outcomes after the subsurface turmoil of the first quarter, although as he expounded, the risk/reward “will be on the right tail” as the US quickly moves towards herd immunity. Specifically, he says to consider the following three data points:

  • i. $4.44tr currently sits in US money market funds ($1.5tr is held by retail, $2.94tr is held by institutions). since February of 2020, that $4.44tr pile has grown by … $830bn.
  • ii. US households have accumulated about $1.5tn in ‘excess’ or ‘forced’ savings, and Goldman expects that to rise to about $2.4tn, or 11% of GDP, by the time that normal economic life is restored around mid-year
  • iii. attendant to the largest jump in US consumer confidence in 18 years: a record share of respondents said they plan to purchase a home in the coming months. a measure of consumers’ plans to buy cars and major appliances also rose. A separate report Tuesday showed U.S. home prices surged to the highest since February 2006.

  His conclusion: after the change observed in the markets in Q1, which presents a different setup for Q2, Pasquariello notes that “if April and May are THE peak growth months for US economic activity – perhaps as robust as anything we’ll see in the remainder of our careers – there’s still a lot to play for, and I still believe a reflationary framework is the right place to anchor your risk-taking.”

  Which, however, is not necessarily good news: judging by the ramp higher in yields after the blockbuster, goldilocks payrolls report on Friday which has nonetheless triggered a new round of the reflationary dynamic, the Goldman strategist warns that “the path higher from here is apt to be choppier and risk/reward is not what it was four or five months ago” and “in practical terms, this argues for a more tactical trading stance where illiquid positions – and recency bias – are the enemy.”

  Tyler Durden
  Sun, 04/04/2021 – 18:30

• Elon Musk's January Claims Of Model S/X Production Debunked By Tesla's Own Q1 Delivery Disclosure
  Elon Musk’s January Claims Of Model S/X Production Debunked By Tesla’s Own Q1 Delivery Disclosure

  If there’s one thing you have to hand to Tesla short sellers, it is that they are incessant and relentless, even in the midst of getting their respective faces kicked in by Tesla equity over the last 24 months.

  But as time passes, more and more critical questions and examples of potential red flags about Tesla continue to pop up, not the least of which is what can only be described as a glaring inaccuracy at best, fraud at worst, made by Elon Musk regarding the company’s Model S&X production earlier this year.

  Short seller Mark Spiegel took to Twitter this weekend to point out what he called “the latest evidence Elon Musk is a securities fraud committing liar”. 

  THE LATEST EVIDENCE ELON MUSK IS A SECURITIES FRAUD-COMMITTING LIAR:
  In January’s conference call he said the new S&X were “in production now & would be delivered in February”

  Yet today’s 8-K says $TSLA produced ZERO. THIS IS BLATANT FRAUD@SEC_Enforcement

  H/T: @ContrarianShort pic.twitter.com/4cnyXx6ZFP

  — Stanphyl Capital (@StanphylCap) April 3, 2021

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

  First, Spiegel points out that in the company’s January 2021 conference call, Musk is quoted as saying that the company’s new Model S and X vehicles were in production and would be delivered in February 2021. Musk’s exact quote was:

  “Regarding the new Model S and X, we are launching the — we’re super excited to announce the new Model S and Model X are in production now and will be delivered in February. So we’ve been able to bring forward the Plaid, Model S and X. And Model S will be delivered in February and X a little later. The Model S Plaid, and we’re actually in production now, and we’ll be delivering next month.”

  But when the company released its production and delivery numbers yesterday, which we documented at length here, their 8-K filed with the Securities and Exchange Commission clearly shows that no Model S or X vehicles were produced during the quarter.

  

  “This is blatant fraud,” Spiegel Tweeted to @SEC_Enforcement. And while it does appear that Spiegel has a case, if regulatory past performance by the SEC versus Elon Musk is any indication of future results, we’re not sure that anyone will care or that Musk will face any real consquences.

  The beat goes on…

  Tyler Durden
  Sun, 04/04/2021 – 18:00

• Goldman Asks "Is There A More Interesting Chart On Planet Earth Right Now"
  Goldman Asks “Is There A More Interesting Chart On Planet Earth Right Now”

  In his exhaustive Q1 lookback and post-mortem, Goldman’s Tony Pasquariello  (global head of Hedge Fund Sales, which these days we assume excludes family offices for obvious reasons) whose work we have profiled extensively in the past, discussed how much has changed in the past quarter, in which while stocks continued to ramp and closed 6.2% higher there was unprecedented turbulence below the surface, and is why he writes that “certain impulses changed as the quarter wore on, which presents a different setup for Q2.”

  In any case, while we will look at a detailed analysis of all that happened in one of the most unforgettable quarters in history (and they said 2021 would be much quieter than 2020), here are the seven most important market charts to follow according to one of the people who is most critical in setting the narrative at Goldman.

  1. Pasquariello starts with the latest fund flows, where he notes that on one hand the market has seen record inflows to equity funds to start the year yet at the same time that really only marks a reversal of outflows in the prior few years (and also takes place during a burst in market volatility as discussed in “Another Market Paradox: Wall Street Struggles To Explain Record Equity Inflows Amid Stock Turmoil“). According to the GS trader, while retail demand is apt to slow from a white hot pace, it should on net remain positive “as equity funds take from both bond funds and the money markets”:

  

  2. Looking ahead, Pasquariello says that Goldman’s composite score for the bank’s proprietary US reopening scale will be critical to watch in the coming months, as the US gets closer to normalcy with every passing day.

  

  3. In turn, the Goldman trader thinks “this is a very interesting chart”: the blue line is a custom basket of stocks levered to the stay-at-home theme (GSXUSTAY), expressed as a ratio vs S&P; the white line is a custom basket of stocks most exposed to the pandemic (GSXUPAND), also vs the S&P. “As you can see, these trades did exactly what you’d expect them to do for a while. What I
  find interesting, however, is how much these spreads have narrowed in recent months:”

  

  4. This brings us to the punchline: a very long-term chart of the long bond. According to Goldman, with the 30Y now at the long-term resistance line and potentially set to break a 31-year-channel, what happens next is critical, and is why Goldman asks “is there a more interest chart on planet earth right now.”

  

  5. And speaking of the bond market, Pasquariello notes that for all the uniqueness of this cycle, the relationship between bond yields (green line) and cyclicals vs defensives (white line) is right in line. In fact as the Goldman trader notes, “look at the tell equities gave in advance of the bond move last year.”

  

  6. One of the prevalent themes on Wall Street in Q1 has been the resurgence of faith in commodity names, and here is another reason why. The next chart from Pasquariello shows a measure of US wealth inequality. Why is this notable? Because as he writes, “the best era of US equality was coincident with exceptionally strong commodity prices. given the focus of global policy makers on the inequality issue right now, one can understand how this underscores a bullish medium-term call on commodities.”

  

  7. Finally, what chart recap is possible without mentioning the virtue signaling craze du jour: As Pasquariello concludes, “the more things change, the more they stay the same, and while outflows from equity funds have thankfully inflected (light blue) , investor demand for ESG product (dark blue) remains firmly in place” and os one of the biggest drivers of inflows into global stocks.

  

  Tyler Durden
  Sun, 04/04/2021 – 17:55

• CBS Yanks 'Straight-News' Article Advising Companies "How To Beat" Georgia Election-Integrity Laws
  CBS Yanks ‘Straight-News’ Article Advising Companies “How To Beat” Georgia Election-Integrity Laws

  Authored by Monica Showalter via AmericanThinker.com,

  Has CBS skidded down to straight-opinion activism? Sure looks like it.

  On April 2, they came out with a supposedly straight-news article (archived version here) bearing this headline:

  3 ways companies can help fight Georgia’s restrictive new voting law

  

  And here’s a summary of the content from the Daily Caller:

  The article in question, written by CBS MoneyWatch reporter Khristopher J. Brooks, gave three suggestions for companies to boycott Georgia’s voting law, according to “activists.”

  The first section urged companies not to donate to the two Georgia Republicans who co-sponsored the bill.

  The second bullet point pushed for companies to “spread awareness” via television and social media advertisements, and

  the third note called for them to “fight for federal law” regarding the “For the People Act.”

  It was as if aliens had taken over Georgia or a pandemic were on, and companies everywhere needed advice on what to do, how to combat it, since they would have no idea and CBS knows everything, even political strategy.

  What didn’t figure in this was that the law they advocated fighting was brought on by the duly-elected and legitimately seated legislature of Georgia. 

  It was pure, straight, naked activism masquerading as news.

  What it shows is that what was once the gold standard of straight-news reporting many decades ago is now as left-wing as The Nation:

  Now it’s been yanked, according to reports, because of backlash from the public, and more important to CBS News, other journalists, who recognize opinion-writing when they see it and know it wouldn’t cut it at their own outlets.

  

  Here’s some Twitter reaction from some of the few professional trained journalists out there:

  

  Embarassment, yes, for CBS, but don’t blame just the bylined writer.

  Incredibly, this crap passed through a lot of editors before making it onto the Internet. Anyone who knows the news industry would know that.

  And that demonstrates a problem of culture, a rotten fish problem that stinks from the top.

  Anyone hear anything funny from CBS of late suggesting as much.

  Take a look at Lester Holt. The Mr. Assuring Newsman of avuncular demeanor was just talking about the importance of not reporting conservative views in his reports. That would make such reports better, of course, but for Lester, they’d undermine the leftist agenda, so guess which one wins?

  I got news for Lester: I’ve been educated in journalism, too, at Columbia University’s famous grad school of journalism, in the 1990s, and don’t think that issue didn’t come up. I recall a memorably good professor of foreign reporting, Stanley Meisler, of the Los Angeles Times, teaching us kids at the time that we don’t have to give every nutbag view equal weight or even space in every story … but, and this is a big ‘but,’ we do have weigh whether a view with which we may disagree with, or find bad does have consequence. That’s called news judgment. 

  Umm, Lester apparently is saying that anyone with conservative views is bearing a view without consequence and conservative voices don’t matter. They’re fringe, despite 70-plus million votes that came in for President Trump in 2020, and therefore, like any nutbag view, need to be ignored. Sound like a good news judgment? Only if you are convinced that Democrats will be in power forever, conservatives will never vote to win, and Republicans will be erased, Stalin-style, from every picture.

  Thus far, history doesn’t work that way. But CBS is continuing its slide downhill, with a “news” culture that lets this kind of activist call to action get put out, trashing its credibility, and retreating only when other journalists say ‘yuck.’

  Tyler Durden
  Sun, 04/04/2021 – 17:30

• Record Warmth Spreads Across Western Half Of US
  Record Warmth Spreads Across Western Half Of US

  Several locations across the West and Midwest may experience record high temperatures this weekend, including Boise, Salt Lake City, Phoenix, Denver, Boulder, and Fort Collins. 

  

  Temperature anomalies for much of the West and Midwest are experiencing above-average conditions this weekend. Temperatures were 10 to 25 degrees above average in some spots. Above-average temperatures will continue through the midpoint of the month. After that, temperatures are expected to be more in line with seasonal averages. 

  

  On Sunday, the forecasted high of 81 degrees for Salt Lake City may smash the 132-year record. 

  Ahead of the warm shot, readers may recall, in a note titled “April Temperature Anomalies Spike In Central US As Farmers Prepare For Early Spring Planting,” we outlined how temperature models suggested warmer weather was ahead and would possibly result in an early spring planting season.

  However, with warmer temperatures hovering over the Western and Central US, these conditions support an elevated fire risk as drought conditions persist with high winds and low humidity. 

  Since our last drought note titled “Fears Of A “Return Of The 1930s Dust Bowl” Rise As Record Drought Sizzles Southwest,” in early March, persistent dry conditions continue for parts of the West, Southwest, and South. 

  

  What a wild few months of weather across the US as record low temperatures were set across the country in February – now record-high are being set in April, a testament to the highly volatile climate. 

  If weather volatility persists through spring, this could be bad news for farmers who many experience crop losses and add to supply strains that would continue to boost food inflation. 

  Tyler Durden
  Sun, 04/04/2021 – 17:00

• Could Bitcoin Solve The Oil Flaring Problem?
  Could Bitcoin Solve The Oil Flaring Problem?

  Authored by Felicity Bradstock via OilPrice.com,

  As governments aim to curb carbon emissions from gas flaring, Bitcoin data centers offer a way to use this energy instead of letting it go to waste, in return for the digital currency.  Gas flaring, a byproduct of fracked shale production, produces around 1 percent of global carbon emissions at present. Companies burn the gas off at the well site, rather than using it as an energy source, because of its unprofitable nature. The alternative option is simply to vent the gas into the atmosphere, releasing methane and adding to harmful greenhouse gasses that have a knock-on effect on the environment. 

  However, several companies are calling for an end to gas flaring within the next decade and looking to find other uses for this energy.

  

  Bitcoin producers realized this gas could be a great source of energy for small, transportable cryptocurrency data centers. One of the biggest problems faced by digital currency producers is the high price of electricity needed to farm the currency. But if this energy can be found cheaper from a product that would not otherwise be used, it could present the perfect solution for both industries. 

  In 2019, it was suggested that Bitcoin required more energy than the entire country of Switzerland for mining. This figure increased in 2020 and it is estimated that the Bitcoin network consumes around 80 terawatt-hours per year.

  But the swinging price of Bitcoin and the Covid-19 pandemic deterred oil companies from making a commitment until now. Bitcoin did not appear a viable long-term option due to its volatility, especially when the future of oil was also looking bleak in 2020. While some companies took the plunge and trialed a Bitcoin-for-gas program as early as 2019, this was a widely overlooked solution to flaring and venting.  

  Sergii Gerasymovych, the owner of a Bitcoin mining company, EZ Blockchain, reached out to oil and gas companies a few years ago to no avail. But “The market conditions have changed,” he explained. “Now, every oil and gas company we reached out to in 2018 is calling us back because they see Bitcoin is making a lot of money.”

  Bitcoin is becoming increasingly attractive to companies looking to modernize and go digital with the price of the digital currency doubling during the last year, despite a pre-pandemic dip. 

  EZ blockchain has recently set up five Bitcoin mines on gas sites, the latest in Utah with independent gas company Wesco Operating Inc. Other companies using the innovative solution include Crusoe Energy Systems Inc., which has introduced low-cost/no-cost ‘Digital Flare Mitigation’ programs with Bitcoin companies to put 20 data centers into action.

  Other countries have also recognized the opportunity, with Russian companies developing similar projects. In January, Russian state-owned oil major Gazprom Neft has announced a successful pilot project that uses gas that would otherwise be flared to produce electricity to mine cryptocurrency at a Siberian drilling site.

  Vekus was the first Russian cryptocurrency company to develop such an energy source for digital currency mining. Vekus used a shipping container to create an on-site mine, demonstrating the potential for digital currency mines to be placed on oil and gas sites around the country. 

  Russia is the world’s biggest gas flare producer, followed by Iraq, the U.S., and Iran, which in total accounted for 45 percent of global gas flares in 2017-2019. 

  Other cryptocurrency companies could make similar deals with oil and gas companies so long as they have proof of Work (PoW) option to process transactions. This could make digital currencies more sustainable in the long-term as electricity costs currently account for the majority of their production costs. 

  As oil and gas companies are feeling increasing pressure from regulators and governments to curb their carbon emissions over the coming decade, Bitcoin-for-gas could offer a simple solution to put an end to flaring and venting. 

  Tyler Durden
  Sun, 04/04/2021 – 16:30

• NASA's Marscopter Prepares For Imminent Flight On Red Planet 
  NASA’s Marscopter Prepares For Imminent Flight On Red Planet 

  On Saturday evening, NASA Jet Propulsion Laboratory tweeted its Mars helicopter “Ingenuity” officially touched down on the Red Planet after being released from the belly of the Perseverance rover. The first helicopter flight on Mars is expected in about a week. 

  “#MarsHelicopter touchdown confirmed! Its 293 million mile (471 million km) journey aboard @NASAPersevere ended with the final drop of 4 inches (10 cm) from the rover’s belly to the surface of Mars today. Next milestone? Survive the night,” NASA Jet Propulsion Laboratory tweeted. 

  

  The helicopter weighs about 4 pounds and is solar-powered. Much of the battery usage is to keep the internal system warm from the harsh Martian night. 

  “This heater keeps the interior at about 45 degrees F through the bitter cold of the Martian night, where temperatures can drop to as low as -130 F (minus 90 degrees Celsius),” NASA’s Bob Balaram, chief engineer for the Mars Helicopter project, wrote Friday. “That comfortably protects key components such as the battery and some of the sensitive electronics from harm at very cold temperatures.”

  The $85 million marscopter will be the first helicopter to fly on the Red Planet. Data from Ingenuity’s first flight, expected to be on Apr. 11, will be received by NASA on Apr. 12. Ingenuity is embedded with multiple cameras that will soon allow it to observe Jezero Crater (where the Perseverance rover landed on Feb. 18). Each flight will be conducted over a 300-foot-long flight range at a maximum altitude of 16.5 feet. 

  

  Balaram said after the first flight, “the Ingenuity team will be anxiously waiting to hear from the helicopter the next day.” 

  While Ingenuity is an exploratory technology demonstration, a successful test flight would confirm the helicopter technology could be scaled up, with larger models that may assist astronauts on the Red Planet with transportation one day. 

  Tyler Durden
  Sun, 04/04/2021 – 16:00

• "Record Market Fragility": Something Snapped In Q1… And What Goldman Expects For Q2
  “Record Market Fragility”: Something Snapped In Q1… And What Goldman Expects For Q2

  As Goldman trader and head of HF sales Tony Pasquariello writes in his first quarter post-mortem, “Q1 is done. boring, it was not.“

  And, boy, can say that again… but before we get into the weeds of what happened (and what may happen) let’s first take a look at the obvious – the best and worst performing assets of the past quarter.

  Luckily, Deutsche Bank has done the analysis, and in a note from the bank’s strategist Henry Allen, he writes that markets had a pretty mixed performance in Q1, with 20 of the 38 non-currency assets in the German bank’s sample having a positive return over the first three months of the year. The gains concentrated among risk assets including equities, oil and HY credit, as progress on the vaccine rollout and the prospect of further stimulus in the US proved supportive. In a reversal of 2020 however, safe havens have struggled against this backdrop, with gold the worst-performing asset in the main sample (bitcoin was on the other end) and sovereign bonds also losing ground over the quarter.

  A quick detour here from BofA CIO Michael Hartnett, gives us the highlights in the form of the following performance: Bitcoin 103.3%,  oil 21.9%, global stocks 4.7%, US$ 3.7%, cash 0.0%, HY bonds -0.1%, IG bonds -4.3%, government bonds -5.8%, gold -9.6% YTD.

  

  Going back to DB, we are reminder that one of the biggest stories over Q1 has been the massive rise in US Treasury yields. This began at the very start of the year as the results of the Georgia Senate runoffs meant that the Democrats would have control of both houses of Congress under the new Biden administration. In turn, this has given them the leeway to pursue substantial stimulus, with the $1.9tn American Rescue Plan already signed into law, and Biden announcing his American Jobs Plan yesterday. In response, yields on 10yr Treasuries have risen by +82.7bps over the quarter, which is the largest rise in absolute terms since Q4 2016 when Donald Trump unexpectedly won the presidency.

  However, the selloff in sovereign bonds hasn’t been confined to the US, with their European counterparts also losing ground as investors increasingly bet on a stronger economic recovery once the vaccine is rolled out. Gilts (-7.3%), bunds (- 2.4%) and BTPs (-0.9%) all fell over the quarter, though their monthly performance for March hasn’t been quite as bad, with only bunds losing ground slightly.

  On the other end, for equities, both March and Q1 marked a very strong performance, and in a major reversal from 2020, it was European indices which saw the largest advances. Over Q1, the DAX (+9.4%), the FTSE MIB (+11.3%) and the STOXX 600 (+8.4%) all saw solid gains in total return terms, while banks led the way thanks to higher yields, with the STOXX 600 Banks up +20.3% over the quarter. The US lagged behind however, with the S&P 500 up +6.2%, albeit rising to fresh highs in March, while EM indices were even further back, with the MSCI EM Equities up just +2.2% over the last three months.

  Of course, nothing compares to bitcoin, which has exactly doubled since the start of the year…

  

  … but away from crypto, the top performing asset continues to be oil on a YTD basis, with a Q1 performance of +22.7% for Brent Crude and +21.9% for WTI. Oil is still in the lead in spite of the fact that both prices fell over the last month, as concerns over a rise in Covid cases at the global level led to renewed fears about further restrictions and reductions in mobility. Nevertheless, while oil is at the top of the DB YTD sample, other commodities haven’t performed so well, with precious metals the worst, in a mirror image of returns last year.

  

  Bottom line, going back to Pasquariello, he puts it best saying that “on the surface, it was a fine quarter: S&P printed a 6.2% total return on 7.8% realized volatility, and sits within close reach of both the highs and the 4000 level.” However, as the Goldman trader expands, “those headlines, belie the degree of difficulty involved in managing professional money along the path — particularly within the fundamental long/short space.”

  To illustrate the turbulence below the surface, consider the following Q1 returns:

  • the hedge fund VIP basket (GSTHHVIP) underperformed a basket of widely held shorts (GSCBMSAL) by … 30%
  • growth stocks (GSXUMFGL) underperformed value stocks (GSXUMFVL) by … 28%.
  • 52-week momentum winners (GSCBHMOM) underperformed 52-week momentum losers (GSCBLMOM) by … 18%.

  In working through the presumed drivers of these factor breaks, the Goldman trader points out the following key items:

  1. be it the 82bps backup in US 10-year note yields — or the worst start to a year in the history of the aggregate index — the bond market sold off hard, with that came an element of climate change for stock operators.
  2. on one hand, Q1 saw the largest inflows to equity funds on record; on the other hand, as the quarter progressed, some steam came out of the higher velocity vehicles (witness a clear decline in single stock call option volumes, recent outflows from ARKK, and some indigestion in certain corners of the new issue market). ZH discussed this one month ago in  “Another Market Paradox: Wall Street Struggles To Explain Record Equity Inflows Amid Stock Turmoil“
  3. on the fundamental side, the fiscal story in Q1 was eye-popping; a $900bn rush in December was followed by a $1.84bn boomer in March. All of that was deficit financed. Meanwhile, as we learned last week, the next round – perhaps the final round – will be much more complicated with respect to funding and taxes.

  If all that is a little abstract for some, here is BofA’s CIO Michael Hartnett breaking down Q1 i) by the numbers; ii) by winners and losers and iii) by flows:

  Q1 by the Numbers:

  • 608MM global Covid-19 vaccinations,
  • More than $4tn US fiscal stimulus,
  • 200bps jump in US ’21 nominal GDP forecast to >8%,
  • global stocks +$5tn in market cap,
  • Value of negative-yielding global bonds drops $6tn,
  • Worst Q1 return for 30-year Treasury since 1919,
  • Worst Q1 for IG bonds since 1980,
  • Worst Q1 for gold since 1982.

  Q1 Winners & Losers:

  • winners = cyclical stocks…energy stocks 29%, oil 22%, banks 23%, copper 13%;
  • losers = bonds & duration…30yr UST -16%, gold -10%, EM LC bonds -8%, US IG bonds -6%, US biotech -4%;
  • tighter financial conditions led to “events”, e.g. GME, Archegos…, but stocks (XHB +22%, XBD +16%) signal “good” rise in rates thus far.

  Q1 flows: record inflow to global equity ($372bn), EM ($65bn), value ($35bn), tech ($30bn), financials ($24bn); largest equity inflow % AUM (2.4% – Chart 3) in 15 years…

  

  … although this appears to be reversing with the biggest tech outflows since Sept 2020:

  

  Indeed, while superficially the broader markets rose, there was a tangible bifurcation within risk assets with catastrophic results for some traders. 

  Which brings us to the latest note from BofA derivatives strategist Benjamin Bowler, who in a note published last week, reverts to his favorite theme, namely that growing market fragility has made risk-taking extremely risky, despite the overall rise in markets.

  As Bowler puts it, in words that could threaten to “cancel” him for being overly honest, “markets are fragile owing to extreme liquidity driving asset bubbles and trading liquidity drying up at record speed during times of stress.” He then adds that “while an increasing number of people intuitively accept this fact, modelling this risk can be difficult, and underappreciating the nature of fragility can make risk-managing levered positions challenging. In part, this is because traditional volatility metrics woefully understate today’s still high PNL volatility among US stocks.” 

  What does Bowler mean by this? Well, consider that as shown in the chart below, so far in 2021, the total market cap being gained or lost in extreme swings among S&P 500 stocks is nearly on par with that of the first half of 2020 (during the Covid crash), despite stock volatility being over 40% lower now.

  

  Notably, there were unprecedented, extreme swings among small cap stocks, which in Q1 set records with 80% more 10-sigma upside shocks this year than ever before according to BofA, which to Bowler illustrates that “there is more risk to managing risk than meets the eye.”

  

  In other words, something clearly snapped in the market’s “reaction function” to a quarter that saw a gargantuan fiscal stimulus injected into the economy to make the already massive monetary stimulus.

  This, in turn, takes us back to the conclusion from Goldman’s Pasquariello, who summarizes his market sentiment as follows:

  certain impulses changed as the quarter wore on, which presents a different setup for Q2. to be clear, if April and May are THE peak growth months for US economic activity — perhaps as robust as anything we’ll see in the remainder of our careers, — there’s still a lot to play for.

  It perhaps not surprising then that looking ahead, one of Goldman’s top traders believes that “a reflationary framework is the right place to anchor your risk-taking” although there are a few key caveats:

  I’m trying to balance that anchor point against an instinct that liquidity dynamics – and the trading environment – are changing. If that’s all mostly correct, the path higher from here is apt to be choppier and risk/reward is not what it was four or five months ago. in practical terms, this argues for a more tactical trading stance where illiquid positions – and recency bias – are the enemy.

  That said, in his final point, Pasquariello writes that if he is wrong on the view that risk/reward is a bit more balanced now, he thinks it will be on the right tail. as the US quickly moves towards herd immunity. In other words, he expects a blow off top in risk assets, due to the following three data points:

  • i. $4.44tr currently sits in US money market funds ($1.5tr is held by retail, $2.94tr is held by institutions). since February of 2020, that $4.44tr pile has grown by … $830bn.
  • ii. US households have accumulated about $1.5tn in ‘excess’ or ‘forced’ savings, and Goldman expects that to rise to about $2.4tn, or 11% of GDP, by the time that normal economic life is restored around mid-year
  • iii. attendant to the largest jump in US consumer confidence in 18 years: a record share of respondents said they plan to purchase a home in the coming months. a measure of consumers’ plans to buy cars and major appliances also rose. a separate report Tuesday showed U.S. home prices surged to the highest since February 2006.

  Pasquariello then shares several “must see” charts (profiled earlier), which also includes the long-term chart of the 30Y TSY, which to the Goldman trader is “the most interesting chart on planet earth right now.”

  

  Read the full post here.

  Tyler Durden
  Sun, 04/04/2021 – 15:30

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