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Texas Judge Blocks Biden’s 100-Day Deportation Ban

Texas Judge Blocks Biden’s 100-Day Deportation Ban

A federal judge on Tuesday threw cold water on the Biden administration’s 100-day deportation moratorium – a central component of the newly minted president’s immigration priorities.

US District Judge Drew Tipton, a Trump appointee and former Marine Sergeant, issued a temporary restraining order (TRO) sought by the state of Texas, which sued the Biden administration on Friday in response to a Department of Homeland Security memo which instructed immigration agencies to halt most deportations, according to the Associated Press. Tipton concluded that the Biden administration had failed “to provide any concrete, reasonable justification for a 100-day pause on deportations.”

Tipton’s order is an early blow to the Biden administration, which has proposed far-reaching changes sought by immigration advocates, including a plan to legalize an estimated 11 million immigrants living in the U.S. illegally. Biden promised during his campaign to pause most deportations for 100 days.

The order represents a victory for Texas’ Republican leaders, who often sued to stop programs enacted by Biden’s Democratic predecessor, President Barack Obama. It also showed that just as Democratic-led states and immigration groups fought former President Donald Trump over immigration in court, often successfully, so too will Republicans with Biden in office. –AP

Acting Homeland Security Secretary David Pekoske had signed the DHS memo on Biden’s first day in office which instructed immigration authorities to refocus their efforts on national security and public safety threats, along with any illegal migrants apprehended in the United States after November 1 – a sharp reversal from President Trump’s policy which opened deportations up to anyone illegally residing in the country.

In the state’s court filing, Texas Attorney General Ken Paxton argued that the moratorium violated both federal law and an agreement signed between Texas and DHS which required Homeland Security to consult with Texas and other states before taking any actions to “reduce, redirect, reprioritize, relax, or in any way modify immigration enforcement.”

The Biden administration argued in court filings that the agreement is unenforceable because “an outgoing administration cannot contract away that power for an incoming administration.” Paxton’s office, meanwhile, submitted a Fox News opinion article as evidence that “refusal to remove illegal aliens is directly leading to the immediate release of additional illegal aliens in Texas.”

Tipton wrote that his order was not based on the agreement between Texas and the Trump administration, but federal law to preserve the “status quo” before the DHS moratorium. –AP

In Paxton’s motion requesting the TRO, Paxton wrote: In one of its first of dozens of steps that harm Texas and the nation as a whole, the Biden administration directed DHS to violate federal immigration law and breach an agreement to consult and cooperate with Texas on that law. Our state defends the largest section of the southern border in the nation. Failure to properly enforce the law will directly and immediately endanger our citizens and law enforcement personnel,” adding: “DHS itself has previously acknowledged that such a freeze on deportations will cause concrete injuries to Texas. I am confident that these unlawful and perilous actions cannot stand. The rule of law and security of our citizens must prevail.”

Tyler Durden
Tue, 01/26/2021 – 15:50

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Inbound Warhead Explodes Above Saudi Capital After Weekend Drone Intercept

Inbound Warhead Explodes Above Saudi Capital After Weekend Drone Intercept

On Tuesday a large explosion shook Riyadh in what may have been an inbound missile intercept. It comes after Saudi air defenses were placed on high alert after similarly destroying an “enemy air target” – believed to have been a drone – sent towards Riyadh on Saturday, likely from Yemen or even possibly from Shia paramilitary forces in Iraq.

Citing multiple sources and eyewitnesses, Deutsche Welle reports the following of the Tuesday attack which ended with a major blast over the city:

A loud explosion was heard over the Saudi Arabian capital of Riyadh on Tuesday, witnesses reported. The cause of the blast has not yet been confirmed, but Saudi-owned al-Arabiya TV cited videos on social media of a missile being intercepted over the city.

Witnesses told Reuters that they had heard two bangs and saw a small plume of smoke in the sky.

Riyadh, via Shutterstock

There’s been no claim of responsibility and the kingdom’s defense ministry has yet to assign blame or give details as to what the projectile was.

“Saudi-owned Al Arabiya TV cited local reports of an explosion and videos circulating on social media purporting to show a missile being intercepted over Riyadh,” Reuters wrote of the attack.

At least one government in the region has now acknowledged it as a “missile attack,” with Turkey’s Defense Ministry issuing the following statement in the hours following: “We strongly condemn missile attacks against residential areas in Saudi Arabia’s capital Riyadh.”

The inbound projectile caused all flights at Riyadh’s international airport to be grounded for hours late into the day Tuesday.

Yemen’s Houthis have in past years launched missile attacks on both the capital and Saudi Aramco facilities, most famously in the September 2019 Abqaiq–Khurais attack; however, they are reportedly denying being involved in either the Tuesday or Saturday incidents.

There’s currently some speculation that the projectile could have come from Iraq, after Iran-backed paramilitary forces appeared to issue messages publicly celebrating the attacks.

Tyler Durden
Tue, 01/26/2021 – 15:35

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The Next Decade Will Likely Foil Most Financial Plans

The Next Decade Will Likely Foil Most Financial Plans

Authored by Lance Roberts via RealInvestmentAdvice.com,

There are many individuals in the market today who have never been through an actual “bear market.” These events, while painful, are necessary to “reset the table” for outsized market returns in the future. Without such an event, it is highly likely the next decade will foil most financial plans.

No. The March 2020 correction was not a bear market. As noted:

  • A bull market is when the price of the market is trending higher over a long-term period.

  • A bear market is when the previous advance breaks, and prices begin to trend lower.

The chart below provides a visual of the distinction. When you look at price “trends,” the difference becomes both apparent and useful.

The distinction is essential.

  • “Corrections” generally occur over short time frames, do not break the prevailing trend in prices, and are quickly resolved by markets reversing to new highs.

  • “Bear Markets” tend to be long-term affairs where prices grind sideways or lower over several months as valuations are reverted.

No Valuation Reversion

The last bullet point is the most important. During “bear markets,” valuations are historically reverted. However, during the 2020 correction, valuations not only did not revert, they actually increased.

The problem, of course, is that valuations tell you everything about “future returns” on invested capital. Such should be relatively obvious. If you overpay for a car, a house, or a tract of raw land, when you go to sell it, you will most likely not make money. The same holds true for capital invested in markets.

However, in the midst of a “raging bull market,” investors, in the short-term, lose sight of this long-term reality. As Howard Marks noted in a recent Bloomberg interview:

“Fear of missing out has taken over from the fear of losing money. If people are risk-tolerant and afraid of being out of the market, they buy aggressively, in which case you can’t find any bargains. That’s where we are now. That’s what the Fed engineered by putting rates at zero.

“We are back to where we were a year ago—uncertainty, prospective returns that are even lower than they were a year ago, and higher asset prices than a year ago. People are back to having to take on more risk to get return. At Oaktree, we are back to a cautious approach. This is not the kind of environment in which you would be buying with both hands.

The prospective returns are low on everything.”

There are two main reasons why returns over the next decade, or two, are currently being overestimated. The first is a “you problem,” the second is “math”.

It’s A You Problem

One of the biggest impediments to achieving long-term investment returns is the impact of emotionally driven investment mistakes.

Investor psychology is helpful in understanding the specific thoughts and actions that lead to poor decision-making. That psychology not only drives the “buy high/sell low” syndrome, but also the traps, triggers, and misconceptions that lead to a variety of irrational mistakes that reduce returns over time.

There are 9-distinct behaviors that tend to plague investors based on their personal experiences and unique personalities.

The biggest of these problems for individuals is the “herding effect” and “loss aversion.”

These two behaviors tend to function together compounding the issues of investor mistakes over time. As markets are rising, individuals are lead to believe that the current price trend will continue to last for an indefinite period. The longer the rising trend lasts, the more ingrained the belief becomes until the last of “holdouts” finally “buy-in” as the financial markets evolve into a “euphoric state.”

As the markets decline, there is a slow realization that “this decline” is something more than a “buy the dip” opportunity.  When losses mount, the anxiety of loss increases until individuals seek to “avert further loss” by selling.

The chart below shows that the behavioral trend runs counter-intuitive to the “buy low/sell high” investment rule.”

The impact of these emotionally driven mistakes leads to long-term under-performance well below those “goal-based” financial projections. According to Dalbar, this underperformance exists over exceptionally long time frames. 

It’s Just Math 

The vast majority of Americans actually have a relatively short timeframe in which to accumulate assets for retirement. For most, by the time a point in life is reached where one can seriously accumulate savings, it is about 15-20 years. 

And therein lies the problem.

As we have discussed previously in “Rationalizing High Valuations:”

“The mistake investors repeatedly make is dismissing the data in the short-term because there is no immediate impact on price returns. As noted above, valuations by their very nature are HORRIBLE predictors of 12-month returns. Investors avoid any investment strategy which has such a focus. In the longer term, however, valuations are strong predictors of expected returns.”

The charts below show the 10 and 20-year rolling REAL, inflation-adjusted, returns for the market as compared to trailing valuations.

(Important note: Many advisers/analysts often pen that the market has never had a 10 or 20-year negative return. That is only on a nominal basis. Inflation must be included in the debate.)

As we pointed out in “Do You Feel Lucky,” virtually all measures of valuation currently suggest that forward returns over the next decade, or longer, will be low.

There are two important points to take away from the data. First, there are several periods throughout history where market returns were not only low but negative. Secondly, the periods of low returns follow periods of excessive market valuations.

This Time Is Not Different.

As David Leonhardt noted previously:

“The classic 1934 textbook ‘Security Analysis’ – by Benjamin Graham, a mentor to Warren Buffett, and David Dodd – urged investors to compare stock prices to earnings over ‘not less than five years, preferably seven or ten years.’ Ten years is enough time for the economy to go in and out of recession. It’s enough time for faddish theories about new paradigms to come and go.

History shows that valuations above 23x earnings have tended to denote secular bull market peaks. Conversely, valuations at 7x earnings, or less, have tended to denote secular bull market starting points.

This point can be proven not only by looking at the distribution of returns in the chart below but mathematically as well.

Capital gains from markets are primarily a function of market capitalization, nominal economic growth plus the dividend yield. Using John Hussman’s formula we can mathematically calculate returns over the next 10-year period as follows:

(1+nominal GDP growth)*(normal market cap to GDP ratio / actual market cap to GDP ratio)^(1/10)-1

Therefore, IF we assume that GDP could maintain 2% annualized growth in the future, with no recessions, AND IF current market cap/GDP stays flat at 1.25, AND IF the dividend yield remains at roughly 2%, we get forward returns of:

(1.02)*(1.2/1.5)^(1/10)-1+.02 = 1.75%

But there is a “whole lotta ifs” in that assumption. More importantly, if we assume that inflation remains stagnant at 2%, as the Fed hopes, this would mean a real rate of return of -0.25%.

In either case, these numbers are well below the majority of financial plan projections which will leave retirees well short of their expected retirement goals. 

Conclusion

While the majority of analysis is based on the idea that individuals should “buy and hold” indexed based portfolios, reality has been far different.

With retirement plans having a finite time span for both accumulation and distribution of assets, the time lost in “getting back to even” following a major market correction is the primary consideration.

The chart below picks up on the investor psychology chart first shown above. The chart below illustrates the difference between expectations and reality. The illustration shows the difference between the inflation-adjusted return on a $100,000 investment in the S&P 500  growing at 8% annually as opposed to the impact of gains and losses in market returns over time. The reason the chart begins in 1990, despite analysis showing 120-year investment returns, is that covers almost all investors in the markets currently. 

Unfortunately, most investors remain woefully behind their promised financial plans. Given current valuations, and the ongoing impact of “emotional decision making,” the outcome is not likely going to improve over the next decade, or possibly two.

Conclusion

Markets are not cheap by any measure. If earnings growth fails to grow sharply, interest rates rise, not to mention the impact of demographic trends, the bull market thesis will collapse as “expectations” collide with “reality.”

Such is not a dire prediction of doom and gloom, nor is it a “bearish” forecast.  It is just a function of how the “math works over time.”

For investors, understanding potential returns from any given valuation point is crucial when considering putting their “savings” at risk. Risk is an important concept as it is a function of “loss.” 

The more risk that is taken within a portfolio, the greater the destruction of capital will be when reversions occur.

This time is “not different.” The only difference will be what triggers the next valuation reversion and when it eventually occurs. Two bear markets taught many this lesson. Currently, there is a whole generation of investors who will have to learn this lesson the hard way.

Tyler Durden
Tue, 01/26/2021 – 15:20

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Gamestop Explodes Higher As Stock Is Now Trapped In Gamma Vortex

Gamestop Explodes Higher As Stock Is Now Trapped In Gamma Vortex

For the third day in a row, Gamestop has exploded higher, and after a brief period of rangebound trading the stock has almost doubled, surging from $90 to as high as $144 (at which point it was halted), dropped and resumed its move higher.

While there has been nothing fundamental to explain the latest move higher – the bullish tweets by Chamath Palihapitiya and Cameron Winklevoss were discussed earlier – the main reason cited for the latest melt up, in addition to a continued short squeeze of course, is that GME has now fallen in the notorious “gamma vortex”, and one look at the highest strike price in this Friday’s expiring options confirms this: with less than 300 $200 Jan 29 puts traded, there has been an absolute frenzy of calls, which at last check were above 70,000 and rising rapidly.

A quick look at the volume at price for the $200 calls shows the insanity that is being unleashed here…

… and with dealers clearly short gamma, they are now rushing to buy the stock creating the infamous feedback loop where the more OTM call activity takes place, the higher the stock rises (amid dealer delta hedging), leading to even more call buying and so on.

What this means in English is that at this point it is increasingly likely that GME will hit $200 as the gamma gravity is activated (and for those who still need an explainer, please read “All You Ever Wanted To Know About Gamma, Op-Ex, And Option-Driven Equity Flows“).

The only question we have is whether Melvin Capital is still short the stock, and whether it is about to need an even bigger bailout from Citadel and Steve Cohen. And, as a follow up, at what GME price will Citadel and Point72 themselves require a bailout from the NY Fed…

Tyler Durden
Tue, 01/26/2021 – 15:08

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Bank Buybacks Surge To Highest Level Since March

Bank Buybacks Surge To Highest Level Since March

Remember when the Fed and the administration were both raging against corporate buybacks, which especially in the case of airline and various service stocks, were the primary reason why so many companies found themselves without a cash buffer as the covid pandemic struck.

Well, it anyone hoped that companies would have learned their lesson – or any lesson – from the pandemic and instead of distributing capital to shareholders would save it for a rainy day, get ready to be disappointed. Because not only are buybacks back, they are back thanks to the Fed’s approval of banks to generously return billions back to shareholders.

As Bank of America’s Jill Carey Hall writes today, buybacks by BofA’s corporate clients over the past three weeks have picked up to their highest levels since March. With Banks allowed to buy back stock again in 1Q, Financials buybacks increased back to March levels.

The number is modest as financials comprised just 7% of buybacks from 2Q-4Q last year after making up 40% of buybacks in 2019; we expect these numbers to ramp up aggressively in the coming months as financial engineering returns to normal and as companies across all sectors quietly resume issuing debt and using the proceeds to prop up their stock price.

 

Tyler Durden
Tue, 01/26/2021 – 15:05

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“Tesla Is Not A Competitor At All”: Waymo CEO Slams Tesla’s Self-Driving Efforts In New Interview

“Tesla Is Not A Competitor At All”: Waymo CEO Slams Tesla’s Self-Driving Efforts In New Interview

Waymo’s CEO, after years of quietly putting the work in with his head down and mouth closed, appears to be ready to publicly dethrone (and humiliate) Tesla in the world of self-driving.

The CEO had some harsh words for Elon Musk in a recent interview with Germany’s Manager magazine, ridiculing Tesla’s current strategy (which, to us, appears to be making small changes here and there and letting the general public beta test their software). 

Tesla appears to be trying to merge its driver assist with full self driving, ARS Technica writes. Waymo, on the other hand, has been working on fully self-driving from the get go. Waymo CEO John Krafcik made this point and said in the interview: “For us, Tesla is not a competitor at all. We manufacture a completely autonomous driving system. Tesla is an automaker that is developing a really good driver assistance system.”

He continued: “It is a misconception that you can just keep developing a driver assistance system until one day you can magically leap to a fully autonomous driving system. In terms of robustness and accuracy, for example, our sensors are orders of magnitude better than what we see on the road from other manufacturers.”

Waymo leaders have also “long doubted” Tesla’s plans to avoid LIDAR, the ARS Technica piece notes: “They believe that lidar sensors will be indispensable to get early self-driving vehicles on the road. They also believe that the transition from a driver-assistance system to a fully driverless system is fraught with danger.”

The report also notes that Waymo seems to be much further along than Tesla: 

Krafcik says that Waymo has largely completed technical work on its self-driving software and is now focused on scaling the technology up. If that’s true, the company may be able to demonstrate the technical and commercial viability of its approach in the next couple of years. Musk has dismissed Waymo’s approach as a “highly specialized solution” and questioned whether Waymo can scale it up.

Meanwhile, despite the repeated failures of his past predictions, Musk continues to insist that Tesla’s full self-driving technology is close to release. “I am extremely confident of achieving full autonomy and releasing it to the Tesla customer base” in 2021, Musk stated last month. Krafcik, meanwhile, believes Tesla’s approach is a dead end.

We have written extensively about Tesla’s self-driving efforts. Recall, in October 2020, we published an article highlighting a video aptly titled: “Bullshit Exposed: Elon Musk & The Self Driving Scam”.

The video splices together Elon Musk’s statements regarding Full Self Driving, which he has been collecting deposits on for years, with clips of the “feature’s” recent performance. As many already know, the promises and timelines that Musk have presented in the past are a far cry from what Tesla’s vehicle’s are actually capable of performing. 

The video calls Full Self Driving a “classic bait and switch”. 

It only takes 2 minutes to thoroughly debunk Musk’s promises as nonsense. The video starts by highlighting Musk, in April 2019, stating that at the “middle of next year” there would be over a million Tesla cars on the road that are feature complete with Full Self Driving.

“We expect to have the first operating robotaxis next year. With no one in them, next year,” Musk said in 2019. 

The video then shows a litany of massive Full Self Driving screw ups, including cars botching turns, stopping in the middle of roadways for no reason and drivers being forced to re-take control of their vehicles. “Shit! Oh my god. Excuse my language. What the heck was that?” one driver says of his car’s performance. 

Tyler Durden
Tue, 01/26/2021 – 14:52

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The Fed’s Final Fantasy

The Fed’s Final Fantasy

Authored by Sven Henrich via NorthmanTrader.com,

Oh dear, the Fed has a problem. It’s one thing to deny a bubble when it’s only cranks like me on Twitter pointing out the unfolding market distortions. Yet bubble talk is now all the rage from Bloomberg, the FT, and others. Indeed Chineses stocks got in trouble last night when an advisor to the central bank mentioned the dreaded stock market bubble term.

US futures promptly ignored the Chinese bubble talk glitch as the overnight the action is as dip buying oriented as it was yesterday on the surprise reversal that itself was immediately reversed. The reversal inspired by a classic topping ingredient bears like seeing: Retail puking into any ticker that moves, valuations be damned:

Yes, we’ve reached final fantasy stage of markets, massive gains in markets and stocks in perpetuity because central banks will keep printing. To the moon risk free. Santa rally forever.

And it’s not that people don’t know it’s a bubble, everybody knows:

The only people still in public denial are the very architects of the bubble, Powell and cohorts. Too afraid they are of popping it, best to just keep expanding it. Now that the bubble question is out there Jay Powell’s next attempt at denial will ring even more hollow than usual, that is if he’s even asked about it during tomorrow press conference. Just recently he declared to not want to even speak about exit “as markets are listening”.

Yes he knows, one misstep and it’s raining stocks.

But he has an even larger problem besides communications and that is excess on every level and a stubborn volatility picture that suggests things could get dicey on the slightest misstep.

Take the aforementioned small cap chase as an example.

Small caps are as overbought as ever with a weekly RSI north of 78:

Not only that but small caps are still the technically most disconnected from basic moving averages ever, having hit 41.5% above the weekly 50 MA yesterday. There simply is no history of this never mind sustainability which raises an important question: Any reversion would raise the volatility component of small caps and note volatility has not only remained high but is remaining about what used to be key resistance levels of volatility for small caps.

Indeed the $RVX sits well above that traditional resistance zone of 25-30 that marked the end of many corrections since 2012. Now the 25-30 area appears to be support while the most recent peaks are printing lower highs meaning that the pattern is compressing and at risk of a meaningful volatility breakout, something to be mindful of as the chart is extending ever farther into uncharted territory.

Also noteworthy in the context of massive extended action in individual stocks is that $ES hasn’t really made much progress since the January 8 spike peak:

Even yesterday’s dip had broken below it before being saved again into the close. Rather algos appear to be content to play ping pong between specific price levels for the moment. None of this doesn’t preclude new highs still especially if the Fed remains ultra dovish and in public denial about asset price bubble behavior, but every new high stretches the equation and economic disconnect formula further and further into final fantasy land: Valuation without production

Volatility keeps warning. Is anyone listening? For now the answer appears to be no.

*  *  *

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Tyler Durden
Tue, 01/26/2021 – 14:25

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Conservative Journalist Andy Ngo Flees The Country Over Antifa Death Threats

Conservative Journalist Andy Ngo Flees The Country Over Antifa Death Threats

Conservative journalist Andy Ngo has fled the United States after receiving death threats from Antifa terrorists.

Ngo following his June, 2019 assault by Antifa

The Portland-based journalist – a regular presence documenting violent Antifa activity in the Pacific Northwest (and having been assaulted for his coverage) – has fled to the United Kingdom.

“My hometown of Portland, Oregon is the epicenter of American Antifa,” Ngo told Sky News Australia in a Saturday interview. Ngo noted tthat US politicians who rightly condemned the January 6 riots at the Capitol were “at best silent last year when my city was literally under siege.”

“At worse they actually promoted some of the crowd funded campaigns,” he added.

Ngo described the increasingly violent death threats he’s received, telling Sky “For a number of months now, there’s just been increasing threats of violence against me, promises by Antifa extremists to kill me.”

“It’s pained me a lot, temporarily having to leave the country and home that settled my parents who came there as political refugees,” he added.

Ngo, editor-at-large of The Post Millennial, was beaten and robbed by Antifa terrorists in July, 2019, after which his assailants – apparently not the “Unity” brand of Democrats – soaked him in liquids which police believed to be quick-drying cement. He was hospitalized following the incident.

As RT notes:

Some Antifa members have condemned Ngo for “enabling fascism” and exposing them to danger by reporting their names and posting their arrest photos. He was vilified by Rolling Stone magazine, which branded him as a “right-wing troll” and said he tries to “demonize” Antifa.

Hatred towards Ngo apparently escalated even further with the upcoming publication of his book, ‘Unmasked’, which chronicles Antifa’s history of violence and its “radical plan to destroy democracy.”

Powell’s City of Books, the Portland retailer which is touted as the world’s largest independent bookstore, was targeted by protesters after saying earlier this month that it would refuse to stock Ngo’s tome on its shelves but would continue selling it online. Demonstrations outside the flagship Powell’s store in Portland were sometimes violent and dragged on for at least a week, forcing the massive retailer to close early and evacuate employees and customers out the back door.

Ngo’s upcoming book Unmasked – scheduled for a February 2 release, is the number one seller in several political categories on Amazon.com. 

Tyler Durden
Tue, 01/26/2021 – 14:05

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Everything Is Broken

Everything Is Broken

Authored by Charles Hugh Smith via OfTwoMinds blog,

I’d say more about Big Tech but since they’ve ‘privatized totalitarianism’, I fear being ‘digitally disappeared’ if I dare criticize Big Tech.

Mr. Bob Dylan was once again prescient: Everything Is Broken. You may think I’m referring to the political system or Big Tech or the Corporate Media, and certainly all those are very broken indeed, but I’m actually referring to everyday life systems that once worked fairly well. I could mention bridges that take decades to build that sport cost-overruns in the billions and the general decline in the quality of goods and services, but let’s just stick to critical digital systems for now.

One shared trait of these broken service systems is that they’re all digital and all online. Wasn’t everything supposed to become faster, better, easier and cheaper when it was digitized and put at our fingertips via websites and mobile phone apps? The opposite is often the case: the digital systems are broken and nobody on either end–staff or customer–can figure out why or how to fix what’s broken.

You’d think the government would make special efforts to make it easy to pay one’s estimated taxes online. You’d be wrong. Like many others who’ve been filing tax returns and paying taxes for 50+ years, I decided to withdraw a few bucks from my 401K “retirement” account (in quotes because who can retire on their 401K?).

The plan manager recommended I pay the estimated taxes due via the Electronic Federal Tax Payment System (EFTPS), which is presented as the “easy way to pay your taxes.” Wow, the cat’s meow–I completed the online form with great anticipation. As a security measure, the EFTPS snail-mails a code to the physical address that’s on record with the IRS.

Alas, the EFTPS rejected my application–something didn’t align with the information on record at the IRS. My wife’s application went through without a hitch, and so after an hour on hold and a long conversation with an EFTPS staffer–who I sincerely believe was doing his best to assist me–I re-applied, attributing the failure to some detail such as typing “Street” instead of “St”. I carefully entered the name, address, etc. on my 2019 tax return and submitted the application again.

This second application was also rejected for the same reason: a discrepancy between the IRS records and what I entered on the form. Since i’d entered the data exactly as shown on my 2019 return, what was the problem?

After another long wait on hold and another fruitless conversation with an IRS staffer who did her best but could shed no light on the problem, and I took her recommendation and decided to pay the estimated tax on the regular IRS website: Direct Pay.

OK, this should be easy, right? Wrong again. Part of the process is you have to select a tax year, not for payment but for alignment with the IRS records. I kept trying 2019 to no avail. The IRS website kept rejecting my name, address and Social Security number no matter how carefully I entered the data. After numerous rejections and another painfully long wait on hold and useless conversation with a helpful staffer, I tried selecting a tax year before 2019 to match the IRS records. 2018–failure. 2017–failure. 2016–bingo, we have a winner! The IRS ignored the address I’d used in 2017, 2018 and 2019, abut kept the PO box address I’d used in 2016. How is a taxpayer supposed to know which tax year is the “correct one”? Was there nothing the staffers could see or do to rectify the guessing game?

Evidently, none of the IRS or EFTPS staff could access this data or suggest trying a previous tax year. I’d like to think I am the only one who’s experienced these kinds of needless travails with the IRS interfaces, but alas, I’ve heard from friends who were trying to sort out their elderly Mom’s tax refund, etc., that after excruciatingly long waits on hold, they got zip, zero, nada in the way of resolution.

It’s not the staff, it’s the digital systems that are broken. I can easily imagine the frustrations of the staffers trying to fix taxpayers’ problems with a kludgy system.

Next up: healthcare. Over the past few decades, as a self-employed worker I’ve paid tens of thousands of dollars in healthcare premiums to my healthcare provider because I’m my own employer, and I don’t qualify for government subsidies (Medicaid).

The task: switch my coverage from one state to another state. The wait time rivaled that of the IRS, and when I finally spoke with a human, the process took almost an hour–much of it related to compliance with regulations designed to make regulators and Corporate America look like they care (they don’t). “Do you acknowledge that if you drop dead during this phone call that you were treated fairly before you expired?” etc.

I set up my online account without issue, and a few days later received emails prompting me to “view and pay my bill.” Nice, except when I logged in, “no documents found.” I had to wait for my credit card statement to see if the autopay setup worked. I could have tried calling, but I’d expended my patience for long waits and near-zero odds of resolution.

Meanwhile, my wife had made the mistake of contacting the provider for information on their plans, and they assumed they had a “live one,” i.e. a potential customer–so they aggressively robo-called her phone every day even after she spoke with a human and explained that she was already a customer so there would be no sale and commission.

So if you’re looking for aggressive marketing, Corporate America has got you covered. If you want service–hello, developing-world, minus the work-around of a bribe.

It’s worth glancing at your Social Security statement/account every once in a while, because your earnings for 2019 might be listed as zero. OK, so the Social Security Administration (SSA) somehow failed to pick up my 2019 earnings from the IRS. A quick phone call should remedy the problem, right? Wrong. The wait time was short but the call stretched on for an hour as the staffer attempted one thing after another.

How difficult is it to strip out the taxpayers’ name, Social Security number and the earnings they paid Social Security taxes on and send that data to the SSA? Most years it works, this year it didn’t. There is apparently no digital fix, as I was eventually instructed to send paper copies of our 2019 tax returns to the local SSA office.

You might attribute these flubs to government services or quasi-government services, but that overlooks one important point: private-sector Big Tech appears to work because its task is simple: privatize customer data and sell adverts. Try getting Big Tech to resolve real-world problems, and you’ll find it’s extremely difficult to get a human to help, and the odds of the human fixing your issue are near-zero. Big Tech’s expertise is in acknowledging there is a problem and then ignoring it until you give up.

I’d say more about Big Tech but since they’ve privatized totalitarianism, I fear being digitally disappeared if I dare criticize Big Tech. A couple years of being shadow-banned were enough to give me a taste of Big Tech’s privatized totalitarianism, thank you very much. That alone tells you our entire system is broken.

Say it again, Bobby: Everything Is Broken. Just don’t say it too loud unless you have lobbyists and lawyers in excess.

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If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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My recent books:

A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).
 

Tyler Durden
Tue, 01/26/2021 – 13:45

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WallStreetBets User Writes Open Letter To CNBC

WallStreetBets User Writes Open Letter To CNBC

In the aftermath of Gamespot’s historic eruption, where infamous r/wallstreetbets, a group of traders on Reddit with more than two million users, was able to outsmart and blow up a bunch of hedge funds short the stock. A user on the reddit site published an open letter, criticizing CNBC’s reporting of the investing forum. 

Here is u/RADIO02118’s open letter to CNBC:

Before you spend another day hosting your shill hedge fund buddies to come on the air and demonize r/wallstreetbets I hope you read this.

Your contempt for the retail investor (your audience) is palpable and if you don’t get it together, you’ll lose an entire new generation of investors.

I keep thinking about these funds that are short GME like your boys at Melvin Capital / your coverage of this subreddit and I’m getting madder and madder.

These funds can manipulate the market via your network and if they screw up big because they don’t even know the basics of portfolio risk 101 and using position sizing, they just get a bailout from their billionaire friends at Citadel. Then they have the nerve to turn us into public enemy #1 just because we believe in an underdog company getting a second chance.

We don’t have billionaires to bail us out when we mess up our portfolio risk and a position goes against us. We can’t go on TV and make attempts to manipulate millions to take our side of the trade. If we mess up as bad as they did, we’re wiped out, have to start from scratch and are back to giving handjobs behind the dumpster at Wendy’s.

Seriously. Motherf**k these people. I sincerely hope they suffer. We want to see the loss porn.

This open-letter comes after a renewed battle today in the video-game retailer stock (this time involving Chamath Palihapatitya and Cameron Winklevoss) is likely to gain business media’s attention.

Users of r/wallstreetbets appear displeased with CNBC’s reporting. It only takes one Reddit post on the forum to go viral, one where it calls for a boycott of the financial television news network. 

Tyler Durden
Tue, 01/26/2021 – 13:27

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BofA Warns “Take Profits” Ahead Of Coming Correction

BofA Warns “Take Profits” Ahead Of Coming Correction

We shared a note on Sunday from Morgan Stanley asking “What To Do About All This Optimism” the bank said that “in November, December and now January, no question or concern has come up more often than ‘everyone is optimistic.'” On Monday, screaming most shorted stock rallies and wild speculation is clear evidence the market bubble continues to inflate. 

After a dramatic rebound from the coronavirus crash last March, investors are overly optimistic, and perhaps new observations from BofA on Monday can finally answer Morgan Stanley’s question of what investors should do with all this optimism, that is, “take some profits or other defensive measures.”

BofA’s technical analyst Stephen Suttmeier published a note on Monday titled “Correction risk increases moving into February,” point out that as January comes to an end, seasonality risks in February may suggest it’s now time to “take some profits, or other defensive measures, as several market indices achieve upside counts projected by the 2020 Election breakouts.”

Suttmeier said S&P 500 (SPX) probed the upside target 3,830-3,885 from the bullish triangle constructed ahead of the US presidential election, the Russell 2000 (RTY) has hit its first upside target, the NASDAQ 100 (NDX) tests the 13,500-13,630 target.

BofA’s market technician has a yearly bullish view of SPX 4,000+. Still, in the short-term, he envisions a tactical downside risk developing from complacent put/calls and a lack of bullish confirmation of the rally into early 2021 from the percentage of SPX stocks above 10-day and 50-day moving averages, cumulative net up the volume on the SPX, Chicago Fed Financial Conditions and the investment-grade corporate bond ETF (LQD). 

Suttmeier adds a weekly Demark upside exhaustion signal was triggered on SPX ahead of the bearish February seasonality. With the risks of a correction mounting next month, he said any downside would be considered a “buyable correction within a larger bullish trend for equities.”

In chart one, Suttmeier said SPX has “achieved upside targets” of 3,830 to 3,885 targets. He said, “should upside stall at or near this projected resistance heading into February, which shows weaker seasonality going back to 1928, the key supports are 3,750, 3,663 – 3,620 and the prior highs from September and October 2020 at 3,588 – 3,550.” 

In chart two, BofA’s market technician said RTY has achieved “its first upside count at 2,160.” 

“The last three US Presidential Elections in 2012, 2016, and 2020 saw big bullish breakouts for the Russell 2000. The post – 2020 Election breakout from a 2- year+ base achieved the first upside count on the RTY at 2,160 last week, and we are not ruling out some backing and filling from this projected resistance,” he said. If key supports at 2,026 to 1,927 and 1,742 to 1,700 are held, the analyst said 2,440 could be the next upside target. 

In chart three, NDX probes the upside target of 13,500 to 13,630. If the index stalls from here, he said, “the immediate support is near 12,530, but the triangle breakout stays intact above support at 12,268 – 12,090 down to 11,800, which is backed up by rising 13 and 26 – week MAs.” 

In chart five and six, both the 5-day and 25-day CBOE total put/call ratios are at contrarian bearish overbought levels. The analyst said, “We view this as a risk,” something that could interrupt the equity rally next month. 

In chart seven, Suttmeier shows the percentage of SPX stocks above 10-day MAs is declining. This is a negative tactical divergence heading into the weaker month of February. 

In chart eight, the percentage of SPX stocks above 50-day MA begins to breakdown. 

In chart nine, cumulative net up volume on the SPX does not confirm the rally. 

In chart eleven, lower highs on LQD is a significant concern that can interrupt SPX rallies. 

Suttmeier takes SPX monthly seasonal data back to 1928 and outlines how February is a risky month for investors, especially given all the optimism and speculation in the epic bubbles created by no other than the Federal Reserve. 

A weekly Demark 13 upside exhaustion signal was recently triggered on SPX. Move evidence suggesting a correction in the index could occur next month. 

Sentiment indicators for SPX are approaching euphoric levelss from 2018, 2015, and 2011.

US Corporate High Yield Average OAS has yet to blowout again, back to pre-coronavirus levels. 

With BofA suggesting a correction could be approaching in the coming weeks, Morgan Stanley points out investors are overly bullish as Goldman Sach’s chief economist outlined days ago in a lengthy note titled “What Could Go Wrong” with the 2021 rebound, other downside risks remain “including uncertainty about how consumers will respond to lingering risks and how new virus mutations will affect virus spread and vaccine efficacy.” Some more details on these three risks:

  • The first downside risk, according to Goldman, is that consumers remain more cautious than expected, even as mass vaccination and warmer weather greatly reduce virus spread and the risk of infection. While this could restrain the consumption boom, consumer surveys and the resiliency of the consumer thus far suggest such downside is likely limited. 
  • The second, “more concerning downside risk” is that virus mutations significantly increase the bar for herd immunity, either because they are far more infectious or because they decrease the efficacy of existing vaccines. This would likely delay the consumption boom by pushing back the date when the US reaches herd immunity and virus risks diminish substantially.
  • The third, most severe downside risk is the evolution of a vaccine-resistant virus strain that would require a new vaccine and another round of vaccination. Virus-sensitive spending would likely retrench while a new vaccine is developed,and although a new vaccine could be approved in less than five months, the consumption boom would likely be delayed until 2022

With downside risk mounting, RIA Chief Investment Strategist Lance Roberts explained Monday morning why he started selling stocks and raised cash for clients ahead of what he believes could be a market correction. 

The biggest take away is that investors are too optimistic heading into a traditionally bearish month. 

Tyler Durden
Tue, 01/26/2021 – 13:25

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Subpar 5Y Auction Sells Another Record Batch Of Debt

Subpar 5Y Auction Sells Another Record Batch Of Debt

Unlike yesterday’s stellar 2Y auction, today’s sale of 5Y paper was decidedly less impressive.

The bond sale, which raised $61 billion up from $59 billion last month, was the latest record-sized 5Y auction.

However unlike yesterday’s 2Y auction which saw the yield also drop to a record low, today’s 5Y yield actually rose from last month’s 0.394% to 0.424%, stopping through the 0.426% When Issued by 0.2bps.

The Bid to Cover of 2.34 was also weaker from last month’s 2.39 and in fact was the lowest since July.

The internals were slightly stronger, however, with indirects taking down 60.5%, up from 57.1% last month and right on top of the 60.3% six auction average. And with Directs taking down 14.1%, Dealers were left with 25.4%, just slightly above last month’s 24.9% and the 6-auction average of 24.4%.

Overall, a forgettable mediocre auction which had no impact on secondary markets, and which is neutral in terms of set up ahead of Thursday’s 7Y auction.

Tyler Durden
Tue, 01/26/2021 – 13:19

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The Chart That Explains Larry Fink’s “Green” Agenda

The Chart That Explains Larry Fink’s “Green” Agenda

Earlier today, Blackrock founder and billionaire Larry Fink took over the CNBC airwaves, and the favorite scribe of the ultra rich, Andrew Ross Sorkin, penned an article in the NYT about how “BlackRock Chief Pushes a Big New Climate Goal for the Corporate World” in which he said that “Larry Fink is using his firm’s huge influence to pressure companies to eliminate greenhouse gas emissions by 2050.” Which, of course, is an amusing take – the Blackrock CEO led a similar “crusade” against buybacks in 2013-2016 with absolutely zero success and in fact, buybacks exploded in 2017 and 2018 after Trump allowed offshore tax repatriation, leaving companies more indebted than ever and more prone to failure once a catastrophic event happened. Such as covid.

Sorkin at least was intellectually honest to admit that – at a time when one of the biggest China lackeys and opportunitists of his generation, Hank Paulson, has launched a “Green Institute” when he certainly could care less about the environment but certainly cares about the fusion of China money and the ESG narrative –  skeptics have argued that “Mr. Fink’s support for the reform-minded E.S.G. movement — which stands for environmental, social and governance — was a marketing gimmick that companies would back in an economic boom but shun in a crisis. If corporate America had to pick between cutting sustainability programs or dividends for investors, the thinking went, sustainability programs would be the first to go.”

There’s that, and there’s also the fact that green and climate change are the biggest taxpayer-funded boondoggles in history, with estimates for the final (subsidized) cost for Biden’s green agenda ranging from $2 to $10 trillion (or more if he goes full “Green New Deal”).

But in the end, the real reason why Fink loves green is that other “green.” Recall what business Larry Fink – the CEO of the biggest asset manager and passive investor in the world – is in: his job is simple – to get investors, everyone from robinhooders, to mom and pop, to professionals into equity funds. And as shown below, there is no greater draw of capital right now than the green narrative (or, as it is known in Wall Street circles, ESG).

So for all those wondering why Larry Fink is such a staunch defender of the environment, the dark blue line below explains it all:

Here’s Goldman explaining it:

ESG investing within the US skyrocketed in 2020. Inflows into US ESG-focused equity funds totaled $47 billion in 2020 compared with combined inflows of $25 billion between 2015 and 2019. ESG-focused funds are those that are marketed as ESG funds or indicated ESG investing as one of their main objectives. ESG-focused equity fund AUM has increased to $375 billion from $260 billion at the start of 2020. In contrast with ESG funds, all other US equity funds (active, passive, and ETFs) saw outflows totaling around $300 billion last year.

While we have discussed the farce that is ESG investing – where the so-called “ESG” stocks are nothing more than the biggest gigacaps, which incidentally burn gigawatts in electricity to power all those cloud servers…

… there is another reason why Larry loves “green”; the reflexive nature of ESG means that the more popular it is, the more it outperforms, not for any other reason but simply because it houses ever more assets. And the more it outperforms, the more capital inflows it gets, and so on creating a perfectly self-contained financial perpetual engine… at least until the ESG bubble pops and all the virtuous hot air inside it escapes. Here’s Goldman again:

Strong fund flows have corresponded with strong ESG fund performance. The average US ESG equity fund has outpaced the S&P 500 (30% vs. 21%) and the average US large-cap core mutual fund (19%) during the past 12 months.

US renewables stocks have outperformed the S&P 500 by around 200 percentage points since the start of 2020 (+218% vs. +21%). Among ESG investments, renewables companies are the most exposed to the transition from fossil fuels to renewable energy across various industry verticals, such as solar, energy storage, electric vehicles, and cleaner fuels. US renewables performance has been particularly strong during the past few months around the US elections.

One final reason why Larry Fink has emerged as the prophet of ESG: the bubble can only keep growing as long as someone is preaching, and getting new capital to come, expanding the multiple… because the price is certainly not coming from earnings growth. Goldman again:

Under the surface, valuation expansion has driven the majority of US renewables returns. During the past 12 months, P/E expansion has accounted for 86% of US renewables returns and 109% of S&P 500 returns. Although the pandemic-driven earnings weakness among US renewables has been less pronounced than that of the overall market, the contribution of earnings growth to US renewables performance has been only modest.

In short, “green” or ESG, is nothing but a marketing gimmick wrapped conveniently inside the virtuously-signaling wrapper of an “environmentally conscious”, socially responsible Wall Street professional, yet at the end of the day it’s all lies, and the only thing that matters – to both Larry and all others like him is to keep the only “green” that matters on Wall Street flowing. That will continue as long as ESG remains the dominant “virtue” on Wall Street, where countless asset managers preach the benefits of ESG, yet only care about their commissions and about investing in the gigacap stocks that continue to lead the market. This is what we said back in October:

Instead of finding companies that, well, care for the environment, for society or are for a progressive governance movement, women’s rights or social equality (a bit of a paradox in a market that has led to the biggest wealth divide in history), it turns out that the most popular holdings of all those virtue signaling ESG funds are companies such as…. Microsoft, Alphabet, Apple and Amazon – you know, the world’s four biggest companies (and in some cases anti-ESG monopolies) that just get bigger by the day  – one which one would be hard pressed to explain how their actions do anything that is of benefit for the environment, society, or whatever the S and G stand for. It gets better: among the other most popular ESG companies are consulting company Accenture (?), Procter & Gamble (??), and Bank of New York Mellon (!!?!!!?!). At least Exxon is missing.

Yes, for all those who are speechless by the fact that the latest virtue-signaling investing farce is nothing more than the pure cristalized hypocrisy of Wall Street and America’s most valuable corporations, which have all risen above the $1 trillion market cap bogey (and Apple is now $2 trillion) because they found a brilliant hook with which to attract the world’s most gullible, bleeding-heart liberals and frankly everybody else into believing they are fixing the world by investing in “ESG” when instead they are just making Jeff Bezos richer beyond his wildest dreams, here is Bank of America’s summary of the 50 most popular ESG funds. Please try hard not to laugh when reading what “socially responsible, environmentally safe, aggressively progressive” companies that one buys when one investing into the “Green”, aka ESG scam.

If Larry really cared about the environment instead of just how to boost his bonus, he would donate the fees that Blackrock generates from its ESG funds and donate them to charity. Or the least he could do is stop using his private Gulfstream 650 which burns 1,100 kilograms of massively polluting jet fuel per hour, while he is participating in this “green charade.”

Larry Fink’s Gulfstream 650 corporate jet, pictured here at Sydney Airport. The G650 burns 1,100 kilograms of jet fuel per hour. 

Neither is ever going to happen.

Tyler Durden
Tue, 01/26/2021 – 13:06

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Budweiser, Pepsi, Other Prominent Brands Pass On This Year’s Superbowl

Budweiser, Pepsi, Other Prominent Brands Pass On This Year’s Superbowl

Submitted by Market Crumbs

This year’s Super Bowl was long destined to be a far cry from the usual spectacle as a result of the pandemic. Super Bowl LV, which will be held at Tampa’s Raymond James Stadium, will see only 22,000 fans witness the game in person compared to a stadium capacity of 65,000.

The NFL saw regular season ratings decline as TV viewership dropped by about 10% this season compared to 2019, ending consecutive years of audience growth. The ratings decline has so far dragged into the playoffs as well, as the first eight playoff games all saw ratings declines compared to last season.

With the NFL’s ratings declines likely to spill into Super Bowl LV, a handful of companies that are regularly big spenders on ads have decided to opt out of advertising for this year’s game, albeit not entirely in some instances.

Pepsi announced earlier this month it wouldn’t advertise its namesake brand, Pepsi, so it could focus on the halftime show it’s sponsoring. Pepsi’s vice president of marketing, Todd Kaplan, said the decision to skip ads in favor of the half time show was not driven by spending cuts.

Kaplan said other Super Bowl advertisers are “talking and fighting for 30 seconds” of people’s attention while he cited data showing the halftime show is responsible for some of the most-watched moments during the telecast.

Pepsi, which spent more than $31 million advertising during last year’s Super Bowl, will still run ads for its other brands such as Mountain Dew and Frito-Lay products.

Pepsi’s competitor, The Coca-Cola Company, also followed suit and said it made the “difficult choice” to not run ads so it could “ensure we are investing in the right resources during these unprecedented times.” Coca-Cola, which spent $10 million on Super Bowl ads last year, announced last month that it was laying off 17% of its global workforce.

This week Anheuser-Busch announced it wouldn’t run an ad for its Budweiser brand for the first time since 1983. The company will instead donate what it would have spent on an ad—which is currently $5.5 million for 30 seconds compared to $5.6 million last year, to coronavirus vaccination awareness efforts.

The company will instead run four minutes worth of ads for its other brands that are becoming increasingly popular such as Bud Light, Bud Light Seltzer Lemonade, Michelob Ultra and Michelob Ultra Organic Seltzer.

Beyond the ratings decline, some believe advertisers just don’t see the value in running ads this year given the overall mood among people.

“I think the advertisers are correctly picking up on this being a riskier year for the Super Bowl,” Villanova University marketing professor Charles Taylor said. “With COVID and economic uncertainty, people aren’t necessarily in the best mood to begin with. There’s a risk associated with messages that are potentially too light. … At the same time, there’s risk associated with doing anything too somber.”

As more well-known brands drop out of advertising for the big game, newcomers such as Triller, Fiverr, DoorDash, Mercari and Huggies are all making their Super Bowl ad debuts.

With everything from ratings, the economy and the pandemic weighing on the Super Bowl, some advertisers are reevaluating the cost of spending millions on a Super Bowl ad while others are embracing the opportunity.

 

Tyler Durden
Tue, 01/26/2021 – 12:45

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Target To Give All Hourly Employees $500 Bonus

Target To Give All Hourly Employees $500 Bonus

By Marianne Wilson of Chain Store Age,

On the heels of a strong holiday season, Target is paying out its fifth round of employee bonuses during the pandemic.

The discounter announced it is giving $500 bonuses to all hourly employees in stores (including seasonal holiday hires), distribution centers, headquarters and field-based offices. In addition, all store directors, executive team leaders and salaried distribution center leaders (12,000 in total) will receive a bonus ranging from $1,000 to $2,000. 

The total investment for the new round of bonuses comes to more $200 million. Target said it aid it has spent $1 billion more on investments in employee benefits and pay in fiscal 2020 than in 2019.

Target also will extend its coronavirus benefits into the new year. The benefits include waiving the company’s absenteeism policy for coronavirus-related illness, providing free access to health care through virtual doctor visits for all team members, a 30-day paid leave for vulnerable workers, free backup care to all U.S.-based team members, and mental health support through free counseling sessions.

Target-owned grocery delivery service Shipt also announced a round of bonuses for its contract workers or shoppers who completed more than 50 orders during November and December. Shoppers who delivered 50-plus, 100-plus, 300-plus, 500-plus and 1,000-plus orders during November and December will receive one-time bonus payouts of $50, $100, $150, $250 and $500 respectively, to be paid out Friday, Jan. 29. They will receive one-time bonus payouts of between $50 and $500, depending on the number of orders completed.

Tyler Durden
Tue, 01/26/2021 – 12:25

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Nancy And Paul Pelosi Bought More Than $1 Million In Tesla, Disney And Apple Calls In December

Nancy And Paul Pelosi Bought More Than $1 Million In Tesla, Disney And Apple Calls In December

When one looks at a situation like Monday’s insanity-fueled, retail induced short squeeze across the board, one must ask: who are the government officials that have allowed this to happen and what have they been doing during the time they should be regulating such multiple-sigma market absurdities?

Allow us to offer a partial answer. If you were Nancy Pelosi and her husband, you were buying call options in names like Apple, Tesla and Disney. That’s what a new disclosure, detailed in Barron’s, revealed late last week. 

Paul Pelosi purchased LEAPS in Tesla, Apple and Disney and shares in AllianceBernstein on December 22, the disclosure revealed. In other words, it’s not just clueless retail Robinhood investors that are speculating; it’s also clueless politicians. 

He purchased 100 $100 strike Apple calls that expire in January 2022 and paid between $250,000 and $500,000 for them. He also bought 25 in the money Tesla calls, selecting the $500 strike calls with a March 2022 expiration, according to the report. Those cost between $500,000 and $1 million. Finally, he bought between $500,000 and $1 million in Disney options, buying 100 calls at a $100 strike that expire in January 2022. 

He also “paid $500,001 to $1 million for 20,000 shares of global investment firm AllianceBernstein,” putting his average price around $33.37.

Obviously, the call option purchases are worth noting – not only because they are leveraged investments and are far more risky than buying outright stock – but because the Speaker now clearly has a vested interest in the success of names like Tesla, whose trajectories as public companies can be altered drastically by government decisions. 

Paul Pelosi and Speaker Pelosi’s office didn’t respond to requests for comment, Barron’s said. Can’t say we’re surprised.

Tyler Durden
Tue, 01/26/2021 – 12:10

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Remote-Workers & Robinhood’rs Routed As Critical Internet Services Suffer Major East Coast Outage

Remote-Workers & Robinhood’rs Routed As Critical Internet Services Suffer Major East Coast Outage

Users of Zoom, YouTube, Google, Gmail, Google Meet, Robinhood, Slack, Spotify, and Amazon Web Services are reporting issues or outages on Tuesday morning, according to Downdetector.

These web services are critical for remote working folks and could cause disruptions.

Zoom users are reporting issues or outages across Mid-Atlantic and Northeast states.

The same goes for users of Google…

..and we all know who is to blame…

Developing…

Tyler Durden
Tue, 01/26/2021 – 11:56

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Top CBS Execs Suspended After LA Times Exposes ‘Widening Allegations’ Of Racist, Sexist Conduct

Top CBS Execs Suspended After LA Times Exposes ‘Widening Allegations’ Of Racist, Sexist Conduct

Two top CBS executives have been suspended following a LA Times investigation detailing “widening allegations that the pair cultivated an environment that included bullying female managers and blocking efforts to hire and retain Black journalists.

Peter Dunn, shown at the Broadcasting & Cable Hall of Fame Awards in 2017, ran the CBS television station group since 2009.
(Andy Kropa / Invision/AP)

According to allegations, Peter Dunn, president of CBS television stations, frequently denigrated black news anchor Ukee Washington (a distant relative of Denzel Washington) at Philadelphia CBS station KYW, calling him “just a jive guy” and criticizing his dancing. Several black journalists reportedly had either left positions at the Philadelphia station, or were blocked by either Dunn or Peter Friend – one of Dunn’s lieutenants and the senior vice president for news.  

Ukee Washington

In addition to the comments about Washington, Dunn allegedly refused to approve a contract extension for another Black anchor, Rahel Solomon, a Philadelphia native who served as KYW morning anchor for more than two years. [Former senior Philadelphia station executive Brien] Kennedy, in an interview, said that in a two-plus-hour phone call, Dunn raised “bizarre objections,” such as saying, “I hate her face.” LA Times

Hours after the Times report, the National association of Black Journalists held a meeting with high-level ViacoomCBS executives, “including CBS Entertainment Chief Executive George Cheeks and ViacomCBS Executive Vice President Marva Smalls, who oversees the company’s diversity and inclusion efforts,” during which NABJ members raised other complaints and demanded the firing of Dunn and Friend.

In a statement, NABJ criticized CBS’ hiring practices at its flagship TV station, WCBS-TV Channel 2 in New York, saying the station only recently hired a full-time Black male reporter in New York after five years without one. NABJ also said that WCBS has just one full-time Black female reporter and only one Black news producer in New York. In addition to overseeing the entire CBS TV stations chain, Dunn has managed WCBS since 2005. –LA Times

Four female CBS executives have also accused Dunn of bullying between 2017 and 2019.

In a late Monday statement, the network said that Dunn and David were “placed on administrative leave, pending the results of a third-party investigation into issues that include those raised in a recent Los Angeles Times report. CBS is committed to a diverse, inclusive and respectful workplace where all voices are heard, claims are investigated and appropriate action is taken where necessary.”

CBS took action just one day after The Times published an investigation that detailed how senior executives disparaged CBS station employees in Philadelphia, the nation’s fourth-largest media market. Dunn ran the Philadelphia station from 2002 through 2004 before several promotions. For the last 11 years, he has been in charge of CBS’ 28 television stations across the country, including KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles.

The division has 2,800 employees and provides local news for millions of viewers who live in cities where CBS owns a TV station, including Los Angeles, San Francisco, Dallas, Chicago and New York. –LA Times

Friend said in a statement to the Times that comments he “may have made” about employees or prospective hires “were only based on performance or qualifications – not about anyone’s race or gender.”

Meanwhile, the Times investigation also uncovered fresh controversy over a CBS’ $55 million purchase of independent New York station WLNY-TV – which included a membership to the ultra-exclusive Sebonack Golf Club in Southampton NY, provided by former WLNY owner, Michael Pascucci. According to CBS, the membership belonged to the company but was put in Dunn’s name because the club doesn’t have corporate memberships.

According to Cheeks, CBS Chief Operating Officer Bryon Rubin will lead the TV station group on an interim basis, saying in a statement to CBS staff that “Bryon is very familiar with your business and ready to support your efforts.

Tyler Durden
Tue, 01/26/2021 – 11:40

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Gordon Johnson: Expect Tesla To “Beat” On 2021 Shipment Guidance And Q4 Net Income

Gordon Johnson: Expect Tesla To “Beat” On 2021 Shipment Guidance And Q4 Net Income

Tesla is set to report earnings on Wednesday after the bell this week and, as such, GLJ’s principal Gordon Johnson has released his look into what Q4 numbers could bring. Johnson estimates that Tesla will beat expectations in both its 2021 shipment guidance and its Q4 2020 net income.

In a note published Tuesday, January 26, Johnson notes that Tesla’s Q4 net margins are expected to come in at a “magical” industry best without any good reason for doing so:

While we have historically done a bridge to approximate TSLA’s forward gross margin, we no longer feel this approach works. Why? Well, simply put, despite 15 price cuts in 2020 for an average ~12.66%, vs. a volume-weighted avg. fall in battery costs of -12.74% in 2020 YoY according to BNEF, TSLA reported higher auto segment margins in 3Q20 (i.e., 27.7%) vs. those reported in both 1Q20 (i.e., 25.5%) and 2Q20 (i.e., 25.4%) – and appears set to report record margins in 4Q20.

TSLA’s 3Q20 COGS margin improvement of +7% was the best seen since 3Q18, and second best since 1Q17. That is, as the math above shows, to simply say battery prices are falling does not appear to be a valid explanation for TSLA’s seemingly impressive margins.

The better margins will come despite the fact that, as we have consistently documented here on Zero Hedge, Tesla continues to lower prices across the board in both the U.S. and China.

In fact, Johnson admits: “We feel there are more questions than answers around how TSLA is achieving such seemingly impressive automotive margins quarter-over-quarter.”

The note continues: “Assuming $450mn in credit sales (our work suggests TSLA’s China NEV credits/car in China in 4Q20 were $2K vs. just $900 in 3Q20), we arrive at GAAP net income of $950mn, or $0.82/shr. Stated differently, we now expect 4Q20 rev/EPS of $10.7bn/$0.82 (Street $10.3bn/$0.73). Furthermore, with E. Musk noting TSLA’s goal to “de-risk” in 2021 so “there’s almost no dependency” on TSLA’s internal cell production), we expect the company’s guided shipments to come in around 800K cars for 2021 vs. the current Consensus.”

Johnson says he thinks there is risk to Tesla hitting its full year 2021 shipment guidance. He puts the primary risk at new domestic players in China:

…simply put, despite five price cuts in 2020 in China alone, where the price of TSLA’s highest-selling model was cut by 30% (Ex. 4), TSLA’s retail EV market share in China fell from a high of 31.5% in Mar. 2020 to 14.8% in Dec. 2020 (Ex. 10). Thusly, when considering significant expansions planned by Chinese domestics (i.e., NIO + Xpev + Li Auto + BYD), VW is planning capacity of 300K cars at its Anting plant in China as well as capacity of 300K cars at its Foshun plant in China (or 600K cars in total).

In Europe, Johnson notes that Tesla’s EU sales fell 10% in 2020. He sees VW taking the title of “leader in the EV space” in the EU and says that Tesla’s new Berlin factory won’t make a “material difference”. 

Finally, Johnson isn’t sold on Tesla’s “great feat” of selling 500,000 cars last year. He swiftly disassembles this favorite talking point by Tesla bulls:

We continue to hear this argument from the “smart bulls”. However, while E. Musk predicted TSLA would sell 1mn cars in 2020 in 2018, TSLA ended up selling just under 500K cars in 2020 (despite stated capacity of 840K cars exiting 3Q20). And, while many “smart bulls” attribute this the COVID pandemic, TSLA cut the price for its cars 15 times in 2020 to get to 499.550K cars delivered in 2020. In short, we don’t see this as sustainable (profitless growth via deep price cuts is not a sustainable business model)

Tyler Durden
Tue, 01/26/2021 – 11:25

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Home Prices Soar At 4.5 Times The Fed’s Inflation Target In All US Cities

Home Prices Soar At 4.5 Times The Fed’s Inflation Target In All US Cities

The Fed’s most frequent lament is that no matter how many trillions in bonds (and stocks and ETFs) it buys or how much liquidity it forehoses into the market, it just can’t push inflation higher.

Well, here’s an idea: maybe all the central-planning megabrains at the Marriner Eccles building and 33 Liberty Street can take a break from whatever circle jerk they are engaged in right now, and look at the latest Case Shiller numbers which showed not only that home prices surged at the fastest pace in seven years, rising more than 9% compared to a year ago…

… but that for the first time since the financial crisis, the annual price increase in every major US MSA (and according to Case Shiller there are 20 of them) rose by at least 6.8% Y/Y (in the case of Las Vegas) and as much as 13.8% in Phoenix, meaning that the average home prices across all of the US is now rising at 4.5 times the Fed’s own inflation target, and even the cheapest US MSA is rising at more than 3 times the Fed’s inflation goal.

Why does this matter? Simple: Because if – as Joseph Carson mused last month – CPI measured actual house prices, inflation would be above 3% right now.

For those who missed it, here again is the explanation:

“Actual” consumer price inflation is rising during the recession. That runs counter to the normal recessionary pattern when the combination of weak demand and excess capacity works to lessen inflationary pressures.

The main source of faster consumer price inflation is centered in the housing market. The Case-Shiller Home Price Index posted a 7% increase the last year, more than twice the gain of one-year ago.

The sharp acceleration in house price inflation represents the fastest increase since 2014 and runs counter to the patterns of the past two recessions. During the 2001 recession house price inflation slowed by one-third, while in the Great Financial Recession housing prices posted their largest decline in the post-war period, falling over 12% nationwide.

The consumer price index (CPI) does not show in house price inflation because it uses a non-market rent index to capture the trends in housing inflation. The Bureau of Labor Statistics (BLS) estimates that the non-market rent index has increased 2.5% in the past 12 months, or 450 basis points below the rise in house prices.

If actual house prices were used in place of rents core CPI would have registered a 3% gain in the past year, nearly twice the reported gain of 1.6%.

If aggregate price measures did not exist house prices would be one of the most important measures to gauge inflation and the proper setting of official interest rates. That’s because house price cycles include easy credit/financial conditions, excess demand, and inflation expectations, three key ingredients of inflation cycles.

Rising consumer price inflation is added to the list of unique features of the 2020 recession. Others include an increase in corporate debt levels instead of debt-liquidation and rising equity prices instead of share price declines.

If the 2020 recession has economic and financial features that normally appear during economic recovery what does that imply for the next growth cycle? The debt overhang at the corporate and federal debt should impede the next growth cycle. And if the cyclical rise in housing demand is occurring in recession it can’t be repeated during recovery.

The next economic cycle will be filled with unique tipping points, and no one should assume that policymakers can control or offset them.

Tyler Durden
Tue, 01/26/2021 – 11:10

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Biden To Halt Oil, Gas Leasing On Federal Land

Biden To Halt Oil, Gas Leasing On Federal Land

As previously reported, and as was just confirmed by the WSJ, President Biden on Wednesday will announce that he is halting all new oil and gas leasing on federal territory, “setting up a confrontation with the oil industry over the future of U.S. energy.” And since this effectively will suspend all fracking on federal lands (albeit once the extension period expires), this means that contrary to his representations, Biden is in fact banning fracking despite his Aug 31, 2020 proclamation that “I am not banning fracking. Let me say that again. I am not banning fracking, no matter how many times Donald Trump lies about me.”

As the WSJ reports, the Biden administration has drafted an order to impose the moratorium while it conducts a review of the federal oil and gas leasing program, in what is potentially a first step toward his campaign pledge to end future leases. The order is expected to be included in a package of measures across government aimed at reducing greenhouse gas emissions and boosting land conservation, which is just another conduit to legitimize trillions in taxpayer spending under the guise of “fixing the environment”, aka the oldest grift in the book, yet one which liberals and virtue-signalers fall for every single time.

In addition to the moratorium on oil and gas leasing, Biden is expected to set a goal of protecting 30% of federal land and water by 2030, the WSJ sources said. The president is also planning to re-establish a White House council of science advisers that was established during the Obama administration.

And since this was leaked well in advance, for those who missed it last week, we published a report from Goldman analyzing the consequences of the biden frack ban. We republish it again below:

Biden’s Federal Land Lease Ban To Send Oil Prices Higher: Goldman

Oil stocks tumbled following yesterday’s one-two punch of Biden energy news, when first we learned that the Interior Department enacted a 60-day moratorium on issuing oil and gas leases that affects all federal lands, minerals, and waters, which was followed by news that Biden was set to fully suspend the sale of oil and gas leases on federal land, which accounts for about a tenth of U.S. supplies.

Yet while E&P companies sold off sharply on the news, one can argue that the decision wasn’t exactly a surprise for the drillers themselves, because as the following chart from BofA shows, federal drilling permits spiked into year-end as companies clearly anticipated a ban on drilling on federal lands.

But it’s not just speculation about what impact on drillers – and especially frackers will be – Biden’s intervention will have: an just as important question is what to expect on the price of oil as a result.

Well, overnight, Goldman’s commodity team said that a lack of urgency from the US government to lift Iranian sanctions and a push for larger fiscal spending support the constructive view on oil and gas prices; at the same time it estimated that a 2 trillion stimulus over 2021-2022 would increase US demand by 200k bpd and stated that delays in a full return of Iran production would support the bullish oil outlook. Goldman’s summary, which could say is obvious: “policies to support energy demand but restrict hydrocarbon production (or increase costs of drilling and financing) will prove inflationary in coming years given the still negligible share of transportation demand coming from EVs (and renewables).

In short, just what Putin and the Crown Prince ordered.

Below we excerpt from Goldman’s note:

Initial orders by the Biden administration include restrictions on North American hydrocarbon leasing, drilling and pipelines. In turn, initial comments suggest no urgency in lifting sanctions with Iran. Combined with a push for greater fiscal spending – and hence higher energy demand – these initial actions reinforce our constructive view on oil and gas prices. As we have argued, policies to support energy demand but restrict hydrocarbon production (or increase costs of drilling and financing) will prove inflationary in coming years given the still negligible share of transportation demand coming from EVs (and renewables).

  • The Interior Department imposed on Wednesday a 60-day moratorium on oil and gas leases and drilling permits on federal lands, minerals, and waters. This order is temporary and has no impact on near-term activity as producers had aggressively accumulated federal drilling permits. While temporary, this order nonetheless suggests that the new administration views its pledge to halt leasing on federal lands as a priority of its climate plan, with such a broader moratorium on federal leasing potentially scheduled for next week according to Bloomberg. As we argued ahead of the election, such actions point to both higher production and financing costs for shale producers in coming years as well as lower recoverable resources. The additional orders to impose a moratorium on leasing activity in Alaska’s Arctic National Wildlife Refuge and to revoke Keystone XL’s border permit point to a similar regulatory shift.
  • On their own, these actions do not point to a faster tightening of the oil market. in 2021-22, as a ban on permitting would still leave a window of up to two years to drill from elevated outstanding permits. In fact, this would likely shift drilling activity away from private to federal land (for example from the Midland to the Delaware basin) for a couple years to minimize the loss of recoverable resources. While producers are focused on shareholder returns over production growth,investors may support more aggressive drilling to secure future cash flows, potentially creating a modest headwind to sharply higher oil prices in the next few years. The administration’s focus on fiscal spending and recent foreign policy comments are, however, likely to help tighten the oil market in 2021-22.
  • The release of President Biden’s COVID-relief plan has led our economists to increase their assumption for additional fiscal measures from $750bn to $1.1tn. Larger boosts to disposable income and government spending will make this recovery energy intensive long before it hurts oil demand, in our view, especially as they come alongside those in China and the EU. On our estimates, a $2 trillion stimulus over 2021-22 would for example boost US demand by c. 200 kb/d. Such spending would further contribute to a weakening dollar which itself lends support to oil prices. A faster vaccination roll-out would in turn accelerate the rebound in jet fuel consumption, which still accounts for more than half of the remaining lost oil demand.
  • Finally, the new administration’s focus on reaching bi-partisan policy support suggest a lessened incentive to quickly revisit the divisive Iran nuclear deal. While the US president has significant freedom to re-enter the JCPOA agreement (see Appendix),the confirmation hearing for the US Secretary of State and Treasury Secretary focused on the need for consultation with Congress and US allies, on Iran being non-compliant and on the goal of reaching a stronger and longer new deal. We view such statements as consistent with our assumption that the increase in Iran exports will remain moderate in 2021 (we assume 0.5 mb/d in 2H21) with in fact risks that our assumed full recovery in Iran production in 2Q22 proves optimistic. Delays in a full return of Iran production would reinforce our bullish oil outlook since we already forecast a tight 2022 crude market with low OPEC spare capacity.
  • Stronger demand and a slower ramp-up in Iran production would create a larger call non shale production, which will face higher regulatory costs, leading to further increases in long-dated oil prices. The oil market experienced such an outcome in 2018, when the loss of Iran production and strong economic growth pushed oil prices sharply higher. As we argued at the time, the rally to $80/bbl Brent prices was necessary to bring high-cost Bakken barrels to the global market by rail. Notably, the potential halt to Dakota Access Pipeline flows could recreate such conditions incoming years (the pipeline may need a new Environmental Impact Study from the Army Corps of Engineers, which is led by a presidential appointee which could stay its operations).

Tyler Durden
Tue, 01/26/2021 – 10:55

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“Let’s Gooooo!!!” – GameStop Halted After Surging On Billionaire Call-Buying Tweet

“Let’s Gooooo!!!” – GameStop Halted After Surging On Billionaire Call-Buying Tweet

Just when you thought it was safe to pile into the shorts again after yesterday’s utter farce in GME shares, this morning has seen the mockery continue.

A pre-market buying panic was sold into during the cash session and was about to erase all the gains when suddenly, none other than billionaire VC Chamath Palihapitiya tweeted the foillowing…

And GME shares immediately spiked higher and were halted…

So while yesterday was a Robinhood vs Citadel cage-match, today is billionaire (Ken Griffiin) vs billionaire as Chamath sides with the WallStreetBets crowd…

Where today will end is anyone’s guess… two billionaires enter, only one will leave with a profit.

Tyler Durden
Tue, 01/26/2021 – 10:41

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Conte Quits As Italy’s PM In New Bid To Build Majority

Conte Quits As Italy’s PM In New Bid To Build Majority

The Tuesday resignation of Italian Prime Minister Giuseppe Conte has left the country in what the Italians call a government crisis “in the dark” – one which has no obvious solution, according to AFP.

After three weeks of political uncertainty following the exit of a small party, Italia Viva, from the coalition government led by Conte, Italy has been plunged into instability. The schism came to a head amid disputes over EU pandemic recovery funds and how they are dispersed. Amid the impasse, ex-premier Matteo Renzi – head of Italia Viva – walked.

Early Tuesday, Conte – Italy’s longest-serving head of state in recent memory – informed his ministers of his resignation, before officially handing it to President Sergio Mattarella – who reportedly asked Conte to remain in a ‘caretaker’ role during the formation of a new government.

Conte’s resignation was largely seen as an attempt to avoid a parliamentary defeat at a Senate vote later this week, after barely surviving a vote of confidence last week. With the departure of Italia Viva, however, his government was stropped of a working majority, meaning any major laws would face gridlock for the remainder of his mandate.

Mattarella now has to decide whether he’ll give Conte another chance to negotiate with lawmakers in order to cobble a majority back together that will allow him to govern. If he can’t strike an agreement  with Renzi on a new coalition government, voters will be forced to head to the polls again in a forced election two years ahead of schedule.

Another possibility, per AFP, is naming an independent as premier, which would prevent conflict between the PD and M5S. Leftist publication La Repubblica Daily reports that Conte could serve as a minister in such a cabinet.

Until now the main coalition parties – the anti-establishment 5-Star Movement and centre-left Democratic Party (PD), have backed Conte’s efforts to remain in power. “Conte is the essential element and we need to broaden and relaunch the government’s action,” Debora Serracchiani, the deputy head of the PD, told state broadcaster RAI.

Conte, an attorney with no direct political affiliation, is close to 5-Star, the largest party in parliament. He first came to power in 2018 after 5-Star formed an unexpected coalition with the far-right League. When that pact unraveled a year later, he stayed on as head of a new administration involving the 5-Star and leftist parties. Opinion polls show that Conte is Italy’s most popular leader, with an approval rating of 56%, almost 20 points above the next closest politician, according to a poll published by Corriere della Sera daily on Saturday.

Italy has recorded over 85,000 deaths linked to COVID-19, according to data from Johns Hopkins University.

Tyler Durden
Tue, 01/26/2021 – 10:25

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Dr. Anthony Fauci: The Highest Paid Employee In The Entire US Federal Government

Dr. Anthony Fauci: The Highest Paid Employee In The Entire US Federal Government

Authored by Adam Andrzejewski via Forbes.com,

Dr. Anthony Fauci made $417,608 in 2019, the latest year for which federal salaries are available. That made him not only the highest paid doctor in the federal government, but the highest paid out of all four million federal employees.

In fact, Dr. Fauci even made more than the $400,000 salary of the President of the United States. All salary data was collected by OpenTheBooks.com via Freedom of Information Act requests.

Only federal employees whose salaries were funded by taxpayers were included in the study. Therefore, Tennessee Valley Authority CEO Jeffrey Lyash— whose salary is paid by revenues of the corporation (owned by the federal government) — was not included.

$2.5 million. That’s how much Dr. Fauci, Director of the National Institute for Health’s (NIH) National Institute of Allergy and Infectious Diseases (NIAID) and current Chief Medical Advisor to the President, will make in salary from 2019 through 2024, if he stays in his post through the end of the current Administration, and doesn’t (or didn’t already) get a raise.  

In a ten-year period between 2010 and 2019, Fauci made $3.6 million in salary. Since 2014, Fauci’s pay increased from $335,000 to the current $417,608.

In an August 13, 2020 Instagram interview with actor Matthew McConaughey, Dr. Fauci was asked (at point 16:49) if he had millions of dollars invested in the vaccines. Dr. Fauci laughed and answered, “Matthew, no, I got zero! I am a government worker. I have a government salary.” He didn’t mention his $417,608 salary was the largest in the entire federal government.  

Dr. Fauci became the early face of the White House Coronavirus Task Force, appearing daily, often in a live broadcast, to update the nation on the emerging COVID-19 disease. In March 2020, he convinced President Donald Trump on the 15-day lockdown policy to try and flatten the curve, and reportedly advocated on March 29, 2020, for extending the policy beyond its initial 15 days. 

Vice President Mike Pence, who chaired the Taskforce might have outranked Dr. Fauci in authority, but the VP’s $235,100 salary in 2019, was less than the well-paid NIH director with whom he shared the stage.  

Their Taskforce colleague Dr. Deborah Birx earned $305,972 in 2019, also less than Dr. Fauci’s salary.  

In comparison to Dr. Fauci: Speaker Nancy Pelosi will earn $223,500 this year. U.S. Supreme Court Chief Justice John Roberts will make $270,700, and Members in the House of Representatives and Senators will make $174,000. Four-star military generals outrank, but still fall below Dr. Fauci at $268,000 a year.  

The Centers for Disease Control and Prevention (CDC) scientist Dr. Stephen Lindstrom in charge of overseeing the CDC COVID-19 testing system, a system whose early roll-out failure set the U.S. testing system back several crucial weeks, made $108,747 in basic pay, an additional $23,533 in adjusted pay, and received an “award” of $750 in 2019.  

The 80-year-old Dr. Fauci holds a medical degree from Cornell University and began his 53-year career at NIH in 1968. He assumed his NIAID Director position in 1984 and has advised every president since President Ronald Reagan, though he serves directly under the NIH Director Francis Collins. Known as the nation’s top infectious disease expert, he qualifies for a full federal pension and social security under pre 1984 federal pension reform rules.  

The Executive Branch includes 2.1 million federal agency employees, 1.4 million members of the military, and 500,000 postal employees. Federal employee salaries are generally capped at level IV of the Executive Schedule, which was $172,500 in 2019.

However, there are exceptions, as Dr. Fauci’s salary demonstrates. The exception exists to make federal salaries for doctors and scientists more competitive with the private-sector.

In our data at OpenTheBooks.com, there are three doctors, all working for HHS, who out-earn the U.S. President with 2019 incomes ranging from $406,000 to $417,000. 

Critics and lifetime achievements

On October 19, 2020, President Trump called Dr. Fauci “a disaster,” though his criticism appeared to be unrelated to the doctor’s salary.   

In 2008, President George W. Bush honored Dr. Anthony Fauci with the Presidential Medal of Freedom, the highest civilian honor.

Dr. Fauci is the 32nd-most highly cited living researcher according to an analysis of Google Scholar citations. Polling has shown he’s the most trusted public figure in the U.S. for information on the pandemic and reliable information on Covid-19 vaccines.

*  *  *

Adam Andrzejewski (say: And-G-F-ski) is the CEO/Founder of OpenTheBooks.com. Our mission: “Every Dime, Online, In Real Time.”

Tyler Durden
Tue, 01/26/2021 – 10:10

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