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Twitter Suspends Iran’s Supreme Leader After Post Threatening Attack On Trump

Twitter Suspends Iran’s Supreme Leader After Post Threatening Attack On Trump

On Friday Iran’s Supreme Leader Ali Khamenei posted to Twitter what most interpreted as a clear threat of attack on now former President Donald Trump. An overhead image of a golf course showed Trump playing on it while a large drone or jet hovered over, ready to attack.

“Vengeance is inevitable,” it stated in Farsi. The tweet stayed up for hours overnight, but now Twitter has suspended the Supreme Leader’s account, presumably over the message threatening violence.

Many Twitter users immediately called it out as a violation of Twitter policies, also given the US platform had recently permanently banned Trump himself for less.

Users also called out what they slammed as Twitter hypocrisy: The threatening tweet appeared to have been up since Thursday night (US time) and was live for many hours.

The featured words of “Vengeance is inevitable” appeared to have been taken from an earlier December public statement where Khamenei said in a more veiled way:

“Those who ordered the murder of General Soleimani as well as those who carried this out should be punished. This revenge will certainly happen at the right time.” 

All of this comes after many Republicans and conservative voices blasted Twitter’s double standards when it comes to foreign dictators…

… with many pointing out that Trump was permanently banned (now being appealed apparently) while overseas despots can often spew whatever propaganda they like on the US-based platform. So in an attempt to at least look somewhat impartial, Twitter did what many said it should have done long ago.

Tyler Durden
Fri, 01/22/2021 – 09:56

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Soaring Inflation & Supply-Chain Disruptions Spark ‘Surge’ In US PMIs

Soaring Inflation & Supply-Chain Disruptions Spark ‘Surge’ In US PMIs

After a ‘mixed’ picture in December (Services down but Manufacturing up – due to the fallacy of lockdown-disrupted supply-chains being a sign of strength?), analysts expected coordinated weakness in preliminary January data, catching down to the slump in ‘hard’ economic data in the last three months. However, amid drastic lockdowns across the nation and daily headlines about just how bad life is in America, both US Services and Manufacturing exploded higher in January

  • Markit US Manufacturing PMI 59.1 vs 56.5 exp vs 57.1 prior – a record high!

  • Markit US Services PMI 57.5 vs 53.4 exp vs 54.8 prior

Source: Bloomberg

All driven by soaring inflation:

Meanwhile, inflationary pressures intensified as supplier delays and shortages pushed input prices higher. The rate of input cost inflation was the fastest on record (since October 2009), as soaring transportation and PPE costs were also noted. A number of firms were able to partially pass-on greater cost burdens, however, as the pace of charge inflation quickened to a steep rate. The impact was less marked in the service sector as firms sought to boost sales, but manufacturers registered the sharpest rise in selling prices since July 2008.

The rate of input price inflation ticked up further in January, amid higher transportation and PPE costs. The rate of increase was the fastest on record (since data collection began in October 2009)

However, the overall rate of growth eased from that seen in December, as service providers indicated a slower expansion in new orders following a rise in virus cases and greater restrictions on business operations. Nonetheless, the upturn among manufacturers accelerated and was the steepest since September 2014.

This pushed the US Composite PMI to the best in the world…

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit, said:

“US businesses reported a strong start to 2021, buoyed by hopes that vaccine developments will mean the worst of the pandemic is behind us, and that the new administration will provide a stable and supportive environment for stronger economic growth. Output growth accelerated in January to the second-fastest in almost six years, and business optimism about the year ahead surged higher. Over the past three months, business sentiment has been running at its highest since the start of 2015.

“However, capacity constraints are biting amid the growth spurt. Not only have the last two months seen supply shortages develop at a pace not previously seen in the survey’s history, but prices have also risen due to the imbalance of supply and demand. Input cost inflation consequently also hit a survey high and exerted further upward pressure on average selling prices for goods and services.

“There was also disappointing news on the labour market, as near-term concerns over the impact of the pandemic, notably on demand for consumer-facing services, and rising costs led to the weakest employment reading since July.”

So employment is weaker, inflation is soaring, and the headline prints are bouyed by a record surge in supplier delivery times (caused by lockdown-driven supply-chain disruptions… not exactly a positive)… It’s all an illusion!

Tyler Durden
Fri, 01/22/2021 – 09:56

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Citron’s Left: I’m Going Quiet On GameStop After “Angry Mob” Committed “Multiple Serious Crimes”

Citron’s Left: I’m Going Quiet On GameStop After “Angry Mob” Committed “Multiple Serious Crimes”

Citron Research’s Andrew Left released a brand new letter Friday morning from a new Twitter account, stating that it will “no longer be commenting on GameStop” due to an “angry mob” that has “spent the past 48 hours committing multiple crimes that [it] will be turning over to the FBI, SEC, and other governmental agencies.”

Zero Hedge has confirmed the new Twitter account is run by Left.

Referring to backlash surrounding its GME short thesis (from, we suspect, the WallStreetBets subreddit), Left starts his letter by saying: “What Citron has experienced in the past 48 hours is nothing short of shameful and a sad commentary on the state of the investment community.”

“This is not just name-calling and hacking but includes serious crimes such as harassment of minor children. We are investors who put safety and family first and when we believe this has been compromised, it is our duty to walk away from a stock,” he continues.

“We hope that government enforcement will eliminate this problem for all future market commentators whose families get terrorized by people who naively think they are anonymous. Family First,” the letter ends.

Recall, earlier this morning, we posted a report about how Citron’s streaming video regarding GameStop was suspended yesterday due to “hacking attempts”. 

Left was forced to stop his stream, explaining on Twitter that too many people were trying to access his Twitter account at the time. Twitter locked his account as a precaution, Bloomberg reported Thursday night, and eventually had to work with Left to get it reinstated. 

“Too many people hacking Citron twitter, will record and post later today. $GME going to $20 buy at your own risk,” Left tweeted mid-day on Thursday. 

Left took to YouTube later in the day to finish the video he had started. “I’ve never seen such an exchange of ideas of people so angry about someone joining the other side of a trade,” he said.

“This is a failing mall based-retailer,” Left starts by saying. 

“You can get mad, you can hack my account, you can go to Twitter, you can sign on and call me every name – but if you wanna save the company, go out there and actually buy something from GameStop. That’s the only way you’re going to be able to save the company. Other than that, the more you buy, I’m sure there will be supply on the other side,” Left concludes. 

You can watch Left’s full video explanation of his GME thesis here:  

Tyler Durden
Fri, 01/22/2021 – 09:45

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People In These Five States Say ‘Get Me Outta Here’

People In These Five States Say ‘Get Me Outta Here’

Authored by Mike Shedlock via MishTalk,

It’s easy to guess the states people are leaving. Can you guess the top states where people are headed?

Top Outbound States

Top Inbound States 

The above numbers are on a percentage basis of inbound to outbound moves, not absolute numbers. 

The report is from North American Moving Services.

Key Takeaways from the 2020 Migration Report

  • People are fleeing California for Texas and Idaho

  • Illinois, New York, and New Jersey are the three states with the most outbound moves. 

  • The top five inbound states in 2020 are Idaho, Arizona, Tennessee, South Carolina, and North Carolina, with Tennessee overtaking South Carolina from the 2019 results. 

  • Florida, Texas, and Colorado round out the top eight states for inbound moves. 

  • Despite pandemic, people continued to move at rates comparable to 2019

Top Five Destination Cities

  1. Phoenix 

  2. Houston 

  3. Dallas 

  4. Atlanta 

  5. Denver 

Top Five Exodus Cities

  1. New York 

  2. Anaheim, Calif. 

  3. San Diego 

  4. Chicago 

  5. Riverside, Calif.

I am disappointed the report did not have absolute numbers, making the study flawed. 

Nonetheless, Idaho is interesting.

Idaho has made the top 10 each year since 2015, most of the time on the top of the list. 

Congratulations to Idaho and of course Illinois in reverse, a state I have written about many times.

Q: Why does it take 3 weeks to leave Illinois?
A: Everyone is leaving and that is how long it took to schedule a one-way van out. 

“Everyone is leaving. No one is coming,” a U-Haul agent told us.

We love it here in Utah. The photo opportunism are endless. There are 7 national parks within 5 hours or so of where we live. 

Tyler Durden
Fri, 01/22/2021 – 09:35

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Commentary: America’s ‘enlightenment’ in this new age of Biden is truly something to behold

President Joe Biden is a “devout Catholic.”

I know this because his protectors keep urging me to digest it in a Christopher Guest “Spinal Tap” “ours goes up to 11” kind of way. Like it’s obvious, but only if you see it in dim lighting from the right angle and free your mind of all reality and common sense that clearly indicate otherwise.

Then, and only then, will you appreciate this age of true holy enlightenment that we are now entering. I mean, on day one of Biden’s reign as only the second Catholic American president in this nation’s history, we got through executive order increased funding for global baby-killing, more money for the baby-killers at Planned Parenthood, obsession with pronouns, the added ferocity of men who feel pretty in the military, a mentally ill “health expert,” and the gender-bending out of existence of both women’s bathrooms and their sports teams.

Rejoice! Make crooked as hell his path!

But lest you sense even a whiff of cynicism from me about this, let me provide you with even more evidence of Biden’s fidelity to the cosmic truths of the universe. Maybe evidence isn’t the right word for it, though. Too temporal. Too worldly. I’m talking astral plane, parting-of-the-seas kind of stuff.

Because you’re never really sure quite how to explain the divine and the angelic to people, I’ll just get right to it: Biden’s very inauguration changed the definition and application of science before he had even made the trip from the Capitol to the White House. Thank God Al Michaels is still alive to reset “Do you believe in miracles?”

I mean, one day you have PCR testing that measures COVID at a rate where apocalypse is around every corner, and the next day — Inauguration Day — the World Health Organization says nah. Let’s go in a different direction and require increased viral levels, multiple tests, and clinical diagnosis before anyone can say their loved one died from the virus after a hang-gliding accident.

Since I know that you are blinded by the light right now, let me help you understand the power and the glory before you. People will be healed from the pox before us and Karen will fear no more because, get this, they will simply be told they were never really sick to begin with. Poof! Now that’s how you solve a pandemic in a pinch. Come, touch the hem of Biden’s garment. Let the lepers be cleansed, and dry every tear from your eye.

This can’t be mere coincidence. God is at work here. Where can this evangelical get some rosary beads and a statue of Mary?

I know G.K. Chesterton said, “We shall soon be in a world in which a man may be howled down for saying that two and two make four, in which people will persecute the heresy of calling a triangle a three-sided figure, and hang a man for maddening a mob with the news that grass is green,” but I don’t get that at all.

The chaos has never been more clear. The hate has never been more loving. The depraved has never been more decent.

Let all the angels blow their trumpets. “Devout Catholicism” be praised.

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Brace For The “Gamma Unclenching” As Put-Sellers & Call-Buyers Spark Extreme Greeks

Brace For The “Gamma Unclenching” As Put-Sellers & Call-Buyers Spark Extreme Greeks

Futures have pulled back overnight ahead of what Nomura’s Charlie McElligott warns is an abnormally large weekly expiry (esp as we rallied into these upside strikes with some violence in just a few days), with 30% of the overall $Gamma in SPX / SPY consolidated options set to roll-off.

Specifically, SpotGamma points out that there was large “straddle” type volume at 3850 yesterday wherein ~40k each of puts and calls traded at that strike. That seems to have essentially filled in that 3850 level overhead which places the market in a “trough” between the large 3800 large gamma level and the 3850 Call Wall. To this trough idea we note the largest Combo strike is 3832, suggesting this is a sticky area today.

The gamma flip levels continue to slide up, with 3800 marking the transition from positive to negative gamma. There remains little in the way of large net put positions until the 3700 level.  The large risk we see here is some type of event that elicits put buying and draws rapid dealer delta hedging (ie shorting futures).

As a result of all this excess, Nomura’s analysis of Nasdaq / QQQ options shows that we have pivoted back towards extreme $Gamma at 96.8%ile and $Delta at 98.0%ile (both since ’13), as traders use options to play for the Secular Growth / Tech recovery after its recent “rotation purge,” on expectations of an “everything up” trade boosted by Rates pausing further selloff / bear-steepening.

What is even more ominous, as SpotGamma points out is that investors have turned to put options as a way to generate income. Strategically this can be a great strategy, but what does it mean when the MAJORITY of put options are SOLD instead of BOUGHT? In other words: the majority of traders are now using put options as income as opposed to insurance.

The circled areas in the chart above highlight the other times this has happened in the last ~2 years. Specifically this chart measures the amount of an option type that was bought to open against the number that were sold to open. Therefore because the gold line is below zero we know that traders are selling puts to open MORE than buying them to open.

This implies that traders have little fear about a decline in markets, as selling a put option exposes a trader to large losses if the market declines. We think this is an indication of overconfidence, and exuberance in markets.

Checking these periods against a chart of SPY, we can see that the forward returns can be quite ominous.

Specifically, Nomura warns that after settlement, spot Equities could certainly “move” into new ranges post the “Gamma unclenching” in the absence of Dealer hedging flows as well as the absence of the corporate buyback stabilizer during EPS.

Tyler Durden
Fri, 01/22/2021 – 09:20

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Rabobank: The Reflation Trade Is Coming Into Question Already

Rabobank: The Reflation Trade Is Coming Into Question Already

By Michael Every of Rabobank

Up until the final few seasons and absolutely the final couple of episodes, there was universal agreement that ‘Game of Thrones’ had been great. One of the things that had been so great about it was the long, slow-moving tale, rich in nuance, told over many years, and in weekly instalments all of us got to see at the same time. That’s what the entire history of mankind since we first sat around the fire together has been about. In a simple word, broadcasting, as opposed to the narrowcasting box-set-binge atomising experience we have today, which wouldn’t exactly have kept a hunter-gatherer society together. (Or a more complex one, evidently.) Besides the socio-psychological commentary, there is a direct parallel today for markets.

It is not even the end of January 2021 and yet the great global meme for the year –“The Reflation Trade”– might be coming into question already. That’s right: the market may have binge-watched the whole thing in just three weeks.

Of course, the “Reflation Trade” was never related to underlying economic fundamentals. These have been lowflationary/deflationary for decades, as we have explained many times before. The disruption of Covid-19 is widely recognised as having accelerated our underlying labour vs. capital and monopoly/monosophy-power MNCs vs. powerless SMEs dynamics.

Yes, we have official recognition that we need more fiscal policy. Hurrah. But most of that spending is in the rear-view mirror already; and it is merely putting the same, and often *less*, back into the economy than is taken out by state-imposed virus restrictions. In balance-sheet terms, if the private sector net saves an extra 3% of GDP due to a drop of confidence or being told to stay at home, and the government spends an extra 3% of GDP, that isn’t reflationary at all.

(On the virus itself, critics point out the new measures proposed by President Biden –to vaccinate 100m people in 100 days and mandate masks in federal locations and on transport– do not appear different to the 17m people vaccinated in 17 days seen in January, or the ineffective mask mandates in Europe. Meanwhile, Glastonbury 2021 just got cancelled and PM BoJo is refusing to rule out virus restrictions lasting into the summer. “Reflation”.)

What one would need to see is a government fiscal package to push the fiscal deficit even wider *once the recovery kicks in* via capital investment- and labour-friendly projects: in other words, to ‘run hot’ on inflation, like some central banks have pledged. Where do we see that? We have a proposed leap in the US minimum wage – but no guarantee it will pass; nor the multi-trillion Green New Deal or infrastructure spending. Europe has its ‘Rubicon-crossing’ fiscal package, of course, but it is may be a one-off, and again puts in much less than has been taken out already: and Europe is now slipping into deflation not reflation. Even China, which knows from fiscal stimulus, Bloomberg’s “China credit impulse” looks like it has topped out and is now about to head down again. Australia has infrastructure plans for it for once, but not enough surveyors to help build the stuff! And where is the protectionist trade policy to keep state spending (and jobs) at home? Maybe that’s what Yellen meant by saying the US pursing “a rules-based trade system that protects us”- but I don’t think markets see it that way. Or, failing that, the low/middle-income tax cuts?

We made this point in a report last month: wars see a downturn not a boom when they end as fiscal support is rolled back too fast for the private sector to handle. Although if you are a reflationista, President Biden is reported to be considering expanding US troop numbers in Iraq, and Secretary of State Blinken has suggested Georgia should join NATO, provoking Russia, and has backed appointing a Special Envoy to monitor military developments in the Horn of Africa. But is that really the boxset you thought you were binge-watching?

Matching the overall net fiscal reticence, not rhetoric, we also need to consider that central banks are suddenly sounding more upbeat. The ECB (see our take on yesterday’s meeting: “The ship is leaking”), BOJ, CBRT, BOC, BCB, BNM are all now trying to accentuate the positive: even some Fed speakers keep mentioning tapering. Okay, one can see why: let’s build optimism. Yet if the market gets the merest hint this means central banks will tighten or, over time, to not keep loosening, then goodbye asset reflation.

Of course, the economic data are going to push and pull on the “Reflation Trade” narrative as places open and close and base-effects play havoc; and, yes, genuine supply and demand in some key commodities may remain inflationary. But keep asking yourself: have the working class started to get a better deal yet or not (and one that will allow them to literally swallow higher commodity prices rather than them being a form of tax?) When they do, let’s talk reflation. Until then, let’s not. Indicatively, the biggest net income boost the UK has proposed so far is to float GBP500 for anyone who tests positive for Covid-19, because fear of lost income due to quarantine means few are coming forward to be tested: but that is one week’s average pay when you have to stay at home and not work for nearly two. (But, knowing the Brits well, watch the teens and tweens who deliberately try to infect themselves to get a free 500 in “beer tokens”.)

And on tokens, one place one might want to look to see if we have binge-watched a 52-week 2021 reflation trade in just 3 is 10-year US yields, now around 1.11%, but not pushing up. The 10-year US breakeven is also at 2.17%, but that is looking like it *might* have topped at around the levels we saw back in 2018 before it last began to shift steadily lower. Moreover, Bitcoin has been smashed to bits and may close more than 14% down this week. Yes, one can make the argument that cryptos always bring a knife to a gunfight against the kind of government that can reflate fiscally (and even generic Big Tech was in the crosshairs of the EU yesterday, calling to the Biden administration to help regulate it together); but there may be more of a message in there than one thinks. Gold has been sending the same signal since late December too: who knew that a hoary old asset like that was also into binge-watching boxsets?

So Reflation Trade or Reflation Fade? Bitcoin or Bingecoin? That’s what makes a market. It’s about the only market we have left, some might say.

Happy Friday!

Tyler Durden
Fri, 01/22/2021 – 09:05

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Farmer Gates, Biden Swamp, I Am Open – New World Next Week


This week on the New World Next Week: Bill Gates becomes the biggest owner of farmland in the US; meet the new swamp, same as the old swamp; and the uprising begins with businesses defying lockdowns around the world.

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The 4th Annual Fake News Awards! (video)


From the palatial living room studios of The Corbett Report it’s the 4th Annual Fake News Awards. The boldest lies. The stupidest propaganda. The ugliest presstitution. Join James as he debunks the lies and shames the liars behind the biggest fake news stories of 2020. Who will take the Dino for the worst fake news story of the year? Watch and find out!

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Dr. Anthony Fauci says he’s finally free to speak the truth of public health and COVID-19 under the Biden administration

Dr. Anthony Fauci claims that he’s finally free to speak the truth of science now that former President Donald Trump is out of the White House.

What are the details?

According to a Friday NBC News report, Fauci — who is President Joe Biden’s White House health adviser — said that the new administration is intent on being “completely transparent, open, and honest.”

“It was very clear that there were things said, be it regarding things like hydroxychloroquine and other things like that, that really was uncomfortable because they were not based in scientific fact,” he told reporters during a Thursday press briefing, the first in which he featured in months. “I can tell you, I take no pleasure at all in being in a situation of contradicting the president, so it was really something that you didn’t feel that you could actually say something and there wouldn’t be any repercussions about it.”

“The idea that you can get up and talk about what you know, what the evidence is, what the science is, it is somewhat of a liberating feeling,” he said.

Fauci added that he met with the new president ahead of Thursday’s news conference, and the two addressed the presentation of information on COVID-19, promising that “everything we do will be based on science and evidence.”

“One of the new things about this administration is that if you don’t know the answer, don’t guess,” Fauci added. “Just say you don’t know the answer.”

The infectious diseases expert also appeared to take a subtle dig at Trump and said, “One of the things that we’re going to do is be completely transparent, open, and honest. If things go wrong, not point fingers, but to correct them and to make everything we do based on science and evidence.”

What else?

Earlier on Thursday, Fauci told the World Health Organization that the United States would remain a member of the agency under the Biden administration.

In May, the former president withdrew from the WHO following controversy regarding the origins and early days of the COVID-19 pandemic.

“As such, I am honored to announce that the United States will remain a member of the World Health Organization,” he said in prepared remarks. “Yesterday, President Biden signed letters retracting the previous Administration’s announcement to withdraw from the organization, and those letters have been transmitted to the Secretary-General of the United Nations.”

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“Not Exactly Ethical” – COVID Vaccine “Tourists” Flock To US Beach & Ski Towns In Search Of Jabs

“Not Exactly Ethical” – COVID Vaccine “Tourists” Flock To US Beach & Ski Towns In Search Of Jabs

As the number of patients vaccinated across the US nears 20MM, a growing number of states are warning about a disturbing trend that, as it happens, dovetails with the WHO’s warnings about inequality related to vaccine access: More wealthy patients are engaging in “vaccine tourism” – shuttling between vacation homes or simply traveling to another nearby state – to try and secure earlier access to one of the Pfizer or Moderna COVID jabs.

In the latest confirmation that the mRNA vaccines produced by Pfizer and Moderna will be for the privileged few, while the rest of the world will need to make do with AstraZeneca’s jab or, worse, the SinoVac jab (or a jab produced by another Chinese company closely tied to the state). Bloomberg reports that “vaccine tourism” is officially “a thing” in the US…though we don’t know exactly how many people are engaging in the practice, various states have witnessed rising numbers of people engaging in the practice.

Beach resort towns in southern Florida and Hawaii, along with ski towns out in Colorado (as well as suburban New Jersey and Connecticut, for the thousands of wealthy New Yorkers doubtless engaging in the process) have been struggling to ensure that the doses – which are, at least for now, still technically federal property – end up with local residents, though many states and localaities added that they won’t refuse patients who meet the eligibility requirements.

Frustrated by crashing appointment websites, shortages of Covid-19 shots and a patchwork of confusing eligibility rules, people with time and money are heading out of town in pursuit of a potentially life-saving inoculation.

Vaccine-seeking tourists are showing up in Miami, at beach resorts in Hawaii, ski towns in Colorado and in New York City, which has received more doses than other parts of the state, as well as nearby New Jersey and Connecticut.

There is no national data, yet states that keep track suggest that tens of thousands of Americans are traveling for the vaccine. More than 37,000 out-of-staters have received Covid-19 shots in Florida, according to state data as of Tuesday. The figure excludes people who have second residences or businesses in Florida, where about 1 million have been vaccinated.

Even though refusal numbers across the US have been surprisingly high for both health-care workers, and long-term care home residents (it even force Gov. Cuomo to loosen eligibility restrictions in New York as vaccines were being left to rot on the shelves), this new vaccine tourism trend raises “ethical concerns,” according to Bloomberg.

More than 17 million doses have been administered across the U.S., according to Bloomberg’s vaccine tracker. Health policy experts say that, generally, the more people with shots in arms, the better. Yet vaccine tourism raises concerns over what happens to people who don’t have the money—or aren’t healthy enough—to travel for immunization. There are also ethical questions about whether it’s right to appropriate a dose intended for a specific city or state. The tourism industry hasn’t launched large marketing campaigns, so as to avoid appearing to advocate skirting the rules.

Though, at this point, with the high number of refusals seen over the last few weeks, health-care policy experts are conceding that there’s no practical downside to getting “shots in arms”, as they say.

Health experts also have concerns about people traveling for immunization.

“Everything we can do to get more people vaccinated will decrease the spread of Covid,” said Marissa J. Levine, a public health professor at the University of South Florida. “But we’re in a situation where demand is outstripping supply significantly, so that puts people on edge if they perceive that others are coming in to take their vaccine, even if it’s really all of our vaccine.”

Vaccines are technically federal property that don’t belong to any one locality, making residency requirements hard to enforce, said Levine, who served four years as Virginia’s state health commissioner.

Ski towns have attempted to limit vaccination to residents – with some success – to ensure people will still be around to get their second shot a few weeks later.

Aspen’s Pitkin County says those eligible for the vaccine must live or work there.

In some places, like Deer Park, Utah, local officials are even asking workers from outside the area to come there and get the shots.

Now, Pfizer is reportedly saying it would be willing to sell doses directly to the states, surpassing the federal government in a way that Gov Andrew Cuomo of New York has asked Pfizer to do. Technically, all vaccine doses right now are federal property. But that might soon change, opening up new opportunities to get those numbers up – and profits along with them.

Tyler Durden
Fri, 01/22/2021 – 08:45

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Italian Bonds Slide As Conte Said To Consider New Elections

Italian Bonds Slide As Conte Said To Consider New Elections

Italian bonds dropped on Friday, continuing their Thursday selloff after Corriere della Sera reported that Italian Prime Minister Giuseppe Conte could seek new elections, as he is increasingly tempted by early voting due to the current state of polls.

According to Bloomberg, Conte, who lost a key ally in parliament last week, is having a tougher-than-expected time rebuilding his majority, and his camp is trying to win over lawmakers by using the threat of snap elections, even though this is widely considered an unlikely option, according to officials who asked not to be named discussing confidential talks.

The 56-year-old Conte, who has no party of his own and was plucked from obscurity to become premier in 2018, does see elections as a possibility, buoyed by opinion polls that suggest he could win 15% or more of the vote, Bloomberg reported citing according to an official familiar with his thinking. But Conte’s allies within the coalition are saying privately they’ll refuse to follow him down that path, and if he persists he could end up returning to his past career as a professor of law, the official said.

Coalition members also fear that a vote would usher in the center-right opposition led by Matteo Salvini, and in any new vote many would lose their seats since the parliament has been downsized following reforms, lawmakers said, asking not to be named discussing confidential deliberations.

Conte, who won confidence votes in both houses of parliament earlier this week but fell short of an outright majority in the Senate, is targeting senators from Silvio Berlusconi’s Forza Italia, centrists, unaffiliated lawmakers and even members of Matteo Renzi’s Italy Alive party, which ditched the coalition last week.

Officials in the two main coalition forces, the Five Star Movement and the center-left Democratic Party, are seeking to persuade lawmakers that refusing to back Conte now would lead to early elections. But senators being targeted by the Conte camp have yet to publicly announce their support, amid reports of haggling over favors including government jobs.

President Sergio Mattarella, who would oversee any attempt to form a new government, has pressured Conte to resolve the impasse quickly and ensure a stable majority. Possible scenarios if the prime minister fails in his quest include a new Conte government, a similar alliance under a different premier, or a broader coalition.

The news was seen unfavorably by markets as new elections would delay crucial reforms for the country and timely access to the EU’s package, and add to investors’ uncertainty over some government-backed deals including the sale of lender Monte Paschi di Siena SpA, according to two people familiar with the matter.

The report added to a bond selloff sparked Thursday by concerns over the pace of ECB bond buying, when the central bank said it may not use up all of its QE “envelope.” Italian yield curve bear flattens, with Commerzbank noting that markets are highly sensitive to ECB flow expectations: “We still believe that the ECB will continue to implement its soft spread cap,” write strategists Michael Leister and Marco Stoeckle. “Ironically, the emphasized language of potentially not using the envelope in full may lead to the ECB having to buy more.”

The Italian 10Y yield was last trading at 0.73%, the highest level since early November, the slide put Italy’s 10-year yields on course for a weekly rise of 12 basis, their biggest jump since April. The premium over German bonds, a key gauge of risk in the region was at 124 basis points, the highest level since November.

 

Tyler Durden
Fri, 01/22/2021 – 08:40

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A Guide to Disaster Resources for Hurricane Zeta Survivors in Alabama

A Guide to Disaster Resources for Hurricane Zeta Survivors in Alabama

MONTGOMERY, Ala. – Recovering from a disaster is usually a gradual process. FEMA and its partners continue to support survivors who live in Clarke, Dallas, Marengo, Mobile, Perry, Washington and Wilcox counties as you recover from Hurricane Zeta.

The deadline to apply to FEMA and the U.S. Small Business Administration for assistance is Monday, Feb. 8.

Below are links you can use to find recovery information from FEMA and other sources:

felicia.jordan
Fri, 01/22/2021 – 08:36

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democracy is mob rule different puppet Donald Trump Douglas Brinkley fooled again government is slavery Headline News Intelwars Joe Biden left vs. right paradigm lie liars in suits national guard troops political parasites ruling class same throne stablishment taxation is theft TOTALITARIANISM

Meet the New Boss, Same as The Old Boss — Americans Get Fooled Again

This article was originally published by Matt Agorist at The Free Thought Project.

In what resembled a scene more akin to that of North Korea than the land of the free, the 46th president of the United States, Joe Biden was sworn into office. Likely pleasing those in attendance, Trump put his name on a shortlist of former presidents and announced he will not be in attendance for the ceremonial transfer of power — which will take place behind several tons of razor wire, 20,000 armed National Guard troops, concrete barricades, boarded-up businesses, and ten-foot-tall fences.

When speaking on the historical move by Trump not to attend the inauguration, presidential historian Douglas Brinkley says it means we are in the midst of a major political feud.

“It’s usually a sign that American society is in the midst of major political feud,” Brinkley said. “The fact that the incoming and outgoing presidents can’t shake hands and co-participate in an inauguration means that something’s off-kilter in the democracy.”

‘Off-kilter’ is the understatement of the year. To understand just how off-kilter and out of whack America is, we can look at how the two parties view what’s about to happen.

In the minds of the establishment left, a new dawn is on the horizon with nothing but unicorns, a$15 minimum wage, and free health care and college for all. In the minds of the establishment right, dark times are ahead, as the child sniffing, gun-grabbing, senile old man takes the throne to send them all off to the gulags.

The truth of the matter is, however, that there will be no free health care and no gulags — yet.

One thing is certain, though, and that is the US empire will continue to fund its hundreds of bases that literally encompass the globe to maintain its murderous global hegemony. The war machine will continue to march on as drone missiles rain down on brown children in the Middle East and Africa. Saudi Arabia and Israel will maintain their places at the US taxpayer-funded trough and Americans will be fed the scraps from the marble-walled tables in Washington. The national debt will continue to explode, and life for everyone — not just Republicans — will continue to become less free and have less quality.

Thanks to the mainstream media’s role in acting as the Praetorian Guard for the establishment, the divide will continue to tear Americans apart as partisan distractions are force-fed to us via blowhard establishment shills and “fact-checkers.” Despite Joe Biden running on a platform of unity to bring Americans back together, before he was even sworn in, he royally fumbled this promise by alienating tens of millions of Trump supporters — essentially declaring them the enemy.

“Don’t dare call them protesters,” Biden said after the largely peaceful march on DC which ended with a few hundred goons out of tens of thousands of peaceful protesters raided the Capitol. “They were a riotous mob. Insurrectionists. Domestic terrorists. It’s that basic. It’s that simple.”

The fact is that on the surface, it will remain business as usual in Washington once the smoke clears. The politicians will get back to doing the bidding for their lobbyists, all the while blaming the other party for America’s woes — despite playing the lead role in creating said woes.

Those who think Biden is going to usher in some new universal healthcare system shouldn’t hold their breath as he was a key architect of Obamacare, a bill written by insurance companies that forced Americans to buy their product at fixed prices or be fined. What’s more, Biden, just like Trump, has already promised to veto any universal health care bill that would ever come to his desk.

If you think Biden is going to treat Wall Street differently than Trump by getting corporate influence out of DC, think again. Biden, who like Clinton, Bush, Obama, and Trump has already begun filling his cabinet with Goldman Sachs insiders and mega bankers — just like Trump and Obama did.

Just like Obama facilitated the largest transfer of wealth in history to the billionaire class, with Trump following in his footsteps, Biden will curtsy to the oligopoly to make sure they maintain their grip on America’s system of cronyism.

If you are one of the few liberals left who oppose war and think that Biden — who voted for the Iraq War and oversaw the destruction of Libya into a hell state with open-air slave markets — will somehow reverse course and advocate peace, you are mistaken. In fact, Biden has already begun to fill his cabinet with the most diverse group of mass murdering war hawks ever assembled.

If you think uncle Joe is going to toe the progressive line in the war on drugs and stop kidnapping, caging, and killing people over arbitrary substances the state deems illegal, again, you are mistaken. Despite a historical vote in Congress last month, to legalize cannabis federally, Biden has refused to even consider legalization as this is a major tool in the box of those who advocate for the prison industrial complex — just like Trump did before them and just like Biden and Harris both always have.

In reality, just like many MAGA folks were duped into Trump’s alleged 4D chess plan of making America great, Biden supporters, begging to be fooled again, are falling for the same slick-tongued lies. And so continues the perpetual cycle so elegantly put into words by The Who back in their 1971 hit, Won’t Be Fooled Again.

We’ll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
And the men who spurred us on
Sit in judgment of all wrong
They decide and the shotgun sings the song
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I’ll get on my knees and pray
We don’t get fooled again
The change, it had to come
We knew it all along
We were liberated from the fold, that’s all
And the world looks just the same
And history ain’t changed
‘Cause the banners, they are flown in the next war
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I’ll get on my knees and pray
We don’t get fooled again, no, no
I’ll move myself and my family aside
If we happen to be left half alive
I’ll get all my papers and smile at the sky
Though I know that the hypnotized never lie
Do ya?
Yeah
There’s nothing in the streets
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Is now parting on the right
And the beards have all grown longer overnight
I’ll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I’ll get on my knees and pray
We don’t get fooled again
Don’t get fooled again, no, no
Yeah
Meet the new boss
Same as the old boss

The post Meet the New Boss, Same as The Old Boss — Americans Get Fooled Again first appeared on SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You.

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The Trouble With Bubbles

The Trouble With Bubbles

Authored by David Robertson via RealInvestmentAdvice.com,

During the fourth quarter, the economy continued to recover but remained well below pre-pandemic activity levels. Simultaneously, the political environment became even more fraught as challenges to the presidential election confirmed the worst fears of political divisiveness.

Despite these challenges, the fourth quarter continued with a strong performance as the Russell 1000 index was up 11.78% in November alone. The Market Ear captured the frothy sentiment: “Upside remains the panic trade.” The open question for investors is to make of the increasing dissonance between the market and underlying conditions?

A Bubble By Any Other Name

Indeed, trying to make sense of that dissonance was an ongoing challenge throughout the last three quarters of 2020 and into the new year. The coverage of the phenomenon by earlier market reviews entitled “Calibrating the craziness” and “Should I stay or should I go?” and also traced out by the weekly “Observations” newsletter.

More recently, Jeremy Grantham came out with a note, Waiting for the Last Dance, that expresses his assessment of the dissonance between markets and fundamentals:

Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives. Speaking as an old student and historian of marketsit is intellectually exciting and terrifying at the same time … “

The critical point here is that the current market environment is like to have an enormous impact on investors. Although it doesn’t matter what you call it, Grantham does refer to it as a bubble.

Criteria 

Fortunately, there are ways to identify and manage through bubbles, albeit on a more qualitative basis than some investors might prefer. Grantham describes:

The single most dependable feature of the late stages of the great bubbles of history has been really crazy investor behavior, especially on the part of individuals.

Not surprisingly, there is plenty of evidence of crazy investor behavior. There has been a strong foundation of just “regular crazy” investor behavior. The phenomenon of the massive capital raises at a record pace despite economic travails, and widespread insider selling is the highlight of a previous blog post. New equity issues garnered special attention as the IPO market re-ignited and special purpose acquisition companies (SPACs) became all the rage.

Incidents of “really crazy” behavior were initially sporadic but became increasingly prominent as the year wore on. Many involved the actions of individual investors. A slew of technological developments combined with the discovery of options vastly reduced friction and increased leverage for individuals eager to capitalize on rising stocks.

FirstNasdaq and bitcoin outperformed other indexes, and then in the fourth quarter, bitcoin launched into an even higher trajectory. Story stocks, most-shorted stocks, and stocks preferred by individual investors outperformed. Inflows into stock funds were strong. John Authers reported, “that behavior is indeed moving to the ‘barking mad’ end of the dial.”

Implications

One of the critical implications is that market drivers are primarily behavioral ones, not objective, fact-based ones. The line between behavioral motivations and objectively based views are never obvious, but at times of excess, a subjective narrative applies to every detail.

For example, the purpose of investing in stocks with low valuations is to provide a margin of safety against the downside. As John Authers relates in a recent commentary, however, the effort to protect against downside risk has been completely abandoned in the Russell 2000 index:

“The P/E of the Russell 2000 topped at above 10,000 last month. For the last three weeks, the index hasn’t had a P/E because on aggregate it has had no E; the losses of its constituent companies have more than counterbalanced the profits.”

Even crazier situations have occurred in individual stocks. Tesla was the poster child of bubble behavior in 2020, but several instances of bankrupt stocks were panic bid. Axios reported the stock Signal Advance continued its surge on Monday “as the stock rose by 438%, after previously gaining 1800% during one 24-hour period.” The catalyst was a tweet by Elon Musk regarding the messaging app Signal, not the company Signal Advance. On Tuesday, it was down 74%.

A Really Crazy Run

Suffice it to say, the condition of “really crazy” investor behavior got met in spades. Once this happens, the proposition of being exposed to stocks changes in subtle but important ways.

One marker of the change is when investment commentary shifts from the realm of the “probable” or “expected” to the realm of the “possible.” The question, “What is to stop stock prices worldwide going on a really crazy run?” by the Economist is a great example.

When the standard transforms from the probable to the possible, the risk profile also transforms. While there may be opportunities for trading, the opportunities for long-term investors saving for retirement diminish.

Herein lies the rub of bubbles. Rapidly expanding markets and individual instances of explosive gains can prove alluring to all kinds of investors. Such becomes a very slippery slope for long-term investors. It is all too easy to fall for the prospect of impressive short-term gains without accounting for the implication of considerably lower long-term expected returns.

It is easy for short-term traders to get caught up in bubble excitement as well. When stocks make big moves more often than not, it is tempting to try to get a piece of the action. Such is especially true when other options to increase wealth are hard and fraught with their challenges.

Also, this exposes a common misunderstanding about trading. So much of the thrill is in making short-term gains. Many novice traders don’t realize that making money is the easy part; keeping the money is the hard part. Doing that over an extended period requires diligence, discipline, and risk management. Without those, all of the actions that produced gains in a bull market will also produce losses when things change.

Lessons

But this is the problem with bubbles; it is tough to tell when things change. There are no objective criteria. There usually aren’t warning signs. Everything is situation-specific, so few rules exist to provide guidance. As Grantham explains,

The great bull markets typically turn down when the market conditions are very favorable, just subtly less favorable than they were yesterday. And that is why they get missed.

Further, it is not like the big investment houses will be helpful either. They will be more likely to be egging investors on well after the bubble pops than to provide a suitable warning in advance. Grantham describes:

“So, don’t wait for the Goldmans and Morgan Stanleys to become bearish: it can never happen. For them it is a horribly non-commercial bet. Perhaps it is for anyone. Profitable and risk-reducing for the clients, yes, but commercially impractical for advisors. Their best policy is clear and simple: always be extremely bullish. It is good for business and intellectually undemanding.”

With so many people on one side of the market, there are opportunities for investors and advisors who can afford to take, and stick to, a contrarian position:

“Fortunes are made and lost in a hurry and investment advisors have a rare chance to really justify their existence. But, as usual, there is no free lunch. These opportunities to be useful come loaded with career risk.”

Finally, investors must contend with their own worst tendencies of being too smart by half. Almost everyone who trades in bubble conditions believes they can exit just before others do. Such cannot be the case in aggregate. Worse, because the appropriate time to leave only gets known in hindsight, most traders remain engaged long after the bubble pops.

A Real Humdinger

While bubbles are extreme events that can radically reorder investment outcomes, there are good reasons to believe this time around will be even more disruptive than usual.

For one, technology has significantly enabled bubble-like behavior. Commission-free trading eliminates the cost of trading. Smartphone trading apps and gamification make trading both fun and convenient. Fractional share trading further reduces obstacles. Today there is exceptionally little friction to inhibit reckless trading.

Besides, the social mores around gambling have softened considerably. Whereas gambling used to be taboo and kept out of the limelight, it is now openly embraced and promoted. It is hard to watch a sporting event without seeing ads for DraftKings or some other gambling service. People who strike it rich get lauded more than people who work to earn their money.

Finally, the structure of the market has changed in ways that amplify bubbles. Mike Green of Logica funds recently discussed this issue on a podcast hosted by Grant Williams and Bill Fleckenstein. He argued that because passive funds do not care about stock prices, as long as net money flows remain positive, there is nothing to “stand in the way of insanity.”

What is worse is there is nothing to stand in the way of insanity during the decline. As Green described, “When the scale [of selling] that hits the market is incapable of being absorbed by the market … that’s where chaos occurs”. In other words, there are likely to be instances of massive price disruptions once the selling gets started.

Conclusion

Bubbles can be hard to navigate because of their insidious ability to prey on human weaknesses. Long-term investors get lured into making short-term wagers. Risk management discipline gets discarded for a shot at spectacular gains. It is all so tempting and looks so easy. Grantham captured this point perfectly:

“And when price rises are very rapid, typically toward the end of a bull market, impatience is followed by anxiety and envy. As I like to say, there is nothing more supremely irritating than watching your neighbors get rich.”

So, the trouble with bubbles is they prove very tempting opportunities to do the wrong thing. Many investors will take their chances and disregard the warning. They will follow overly optimistic projections to the top and will also follow them back down to the bottom. Some will try but fail to resist the temptation. Grantham explains the challenge:

“For positioning a portfolio to avoid the worst pain of a major bubble breaking is likely the most difficult part. Every career incentive in the industry and every fault of individual human psychology will work toward sucking investors in.”

However, some others will be able to draw on their grit, adhere to their long-term plan, and avoid the worst of the pain. As a result, another aspect of bubbles is they represent significant transformations. Namely, “These great bubbles are where fortunes get made and lost.”

Tyler Durden
Fri, 01/22/2021 – 08:25

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Citron Research Says “Hacking Attempts” Interrupted Livestream Detailing GameStop Short

Citron Research Says “Hacking Attempts” Interrupted Livestream Detailing GameStop Short

Andrew Left of Citron Research took to Periscope yesterday to try and layout his short thesis on GameStop, which he claims is going back to $20 per share. 

But instead of completing his video informing the public of his investment thesis, Left found out first hand the “madness of crowds” when he set off many GameStop bulls in the WallStreetBets subreddit, who took to the web to make pests of themselves during his video. 

Left was then forced to stop his stream, explaining on Twitter that too many people were trying to access his Twitter account at the time. Twitter locked his account as a precaution, Bloomberg reported Thursday night, and eventually had to work with Left to get it reinstated. 

“Too many people hacking Citron twitter, will record and post later today. $GME going to $20 buy at your own risk,” Left tweeted mid-day on Thursday. 

Left took to YouTube later in the day to finish the video he had started. “I’ve never seen such an exchange of ideas of people so angry about someone joining the other side of a trade,” he said.

“This is a failing mall based-retailer,” Left starts by saying. 

“You can get mad, you can hack my account, you can go to Twitter, you can sign on and call me every name – but if you wanna save the company, go out there and actually buy something from GameStop. That’s the only way you’re going to be able to save the company. Other than that, the more you buy, I’m sure there will be supply on the other side,” Left concludes. 

You can watch Left’s full video explanation of his GME thesis here:  

Tyler Durden
Fri, 01/22/2021 – 08:12

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Aerial view of rare snow on Taklimakan Desert, China

View from up high: Sit back and enjoy the winter scape splendor of the in NW China.

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Futures Slide As Euphoria Fizzles On Renewed Lockdown Fears

Futures Slide As Euphoria Fizzles On Renewed Lockdown Fears

Global shares slid from record highs, and US equity futures stumbled on Friday, halting a rally fuelled by stimulus hopes, amid renewed investor concern about tighter, extended coronavirus restrictions after Hong Kong announced it would lock down 150 residential buildings in an “unprecedented” bid to contain an outbreak of covid, coupled with Joe Biden’s warning that U.S. deaths will hit 500,000 next month. Treasuries edged up and the dollar strengthened for the first time this week. Bitcoin rebounded sharply overnight, rising as high as $32,000 after tumbling almost 20% on Thursday and sliding below $29,000.

S&P futures were down 0.8%, or 29 points, to 3,817. Among the top movers were Intel which beat on EPS and revenue making gains just before the close before paring to trade lower by 4% in the pre-market after the company unveiled plans to keep chip production in house until 2023 while IBM tumbled 8.2% in premarket trading on Friday, after it reported fourth-quarter revenue that missed expectations. Analysts were broadly disappointed by the results, which was seen as the latest sign of weak growth prospects. Cryptocurrency-exposed stocks extended losses in premarket trading on Friday, with Bitcoin holding steady under $32,000 during a week that saw a drop of about 13% for the digital asset.

The risk-off mood followed a period of relief after the transition of power in the United States, culminating in Biden’s inauguration on Wednesday and strong expectations that U.S. stimulus will provide continued support for global assets. President Joe Biden, who is pushing for $1.9 trillion in additional spending, unveiled a strategy to combat the virus while warning the pandemic will worsen before it improves. Restrictions intensified from Germany and the U.K. to Hong Hong, and the European Central Bank cautioned that the euro area is headed for a double-dip recession.

“Recent news flow on the pandemic has not been favorable,” said Jean-Francois Paren, global head of market research at Credit Agricole. “After the post-election wave of optimism from the U.S., markets have been left facing the reality of vaccine delivery and new lockdown measures, and the perspective of a double-dip in Europe.”

“The fact that there would be U.S. stimulus was well known and the size of the package and the very high-level details of what they’re aiming for with the package was well known some while ago,” said James Athey, investment director at Aberdeen Standard Investments. “The realities of what is likely to be achievable relatively quickly are not supportive of just blindly buying cyclical assets. There’s a lot more nuance and a lot more politics to go on before we get there.”

The MSCI world equity index was 0.2% softer following three straight sessions of gains which pushed it to a record.

The Euro STOXX 600 was 0.8% weaker as investors digested weaker flash PMI readings for January. Lockdown restrictions to contain the coronavirus pandemic hit the bloc’s dominant service industry with Lagarde warning that Europe was in a recession in Q4. All industry sectors were in the red, with travel, energy and resources leading the decline. The FTSE 100 index slipped 0.5% as data showed British retailers struggled to recover in December from a partial coronavirus lockdown the previous month, while Uk PMIs dropped sharply.

The Stoxx 600 Energy index fell as much as 1.9%, hitting the lowest since Jan. 6, after crude prices fell on pessimism about the demand outlook. Oil majors Shell, BP and Total were all lower and dragging on the index; pipe manufacturer Tenaris the worst performer in the index, down as much as 5.1%.

Sentiment in Europe was already more cautious after Thursday’s European Central Bank meeting, in which the bank’s message was perceived as more hawkish than expected. The yield on Italian 10-year benchmark bonds touched its highest since early November on reports that Prime Minister Giuseppe Conte may be tempted by the prospect of a snap election.

MSCI’s broadest index of Asia Pacific stocks outside of Japan was 0.8% lower as investors paused for breath following a recent string of climbs to fresh record highs amid concerns over the latest coronavirus-related restrictions. China’s composite stock index slid 0.4%, while the blue-chip CSI300 index edged up 0.1%. TSMC was the biggest drag on the MSCI Asia Pacific Index after Intel’s incoming CEO pledged to regain the company’s lead in chips, aiming to move the majority of manufacturing internally by 2023. Hong Kong stocks fell 1.6% after the South China Morning Post reported the government will lock down tens of thousands of residents in parts of Kowloon in an effort to limit the spread of Covid-19. Philippine stocks dropped for a sixth straight day. New Zealand stocks bucked regional declines, climbing after the country’s inflation was firmer than economists expected in the fourth quarter.

Data from Japan overnight showed that factory activity slipped into contraction in January and the services sector was more pessimistic as emergency measures to combat a COVID-19 resurgence hit sentiment.

Treasury futures hovered near top of daily range on light volume, leaving cash yields richer by 2bp-3bp across long-end of the curve. Risk-aversion is a driver, as virus-related global restrictions are back in focus. The 10-year yield at around 1.09% was richer by ~2bp on the day, led by gilts and bunds amid weakness in European stocks, and little changed on the week; long-end-led gains flatten curve, with 5s30s in retreat from highest level since November 2016. With February Treasury options set to expire, large open interest in 137 strikes on 10-year futures contract trading just below that level may help limit movement away from it. Yields on German bunds edged lower, while Italian bonds dropped after Corriere della Sera reports Italian Prime Minister Giuseppe Conte could seek new elections, adding to a selloff sparked Thursday by concerns over the pace of ECB bond buying.

With China reporting 103 COVID-19 cases on Friday. travel plans were in limbo for tens of millions of people in China’s northern cities. They have been under some kind of lockdown amid worries that undetected coronavirus infections could spread quickly during the Lunar New Year holiday, which is just weeks away.

In FX, the Bloomberg Dollar Index advanced and the greenback was higher against risk-sensitive Group-of-10 peers while trading little changed versus the euro and the Swiss franc. The U.S. dollar paused after three straight days of losses, though it was still on track for its biggest weekly loss since mid-December. Its recent slide has been led by investors ploughing money into higher-yielding currencies on optimism about a rapid economic recovery led by the U.S. stimulus. The euro touched a session high of $1.2190 following slightly better- than-forecast German PMI data, only to trim those gains after the euro-zone wide PMI didn’t offer the same positive surprise. The pound was also lower after a disappointing PMI print and weak retail sales data; Boris Johnson refused to rule out the U.K.’s lockdown lasting into summer. Nokkie, Aussie and Kiwi all snapped three days of gains versus the greenback.

Bitcoin steadied, rebounding as high as $32,000 after earlier slumping below $30,000 on Friday in a retreat that stoked fresh questions about the sustainability of the cryptocurrency boom.

In commodities, oil prices were weighed down by worries that new pandemic restrictions in China will curb fuel demand in the world’s biggest oil importer. Brent crude futures fell 2.3% to $54.81 a barrel, while WTI was 2.4% lower at $51.87 per barrel. Spot gold was down 0.7% at 1,845 an ounce.

Looking at the day ahead, the December Markit PMIs and existing home sales are the main highlight. Schlumberger is among companies reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.6% to 3,821.25
  • MXAP down 0.7% to 213.09
  • MXAPJ down 0.9% to 718.03
  • Nikkei down 0.4% to 28,631.45
  • Topix down 0.2% to 1,856.64
  • Hang Seng Index down 1.6% to 29,447.85
  • Shanghai Composite down 0.4% to 3,606.75
  • Sensex down 1.6% to 48,848.02
  • Australia S&P/ASX 200 down 0.3% to 6,800.37
  • Kospi down 0.6% to 3,140.63
  • STOXX Europe 600 down 1% to 406.97
  • German 10Y yield fell 0.6 bps to -0.502%
  • Euro up 0.07% to $1.2172
  • Italian 10Y yield rose 6.6 bps to 0.574%
  • Spanish 10Y yield rose 1.2 bps to 0.138%
  • Brent futures down 1.4% to $55.33/bbl
  • Gold spot down 0.5% to $1,860.70
  • U.S. Dollar Index little changed at 90.17

Top Overnight News from Bloomberg

  • ECB officials have asked staff to propose new ways to measure financial conditions in the euro area, potentially assisting future decisions on how much stimulus the region’s pandemic-hit economy needs
  • Europe’s bond markets are becoming wary that the European Central Bank may just be easing off the gas after President Christine Lagarde emphasized that the central bank’s entire 1.85-trillion-euro pandemic stimulus package may not be needed, should financing conditions in the euro area remain favorable
  • Federal Reserve officials meeting next week are likely to put off any changes in their bond-buying program until 2022, when a tapering of purchases may begin, according to economists surveyed by Bloomberg News.
  • Japan’s pension fund, the world’s largest, is determining the impact of FTSE Russell adding Chinese government debt to its bond benchmark, according to Masataka Miyazono, the president of the Government Pension Investment Fund
  • European leaders painted a bleak picture of the continent’s health emergency, warning that mutant coronavirus strains will result in longer and potentially stricter lockdowns with no clear sense of when they may end
  • Iran has started ramping up its oil production and expects to reach pre-sanctions levels in one to two months, said Deputy Oil Minister Amir Hossein Zamaninia

Quick look at global markets courtesy of Newsquawk

Asian equity markets traded cautiously after the mixed lead from Wall St where most indices stalled at record levels aside from the Nasdaq which was bolstered by continued strength in large tech including firms gains in Intel which announced its results prior to the closing bell and beat on both top and bottom lines and with Apple also boosted by optimism from Morgan Stanley regarding the tech giant’s upcoming earnings report. Nonetheless, trade across the Asia-Pac region was subdued with ASX 200 (-0.3%) pressured by heavy losses in the energy sector and as smaller tech stocks were shunned in the shadow of the global industry giants, with a larger than expected decline in Retail Sales adding to the glum mood. Nikkei 225 (-0.4%) was negative following soft inflation data, which was not as bad as feared, but still registered the fastest pace of decline since September 2010. In addition, there was an initial report that Japan’s government is said to have privately concluded the Tokyo Olympics will have to be cancelled due to the pandemic and focus will be on securing games for Tokyo at the next available year in 2032, although PM Suga later pushed back against this and said they are determined to realize the Olympics. Hang Seng (-1.6%) and Shanghai Comp. (-0.4%) conformed to the downbeat picture with Hong Kong weighed on by expectations of a tough lockdown to be imposed from this weekend for certain districts and with CNOOC the worst performer after MSCI announced yesterday it will delete the Co. from its MSCI ACWI and MSCI China All Share Indexes. There were also recent comments from US Treasury Secretary nominee Yellen who suggested the US will use a full array of tools to counter China’s abusive and illegal practices, while she added that they will not alter China tariffs until allies have been consulted and that a new approach is needed for meaningful pressure on China. Finally, 10yr JGBs are lower after its pullback from resistance near the 152.00 focal point and alongside similar lacklustre trade in T-notes, with prices ignoring the improved results and stronger demand seen at the enhanced liquidity auction for JGBs ranging from 2yr- 20yr maturities.

Top Asian News

  • Shiseido Is in Talks to Sell Personal-Care Business to CVC
  • Hong Kong Stocks Drop on Report City to Lock Down Some Buildings
  • Oil Giant Cnooc Turns Index Pariah After U.S. Blacklists Parent

Bourses in Europe continue to extend on losses (Euro Stoxx 50 -1.1%) as the downbeat APAC performance reverberates into the region amid woes of further shut downs due to worsening COVID-19 outbreaks. This fallback in sentiment has also been reflected in the EZ and UK PMI figures which waned M/M. The risk-off mood is Europe has also seeped into US equity futures which are also dented – with the ES -0.6%, NQ -0.5%, RTY -0.9% and YM -0.8%. Cash bourses in Europe mostly see broad-based losses with a few of outliers – UK’s FTSE (-0.7%) sees more contained declines with the aid of favourable Sterling dynamics, Italy’s FTSE MIB (-2.1%) underperforms as COVID-fears fuse with political jitters as reports via Corriere suggested that Italian PM Conte is reportedly considering the possibility of elections, and is becoming increasingly tempted by early voting due to the current state of polls. Meanwhile, losses in the SMI (-0.2%) are cushioned by risk-off defensive flows into pharma names. As such Healthcare resides as one of the better performing sectors in the region. On the other end of the spectrum, Oil & Gas is the laggard amid price action in the crude complex (see the commodities section), with Travel & Leisure also hit in a similar vein on further lockdown woes. Banks reside towards the bottom of the pile against the backdrop of a lower yield environment and drag from the politically-hit Italian banks, with UniCredit (-3%), Bper Banca (-2.8%) and Intesa Sanpaolo (-2.6%) all towards the bottom of the Italian benchmark index. The IT sector also feel some pressure despite positive metrics from Intel (-4% pre-mkt) but underwhelming earnings from IBM (-7.5% pre-mkt) – with some also suggesting profit-taking/sell-the-fact play after the recent tech rally. In terms of individual movers, DAX heavyweight Siemens (+4.5%) is bolstered and in turn is stemming downside in the DAX (-0.5%) following stellar prelim-earnings in which Q1 revenue rose 5% Y/Y, exceeding expectations. Airbus (-0.1%) is relatively flat following a mixed update but noted that overall production rates are to remain lower for longer.

Top European News

  • EU Warns City of London That Brexit Finance Deal Is Distant
  • ECB Seeks New Gauges by March to Aid Pandemic Stimulus Plans
  • Brexit Sparks Record Slowdown in Deliveries, Hitting U.K. Output
  • U.K. Considers Paying People to Stay Home Amid Lockdown Breaches

In FX, there was another downturn in broad risk sentiment, softer crude and commodity prices have combined with a retreat in several currency counterparts to save the Buck from a further collapse, while perma bulls may also derive more encouragement from the fact that the DXY fended off the latest attempt to flush out underlying and psychological bids at 90.000, albeit even more narrowly (at 90.039 vs 90.043 yesterday). Indeed, the index and Greenback overall remain depressed, with rebounds running into offers at increasingly lower levels and readily, ie 90.286 so far compared to 90.454 on Thursday and 90.699 the day before. Ahead, US Markit preliminary PMIs and existing home sales are scheduled and could provide impetus, but perhaps on the good news is bad and vice-versa mantra for the downbeat Dollar.

  • GBP/CAD/AUD/NZD – The writing was on the wall for the Pound after early UK data disappointment in the form of retail sales and public sector finances, but the so called flash PMIs were anything but, and have seen Cable relinquish the 1.3700 handle, while Eur/Gbp has rebounded to 0.8900+ from its pre-ECB low around 0.8830. Elsewhere, the aforementioned retreat in oil and perhaps some trepidation ahead of Canadian consumption figures have exacerbated the Loonie’s reversal to circa 1.2700 from 1.2590 or so on Thursday, while a bigger than expected drop in Aussie retail sales and the negative risk tone have dragged Aud/Usd back under 0.7750. Conversely, the Kiwi is only holding up marginally better in wake of firmer than forecast NZ CPI and another RBNZ rate outlook upgrade (Kiwibank not looking for a sub-zero OCR any more) by virtue of a retracement in the Aud/Nzd cross to test 1.0750.
  • EUR/CHF/JPY – More post-ECB volatility for the Euro, though above 1.2150 vs the Buck, as a significant deterioration in already contracting French services sector activity outweighed strength in manufacturing in stark contrast to Germany that compensated sufficiently to keep the pan Eurozone prints close to consensus. However, an official German GDP downgrade for 2021 and technical resistance ahead of 1.2200 via the 21 DMA (1.2196) is capping Eur/Usd, while Eur/Chf is softer again sub-1.0780 on renewed Italian political uncertainty amidst reports that PM Conte is contemplating calling an early election to give Usd/Chf the impetus to breach 0.8850. On the flip-side, not much in the way of safe-haven demand for the Yen following fractionally less deflationary than anticipated Japanese inflation data, as Usd/Jpy bounces from beneath 103.50 towards 103.75 eyeing decent option expiry interest between 103.40-50 (1 bn).
  • SCANDI/EM – The Nok is unwinding post-Norges Bank strength alongside the retracement in crude prices to 10.3345 vs 10.2120+ against the Eur, while the Mxn is also having to contend with more Government moves that would put the onus on Banxico to mop up excess Usd and other foreign currency reserves. Nevertheless, the Krona and Peso are not depreciating as much as some on risk-off or averse positioning ahead of the weekend.

In commodities, WTI and Brent front month futures continue to edge lower in early European trade in a continuation of the price action seen overnight, as sentiment is dented by some supply and demand side developments. Firstly, the complex has been knocked off-course as the severity of the new COVID-19 outbreaks have prompted further economies to impose lockdown measures, with Hong Kong the latest to restrict city residents for the first time, whilst UK PM Johnson suggested UK’s lockdown could run into the summer. On the supply side, Iran’s OPEC governor said the country has started ramping up oil production, which comes as Biden took the helm of the White House – with hope for Iranian sanctions to be unwound. That being said, we have yet to see any firm commitment from the Biden admin and the reaction from the OPEC+ de-facto heads – Saudi and Russia, namely the former after the 1mln BPD voluntary cuts announced in Jan for Feb and Mar. Iran is currently exempt from quotas but increased flows into the market during the rise of COVID-19 variants may not bode well with fellow producers. Brent relinquished its USD 55/bbl handle as it extends its decline from USD 56.20/bbl highs, while its WTI counterpart dipped south of USD 52/bbl (vs high USD 53.13/bbl). Looking ahead, today sees a delayed release of the weekly EIA stockpiles (crude exp. -1.167mln bbl) given Monday’s MLK holiday and Wednesday’s US inauguration. Elsewhere, spot gold and spot silver are softer as the Dollar regains traction and extends its gains, with the former around USD 1860/oz with nearby levels including the 50 DMA (1859.50/oz), USD 1850/oz and 200 DMA (USD 1846.4/oz). In terms of base metals, LME copper is faltering amid a similar performance in Shanghai amid the resurgence of the virus causing demand jitters ahead of Lunar New Year holiday next month in China. Similar downside was also seen in Dalian iron ore futures overnight, with near-term outlook also impacted by weakening steel margins.

US Event Calendar

  • 9:45am: Markit US Manufacturing PMI, est. 56.5, prior 57.1; 9:45am: Markit US Services PMI, est. 53.4, prior 54.8
  • 10am: Existing Home Sales, est. 6.56m, prior 6.69m; Existing Home Sales MoM, est. -1.94%, prior -2.5%

DB’s Jim Reid concludes the overnight wrap

Back to bubbles, and time will tell whether today’s valuations prove sustainable, but US equities witnessed yet more records yesterday as large cap tech stocks fueled the NASDAQ (+0.55%) to new all-time highs and dragged the S&P 500 (+0.03%) to a fresh one too. Yesterday’s gains were driven by Tech Hardware (+2.85%) and Semiconductors (+2.21%). The big laggards on the day were actually the more cyclical stocks like Energy (-3.34%), Transportation (-1.95%) and Banks (-1.29%). The moves may point to a crowded cyclical trade for now as oil prices were fairly flat – Brent crude was down just -0.12% – and rates were higher with yield curves steeper. Indeed the reflation trade was alive and well in fixed income, with 10yr US breakevens hitting yet another 2-year high of 2.18% and up a pretty substantial +5.6bps and within touching distance of 6 year highs although a new 10yr TIPS auctions probably had much to do with the move. In addition the 5s30s Treasury curve steepened to its highest in over 4 years, as 10yr yields themselves rose +2.6bps. The mood was further bolstered by some positive economic data out of the US, with the weekly initial jobless claims for the week through January 16 coming in at a lower-than-expected 900k (vs. 935k expected), whilst the previous week’s number was revised -39k lower. On top of this, housing starts in December hit an annualised rate of 1.669m (vs. 1.560m expected), taking them to levels not seen since 2006, as did building permits at 1.709m (vs. 1.608m expected).

European assets didn’t have such a strong day however, as the ECB made some moderately hawkish noises in its latest policy meeting. While the Governing Council left their main policy rates unchanged as expected, there was a new section in the statement on the symmetric flexibility of their pandemic emergency purchase programme, which said that “If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full. Equally, the envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation.” This nod to the fact that the envelope might not be used in full wasn’t in itself new news, since it was mentioned in the minutes of the ECB’s December meeting, but its inclusion in the statement in addition underlined the hawkish point. While our European economists saw the message about symmetry around the PEPP envelope as a significant new point, they also highlighted President Lagarde emphasis on the conditional nature of that symmetry. Meaning that holistic financial conditions need to reach a certain threshold before support is eased. They feel that the statement implies that ECB sees sovereign yields as low enough currently but now attention has shifted to ensuring that the stimulus gets passed through to the whole economy. See their full reaction note here.

Against this backdrop, the euro strengthened +0.48% against the dollar yesterday and sovereign bond yields rose across the continent, with those on 10yr bunds (+3.3bps), OATs (+3.6bps) and BTPs (+6.7bps) all moving higher. Italian BTP yields rose to the highest levels in just over two months, this comes even as reports continue to show Prime Minister Conte being able to cobble together a governing coalition. Equity markets similarly weakened through the day, with the STOXX 600 paring back its intraday high of +0.76% after the open to eke out a gain of just +0.01%.

One of the main highlights today will be the release of the flash PMIs from around the world, which will give us an early indication of how the global economy is performing into 2021. With the resurgence of the virus in Europe and fresh restrictions, the consensus is pointing to further declines from December’s numbers, though with manufacturing doing better than services as has been the case throughout the pandemic. Overnight we’ve already had the releases from Australia and Japan with Japan’s manufacturing (at 49.7 vs. 50 last month) and services (at 45.7 vs. 47.7 last month) PMIs on the softer side as the country imposed a state of emergency across several prefectures. Australia’s PMIs were a bit more mixed with services softer at 55.8 (vs. 57.0 last month) while the manufacturing reading improved to 57.2 (vs. 55.7 last month). In other overnight data, Japan’s Dec CPI (-1.2% yoy vs. -1.3% yoy) and core CPI (-1.0% yoy vs. -1.1% yoy) both came in weaker than expectations.

Asian markets are trading softer this morning with the Nikkei (-0.21%), Hang Seng (-1.22%), Shanghai Comp (-0.61%) and Kospi (-0.05%) all down. The underperformance of the Hang Seng is coming on the back of news that the city will for the first time lockdown tens of thousands of residents in Yau Tsim Mong, the core urban district of Kowloon, to control the spread of the coronavirus outbreak. Futures on the S&P 500 are also trading down -0.25% while Brent crude oil prices are down -1.12%.

Meanwhile, Bitcoin which received a 10/10 bubble rating from 50% of respondents in our survey was down as much as -7.7% today at one point to trade at $28,818 before popping back up to $31.785 (+1.82%) as we type. The crypto currency is now down -24.3% from its peak of $41,981 reached on January 8, 2021. In other news, Google has said that it will disable its search engine in Australia if it’s forced to pay local publishers for news. This came as Australia is working on a law that will require Google to compensate publishers for the value of their stories. Facebook is the only other company besides Google which is being targeted by this legislation. Facebook has said that it is considering blocking Australians from sharing news on Facebook if the law is passed. Is this a small sign that the regulatory/legal framework for big tech is changing?

On the coronavirus pandemic, President Biden’s first full day in office saw a number of executive orders that mark a shift in approach from the previous administration. The executive actions seek to stabilise supply chains as well as boost the government’s ability to rapidly deploy vaccines to states, but the administration also acknowledged that it needed Congress to pass legislation for additional spending in order to make a significant change in trajectory. There are new quarantine measures for all international travellers. The Biden administration also will require masks on airplanes, trains and other modes of transportation that cross state lines and in a short address, the President urged mask-wearing broadly and promised to try and make vaccinations free where possible. He also tempered expectations a bit, warning that, “it’s going to take months before we can get the majority of Americans vaccinated.” The administration is aiming to get 100mn doses administered in the presidents first 100 days, and Dr Fauci has said he does indeed expect that the country will soon be able to register one million doses per day in the near future, with the majority of Americans vaccinated by mid-year. On a related note, he announced that the Johnson & Johnson vaccine would have sufficient data to analyse by early-February, with emergency authorisation taking another week or so after that. The Johnson & Johnson shot has the potential to accelerate the amount of vaccinated people in the population as it only requires one shot compared to the two needed by the Moderna and Pfizer jabs. Overnight, J&J has said that it aims to have 100 million vaccines available for Americans by the spring.

Otherwise, there was some positive news out of the UK, where more than 4.9m people have now had their first vaccine dose, with the current rate putting the UK on track to meet the government’s target of having offered a first dose of the vaccine to the over-70s, health and social care workers, and the clinically extremely vulnerable by February 15. However, Portugal announced that schools and universities would be closing for at least 15 days as they reported their highest number of daily deaths since the start of the pandemic. Overnight China has banned residents of an area of Shanghai from leaving the city after six Covid cases were found in the finance hub, the first cases there in almost two months. The country is also suspending schools in Beijing from Saturday and one Beijing district and multiple cities in neighbouring Hebei province have been put under lockdown as the current outbreak is continuing to grow.

To the day ahead now, and the aforementioned release of the January flash PMIs will be the main highlight. Other data releases include December data on UK retail sales and US existing home sales.

Tyler Durden
Fri, 01/22/2021 – 07:52

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