- Whitehead: Invasion Of The Body Snatchers – Psychological Warfare Disguised As A Pandemic Threat
Whitehead: Invasion Of The Body Snatchers – Psychological Warfare Disguised As A Pandemic Threat
Tyler Durden
Wed, 12/09/2020 – 00:05Authored by John Whitehead via The Rutherford Institute,
“Look! You fools! You’re in danger! Can’t you see? They’re after you! They’re after all of us! Our wives…our children…they’re here already! You’re next!”
– Dr. Miles Bennell, Invasion of the Body Snatchers (1956)
It’s like Invasion of the Body Snatchers all over again.
The nation is being overtaken by an alien threat that invades bodies, alters minds, and transforms freedom-loving people into a mindless, compliant, conforming mob intolerant of anyone who dares to be different, let alone think for themselves.
However, while Body Snatchers—the chilling 1956 film directed by Don Siegel—blames its woes on seed pods from outerspace, the seismic societal shift taking place in America owes less to biological warfare reliant on the COVID-19 virus than it does to psychological warfare disguised as a pandemic threat.
As science writer David Robson explains:
Fears of contagion lead us to become more conformist and tribalistic, and less accepting of eccentricity. Our moral judgements become harsher and our social attitudes more conservative when considering issues such as immigration or sexual freedom and equality. Daily reminders of disease may even sway our political affiliations… Various experiments have shown that we become more conformist and respectful of convention when we feel the threat of a disease… the evocative images of a pandemic led [participants in an experiment] to value conformity and obedience over eccentricity or rebellion.
This is how you persuade a populace to voluntarily march in lockstep with a police state and police themselves (and each other): by ratcheting up the fear-factor, meted out one carefully calibrated crisis at a time, and teaching them to distrust any who diverge from the norm.
This is not a new experiment in mind control.
The powers-that-be have been pushing our buttons and herding us along like so much cattle since World War II, at least, starting with the Japanese attacks on Pearl Harbor, which not only propelled the U.S. into World War II but also unified the American people in their opposition to a common enemy.
That fear of attack by foreign threats, conveniently torqued by the growing military industrial complex, in turn gave rise to the Cold War era’s “Red Scare.” Promulgated through government propaganda, paranoia and manipulation, anti-Communist sentiments boiled over into a mass hysteria that viewed anyone and everyone as suspect: your friends, the next-door neighbor, even your family members could be a Communist subversive.
This hysteria, which culminated in hearings before the House Un-American Activities Committee, where hundreds of Americans were called before Congress to testify about their so-called Communist affiliations and intimidated into making false confessions, also paved the way for the rise of an all-knowing, all-seeing governmental surveillance state.
The 9/11 attacks followed a similar script: a foreign invasion mounts an attack on an unsuspecting nation, the people unite in solidarity against a common foe, and the government gains greater war-time powers (read: surveillance powers) that, conveniently enough, become permanent once the threat has passed.
The government’s scripted response to the COVID-19 pandemic has been predictably consistent: once again, in order to fight this so-called “foreign” foe, the government insists it needs even greater surveillance powers.
As we’ve seen since 9/11 and more recently with the COVID lockdowns, those in power have always had a penchant for enacting extreme measures to combat perceived threats. However, unlike the modern America police state, the American government circa the 1950s did not have at its disposal the arsenal of invasive technologies that are such an intrinsic part of our modern surveillance state.
Today, we are watched and tracked 24/7; data is collected on us at an alarming rate by governmental and corporate entities; and with the help of powerful computer programs, American domestic intelligence agencies sweep our websites, listen in on our telephone calls and read our text messages at will.
Now with the COVID pandemic and its offshoots such as contact tracing and immunity passports, the governmental landscape is even more invasive.
Yet no matter the threat, the underlying principle remains the same: can we hold onto our basic freedoms and avoid succumbing to the soul-sucking dredge of conformity that threatens our very humanity?
This conundrum is at the heart of the 1956 classic Invasion of the Body Snatchers, which was based on a 1954 science fiction novel by Jack Finney (and later remade into an equally chilling 1978 film by Philip Kaufman).
Body Snatchers not only captured the ideology and politics of its post-war era but remains timely and relevant as it relates to the worries that plague us today. Filmed with only seven days of rehearsal and 23 days of actual shooting, Body Snatchers is considered one of the great science fiction classics.
Body Snatchers is set in a small California town which has been infiltrated by mysterious pods from outer space that replicate and take the place of humans who then become conforming non-individuals. Miles Bennell, the main character, is a local doctor who resists the invaders and their attempts to erase humanity from the face of the earth.
At the very least, the film conveys a double meaning, serving as both a mirror of a particular moment in history and a compass pointing to a growing societal illness. Following World War II with the emerging military empire, the atomic bomb and the Korean War, Americans were confused and neurotically preoccupied with domestic threats, the polio pandemic and international political events, not much different from today’s populace preoccupied with domestic and international political drama, terrorism and the COVID-19 pandemic.
Yet Siegel’s film delves beneath the surface to confront an even more sinister threat: the dehumanization of individuals and the horrifying possibility that humanity could become infused as part of the societal machine.
Central to the film is one key speech delivered by Bennell while hiding from the aliens:
In my practice, I see how people have allowed their humanity to drain away…only it happens slowly instead of all at once. They didn’t seem to mind…. All of us, a little bit. We harden our hearts…grow callous…only when we have to fight to stay human do we realize how precious it is.
As Siegel makes clear, it is not Communists or terrorists or even viral pandemics that threaten our well-being. The real enemy is invasive governmental measures—something we now see happening across the country—and, thus, totalitarian conformity. And resistance must be against all government measures that threaten our civil liberties and against all kinds of conformity, no matter the shape, size or color of the package it comes in.
When all is said and done, however, the real threat to freedom (in the fictional world of Body Snatchers and in our present-day America) is posed by an establishment—be it governmental, corporate or societal—that is hostile to individuality and those who dare to challenge the status quo.
The mob hysteria, sense of paranoia, fascist police and the witch hunt atmosphere of the film mirror the ills of a 1950s America that is frighteningly applicable to present American society.
Acknowledging that Body Snatchers portrayed the conflict between individuals and varied forms of mindless authority, Siegel stated, “I think the world is populated by pods and I wanted to show them.” He explained:
People are pods. Many of my associates are certainly pods. They have no feelings. They exist, breathe, sleep. To be a pod means that you have no passion, no anger, the spark has left you…of course, there’s a very strong case for being a pod. These pods, who get rid of pain, ill-health and mental disturbances are, in a sense, doing good. It happens to leave you in a very dull world but that, by the way, is the world that most of us live in. It’s the same as people who welcome going into the army or prison. There’s regimentation, a lack of having to make up your mind, face decisions…. People are becoming vegetables. I don’t know what the answer is except an awareness of it.
All of the threats to freedom documented in my book Battlefield America: The War on the American People came about because “we the people” stopped thinking for ourselves and relinquished control over our lives and our country to government operatives who care only for money and power.
While the specific game plan for turning things around is complicated by a police state that wants to keep us at a disadvantage, the solution is relatively simple: Don’t be a pod person. Pay attention. Question everything. Dare to be different. Don’t follow the mob. Don’t let yourself become numb to the world around you. Be compassionate. Be humane. Most of all, think for yourself.
- America's Highest Paid Hooker Sues Nevada To Reopen Brothels
America's Highest Paid Hooker Sues Nevada To Reopen Brothels
Tyler Durden
Tue, 12/08/2020 – 23:45Alice Little, a legal sex worker in Nevada and quite possibly the highest-paid one in the US, is suing the state of Nevada to reopen its brothels, according to Yahoo Life.
Little is an employee at the BunnyRanch Legal Nevada Brothel in Mound House, Nevada. The brothel has been closed since Mar. 17, despite other “close contact” businesses reopening.
Little recently filed a complaint and motion for a preliminary injunction against Nevada’s Gov. Steve Sisolak in the Third Judicial District Court in Lyon County to reopen brothels. She cites unstated damages for her lost wages and seeks the right for her and other licensed sex workers to “ply their legal trade” at private locations.
The lawsuit said Sisolak has “without any rational basis, decided to single out brothels.”
Last month, a Nevada court ordered the state’s attorney general to respond to Little’s legal action within 30 days.
“It would be understandable if the governor kept all close-contact businesses closed. But the fact that massage parlors, estheticians, salons, escort services and other non-essential businesses have been allowed to reopen lead me to believe that the governor’s decision to keep brothels closed is just blatant discrimination against Nevada’s legal sex workers,” Little said in a press release.
“I just can’t let the governor arbitrarily decimate the livelihoods of an entire class of hard-working women. That’s why I decided to take legal action.”
Little is drumming up her legal battle with the state. She launched a GoFundMe campaign last month that has so far raised $8,404 for her legal defense.
The high-rolling hooker said her lawsuit has been “self-funded up to this point, and now I’m asking for your help to allow me to pursue this case all the way through to a successful victory.”
The Nevada Independent spoke with other sex workers who say the brothel shutdown is “discriminatory.”
Kiki Lover, an employee of the Sagebrush, told the local paper that Sisolak is “discriminating against sex workers,” adding that the industry’s collapse has forced many women out, and some are now homeless.
Little told Yahoo that the risk level of contracting COVID-19 is not that different from other services, such as a massage parlor.
In April, brothels were preparing to reopen, but eight or so months of closure, at the hands of the state government, has forced the industry into collapse.
- CJ Hopkins: Where's The Hitler?
CJ Hopkins: Where's The Hitler?
Tyler Durden
Tue, 12/08/2020 – 23:25Authored (mostly satirically) by CJ Hopkins via The Consent Factory,
All right, that’s it. I’ve run out of patience. No more excuses. Where’s the Hitler?
Yes, you heard me. I’m talking to you. You respectable journalists and political pundits. You Intelligence officials and politicians. You fanatical liberals. You pseudo anti-fascists. All you members of the GloboCap “Resistance” who have been hysterically shrieking that “Trump is Hitler!” since he won the nomination back in 2016.
Well, OK, it’s November 2020. The show is almost over. When do we get Hitler?
No, do not tell me “any day now.” You’ve been telling us that for four straight years. Do we look like a bunch of gullible idiots that you can whip up into a four-year frenzy of mindless hatred and paranoia by screaming “Hitler!” over and over, and then not produce an actual Hitler?
Well, we’re not. We remember what you said. You promised us Hitler, and we want Hitler, or at least a decent facsimile of Hitler.
And don’t even think of trying to pretend that you didn’t actually promise us Hitler.
You did. You want me to prove it? OK.
Remember back in 2016, when The Wall Street Journal, The New York Times, The Guardian, the Washington Post, The Inquirer, and other such “leading respectable broadsheets,” and online magazines like Mother Jones, Forward, Slate, Salon, Vox, Alternet, and countless others, warned that Trump was sending secret anti-Semitic “dog whistle” signals to his underground army of Nazi terrorists by talking about “international banks,” “global elites,” the “political establishment,” and even “corporations” and “lobbyists” … all of which was supposedly code for “the Jews,” who he was going to exterminate if won the election?
I do. I remember that, distinctly.
How about after he won the election, when The Guardian reported that “white supremacy ha[d] triumphed!,” and The New York Times, NPR, Keith Olberman, and other verified news sources warned that America had descended into “racial Orwellianism,” or Zionist Anti-Semitism, or the “bottomless pit of fascism,” or whatever? Or when Michael Kinsley in the Washington Post confirmed that “Donald Trump is actually a fascist”?
Do you remember all that? Because I certainly do.
Remember Aaron Sorkin’s letter to his daughter warning her that millions of “Muslim-Americans, Mexican-Americans and African-Americans [were] shaking in their shoes” as they waited for Trump to round them all up and send them to the camps, along with the “Jewish Coastal Elites”?
And how about when Stern Magazine depicted Trump wrapped in the flag and heiling Hitler? Or when the Philadelphia Daily News also portayed him as Hitler on its cover?
What about when the corporate media reported that Trump had called those tiki torch Nazis in Charlottesville “very fine people” (despite the fact that he demonstrably did not)? Or when they caught Trump calling somebody a “globalist”? (That episode was particularly disturbing to me, personally, as I had no idea that I was literally a Nazi until the corporate media and the ADL explained that talking about “global capitalism,” or “neoliberalism,” or, God help me, “banks,” was just Nazi codespeak for “Kill the Jews!”)
Oh, and speaking of Nazi “dog whistles,” remember when the Department of Homeland Security embedded secret Nazi code in one of its official press releases? Or when that Jewish-Mexican-American law clerk signaled to Trump’s underground Nazi army that they had infiltrated the US Supreme Court, and thus the dreaded “Boogaloo” was probably imminent?
And who could forget when The New York Times published a full-blown dystopian fantasy in which Trump, Putin, Marine Le Pen, the AfD, and other notorious “globalist”-hating Hitler-alikes secretly formed an Evil Axis (the “Alliance of Authoritarian and Reactionary States”), dissolved the European Union and NATO, declared international martial law, and ethnically cleansed the world of immigrants? Or when they ran this propaganda film, “If You’re Not Scared About Fascism in the U.S., You Should Be!”
And the “emboldening”! I almost left out the “emboldening.” Surely, you remember when the corporate media reported that Trump was emboldening white-supremacist terrorism with his Hitlerian Tweets … as if homicidal racist psychopaths had been sitting around in their mother’s basements, semi-automatic rifles in one hand, smartphones tuned to Twitter in the other, just waiting to be “emboldened” by the president.
Oh, and the “concentration camps.” You know, the ones that Biden and Harris personally flew down and liberated the morning after they won the election. The ones where they put the kids in cages and forced all the prisoners to drink out of toilets. I couldn’t forgive myself if I didn’t mention them.
And those are just a few of the highlights.
Look, the point is, you “Resistance” people promised us Hitler for four years straight, and now you’re acting like you just defeated Hitler, and, I’m sorry, but that is not going to cut it. We’re going to need some actual Hitler before we transition to the Brave New Normal, or we might start to … you know, doubt your credibility.
I mean, come on. Lawsuits? Recounts? Audits? Angry tweets? Golf, for Christsakes? This is not remotely Hitlerian behavior. You people promised us an attempted coup, a Reichstag fire, Nazi militias occupying the halls of Congress, stadiums full of Sieg-heiling rednecks, white-supremacist terrorists terrorizing everyone … and now all we get is Rudy Giuliani sweating rivulets of hair dye, or something, on TV? All right, granted, that was pretty scary, but it’s not exactly Joseph Goebbels fanatically barking about “total war,” or legions of Hawaiian-shirt-wearing fascists goose-stepping up Pennsylvania Avenue.
The way I see it, you people have got another four or five weeks to goad Donald Trump into going full-Hitler and staging a coup, or gratuitously mass-murdering the Jews, or somebody, or the public is going to feel … well, bamboozled, and insulted, and even a little angry. They are going to feel like you “Resistance” people regard them as a bunch of total morons that you can manipulate, over and over again, with blatantly ridiculous propaganda that anyone with half a brain could see through … some of which, frankly, has been downright offensive.
Seriously, fascism, Hitler, the Holocaust … these are solemn, sensitive subjects. They’re not just convenient emotional buttons that you can press to whip folks into a frenzy of mindless paranoia and murderous hatred whenever you feel like demonizing some foreign leader or unauthorized president.
The same goes for racism and anti-Semitism. These are real issues, which people care about. They’re not just glorified marketing buzz words that you can pull out of your bag of cheap tricks and slap onto your enemies like they don’t mean anything. If you spend four years accusing someone of literally being Adolf Hitler, or the resurrection of Adolf Hitler, and brainwash millions of credulous liberals into believing that America is on the brink of fascism, you can’t just suddenly say, “We were only kidding. We didn’t mean that he was actually Hitler, or that fascism was really on the rise.” People won’t stand for it. They’ll go ballistic. You’ll have some sort of revolt on your hands.
Or, all right, on second thought, maybe not. Maybe you can get away with pointing at some billionaire ass clown and howling “Hitler!” over and over, on a daily basis, for years and years, without ever providing any actual evidence that the ass clown in question resembles Hitler, or has done anything comparable to Hitler, or is in any way remotely similar to Hitler. Why not? You successfully Hitlerized Corbyn, not to mention Saddam, Gaddafi, and Milošević, and a long list of other “threats to democracy.” You’ll probably get away with Hitlerizing Trump.
After all, it appears you’ve convinced the public (or at least the vast majority of the public) that they are being attacked by an apocalyptic plague that causes mild to moderate flu-like symptoms (or, more commonly, no symptoms at all) in 95% of those infected and that over 99.7% survive, and thus we have to cancel constitutional rights, let government officials rule by decree, devastate the economy (or at least small businesses), have global corporations censor all dissent, force everyone to wear medical-looking masks, put whole societies under house arrest, psychologically terrorize children, and otherwise transform the planet into one big paranoid, totalitarian theme park.
If you can get people to go along with that … well, they’ll probably go along with anything.
- Tenants, Landlords Face Imminent Crisis As Pandemic Lifelines Expire
Tenants, Landlords Face Imminent Crisis As Pandemic Lifelines Expire
Tyler Durden
Tue, 12/08/2020 – 23:05January is going to be a mess. America’s small-time landlords, along with their tenants, are in trouble as safety nets are set to expire. Tenants haven’t paid rent in months, with a looming eviction moratorium expiring at the end of December. According to Reuters, the lack of rental income for landlords has also been troublesome, with many skipping mortgage payments, potentially resulting in a firesale of properties in the year ahead.
For 12 million Americans and their families – this Christmas will be their worst – as the extended unemployment benefits that have kept many of them afloat are set to expire later this month. Then on New Year’s Day, the Centers for Disease Control and Prevention’s eviction moratorium expires, which could result in a massive wave of evictions in the first half of 2021.
At the moment, $70 billion in unpaid back rent and utilities are set to come due, according to a new report via Moody’s Analytics Chief Economist Mark Zandi.
Last month, Maryland utility companies began to terminate customers with overdue bills, many of which were unable to pay because of job loss due to the coronavirus downturn.
New research from the Aspen Institute warns 40 million people could be threatened with eviction over the coming months as the real economic crisis is only beginning.
According to Stacey Johnson-Cosby, president of the Kansas City Regional Housing Alliance, landlords are also in deep turmoil. She said more than 40% of the landlords surveyed in her coalition said they will have to sell their units because of the lack of rental income.
“They are sheltering our citizens free of charge, and there’s nothing we can do about it,” said Johnson-Cosby. “This is their retirement income.”
She said small landlords are frightened to speak out about non-paying tenants because social justice warriors and their “Cancel Rent” groups have attacked landlords.
“What they don’t realize is that if they run us out and we fail, it will be private equity and Wall Street firms that buy up all our properties, just like they did with houses after the last foreclosure crash.”
Reuters interviewed Clarence Hamer, who may have to sell his house in the coming months because his “downstairs tenant owes him nearly $50,000.” He owns a duplex in Brownsville, Brooklyn – and without those rental payments, Hamer has been unable to pay his mortgage.
“I don’t have any corporate backing or any other type of insurance,” said Hamer, a 46-year-old landlord who works for the city of New York. “All I have is my home, and it seems apparent that I’m going to lose it.”
Hamer is not alone – millions of Americans are headed for a “dark winter” as they could be evicted or lose their homes in the coming months as government safety nets are set to expire.
Meanwhile, on Tuesday, stimulus talks quickly faded after it was reported that Senate Majority Leader Mitch McConnell touted his own plan rather than a bipartisan compromise for a deal.
John Pollock, a Public Justice Center attorney and coordinator of the National Coalition for a Civil Right to Counsel, recently said January could bring a surge of eviction and homelessness,” unlike anything we have ever seen” before.
- Deflation Is Back In China As CPI Turns Negative For First Time Since The Financial Crisis
Deflation Is Back In China As CPI Turns Negative For First Time Since The Financial Crisis
Tyler Durden
Tue, 12/08/2020 – 22:50Yesterday, when discussing the biggest jump in Chinese FX reserves in 7 years we wondered if this was an indication that the PBOC was starting to lean against the surging yuan. Today, after the latest Chinese inflation data released moments ago, we are confident that it is only a matter of time before Beijing will once again aggressively intervene and/or devalue its currency.
According to the National Bureau Of Statistics, in November China’s CPI unexpectedly tumbled to -0.5% Y/Y in November, below market expectations and the first year-over-year decline in consumer prices since the financial crisis. While rapid decline of food prices continued to be the main driver for lower headline CPI inflation, non-food inflation also edged down to -0.1% yoy from 0% yoy in October, which begs the question: how much of China’s now deflation is the result of the surging yuan, and how much longer will Beijing tolerate the soaring currency (or, said otherwise, the plunging dollar). On the flip side, PPI inflation was at -1.5% yoy in November, which while still negative (the last positive PPI print was in January), was less negative than October as inflationary pressures increased along with the strong expansion of industrial activity.
Here are the key numbers:
- CPI: -0.5% yoy in November, exp. +0.0%; down from October’s +0.5% yoy.
- Food CPI: -2% yoy in November; October: +2.2% yoy.
- Non-food CPI: -0.1% yoy in November; October: +0.0% yoy.
- PPI: -1.5% yoy in November. exp. -1.8% yoy; up from October’s -2.1% yoy.
Some more details: in year-on-year terms, food inflation went down to -2.0% yoy in November from +2.2% yoy in October, largely because pork prices tumbled 12.5% on a year-over-year basis, lowering year-over-year CPI inflation by 0.6pp.
Egg prices also plunged, dropping 17.1% yoy, and lowering the headline CPI by another 0.1pp. Fresh vegetable prices rose albeit at a slower pace: Inflation in fresh vegetables was +8.6% yoy in November (vs 16.7% yoy in October), adding 0.2pp to headline CPI inflation.
Non-food CPI inflation edged down to -0.1% yoy in November, from 0.0% in October. Fuel costs fell further by 17.6% yoy, vs -17.2% yoy in October. Core inflation (headline CPI excluding food and energy) was unchanged at +0.5% yoy in November.
On the other side, PPI inflation rose modestly and was at -1.5% Y/Y in November, less negative than October. In month-over-month annualized terms, PPI rose by 5.6%, vs -1% in October. Price declines narrowed for producer goods (-1.8% yoy vs -2.7% yoy in October) but price decline for consumer goods widened (-0.8% yoy in November, vs -0.5% yoy in October) mainly on lower food and clothing price inflation. By major industry, PPI inflation increased on a year-over-year basis in most sub-industries except food processing and telecom industries.
According to Goldman, headline CPI inflation may remain at low levels in the coming months on falling food prices and a high base while PPI inflation could rise further as inflationary pressures continue to build in the industrial sector.
A bigger problem for China is that while PPI may be rising, it’s only a function of higher commodity prices and industrial strength on the back of massive credit injections; meanwhile consumer deflation is starting to emerge as a major concern for a country that has not had a negative CPI print since 2009.
One wonders how long Beijing will allow this, and how long will Chinese rates remain as high as they are, before the Politburo capitulates and realize it needs to aggressively devalued its soaring currency (and offset the tumbling dollar) if it hopes to keep deflation in check.
It may even have to decide between keeping interest rates highs, and thus yields on Chinese bonds attractive for foreign investors (as a reminder, everyone knows by now that one of Beijing’s top priorities is to have a steady source of offshore capital entering the negative current account nation), or finally conceding it needs to cut rates in order to let some of the air in the yuan out.
- Fireworks, Batteries And Liquid Ethanol Among Dangerous Goods Lost At Sea From Apus Containership
Fireworks, Batteries And Liquid Ethanol Among Dangerous Goods Lost At Sea From Apus Containership
Tyler Durden
Tue, 12/08/2020 – 22:45From Freight Waves
Fireworks, batteries and liquid ethanol were inside the 64 dangerous goods containers that went overboard with more than 1,750 others from the ONE Apus last week, whose plight we discussed over the weekend. None of the containers has been sighted.
In one of the single worst cases of container losses on record, 1,816 twenty-foot equivalent units (TEUs) were lost overboard after the year-old Apus reportedly encountered severe weather at about 11:15 p.m. Nov. 30 en route from Yantian, China, to the Port of Long Beach in California, the vessel’s owner, Chidori Ship Holding, and manager, NYK Shipmanagement, said.
Of the 64 containers identified as carrying dangerous goods, 54 held fireworks, eight had batteries and two contained liquid ethanol, according to a ONE Apus information center update Monday.
The update said Chidori and NYK Shipmanagement are working with the U.S. Coast Guard’s Joint Rescue Coordination Center in Honolulu, which “has advised that there have not been sightings of any containers” as of yet.
After the accident, the Apus turned back for Asia. The information center update said the container ship is “cautiously proceeding to the Port of Kobe, Japan,” and has an estimated berthing time of noon Tuesday (10 p.m. EST Monday).
“Once berthed, it’s expected to take some time to offload the dislodged containers that remain on board,” the announcement said. “Then a thorough assessment will be made on the exact number and type of containers that have been lost or damaged.”
Ownership of the goods lost has not been revealed and thus it’s not known whether some New Year’s Eve celebrations will be dimmer with 54 U.S.-bound containers of fireworks lost at sea. Henry Byers, FreightWaves’ maritime market expert, said the top importers using ONE as their ocean carrier into Long Beach the past 30 days were Flexport International, MOL Consolidation, Topocean Consolidation, UPS Ocean Freight Services, DHL Global Forwarding, Kuehne + Nagel and C.H. Robinson.
Rounding out the top 20 are Hecny Transportation, Rimports, Daniel M. Friedman & Associates, Apex Maritime, Hankook Tire America, Yusen Logistics, Ameziel, BDP Transport, Kintetsu World Express, Penguin Random House, Expeditors International, Harman International Industries and R.T. Express International.
Still other ONE customers through Long Beach are Living Spaces Furniture, APL Logistics, Signal Products, Wilson Sporting Goods, Sumitomo Rubber North America, Lexmark Juarez Distribution Center, Guardian Technologies, Konica Minolta Business Solutions and Hasbro.
Built in only 2019, the ONE Apus is 364 meters long and 51 meters wide and has a carrying capacity of 14,052 TEUs.
According to the World Shipping Council, container losses actually are few and far between. In fact, a WSC report issued in July said an average of only 1,382 containers were lost at sea per year between 2008 and 2019.
For many in the maritime industry, the Apus incident has brought to mind the June 2013 sinking of the MOL Comfort. The 7,041-TEU container ship cracked in half during an Arabian Sea storm. While efforts were made to tow the two halves of the ship to port, both eventually sank.
- ECB Preview: Here Comes Another €500 Billion In QE
ECB Preview: Here Comes Another €500 Billion In QE
Tyler Durden
Tue, 12/08/2020 – 22:25Last March, the ECB’s then-brand new boss Christine Lagarde sparked a mini crisis when quipped that it was not the job of the European Central Bank to narrow the gap in borrowing costs between the eurozone’s stronger and weaker members. The resulting bond selloff and market mess prompted the ECB’s chief economist Philip Lane to secretly call some of the largest asset managers to calm them that Lagarde had no idea what she was talking about and to stop selling.
Nine months on, investors have gone all-in on bets that the ECB boss has changed her mind, and is here “to close spreads” after all.
Ahead of the central bank’s next policy meeting tomorrow, the FT notes that spreads in the eurozone’s periphery have been squeezed by relentless demand for riskier bonds. The buying helped push Portugal’s 10-year yield below zero for the first time. Spain is not far behind, and Italy — the last big eurozone market to offer a significant positive yield over a decade — has seen its spread closing in on its lowest since the region’s debt crisis a decade ago.
With the ECB expected to expand its €1.35tn emergency asset purchase program by (at least) another €500bn tomorrow, investors are increasingly relaxed about holding peripheral bonds despite the explosion in debt levels driven by the pandemic.
Are they right? Courtesy of NewSquawk, here is a breakdown of what to expect tomorrow:
- ECB policy announcement due Thursday 10th December; rate decision at 12:45GMT/07:45EST, press conference 13:30GMT/08:30EST
- PEPP and TLTRO set to be tweaked, rates, PSPP and tiering expected to be left untouched
- The upcoming release will also be accompanied by the latest round of staff economic projections
OVERVIEW: After telegraphing in October that further stimulus would be unveiled at the upcoming meeting, the consensus looks for a €500bln addition to the PEPP programme and 6-month extension until December 2021 (a longer extension has been speculated by some), while a majority of economists expect no change to its PSPP. Elsewhere, market participants expect policymakers to tweak the parameters of the Bank’s TLTROs. Rates are set to be left unchanged, whilst an adjustment to the tiering multiplier is not expected this time around. Accompanying economic projections are set to see a downgrade to the near-term inflation outlook, but greater focus could be placed on the initial 2023 forecast. For growth, any near-term optimism on vaccines could be tempered by how the ECB addresses the yet to-be passed recovery fund and disappointing Q4 2020 outturn.
PRIOR MEETING: As expected, policymakers opted to stand pat on policy settings, with rates and bond-buying operations held at current levels. The main takeaway from the initial announcement was the introduction of a new paragraph in the statement noting that risks to the economic outlook were “clearly tilted to the downside” and the new round of Eurosystem staff macroeconomic projections in December “will allow a thorough reassessment of the economic outlook and the balance of risks.” Additionally, “on the basis of this updated assessment, the Governing Council will recalibrate its instruments, as appropriate, to respond to the unfolding situation.” In terms of the policy measures set to be unveiled in the final meeting of 2020, President Lagarde did not delve into specifics. Despite policymakers acknowledging the bleak outlook for the region, the ECB chief stated that no discussion was held on unveiling measures at the October meeting with policymakers wanting to gather further evidence on the economic impact of the second wave of COVID across the Eurozone.
RECENT DATA: Q3 Eurozone GDP was confirmed as showing a 12.5% Q/Q expansion from Q2 with the Y/Y figure printing a 4.3% contraction. On the inflation front, the Y/Y flash CPI print for November remained at -0.3%, with core CPI holding steady at 0.4%. Survey data has highlighted the differing fortunes of the services and manufacturing sectors with the EZ-wide Markit PMI report showing the former in contractionary territory and the latter in expansionary, the broader composite reading fell to 45.1 in November from 50.0 in October. Markit noted, that while the EZ economy has slipped back into a downturn, the decline is of a far smaller magnitude than seen in the spring. The unemployment rate in the Eurozone for October came in at 8.3%, with the figure obscured by regional employment support schemes.
RECENT COMMUNICATIONS: Beyond the clear signposting at the October meeting by Christine Lagarde that stimulus is set to be unveiled in December, the ECB President has reaffirmed that all options are on the table. That said, Lagarde (Nov 11th) talked up the efficacy of PEPP and TLTROs throughout the pandemic, suggesting that they will “likely remain the main tools for adjustment”. Additionally, the central banker emphasised that “what matters is not only the level of financing conditions but the duration of policy support, too”, suggesting that any expansion to the PEPP could also be met with an extension from the current endpoint of end-June 2021. Chief Economist Lane – who many view as the thought-leader at the ECB –has echoed Lagarde’s views on the efficacy of PEPP and TLTROs, whilst also noting that it is essential that the macroeconomic recovery is not derailed by a premature steepening of the yield curve. Germany’s Schnabel, one of the more vocal members of the Governing Council, recently remarked that the ECB is not obliged to do what the market expects it to, before going on to state that a 12-month extension to PEPP is one option being considered, and that the ECB could also look at a longer duration or more favorable rate for TLTROs. Elsewhere, on vaccines, Ireland’s Makhlouf says the ECB will have to evaluate the emergence of the COVID-19 vaccine, suggesting that no firm view on the matter is currently held by the Governing Council at this stage; however, Vice President de Guindos noted that vaccine developments will be taken into account at the meeting. On the prospects for a further dive into negative territory for the deposit rate, Spain’s de Cos refused to rule out a rate reduction, but acknowledged that rates were close to the lower bound, Austria’s Holzmann has stated that such a move would not have an effect. In terms of lesser talked about measures the Bank could take, outgoing Hawk Mersch recently pushed-back on the prospect of the ECB expanding its purchase remit to include “fallen angels”
RATES: From a rates perspective, consensus looks for the Bank to stand pat on the deposit, main refi and marginal lending rates of -0.5%, 0.0% and 0.25% respectively. A recent research piece from the Bank noted that the reversal rate for the deposit rate stands around -1%, suggesting there is around 50bps of space until further rate reductions could become counterproductive. That said, whilst all options are said to be on the table (and it might help stem some of the recent EUR appreciation), commentary from central bank officials has done little to suggest that rate tweaks are on the cards. Additionally, when faced with the option of lowering the deposit rate in March as the crisis was unfolding, policymakers refrained from doing so. As a guide: markets currently assign a 13.5% chance of a 10bps cut to the deposit rate at the upcoming meeting and around a 55% probability by the end of next year.
BALANCE SHEET: With the balance sheet seen as the preferred easing tool for the Governing Council, focus remains on any adjustments to its bond-buying operations. Its PEPP currently has an envelope of EUR 1.35trl and is set to run at least until the end of June 2021, whilst its regular Asset Purchase Programme (of which the Public Sector Purchase Programme is a component) runs at a monthly pace of EUR 20bln together with the purchases under the additional EUR 120bln temporary envelope until the end of 2020. A Reuters survey of economists stated that expectations are for a EUR 500bln addition to the PEPP programme and 6-month extension until December 2021. UBS also expects the ECB to extend its commitment to reinvesting the principal of maturing securities purchased under PEPP by another year, from currently end-2022 to end-2023. Note, 33 of 44 surveyed do not think that the ECB will expand the PSPP, according to the survey. Going back to PEPP, expectations have continued to gather steam since the October meeting, and it remains to be seen if policymakers could trigger a “dovish surprise” on this front. Policymakers could opt to increase the PEPP by more than EUR 500bln, however, in recent weeks policymakers have placed greater emphasis on reassuring markets about the duration of its support. Accordingly, ECB’s Schnabel has touted the possibility of a 12-month (consensus looks for 6-month) extension to PEPP. Additionally, the prospect of including “fallen angels” into its Corporate Sector Purchase Programme (CSPP) lingers around the bank, however, this idea recently received pushback from outgoing hawk Mersch.
TLTROs: Given recent rhetoric from policymakers on the efficacy of Targeted longer-term refinancing operations (TLTROs), a tweaking of its current operations has also formed part of the consensus ahead of the meeting. As it stands, the facility has just two auctions left (10th December, and 18th March 2021) with current borrowing conditions running with a rate of -0.5% for three years or as low as -1% for banks that reach certain lending requirements. The Reuters survey found that 37 of the 48 economists surveyed expect the ECB to change the terms of its TLTROs, however, there are differing views on how this will be carried out. SocGen highlights four potential ways in which the ECB could act on this front, 1) it could go for a longer maturity, or signal continuous TLTROs, 2) it could lower the threshold for the best available rate, 3) lower the best interest rate below -1%, and 4) include new loan types such as mortgage lending. SocGen themselves predict “largely unchanged conditions” with “around five quarterly operations until March 2022, for corporate lending only, 3-year loans at -1% at best, lending threshold for best rate at 0%”.
TIERING: Another option for the ECB could be an adjustment to the existing tiering multiplier of six (exempt from negative interest rates) amid rising levels of excess liquidity. However, a complicating factor is that a large part of the recent increase in excess liquidity is attributed to the ECB’s TLTRO-III facility. Therefore, an increase in the tiering multiplier could undermine policymaker’s efforts to get banks to lend to the corporate sector. One option, UBS says, would be for the ECB to exempt funds from TLTRO-III, in which case it could raise the tiering multiplier to nine from six in order to keep banks’ deposit costs constant. However, UBS suggests that even this could prove to be too generous given the lending incentives in the TLTRO scheme that already reduce net deposit costs. As such, the Swiss bank looks for no adjustment on this front in December. Additionally, SGH Macro notes that an increase in the multiplier would be unlikely to occur unless met with an accompanying deposit rate cut.
EUR: The recent appreciation of the EUR which has seen EUR/USD breach 1.20 and trade at levels not seen since 2018, has raised questions as to whether or not the ECB will attempt to talk down the currency. Note, at the September meeting after EUR/USD breached 1.20, President Lagarde noted that “the ECB does not target an FX level but will continue to monitor developments, including the EUR”. Morgan Stanley, however, suggests that we are not at levels that will concern policymakers given that the move in EUR/USD is more of a by-product of USD weakness, rather than EUR strength. In fact, the trade-weighted Euro is “a little weaker than in the summer,” the bank notes. As such, the EUR may prove to not be a major feature of the upcoming meeting.
ECONOMIC PROJECTIONS: Please see below for the September Staff Economic Projections: Inflation: 2020 +0.3% (unch), 2021 +1.0% (prev. 0.8%), 2022 +1.3% (unch) GDP: 2020 -8.0% (prev. -8.7%), 2021 +5.0% (prev. +5.0%), 2022 +3.2% (prev. +3.3%) This time around, from a growth perspective, despite a potentially disappointing Q4 outturn, better than expected growth in Q3 should see the ECB revise its 2020 estimate upwards to -7.2% from -8.0%, according to UBS. For 2021, despite the positive COVID vaccine updates, the fallout from Q4 2020 should prompt just a modest upgrade of its forecast to 5.0% from 5.5%, albeit this is largely dependent on how the ECB factors in the (yet-to-be passed) recovery fund. For 2022 and 2023, the Swiss bank pencils in growth of 3.9% and 1.9% respectively. On the inflation front, UBS expects the 2020 reading to be revised lower to 0.2% given softer prints in recent months relative to ECB expectations, whilst the better growth environment should offset any drag from softer oil prices in 2021 and 2022, leaving them unchanged at 1.0% and 1.3%. Of potentially greater interest will be the initial 2023 estimate, which UBS expects to remain below the pre-COVID inflation trend of 1.6% and therefore warrant additional stimulus.
STRATEGIC REVIEW: One issue lingering at the Bank is its ongoing strategic review. The review has been delayed by the pandemic with its findings now not due to be released until September 2021. However, on the 30th September, President Lagarde delivered a speech in which she highlighted some preliminary considerations for the review. Lagarde noted that the ECB would be considering whether to depart from its current inflation target of “below, but close to 2%” and move towards a more “symmetric” target that would tolerate overshooting the 2% threshold. Ahead of the October meeting, Morgan Stanley suggested that accelerating the release of the outcome of the review could amount to another policy option for the Bank. However, MS noted that given the current H2 2021 timeframe, it seems implausible that the findings could be released in the near-term, particularly given reports of differing views on the Governing Council, which will make fostering consensus a more difficult task.
* * *
Finally, here is the traditional scenario matrix analysis from ING Economics, which as usual should be rather useful for FX traders hoping to gauge how to trade the Euro based on what Lagarde unveils tomorrow.
- 56% Of Americans Say They Would Live In A Tiny Home
56% Of Americans Say They Would Live In A Tiny Home
Tyler Durden
Tue, 12/08/2020 – 22:05Although the micro home movement isn’t necessarily new, many have put tiny homes on their radar since COVID-19. Whether it’s a weekend escape from city living, or even a tiny backyard office, these dwellings have seen a recent boom in popularity. IPX 1031 recently did an extended analysis of the sector which is presented below, but here is a summary of what they found:
- 56% of Americans say they would live in a tiny home. 86% of first-time home buyers would consider a tiny home for their first home.
- 72% of home buyers would consider buying a tiny home as an investment property.
- Most appealing factors of tiny home living: 1. Affordability 2. Efficiency 3. Eco-friendliness 4. Minimalist lifestyle 5. The ability to downsize.
- Most desired tiny home amenities: 1. Heating/AC 2. Kitchen space 3. Designated bedroom 4. Laundry 5. Outdoor space.
- 53% of Americans can afford the median price for a starter home ($233,400) vs. 79% of Americans can afford the median price of a tiny home ($30,000-$60,000).
- Top states for tiny homes: 1. Vermont 2. New Hampshire 3. Maine 4. Wyoming 5. Washington 6. Idaho 7. Montana 8. Oregon 9. Rhode Island 10. Alaska.
Below is the full survey report from IPX 1031:
In order to get more insight on tiny living, we surveyed 2,000 Americans across the country to find out how likely they would be to live in a tiny home and what amenities they would like to have in a tiny home. We also analyzed Google search volume to determine where tiny homes are most popular around the country.
Tiny Home Lifestyle
Living in a tiny home is certainly an adjustment that isn’t right for every lifestyle, but more than half of respondents say they would consider living in one. Unique factors such as affordability (65%), efficiency (57%), eco-friendliness (48%) and the ability to live a minimal lifestyle (44%) are among the top reasons why respondents say they would like to live in a tiny home.
It’s also interesting to note that among those who have never owned a home, 86% say they would consider buying a tiny home for their first home.
The Ideal Tiny Home
Considering that most tiny homes are 400 square feet or less, many can be built on wheels, which allow homeowners to live a mobile lifestyle. According to respondents, 54% would prefer their tiny home to be mobile and a majority (54%) would prefer that their home is under 400 square feet.
With such a small amount of living space, it’s no surprise that the ideal number of people to live in a tiny home is two. In terms of amenities, heating/AC (60%), kitchen space (58%), designated bedroom (48%), laundry (43%) and outdoor space with a view (42%) are the most desired and “must haves,” according to respondents.
Tiny Home Budget
The price to purchase or build a tiny home can vary and depends on a number of factors. Most tiny homes cost between $30,000 to $60,000 while the median price for a starter home is $233,400, according to the National Association of Realtors. Exactly half of respondents say they would spend less than $40,000 on a tiny home and 79% say they would be able to buy or finance a tiny home rather than a traditional starter home.
Where Are Tiny Homes Most Popular?
When most people think of tiny homes, images of a secluded lot in the woods or a home nestled near a lake come to mind. We were curious to see where tiny homes are the most popular, so we analyzed Google search volume for more than 1,300 terms and keywords related to tiny homes.
The results show that tiny homes have seen the most interest in rural states such as Vermont, New Hampshire, Maine, Wyoming and Washington. Illinois, Pennsylvania, Ohio and New York showed the least interest in searches for tiny homes.
Tiny Home Investment Property
With a low cost to build and maintain, tiny homes could bring big profits for property investors. According to respondents, 72% would consider buying a tiny home to serve as an investment property. Among those, 63% say they would rent out their tiny home as a long-term rental while 37% say they would rent their tiny home as a short-term rental. On average, respondents say their ideal monthly rent would be set at $900 per month for a long-term rental and $145 per night for a short-term rental.
Tiny Office
With many Americans adapting to remote work or working from home, the concept of a tiny office (or a “backyard office”) is an appealing alternative to working inside a home office, kitchen or living room. In fact, more than half (54%) say they would buy a tiny office and 62% of remote workers would consider buying one. Ideally, more than a quarter of respondents say they would spend less than $8,000 on a tiny backyard office.
With many Americans adapting to remote work or working from home, the concept of a tiny office (or a “backyard office”) is an appealing alternative to working inside a home office, kitchen or living room. In fact, more than half (54%) say they would buy a tiny office and 62% of remote workers would consider buying one. Ideally, more than a quarter of respondents say they would spend less than $8,000 on a tiny backyard office.
- "This Is Astounding": China Is Snapping Up Most Of The World's "Missing" Barrels Of Oil
"This Is Astounding": China Is Snapping Up Most Of The World's "Missing" Barrels Of Oil
Tyler Durden
Tue, 12/08/2020 – 21:45In almost every oil cycle, the market is confronted with the problem of “missing barrels”, or the gap between the change in inventory implied by global supply-demand balances on the one hand and the observed change in inventory levels by commercial and government entities (adjusted for floating storage and oil in transit) on the other hand.
As the Oxford Institute for Energy Studies writes in a report published today, based on IEA global oil balances, the surplus during the first three quarters of 2020 averaged around 4.4 mb/d, with the surplus in the first half of 2020 reaching a record level of 7.6 mb/d due to the severity of the demand shock and the break-up of the OPEC+ agreement in March. This implies an inventory increase in H1 2020 of 1,390 million barrels (mbbls), before declining by 194.2 mbbls in Q3.
According to the IEA, out of the total stockbuild in the first half of the year, total OECD stocks accounted for 344.3 mbbls or 25% of the total increase, floating storage and oil in transit accounted for 105.3 mbbls or 8% of the total increase and the remaining 940.4 mbbls or 68% of the total increase to balance is essentially unaccounted for including changes in non-reported stocks in OECD and non-OECD areas that the IEA labels as “Other & Miscellaneous to balance” (as shown in Figure 1).
The volume of missing barrels in H1 2020, the OIES writes, “is the largest ever recorded gap between observed and implied stocks since at least 1990, being three times larger than previous historical downcycles such as in H1 1998 and more recently the H2 2018 downturn and nearly 10 times larger than the imbalance of H2 2008 in the aftermath of the global financial crisis.”
The “missing barrels” problem can arise due to a number of factors. The most obvious reason is that models could be generating “artificial barrels” by underestimating demand and overestimating supply. The severity of the oil crisis in 2020 due to the global coronavirus pandemic led to the break of some key relationships (for instance between economic growth and oil demand) and models had to be calibrated to account for the severity of the shock (for instance, including indicators of the severity of restrictions across countries).
Another factor is the coverage and quality of data on stocks. The reason for this is that very little publicly reported, accurate information exists for oil stocks outside of the United States. And yet the US oil stocks many not be an accurate reflection of the world situation. This observation increasingly holds as demand growth has shifted from OECD to non-OECD, especially given the key role that China is playing in global crude demand. In this latest cycle, China’s position as a key equilibrating mechanism was further highlighted as it absorbed surplus barrels from all over the world as it took advantage of relatively cheap crude to fill its large and growing storage capacity.
To put this in perspective, OIES utilized crude inventory and fleet metrics data from Kpler and attempted to identify some of the missing barrels implied from IEA balances. As Figure 2 shows, even accounting for additional floating storage and oil in transit (+250.4 mbbls), as well as OECD and non-OECD crude stock changes excluding China (+85.2 mbbls), all of which are not previously reported by IEA, we are still missing 597.8 mbbls or 64% of the total missing barrels in H1 2020. This issue becomes more complex in Q3 2020 for which the IEA balances imply a 194.2 mbbls deficit of which 171.3 mbbls are accounted for and 22.9 mbbls are missing. Kpler data, however, show a much larger draw of floating storage, suggesting one (or a combination) of three possibilities: the actual deficit is much larger than estimated by the IEA (by about 150 mbbls); there was a large build in non-OECD stocks, or the implied market surplus in H1 2020 was overestimated and carried over. Indeed, a large build in unaccountable stocks in Q2 2020 followed by a draw in Q3 2020 suggests that barrels were stored and drawn in places where they currently cannot be tracked.
The China Conundrum
The issue of “missing barrels” has long plagued Chinese data, but much like in the rest of the world, has become more pressing and perplexing in 2020. Net crude imports in the year-to-October averaged 11.09 mb/d, rising from 2019 levels by over 1 mb/d and maintaining their 2019 growth rates. According to the OIES report, “this is astounding given that economic activity has been considerably weaker and runs have averaged 13.3 mb/d in the first ten months of 2020, growing by an impressive 0.47 mb/d, but still lower than the 0.82 mb/d increment seen over the same period last year.”
Put simply: the data suggest China has overbought crude to put in storage.
But the key question is, how much has gone into storage and perhaps more critically, how much is likely to come back out?
In response to this rhetorical question, the Oxford Institute authors notes that assessing how much crude has gone into storage has become both an art and a science, given the limited official data. When looking at implied stockbuilds (i.e deducting crude used for refinery runs from the sum of domestic production and net imports), in the year-to-October, China has stored on average 1.6 mb/d, or a staggering 488 mbbls of crude.
While it has been clear that large volumes of crude oil have headed to China, judging by port congestion at Chinese shores, differentials and benchmarks, such volumes seem overstated as they would have likely led to tank tops earlier this year. According to OIES estimates, China had close to 1,100 mbbls of crude storage capacity at the end of 2019 (that’s over 1.1 billion and far, far more than Cushing and the US Strategic Petroleum Reserve). Assuming a roughly 60% utilization rate, crude stocks would have reached 650-680 mbbls. A build of an additional 500 mbbls, even when taking into account 250 mb of new tank space added over the year, would have overwhelmed China’s storage capacity leading to a slowdown in crude arrivals already earlier this year.
And even though imports into China are slowing somewhat and storage utilization rates are likely at over 75% currently, there are signs of a recovery in crude buying for early 2021. It is therefore useful to look more closely at implied stockbuilds.
First, many crude balances for China do not account for crude losses during the refining process or burnt at the field, which between 2000 and 2017, according to the National Bureau of Statistics, have averaged 0.30 mb/d8. In the five years prior to 2017, losses in refining increased to average 0.35 mb/d, so when deducting these losses, the implied stockbuild for the year-to-date falls to an average 1.3 mb/d, or just over 375 mbbls. While this is still a monumental build, it is more plausible.
At the same time, Chinese demand could also be underestimated. China’s independent refiners have been infamous for tax evasion and especially between 2016 and 2018 were estimated to have underreported refining throughputs by 0.3-0.8 mb/d10. So historically, Chinese crude demand has been understated. The shift to new tax reporting practices in early 2018 have limited the independents’ ability to under report runs, although a number of them subsequently turned to misrepresenting their product output. In late 2020, following an announcement by Shandong officials that they will be levying a windfall tax this year, which is based on product output, the independents may be resorting to some under reporting again, although any such volumes are likely small, given that China’s demand is recovering slowly and product tanks are also estimated to be two-thirds full. Some combination, therefore, of underestimated demand and crude in storage suggests that China could well be responsible for as much as half of the missing barrels and that these are indeed “real.”
The next question is then, how likely are these barrels to be drawn down, and will they weigh on Chinese imports?
Roughly a third of these volumes could have gone into bonded tanks. When looking at China’s crude imports, there is a discrepancy between waterborne flows as assessed by Kpler and arrivals reported by customs data, with assessed arrivals higher than customs data by 0.47 mb/d for the year-to-October (Figure 3). In previous years, the difference in assessed volumes and customs data were smaller, mostly due to discrepancies between the timings of arrival and discharge, alongside some crude going into bonded tanks.
This year, the discrepancy is more substantial and points to a large accumulation of crude in bonded tanks, which are not consistently counted as imports. Not only has the INE increased its storage capacity this year, with its tanks holding 34 mb of crude at the end of October according to the exchange but sanctioned barrels may have also gone into bonded tanks. For example, in the year-to-October, Kpler estimates point to 0.15 mb/d of Iranian crude going to China (compared to 75,000 b/d recorded by customs) as well as 0.21 mb/d of Venezuelan crude flowing to the country (although customs have reported no Venezuelan crude going into China). Theoretically, then, at the end of October, China had accumulated as much as 85 mb of Iranian and Venezuelan crude in bonded storage tanks over the course of the year, although some of these will have likely been drawn down by refiners, and if they have not been yet, they will be.
But that still leaves over 200 mbbls of crude in storage, of which only a fraction is likely to return to the market. This is because these volumes have gone into both commercial and strategic petroleum reserve (SPR) tanks that are used as buffer, both for refiners’ forward cover and strategic reserves. China has a small number of designated SPR tanks of close to 400 mbbls, that are likely 300 mbbls full, with Argus estimating 32 mbbls of fills this year alone (see Figure 4). At the same time, the government has been leasing out commercial tank space for its SPR programme, as the construction of dedicated SPR sites has been slow. But even with close to 150 mbbls of commercial tanks that are widely assumed to be leased out to the SPR, the SPR program only meets around 40 days of import cover (as 90 days at current import volumes would imply over 1,000 mbbls).
In addition, China’s refiners are mandated to hold 15 days of forward cover, which, for a system of close to 19 mb/d of nameplate capacity, means almost 300 mbbls of forward cover. Indeed, part of the increase in import licences awarded to non-state refiners this year was intended for them to build up their crude stocks while prices remain at relatively low levels.
In sum, when taking into account the crude requirements of storage tanks at the various ports and other commercial sites as well as pipeline fills, the crude requirement for China’s oil system is massive. As a result, most of the crude flowing into China this year has helped meet these needs. All in all, we estimate China now holds close to 1,000 mbbls in storage, which is roughly 90 days of its import needs, with capacity by year end reaching 1,300-1,400 mbbls. The good news for markets is that only a small part of these barrels will be drawn down, but the bad news is that China’s future stockpiling needs are now shrinking.
This is not to say that China’s crude imports will fall: with over 1 mb/d of new refining capacity starting up over the next two years, refiners will continue sourcing crude as refining throughputs continue to rise and as new plants require operating stocks. Moreover, additional infrastcuture including tanks and pipelines will need filling. But over the next two years, incremental demand for strategic stocks will slow, and crude imports will become more closely aligned with refiners’ needs.
Conclusion
The large accumulation of barrels in China suggests that “artificial” or “imaginary” barrels, as a result of imprecise measurement of global oil supply-demand balances, are not the only explanation to the missing barrels question. Indeed, even though China’s crude balances are riddled with inconsistencies, it is clear that the country has amassed large volumes of crude this year — potentially close to 400 mbbls — which have contributed both to the country’s strategic reserves and commercial forward cover. At the same time, Chinese demand may well be underestimated given refiners’ tax avoidance practices. So, as global supply and demand numbers get adjusted with the arrival of new information — which likely includes other Asian countries for which both demand and storage estimates are imperfect — the volume of missing barrels will shrink further, if indeed half have ended up in Chinese storage tanks and are unlikely to be released back into the market. In addition, some of the missing barrels are a result of unobservable barrels in important consuming centers and perhaps also stocks held at the distribution level and by final end consumers.
As the Oxford researchers conclude, “the complexities of global crude balances, despite the important contribution made by new technologies, highlight the ongoing challenges facing OPEC+ in estimating how long it will take to rebalance the market. In addition to the uncertainties surrounding the demand outlook in these unprecedented times, assessing the extent and nature of buffers in the system has become more complicated.”
The question is whether going forward, OPEC+ can afford to ignore non-OECD stocks? And if these stocks are being stored for strategic purposes and the bulk of these stocks will not be released back into the market, does targeting non-OECD stocks really matter for oil policy purposes? Should we exclude years of elevated stocks from the averages or have these become main features of the new cycles and the adjustment process? As we enter 2021 in an environment of extremely depressed oil demand, these questions will become more pressing.
- Janet Yellen: Too Dumb To Stop
Janet Yellen: Too Dumb To Stop
Tyler Durden
Tue, 12/08/2020 – 21:25Authored by Economic Prism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,
Autographing Funny Money
The United States Secretary of the Treasury bears a shameful job duty. They must place their autograph on the face of the Federal Reserve’s legal tender notes. Here, for the whole world to witness, the Treasury Secretary provides signature endorsement; their personal ratification of unconstitutional money.
Janet Yellen – first she got to print a lot of funny money, now she gets to autograph it. The Titanic meanwhile finds itself in uncharted waters and rumor has it that there may be icebergs lurking not too far from here. [PT]
If you recall, Article I, Section 8, of the U.S. Constitution empowers Congress to coin money and regulate its value. What’s more, Article I, Section 10, specifies that money be coined of gold and silver and cannot be bills of credit.
Indeed, paper dollars are illegal money per the U.S. Constitution on two counts. First, they’re issued by the Federal Reserve. Second, they are bills of credit with no ties to gold or silver.
This critical defect does not register even a passing concern for most Americans. But it should. Because illegal money – like paper dollars – has its deficiencies. Mainly, it’s prone to gross over issuance for political means. Thus, as it funds the unlimited growth of government, its payment quality grows evermore suspect.
Without question, illegal money has a whole host of problems. And the woman who will soon be autographing the illegal money – Biden’s nominee for Treasury Secretary, Janet Yellen – will further stimulate these problems.
Deceptive and Cruel
Janet Yellen, if you don’t remember, was Chair of the Federal Reserve from 2014 to 2018. She will be only the second bureaucrat to be both Fed Chair and then Secretary of Treasury. The first was G. William Miller, way back when Jimmy Carter was President. Miller was a poor steward of the dollar. Inflation went off the Richter scale on his watch.
The Miller years were quite a harrowing time with respect to galloping price inflation. The extent to which Miller can be blamed is debatable – the event was a co-production cooked up by an entire gaggle of loopy bien-pensants over the years. They were just as arrogantly confident in their prescriptions as their successors deciding today’s policies are. [PT]
Yellen, like Miller, will have the unique opportunity to authorize the money she previously issued. The consequences could be equally destructive for the dollar. They may even be worse.
Prior to her time as Fed Chair, Yellen held various positions with the Federal Reserve over a 20 year run. We don’t really know much about what she actually did. But, at a minimum, she participated in an era of unprecedented Fed activism.
Certainly, Yellen has spent hours squinting at aggregate demand graphs while contemplating how monetary policy can be twisted to boost spending. She also believes monetary policy is a moral issue.
In fact, back in 1995, at a Federal Open Market Committee meeting, Yellen argued in favor of allowing inflation to exceed inflation targets for moral reasons. The Economic Policy Journal offers the following account:
“Ms. Yellen told the committee that ‘the moral’ of all this is ‘that the Fed should pursue multiple goals.’ She said that ‘when the goals conflict and it comes to calling for tough trade-offs, to me, a wise and humane policy is occasionally to let inflation rise even when inflation is running above target.’”
Remember, inflation acts as a hidden tax on savers. It devalues the purchasing power of their savings. Ask any retiree living on a fixed income or a hardworking prudent individual skimping to squirrel away some nuts for retirement. Policies of inflation are not wise and humane; they are deceptive and cruel.
Janet Yellen: Too Dumb To Stop
After all these years Yellen still thinks she knows best. That she is the true arbiter of morality. Guided by silly academic models she thinks she is helping people when she is really hurting them.
Fiscal and monetary policies over the last 40 years have been characterized by increasingly extreme intervention. Over this period Yellen and other central planners have pursued inflationism as a means to perpetually stimulate demand.
The Fed creates the illegal money. The Treasury authorizes it. And the economy adjusts accordingly. Business transactions are made with the illegal money. Private and public buying and selling is conducted with it. All commerce is settled with it.
The over-issuance of illegal money has warped and distorted the economy… delivering extreme riches to asset holders while leaving the vast majority of wage earners with empty pockets. Alas, Yellen is too dumb to stop. In a Tweet following the announcement of her nomination, she wrote:
“We face great challenges as a country right now. To recover, we must restore the American dream—a society where each person can rise to their potential and dream even bigger for their children. As Treasury Secretary, I will work every day towards rebuilding that dream for all.”
But what will Yellen, as Treasury Secretary, really do to restore the American dream? Will she start new companies that employ people? Will she create more high paying jobs?
No, she won’t – because she can’t. Starting companies that create high paying jobs, and produce goods people demand, is out of the realm of what a Treasury Secretary can do. But what Yellen can do is work in concert with the Fed and Congress to authorize vast amounts of illegal printing press money.
It may be an overused cliché and who knows if it was really Einstein who said it, but in this case it certainly fits. [PT]
Should Yellen follow the path of 1980 through 2019 and inject new credit into the financial system, we will see further inflation of financial assets. Should Yellen follow the CARES Act model and send checks directly to the people, consumer prices will inflate. Perhaps she will be compelled by her high morality to do both.
Regardless, Yellen will not be up to the task of returning reverence and trust to the dollar. And without that, there is little hope of restoring the American Dream.
- MBA Applications Surge Despite Fed Defiling All Economic Laws As We Know Them
MBA Applications Surge Despite Fed Defiling All Economic Laws As We Know Them
Tyler Durden
Tue, 12/08/2020 – 21:05Who in their right mind would want to be an MBA in this environment?
That’s the first question that came to our minds when we found out that MBA application volume was surging. Thanks to vast distortions in both capital markets and the economy brought on by the Fed rigging interest rates and introducing limitless money into the supply, we’re not sure any of the economic “basics” one would learn in an MBA program would even apply in the lunatic asylum our economic system has become in 2020.
Despite this, the upcoming MBA admissions cycle is “shaping up to be the most competitive in recent memory,” according to the Wall Street Journal. Full time residential MBA applications have seen higher volumes for next fall and expect to have fewer spots for enrollment than in years past.
Schools have also let some international students defer enrollment due to the pandemic’s travel restrictions, locking up supply for spots. The deferral rate for all students was up from 2% in 2019 to 6% in 2020 as a result of the pandemic.
Jeremy Shinewald, founder of admissions consulting firm mbaMission, said: “Everything points to this being the most competitive year ever for M.B.A. applicants. I wouldn’t be the least bit surprised if schools crush their records for application volume.” Consultations at his firm were up 30% from July to September, he said.
Applications to MBA programs in American “rose for the first time in five years” in 2020 as a result of lowered testing requirements and more applicants looking to bypass the economic slowdown caused by Covid.
“I feel the importance of the whole [application] package has increased. The bar is higher for applications,” applicant Jimmy Lin told the Journal. He is applying to Northwestern University’s Kellogg School of Management.
Georgetown has accepted a majority of its candidates during its sound round of applications this year, whereas it normally takes three to four rounds to fill out a class. The university doesn’t expect to increase its class size despite the surge in interest for its program.
Shelly Heinrich, the associate dean of M.B.A. admissions at Georgetown University’s McDonough School of Business, said: “It can be nerve-racking for applicants. They are now thinking, ‘Oh goodness, not only do you have deferrals who have secured spots in your class for next year but your applications are now up significantly, and so what does that mean for me?”
Applicants that schools are inviting for interviews have fallen about 8% at the Top 16 schools, the Journal notes, and the rejection rate is up 7% from a year prior.
Some schools, like Harvard Business School, are expanding their 2021 class sizes to try and meet some of the demand. Harvard said it would enroll 1,000 students over the next two years, up from the 730 it enrolled last fall.
Perhaps next they will alter their programs to specialize in how to get a multi-billion dollar market cap without ever turning a profit, the wonders of SPACs and why buying the dip will be a sound strategy for decades to come.
- How The COVID Response Has Destroyed The Personal Finances Of Americans
How The COVID Response Has Destroyed The Personal Finances Of Americans
Tyler Durden
Tue, 12/08/2020 – 20:45Authored by Daisy Luther via The Organic Prepper blog,
Back when the virus that would soon be known as Covid-19 was just a blip on the radar, Selco wrote an article called, It’s Not the Virus You Need to Worry About. It’s the System. And like much of what Selco writes, it was prophetic.
Here we are, coming up on a year after the virus first began making itself apparent and the world is dramatically different. Not only are there the inevitable arguments about masks, lockdowns, vaccines, and hypocritical politicians using the whole thing as a power grab, but there are very real effects on everyday families all over the world.
In the United States, our personal finances have taken blow after blow. Eight million more Americans than last year are now living in poverty as millions of jobs have disappeared, never to return. Data from the review site Yelp shows that 60% of the businesses that shut down due to Covid have permanently closed. People who were formerly struggling are sinking, and many of those who were comfortably middle class are desperately trying to stay afloat.
It isn’t so much the virus that has caused our financial woes – it’s the response to the virus. Federal, state, and local governments have deemed what businesses are allowed to operate and how they must do so. This has resulted in the loss of businesses themselves, loss of sales, and loss of jobs. Nearly every family is feeling the effects to some degree. Please check out our new frugality website for practical solutions if you are dealing with financial issues.
Here are some of the ways American families are suffering financially due to the response to the virus.
More people are living paycheck to paycheck.
Back in February of this year, a report was released that showed 40% of American workers were living paycheck to paycheck.
Willis Towers Watson’s Global Benefits Attitudes Survey discovered that although 58 percent of workers think their finances are heading in the right direction, 38 percent of employees are living paycheck to paycheck…
…Almost one-fifth of those making more than $100,000 are living paycheck to paycheck, and about one-third say their financial problems negatively affect their lives. The survey polled 8,000 American workers. (source)
That early 2020, pre-lockdown report looks like a glimpse of nostalgia from the good old days. A more recent report has found, due to the Covid response, that now almost two-thirds of Americans are living the paycheck to paycheck life.
With government shutdowns forcing countless businesses to close and then lay off workers, one in four respondents now feel their income is not stable. Nearly two in three (63%) say they’re going paycheck-to-paycheck since March 2020. Millennials seem to be the hardest hit, with 64 percent saying they’re living off their paychecks.
“After the unemployment rate spiked to more than 14% in April, Americans continue to be wary about their job security and income,” writes Highland President Jon Berbaum in a media release. (source)
Anyone who has ever lived through this situation knows that paycheck-to-paycheck is a delicate dance and it only takes one small thing to go wrong to cause your house of cards to come tumbling down.
NSF fees, late fees, reconnection fees, extra deposits, overdraft interest, and payday loans can all destroy the financially fragile, leaving them in a downward spiral designed to keep them trapped. There’s a reason that broke people tend to stay broke, and it’s not because they’re simply lazy and irresponsible. It’s because the system is set up in a way that it earns more money by charging poor people extra.
Hardly anyone has an emergency fund left.
Back in 2019, Bankrate released a survey that said only 40% of Americans would be able to pay for an emergency costing a thousand dollars out of their savings. Yet again, those were the good old days.
A more recent survey said that an astounding EIGHTY TWO PERCENT of Americans could no longer handle an emergency costing $500. Zero Hedge reports:
But perhaps the most alarming number from the entire survey: a whopping 82% of respondents said they wouldn’t be able to cover an emergency $500 expense without borrowing money.
For context, prior to the pandemic, surveys showed that roughly half of Americans couldn’t afford a $500 emergency expense, which means the number of people who say they couldn’t cover a small emergency has risen by 60%. (source)
An emergency fund is the most important financial prep you can make.
When your finances are tight, sometimes your first impulse is to spend every dime. Many people focus on things like paying off debts, stocking up on food and supplies, or paying more than the minimum payments on bills.
However, that may not be your best bet. Don’t get me wrong – paying off debt is absolutely vital, but most experts recommend establishing an emergency fund as the first step back to financial security. (source)
Many people report making up the difference between their income and output with credit cards and other forms of personal debt. Unfortunately, with our somber economic forecast, this is just delaying the inevitable implosion of their personal finances.
People are unable to find work.
An October jobs report showed that millions of the positions lost back in March have not returned, and that millions of people have now reached the classification of “long-term unemployment.” The New York Times reported:
The Labor Department said on Friday that 2.4 million people had been out of work for 27 weeks or more, the threshold it uses to define long-term joblessness. An even bigger surge is on the way: Nearly five million people are approaching long-term joblessness over the next two months. The same report showed that even as temporary layoffs were on the decline, permanent job losses were rising sharply.
Those two problems — rising long-term unemployment and permanent job losses — are separate but intertwined and, together, could foreshadow a period of prolonged economic damage and financial pain for American families.
Companies that are limping along below capacity this far into the crisis may be increasingly unlikely to ever recall their employees. History also suggests the longer that people are out of work, the harder it is for them to get back into a job. (source)
In September and October, many large corporations made the decision to end even more jobs.
Disney announced this past week that it would lay off 28,000 U.S. employees as its theme parks struggle. Layoff notices filed with state authorities show that hospitality and service companies across the country, from P.F. Chang’s restaurant branches to Gap stores, are making thousands of long-term staff reductions. Airport bookstores in Pennsylvania and Tennessee are cutting jobs as travel dwindles. So are wineries and upscale sports clubs in California.
Airline job cuts run to the tens of thousands. American Airlines started to send furlough notices to 19,000 workers and United Airlines to 13,000 after a federal moratorium expired on Thursday. Those are on top of reductions at other carriers, and existing firings across the industry.
Altogether, nearly 3.8 million people had lost their jobs permanently in September, according to the Labor Department’s latest monthly survey, almost twice as many as at the height of the pandemic job losses, in April. (source)
And then, things had just begun to look up just a little bit for those in service industries when the second round of lockdowns hit crushing the hopes of many of those who were just beginning to get back to work.
The closure of schools has kept many parents from returning to work or caused financial hardship.
It isn’t just the unavailability of jobs that has made things difficult. The erratic 2020 school year has also caused financial hardship and in many cases, made it impossible for parents to return to work.
Now, I know a lot of homeschool parents will say that people shouldn’t be using public school as a free babysitter. But the fact remains that many families require two incomes to survive. In my case, as a single mom, the school year allowed me to make a living. During the summer, my children had wonderful vacations with both sets of grandparents, mercifully, because paying for full-time childcare for both of them would have taken almost every dime I was earning, leaving nothing for housing, food, and other costs.
If you aren’t familiar with current childcare costs, a person quoted in the article cited below reported that she and her husband were spending an eye-watering $5300 per month for their three children.
While wealthier parents can afford to “get creative,” lower income and many single parents have far fewer options, said Caitlyn Collins, a professor of sociology at Washington University in St. Louis who studies women and families. Some are leaning on family members or just doing the best they can on their own. Others have been laid off, or have had to quit their jobs to take care of their kids…
…The United States has been an outlier on child care long before the coronavirus, Collins said, with price tags far exceeding those in other high-income countries. The average cost of child care for a child under 4 is $9,589 per year, according to New America’s Care Report — more than the average cost of in-state college tuition. It’s much more expensive in big cities: In Washington, D.C., the average cost of care for an infant is more than $24,000.
Rising child care costs are particularly “terrifying” for U.S. families, Collins said, because child care already accounts for an enormous part of their budget, often second only to a family’s rent or mortgage. (source)
Financially speaking, women are suffering the most with regard to pandemic related job losses. Hundreds of thousands of women left the workforce in September – approximately 849,000 – in comparison to 216,000 men. Betsey Stevenson, a professor of public policy and economics at the University of Michigan, explained in an interview why women have been unevenly affected.
…the age group that had the biggest decline was thirty-five to forty-four. And it’s not at all surprising to me, in the sense that the people who are really struggling are people with young kids and multiple kids at home. It’s the parents who have a four-year-old, a six-year-old, and a nine-year-old, and those kids are at home, and they’re trying to do Zoom school. It’s really difficult. Even if both parents had the opportunity to work from home, that’s a really hard thing to manage. I want to make sure that I emphasize that that’s one kind of hardship, and then there’s another kind of hardship, which is parents or single moms who had an in-person job and no child care. (source)
I have more than one friend who has been attempting to oversee “distance learning” while keeping her job remotely and the stress levels are through the roof. If you can’t afford a nanny or you don’t have a family member willing to take on the task, quite simply, someone is going to have to stop working at a time when we can least afford to have our incomes drop any further.
The price of food has increased dramatically.
Food prices increased for the fifth month in a row, according to the United Nations Food and Agriculture Organization. People around the world are seeing a 6.5% increase in their costs of commodities such as cereals, dairy, vegetable oil, meat, and sugar.
But your trip to the local grocery store may look like a much greater increase than six and a half percent. There’s a variety of reasons that prices have gone up. Everything from supply chain shortages to production issues has caused costs to increase. There are other Covid-related reasons that explain why you may be experiencing sticker shock:
Shift to eating at home: In a matter of two months, approximately $23 billion in consumer spending away from home was redirected toward grocery stores as restaurants were forced to close due to COVID-19, according to FMI – The Food Industry Association.
Loss of foodservice demand: When restaurants closed, farmers and ranchers lost a key channel for their product. With fewer buyers, it is costly or impractical to harvest, preserve or store some food and beverage products.Increasing production and processing costs: During COVID-19, companies have made investments and adjustments to safeguard their products and employees. This means costs for food production are higher. Some manufacturers have been able to innovate and find new markets for their products, but these changes often entail added costs.
Increasing operating costs for grocery stores: Compared to 2019, supermarket operating costs were up 7.9% in April 2020 and 6.7% in May 2020, according to USDA Economic Research Service.
Grocery stores have remained open during the pandemic and have had to quickly adjust to new regulations, safety and sanitation practices and enhanced customer education – all requiring resources. In addition, some areas of the grocery store, including salad bars and hot bars, have had to shut down, meaning a loss of revenue. (source)
There are also fewer sales:
Usually, 31.4% of grocery store items are purchased on some sort of sale, but at the end of September the share was 26%, according to market research firm Nielsen. The biggest impact was in the household care department, where just 15% of items were sold on promotion, half the usual amount. Heightened consumer demand and strained supply are giving stores little reason to mark down prices, Nielsen said. (source)
While the statistics only note a few percentage points, the real picture looks a lot different.
Eva Rosol was stunned during the summer when a rotisserie chicken that she could normally find on sale for $6 suddenly set her back $15…
….Ariel Neal, owner of Leira Knows Cocktails and Events, has been opting for more potatoes and starches and fewer fruits and vegetables…She didn’t qualify for unemployment benefits or small business relief, and has been subsisting on her savings and the government’s Supplemental Nutrition Assistance Program, formerly known as food stamps.
“Before, $20 would have gotten me at least two to three meals,” said Neal, 42, who lives in Calumet City. “Twenty dollars doesn’t do that anymore.”
…Yvernia Wilson, who is on a fixed income and vigilant about grocery prices, was taken aback early in the summer when a large package of hamburger meat she’d normally pay $8.99 for was listed at $14 at the Jewel-Osco she shops at on Chicago’s South Side.
A nice-sized pot roast for Sunday dinner was almost $20, $6 more than she’d usually spend. Even a package of chicken wings cost $3 more…
…Wilson restricts herself to two meats and for some items has resorted to buying cheaper brands she doesn’t necessarily like. She bypasses the organic aisle and sometimes forgoes fruit altogether if it isn’t on sale. (source)
Don’t look for food prices to decrease any time soon. Our supply chain is still broken and getting worse. Another lockdown means that store owners will be trying to get the most money possible from customers in order to keep afloat for as long as possible. The current price increases could be permanent.
The eviction moratorium runs out soon.
And finally, to make matters even more difficult for struggling families, a federal moratorium on evictions will be running out on December 31, leaving as many as 19 million people at risk of being homeless as 2021 begins. A few states will continue eviction bans but most will follow the federal guidelines.
It’s important to note that people who were not paying rent based on the moratorium will now have to catch up immediately or risk being evicted.
The federal mandate doesn’t prohibit late fees (although some local ordinances do), nor does it let tenants off the hook for any back rent they owe. It also doesn’t establish any kind of financial assistance fund to help renters get caught up, a safeguard some say is critical to preventing a massive wave of evictions when the ban eventually lifts…be aware that you may still be held responsible for any back rent you currently owe as well as any rent that accrues between now and the end of your lease (if you have one), whether or not you vacate. (source)
It’s projected that 6.7 million households could be affected by the end of the moratorium.
This is, of course, a double-edged sword. Not all rental property owners are massive corporate entities with teams of lawyers diligently searching for loopholes. This has been a tremendous hit for Mom and Pop landlords, many of whom invested in real estate to have a bit of income during their retirement. They have been unable to evict tenants who aren’t paying their rent but still had to maintain the property in a manner according to the local bylaws, pay their mortgage payments, and make timely property tax payments.
2021 isn’t going to be a magical solution.
A lot of folks have just written off 2020 as “a bad year” and seem to believe that the moment this year is over, the curse will be lifted and we’ll all be able to go on with our lives having survived it and gotten through it.
Unfortunately, the changes that I’ve written about aren’t going to disappear when you put that new calendar on the wall. Businesses that hung on through Christmas to try and sell their remaining inventory could be closing right after the holiday, leaving even more jobs in the dust. Lockdowns could very well become even more stringent after the inauguration, which would keep all the same problems going. It’s time to redouble your preparedness efforts and really examine your situation.
This has been more than a pandemic. It’s been a major economic catastrophe, just as predicted, and we’re in it for the long haul.
- NJ's Murphy Complains Non-Compliance With COVID Contact Tracers Hits 74%
NJ's Murphy Complains Non-Compliance With COVID Contact Tracers Hits 74%
Tyler Durden
Tue, 12/08/2020 – 20:25Time to break out the microchips.
NJ Gov Phil Murphy expressed his frustration during a press briefing on Monday with the fact that NJ’s contact-tracing efforts have been a colossal failure, largely due to astronomical rates of non-cooperation, a problem that also plagued NYC’s famously botched contact tracing program.
According to the Garden State Governor, “the rate of noncooperation with our contact tracers is now up to a whopping 74%.”
“The rate of noncooperation with our contact tracers is now up to a whopping 74% of cases. Quite frankly, this is unacceptable and we need folks to turn that around,” Murphy said. “It is extremely critical for contact tracers to get in touch with the close contacts of those who test positive to help us stop the spread of this virus.”
The audibly and visibly irritated governor added that contact tracers aren’t conducting a “witch hunt”; they’re just trying to help people. “We’re only trying to stop the spread of this virus,” Murphy reiterated. He added later in a tweet that the state has more than 30 contact tracers on the ground for every 100K residents, a solid ratio that should be producing much better results.
Contact Tracing Update:
We now have more than 30 contact tracers on the ground for every 100,000 residents.
The rate of non-cooperation is now up to a whopping 74%.
This is not a witch hunt. We’re only trying to stop the spread of this virus.
Work with our contact tracers. pic.twitter.com/ZL79FkiWst
— Governor Phil Murphy (@GovMurphy) December 7, 2020
But what the governor has demonstrated is that no matter how many contact tracers the state employs, results will likely remain subpar because the fact of the matter is: most people view the government – whether federal, or state – with skepticism and suspicion, and would probably prefer not to share personal information about their whereabouts and activities – just in case these ‘contact tracers’ get the wrong impression.
NJ reported another 5K+ new cases on Tuesday.
NEW JERSEY #COVID19 UPDATE:
➡️5,820 new positive cases
➡️377,055 cumulative total cases
➡️90 new confirmed deaths
➡️15,590 total deathsI know that we can win this fight together. Mask up. Social distance. Wash your hands. Use common sense.https://t.co/JW1q8awGh7 pic.twitter.com/9l1lJmqJPD
— Governor Phil Murphy (@GovMurphy) December 8, 2020
Murphy recently tightened restrictions on social gatherings and youth sports to try and stanch the surge in new cases.
Watch the clip below:
- Pelosi, Schumer Reject Mnuchin's $916 Billion COVID Relief Bill Offer
Pelosi, Schumer Reject Mnuchin's $916 Billion COVID Relief Bill Offer
Tyler Durden
Tue, 12/08/2020 – 20:24Update (2020ET): As details emerged that the state and local aid embedded in Treasury Secretary Mnuchin’s latest $916 COVID Relief bill offer was around $100 billion of school-reopening-targeted funds (and not free money to bail out the pension funds), it will come as no shock to anyone that Democrats rejected the bill.
Pelosi and Schumer did accept that McConnell signing off on Mnuchin’s deal was “progress,” they said the proposal’s unemployment insurance position is “unacceptable.”
Proposal “must not be allowed to obstruct the bipartisan Congressional talks that are underway.”
“The President’s proposal starts by cutting the unemployment insurance proposal being discussed by bipartisan Members of the House and Senate from $180 billion to $40 billion. That is unacceptable.”
* * *
Update (1745ET): While Mitch McConnell reportedly suggested he would be willing to trade liability for state and local bailouts, a statement from Treasury Secretary Mnuchin adds yet more confusion to the situation over COVID Relief. The bill is slightly larger than the $908 billion bipartisan bill that has been floated:
So, that means $569 billion is in ‘recycled’ funds and this bill includes a state and local bailout (what Dems want) and liability protection (which GOP wants).
* * *
Update (1300ET): Senate Majority Leader Mitch McConnell has made a move from his more stoic position, making it clear that he is willing to pass a COVID relief bill without the liability protection clause that the GOP has been pushing for for months, if Democrats are willing to remove their state and local bailout funding demands.
As far as he is concerned, these are the two things holding up relief to millions of Americans.
* * *
Hopes of a bipartisan stimulus deal faded on Tuesday after failing to resolve several remaining stumbling blocks left over from Monday – including Senate Majority Leader Mitch McConnell’s refusal to endorse a $908 billion bipartisan proposal as a basis for talks.
McConnell has also insisted on applying broad federal limits on COVID-19 related lawsuits against businesses – for which Democrats are offering a six-month moratorium.
“Drop the all-or nothing tactics,” McConnell said of Democrats during a Monday Senate floor speech in which he called on Senate Minority Leader Chuck Schumer to allow a vote on a targeted bill which would provide extended unemployment insurance, along with small business assistance and funding for vaccine distribution.
Senators from both sides of the aisle concluded that the prospects for a $908 billion compromise that Republican and Democratic negotiators are hashing out will come down to McConnell’s decision. Several GOP members have endorsed or been open to the plan, and top White House economic adviser Larry Kudlow said President Donald Trump would likely sign it. McConnell is engaging the negotiators even though he hasn’t budged. –Fortune
In addition to gridlock over liability protection for businesses, Republicans and Democrats are butting heads over aid for states and localities – which has been House Speaker Nancy Pelosi’s line in the sand for months.
“Those are coupled together,” said Texas Republican Senator, John Cornyn, referring to the liability protection and funding for states and municipalities. “There’s either going to be none for both of those, or both of those that are going to be provided for. My hope is we’ll do both.”
Republicans claim that state assistance is a scheme to bail out poorly-run Democratic areas, while Democrats have refused to shield employers from lawsuits for failing to protect employees who contract COVID-19.
Meanwhile, lawmakers are in even deeper gridlock on the omnibus spending bill – which includes disputes over further border wall funding, money for police anti-racism training (!?) and other measures.
Speaking about the Covid-19 relief proposal, McConnell said it’s getting “down to the wire.“
Schumer blamed his GOP counterpart for stalling the compromise effort. He and Pelosi publicly endorsed the $908 billion plan last Wednesday, after having made a new pitch to McConnell two days before. They previously sought a $2.4 trillion bill.
“We want the leader to sit down and negotiate so we can come up with a bipartisan proposal that can pass the House and the Senate,” Schumer said on the Senate floor. He highlighted that some economists are warning of a double-dip recession if Congress fails to pass a deal. –Fortune
On Tuesday, GOP leaders plan to discuss the situation with Treasury Secretary Steven Mnuchin and White House Chief of Staff Mark Meadows. In particular, they will seek a separate COVID-19 relief initiative.
- Facts – Not Fear – Will Stop The Pandemic
Facts – Not Fear – Will Stop The Pandemic
Tyler Durden
Tue, 12/08/2020 – 20:05Authored by Dr. Jayanta Bhattacharya via The American Institute for Economic Research,
The media relish negative news. “If it bleeds it leads” still holds, and perhaps it’s never been truer than in the COVID-19 era. Every day the news highlights the spread of the virus and tells the sad stories of some of its victims.
And yet, much of the media does not pay sufficient attention to the good news regarding improved treatments and survival of patients with the coronavirus.
In contrast with the international media, the American press has been unrelentingly negative in its COVID coverage, even when there is good news to tell. That negativity is part of what fuels a culture of fear that affects local, state and federal politicians and the decisions they make.
But there is a lot of good news to tell. The case fatality rate from the virus has dropped sharply since March. The infection survival rate is 99.95 percent for people under 70 and 95 percent for people over 70. Hospitals are much better equipped to handle patients, with improved ventilator protocols, improved management of outpatients and new therapeutic strategies to provide relief and recoveries. Moreover, thanks to multiple ongoing clinical trials around the world, there may soon be a safe and effective vaccine.
By contrast with their focus on COVID deaths, the media have paid scant attention to the enormous medical and psychological harms from the lockdowns in use to slow the pandemic. Despite the enormous collateral damage lockdowns have caused, England, France, Germany, Spain and other European countries are all intensifying their lockdowns once again.
By lockdowns, we mean the all-too-familiar shuttered schools and universities, closed playgrounds and parks, silent churches and bankrupt stores and businesses that have become emblematic of American civic life these past months. The relative dearth of reporting on the harms caused by lockdowns is odd, since lives lost from lockdown are no less important than lives lost from COVID infection. But they’ve received much less media attention.
The harms from lockdown have been catastrophic. Consider the psychological harm. Reader, since you’re reading this in lockdown, you can undoubtedly relate to the isolation and loneliness that these policies can cause by shutting down typical channels for social interaction. In June, the Centers for Disease Control and Prevention (CDC) estimated that one in four young adults had seriously considered suicide. Opioid and other drug related deaths are on a sharp and unsurprising upswing.
The burden of these policies falls disproportionately on some of the most vulnerable. For example, isolation led to a 20 percent increase in dementia-related deaths among our elderly population. Moreover, retrospective analysis of the lockdown in the United States shows that patients skipped cancer screenings, childhood immunizations, diabetes management visits and even treatment for heart attacks.
Internationally, the lockdowns have placed 130 million people on the brink of starvation, 80 million children at risk for diphtheria, measles and polio, and 1.8 million patients at risk of death from tuberculosis. The lockdowns in developed countries have devastated the poor in poor countries. The World Economic Forum estimates that the lockdowns will cause an additional 150 million people to fall into extreme poverty, 125 times as many people as have died from COVID.
Though there has been some coverage of lockdown harms, the media have not paid the same attention to it as they have to COVID deaths. If there is a COVID-death tracker, there should be side-by-side with it a lockdown-death tracker.
The lack of balanced media attention towards the good news about the virus and the costs of lockdowns comes with its own cost. Without a balanced approach to COVID news, the public cannot make informed choices about COVID policy, such as school closures. Even a diligent citizen cannot make an informed judgment about the wisdom of continuing lockdowns if only their benefits are emphasized and their costs downplayed. The media have an obligation to show both.
Finally, the neglect of the good COVID news breeds panic and fear, which is never a good public health strategy. The public should know that the pandemic will not be here forever. While these are challenging times – and, for many families, life-changing times – like every other pandemic in human history, the COVID-19 pandemic will end. With wise and informed policy choices, we can reduce its ultimate toll of death and human misery.
- Former Nikola CEO Milton Sold $55 Million In Stock, Bought Three Properties
Former Nikola CEO Milton Sold $55 Million In Stock, Bought Three Properties
Tyler Durden
Tue, 12/08/2020 – 19:45Today in “how to turn assets that don’t exist into assets that do” news…
It was reported yesterday that disgraced founder and former CEO of Nikola, Trevor Milton, had sold 3.2 million shares of Nikola stock while still at the company in order to consummate “three real-estate transactions” and purchase three different properties.
As part of the transactions, Milton’s LLC gave the shares on December 3 to the sellers of three piece of real estate, including a sprawling $32 million ranch Milton bought in Utah.
It appears Milton sold about $55 million worth of stock on the company’s lockup expiration date last week, according to SEC filings. And voila! That makes three more pieces of real estate than Nikola trucks sold, as Hindenburg Research’s Nathan Anderson noted on Twitter on Monday.
Looks like Trevor Milton dumped $55m worth of $NKLA shares on lockup expiry day as part of a real estate deal.
Zero trucks sold.https://t.co/Bfw0ehTA97 https://t.co/ewK7w9SkSx
— Nate Anderson (@ClarityToast) December 8, 2020
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Bloomberg reported on Monday that Milton says he is “committed to his Nikola Corp. holding and doesn’t plan to relinquish his position as its largest shareholder”.
It’s a statement that sounds reassuring, but doesn’t necessarily preclude Milton from selling more shares before becoming the second largest holder of Nikola stock. He could still sell “millions of shares” and be the company’s largest holder, Bloomberg noted.
It’s incredible how much Trevor Milton has already made from $NKLA https://t.co/7Z0eyh0fZ7 pic.twitter.com/I4vGjxsQKu
— Joe Weisenthal (@TheStalwart) December 8, 2020
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Milton’s lockup expired last week, on the same day the company announced that GM would no longer be taking an equity stake. Milton has the ability to now hit the bid with 91.6 million shares if he desires. In a CNBC interview two weeks ago, Nikola CEO Mark Russell “failed to assure” investors on both a GM deal and the idea that Milton wouldn’t immediately hit the bid when given the chance.
Nikola partner Bosch also cut its stake in the company to below the 5% reporting threshold last week after its share lockup expired.
- California Is The Top US Net Importer Of Electricity
California Is The Top US Net Importer Of Electricity
Tyler Durden
Tue, 12/08/2020 – 19:25Authored by Charles Kennedy via OilPrice.com,
California’s imports were the largest in the United States last year when 25 percent of California’s total electricity supply was imported, the Energy Information Administration (EIA) said on Monday.
Last year, California’s net electricity imports were the largest in the country at 70.8 million megawatt-hours (MWh), followed by Ohio, Massachusetts, Virginia, and Tennessee, EIA data showed.
In California’s case, the state’s utilities partly own and import power from several power plants in Arizona and Utah. California’s electricity imports also include hydroelectric power from the Pacific Northwest, mostly across high-voltage transmission lines from Oregon to the Los Angeles area.
This summer, amid the great West heatwave, the largest U.S. solar state, California, was grappling with power issues and struggling to keep its electricity grid stable as demand exceeds supply.
California energy consumers were warned of rolling outages as there was insufficient energy to meet the high demand during the heatwave in August. In California, where solar power supplies more than 20 percent of electricity as per the Solar Energy Industries Association (SEIA), August’s rolling outages were the worst such outages since the 2000-2001 energy crisis in the state.
According to 2019 data from the California Energy Commission, the state imported 30.68 percent of its renewables-generated electricity supply and 69.32 percent of non-renewables supply.
While California was the biggest net importer of electricity in the U.S. last year, the largest net exporter of electricity was Pennsylvania, with 70.5 million MWh of exports, or 24 percent of total supply, EIA data showed.
Pennsylvania’s electricity generation was the third-largest in the United States in 2019, behind Texas and Florida. Natural gas-fired and nuclear power plants produced most of Pennsylvania’s electricity generation in 2019, at 43 percent and 36 percent, respectively. Pennsylvania ranks second in the U.S., after Illinois, in terms of nuclear power generating capacity.
- DoorDash Hikes IPO Price Again To $102 Per Share As US Heads For Best Year For Deals Since 1999
DoorDash Hikes IPO Price Again To $102 Per Share As US Heads For Best Year For Deals Since 1999
Tyler Durden
Tue, 12/08/2020 – 19:06Ahead of their IPOs this week, Airbnb and DoorDash are now seemingly taking turns hiking the debut price range for their respective IPOs, as year-end deal frenzy hits a fever pitch .
Early this morning, Tesla announced plans for another $5BN “at the money” offering of new shares. When shares erased their selloff and traded higher, it offered the latest confirmation that the market’s appetite remains as robust as ever.
DoorDash has acknowledged in the section of its S-1 where it addresses long term risks that there’s a chance it might never be profitable, as the economics of third-party food delivery.
Now, DoorDash is reportedly expecting to price shares at the IPO at about $102 apiece, according to WSJ.
The price will increase DoorDash’s take during the offering to $3.4BN, roughly $400MM more than before, bringing its post offering valuation to $39BN, if all goes according to plan.
On a fully diluted the company’s valuation could draw very close to $40BN.
According to WSJ’s sources, DoorDash’s roadshow, which began last week, elicited strong interest from investors who have shown a strong interest in the offering, prompting the company to boost the price range from an initial $75 to $85 a share.
During Q2, DoorDash booked a profit of $23MM on $675MM in revenue, though it reverted to a net loss the next quarter even as revenue jumped to $879MM.
CNBC confirmed the report while several of its reporters debated the merits of such a frothy valuation for the startup that has seen its market share in the US surge to roughly 50% of the entire market. However, profits have remained difficult to come by.
DoorDash prices IPO at $102: Sources from CNBC.
Earlier,Rahul Vohra, tech investor, founder and CEO of subscription email app Superhuman, appeared on “the Closing Bell” to sing DoorDash’s praises as one of the best gig economy apps out there (per Vohra), who pointed out that the company is growing far faster than already-public rival GrubHub.
WSJ also explains how both DoorDash and Airbnb are embracing a more innovative approach to gauging interest and doling out allocations. Both companies are asking investors in the IPO (mostly institutions and some wealthy individuals) to input stock orders through a computerized system in which they outline the number of shares they are seeking and at what price. Investors have the option to indicate how much they are willing to buy at various price points. Typically, the syndicate banks managing the IPO play the critical role in setting the price. But this new strategy will give both companies more control.
Typically a quiet month for IPOs, December is shaping up to be a frenzied finish to what has already been a gangbusters year for deals. Already, more than $140BN has been raised in via IPOs on US exchanges, a number that far exceeds the previous full-year record high set at the height of the dot-com boom in 1999.
Unfortunately for beleaguered IBD analysts, management is cutting short Christmas breaks and pressuring them to pull longer hours than usual during the holiday, despite rumors about steep cuts to the bonus pool, as banks shift more capital toward loan loss provisions despite a surprisingly strong year in terms of revenue and profits from sales and trading and other investment banking activities.
- Merrill Lynch To Pay Former NH Governor $24 Million Over Excessive Trading Allegations
Merrill Lynch To Pay Former NH Governor $24 Million Over Excessive Trading Allegations
Tyler Durden
Tue, 12/08/2020 – 19:05Merrill Lynch has been ordered by the state of New Hampshire to pay $26.25 million in fines and restitution to settle allegations that one of its top brokers traded excessively and without authorization in order to rack up huge commissions. The company was also cited for failure to supervise and was ordered to maintain new compliance rules.
Of that $26.25 million, more than $24 million in restitution will go to the former governor of New Hampshire, Craig Benson.
The fine is the “largest monetary sanction in the state’s history and the second largest FINRA settlement in at least a decade,” according to CNBC.
The former broker accused of the wrongdoing, Charles Kenahan, has been barred from the industry. He was found to have “traded without authorization, mismarked trade confirmations, excessively traded stocks and Initial Public Offerings, over charged commissions, and inappropriately traded inverse and leveraged products,” according to NH regulators.
His actions resulted in “high commissions for Merrill Lynch and Kenahan and heavy losses for the investor.”
Jeff Spill, the deputy director and head of enforcement for New Hampshire’s Bureau of Securities Regulation, commented: “This case is about an abuse of trust committed by Merrill Lynch and Kenahan. Ultimately, Kenahan’s recommendations benefited Kenahan and Merrill Lynch and not the investor.”
Kenahan’s FINRA BrokerCheck record offers his take on the allegations, stating:
“…the transactions giving rise to the customers’ allegations were executed at the customers’ direction. The allegations resulted in arbitrations and settlements. I was not a party to the arbitrations; I had no say in the firm’s decision to settle the claims; and I was not asked to make any payment as part of the settlements.”
“I certainly didn’t sign a document and say it’s OK to steal from me. This is a fight I never chose,” Benson had said over the summer, after claiming “widespread misconduct” led to market-adjusted damages of over $100 million.
During the summer, a group of Merrill clients had alleged $200 million in damages which ultimately led to the New Hampshire investigation, CNBC noted in an interview with Craig Benson:
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