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[l] at 8/11/20 7:05pm
Mississippi School Reopens Only To Send 100 Students Home When Teacher Appears Sick Tyler Durden Tue, 08/11/2020 - 21:05

School districts across the nation are on edge now that we're entering mid-August into September, when K-12 schools typically open. And during more normal times Fall sports like football are already in full swing in terms of practices, which in some places, for example in most parts of Texas, appears to be resuming as normal.

Many districts especially in the South are offering an 'online option' especially for middle through high school students while simultaneously opening their doors, albeit with strict safety measures in place, such as temperature checks and the wearing of masks.

But one Mississippi public school opened its doors as scheduled in early August, only to now be living the nightmare that most fear: "Roughly 100 students were sent home from a southern Mississippi high school on Tuesday after coming into contact with a teacher who was exhibiting mild COVID-19 symptoms," The Hill reports.

Gulfport High School in Gulfport, Mississippi, via WLOX News.

Amid raging school board debates and varying opinions among administrators over re-opening, many who say schools should stay closed altogether this fall argue that the moment a cluster of COVID-19 confirmations emerges in any given school they are going to shut their doors anyway.

In this latest case in Gulfport, Mississippi it's not even as yet clear whether the teacher actually has coronavirus. But while a test is pending students were sent home anyway “out of an abundance of caution to keep everyone safe,” the district said in a statement.

Any students and faculty that had contact with the teacher will enter a 14-day quarantine - again estimated at about 100 - not returning to campus, pending the teacher's test results return, The Hill continues. In the case of a negative test, the school said classes will resume as normal. The school says social distancing measures have been in place. 

The whole episode presents a serious dilemma which high schools and hesitant colleges are sure to experience: assuming a school reopens, how much panic will ensue the moment students and teachers naturally catch common colds or other viruses? 

Stock image: Infection Control Tech

Outbreaks of various types of illnesses, or coughs, or also bacterial illnesses like Strep throat tend to be all-too-common on school campuses particularly in the fall and winter months.

It begs the question: will schools go on lockdown every time someone catches a common cold?

Add to this scenario the concern that many doctors and health officials have expressed, namely there's a greater likelihood that after multiple months of much of the nation staying at home and social distancing, people's immune systems tend to be much weaker, and thus could experience a 'shock' of sorts (in the form of illness) the moment individuals are back among crowds.

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[l] at 8/11/20 6:45pm
Commercial Real Estate Bankruptcy Legislation Introduced Tyler Durden Tue, 08/11/2020 - 20:45

Two weeks ago we reproted that "in an uprecedented move, Congress proposes taxpayer-funded bailout Of $550 billion CMBS industry." And now this: according to Chain Store Age, legislation has been introduced that would make "meaningful" temporary changes to bankruptcy laws, related to commercial real estate.

The bill, introduced by Sen. Thom Tillis (R-NC) and supported by the International Council of Shopping Centers, would allow for the facilitation of commercial tenant rent deferrals and providing additional flexibility for small business tenants that file Chapter 11 bankruptcy.

"The legislation will help businesses struggling with bankruptcy to weather the storm," ICSC president and CEO Tom McGee said. "The bill provides significant relief to small business debtors and landlords. It also reinforces what many landlords have done since spring, as well as encourage deferred deals going forward."

Under current law, rent deferral agreements waiving some or all of the current rent to be repaid in the future can be undone if the commercial tenant later files for bankruptcy. This risk discourages such agreements from happening. Specifically, Bankruptcy Code Section 547 deems the installment payments as “preferences" and commercial landlords can be forced by the court to forfeit such payments. 

The Tillis bill would prevent this from happening, providing "certainty" to business landlords, as well as tenants, according to ICSC.

Additionally, the Tillis bill would allow an extra 90 days for commercial tenants in bankruptcy to decide whether to continue with current leases. And for certain small businesses, the bill would give tenants the ability to spread the payment of some post-bankruptcy rent over a longer period. The extra time would provide liquidity to small businesses, preserving jobs and businesses, noted ICSC.

As we reported previously, a parallel attempt to bail out the ultra-rich investors who are holding impaired commercial mortgage-backed securities was introduced by Reps Van Taylor (R., Texas) Rep. Al Lawson (D., Fla.). According to the initial proposal, and as usual, taxpayers would end up being on the hook via the various Fed-Treasury JVs that will fund these programs, as any new money injected to rescue CMBS debt will by default be junior to existing insolvent debt as "many of these borrowers have provisions in their initial loan documents that forbid them from taking on more debt without additional approval from their servicers. The proposed facility would instead structure the cash infusions as preferred equity, which isn’t subject to the debt restrictions."

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[l] at 8/11/20 6:25pm
Central Bank Balance Sheets To Hit $28 Trillion Next Year Tyler Durden Tue, 08/11/2020 - 20:25

As noted earlier, silver is crashing as much as 15% today, a plunge which if it had spread to stocks would prompt a panic at the Fed and an injection of at least several trillion. The fact that precious metals do not need a rescue from the Fed - and in fact anything the Fed does do will only send them higher - is probably worth its own take, but for now we will simply look at how we got here, where we are going and update details on the balance sheets of the Federal Reserve, European Central Bank (ECB), Bank of England (BoE), Bank of Japan (BoJ), Reserve Bank of Australia (RBA), and Bank of Canada (BoC) balance sheets, as well as on the programs implemented by each central bank.

As BofA shows, central bank balance sheet have never been bigger with the Fed now "holding" 34% of US GDP, and expected to see this number rise to 38%. For the other central banks the number is 25% for Canada and 123% for Japan.

Putting an actual number to the liquidity firehose, central banks have injected $24 trillion, or about a quarter of global GDP, into the market to keep it from crashing and expectations are that this number will increase to $28 trillion by the end of next year (this excludes the tens of trillions in assorted liquidity instruments in China). That would be a very optimistic expectation.

And since these days chart inflation means that one picture is worth a trillion words, we will focus on the visuals as they are self-explanatory.







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[l] at 8/11/20 6:05pm
Exposing COVID-19's "Orgy Of Incoherence" Tyler Durden Tue, 08/11/2020 - 20:05

Authored by Omar Khan via Medium.com,

Of late, despite flashes of social media mania, there has been heartening focus in a number of countries from policy makers on evidence based COVID responses, localized interventions where needed, encouraging prudent social distancing and hygiene measures. This deserves to be supported.

An Orgy of Incoherence

Each day, in “COVID panic land” statements are issued that are never seemingly challenged, or even questioned, or even unpacked, or even “quizzed” for minimal coherence.

First, just a canopy bit of perspective, quoting Lord Sumption, former High Court Judge in the UK, who has become a lightning rod for speaking out about the mass invalidation of civil liberties over hyped hysteria.

“COVID-19 is a serious disease, but historically it is at the bottom end of the scale. For anyone under 50 the risk of death is tiny, less than for seasonal flu. In the great majority of cases the symptoms are mild or non-existent. Our ancestors lived with far worse epidemic diseases without rushing to put their heads in a bag. In other parts of the world they still do (world-wide, tuberculosis kills many more than COVID-19).”

While there is some outrage evident in Lord Sumption’s assessment, the above statements are all factually true, and can be objectively corroborated. Relative to our ancestral experience with viruses, I will spell that out further below as well, so as to pacify the “here and now” doomsayers.

Samples of Mindlessness

“What if COVID never goes away?”

Since it kills virtually no one in statistical terms below 60, and above 60 without comorbidities recovery rates are still highly encouraging, and since the impact on net mortality is not anywhere close to seismic on the actual numbers, the answer is, “We live with it.” Or “We end all life as we know it due to what is tantamount to a bad influenza period.”

It’s a virus, so likely may not disappear. We will develop greater immunity, our hygiene habits will improve, we might get a vaccine, but we need a “vaccine” against panic and the myopia of “risk-free” living, which we have not imposed on ourselves in reaction to anything else in history: from terrorism to earthquakes to tuberculosis to race car driving (so from the man-made catastrophes to natural disasters, to global diseases to human hobbies).

So, the question emerges, other than the now clearly discredited “optics” of warning us of millions of deaths, inflamed by modelers who have perfected the art of imperfection in their predictions (and our saying that is as “factual” as it gets), and other than reality being “gas-lighted” by deranged and virtually unremitting media reports urging panic and paralysis upon us, what triggers this bizarre new threshold of absurd self-preservation, even when the opportunity cost is the virtual end of social and economic life as we know it? We “sneezed” civilization away?

“What if there’s a second wave?”

It will, if following the patterns of virtually all viruses, be even less dangerous, immunity will be greater, we may be sane enough to protect nursing homes, and we will find the rebuilding of society a better place to focus our attention.

And why on God’s earth are we so infatuated with caseloads? A mild upward tick in Catalonia, and the UK in sheer panic imposes quarantine on anyone returning from Spain? Overall net mortality is no worse than the UK (zero in the last two days, August 1st and 2nd), and we are just postponing the inevitable, unless the UK is going to not only leave Europe but take leave of its senses at the same time, and operate as an “anti-COVID fortress” with dwindling economic and cultural and social prospects.

“But, by God, I’m NOT getting a fever or a dry cough, forget number of deaths annually by influenza, pneumonia, crossing the street, diabetes, heart attacks… all acceptable EXCEPT the dread… theme music please!… scourge of “COVID!”

Vietnam, which marshaled its sanity and responses so remarkably and reports to date no deaths from COVID, found three residents infected in DaNang, after months of no local cases reported apparently, and in a fit of over-reaction, shut DaNang down, and evacuated the (mostly local) tourists from there. Elephant guns and mosquitoes come to mind. (Several days later, updating on August 10th, there are now 11 deaths in Vietnam, averaging about 20 cases a day for the last few days; compared to anywhere else in the world, scant argument for panicked evacuation or shutdown).

Some large global multinationals have proclaimed no face-to-face meetings, even if crucially needed in local markets, until 2021! On what basis? Surely, this should be assessed locally? And if you are in a community which is recovering, now has 1,000 people gathering thresholds, or marriages of up to 500 or more taking place in Asia, and if you are a newly forming team that needs to engage, to rally, to align, to build the necessary relationships for greater virtual work to be possible, in fact, why would a HQ “declare” themselves a medical authority on gatherings per se, large or small, decoupled from the leadership discretion of leaders you have entrusted brands, livelihoods of your employees and hundreds of millions (or more) dollars in revenue to? And should not a “factual” threshold, rather than a calendar one be established?

We surely cannot manically shut down whole communities when infection rates and lethality rates show a serious but statistically modest viral challenge. But the economic meltdown, psychological impacts, social disruption, while not reducible to lab results, are every bit as palpable, arguably more devastating in the medium to longer term, and will not recover if societies and economies are being turned “on” and “off” by every “spasm” of control fetishism.

And the “Facts” Keep Rolling In

Just taking the “florid” Floridian over-reaction, a cursory look at July 25th shows 124 deaths reported, of which only one, only one I reiterate, took place that day! The rest were merrily backfilled from May 28th cumulatively! Should this not be taken as scandalously distorting? No, just another day in the “porn media” sweepstakes. As I write (August 2nd), hospital capacity in Florida is greater than it was on July 2nd, despite 300,000 tests administered since.

We also hear from numerous studies, including from Professor Francois Balloux in a pre-print, reconfirming evidence that eight out of 10 who never had COVID-19 seem to have an immune response triggered by T-cells based on prior exposure to other illnesses, including the common cold. That would argue for an affinity between this coronavirus and other more common strains, rather than this being a world ravaging contagion unlike any seen before. One wonders if we never encountered a virus prior to 2020?

Hot on the heels of that, The Wall Street Journal reported: Flu wiped out in Southern Hemisphere virtually, from reports. As an example, Chile had recorded as of the time of the article going to print, 1,134 respiratory illnesses compared to 20,949 last year. Could it be that people diagnosed with flu or influenza are being “tagged” as COVID-19, particularly those who die, hence the cases of flu and influenza seem to be on a precipitous decline?

As the plummeting numbers of seasonal respiratory viral infections from Argentina to South Africa to New Zealand continue to confound, the myopic are congratulating draconian COVID containment measures for this positive byproduct, ignoring the far more likely rationale that these are still there, “baked” into the COVID numbers. After all, other than via notoriously fallible tests, based on the symptoms, how could you know?

Once More a Plea for Perspective

Despite only 2% of DC’s hospital capacity being utilized, school has been cancelled for the fall due to the demands by the teacher’s union. With overwhelming global evidence of school openings being unconnected with any spikes thereafter, children not being at risk by and large (statistically being far more likely to be killed riding over to school, and over nine times as statistically likely to drown — source CDC — than from deaths “ascribed” to COVID), we have to more than wonder. Specifically, in the US,138 COVID “ascribed” deaths in that age group versus 995 from drowning in an average year, 4,000 in auto accidents for school age kids and teens over a similar period.

The Lancet has now also weighed in that Lockdowns don’t work, in a country by country analysis. But we already knew that! Just compare Japan to Belgium! Compare Taiwan to the UK. And we’ll get to Sweden, as fatality numbers plummet, and it was the only western country to have grown economically last quarter (Taiwan grew first quarter 2020, too). But for some reason we should insist rather that our “poster children” for COVID rectitude should be the shattered economies with no viral “breakthrough” to show for it? Virtually all of Europe has said, no hardcore lockdowns going forward, localized restrictions, prudent, evidence-based reactions, and following key elements of the Swedish model, would be the essential playbook.

As a percentage of the global population, even with all the likely “mis-stated” COVID fatalities, taking the numbers as gospel, we come in at .0052%. Swine Flu (2009–10) was .0029%, HIV .565%, Hong Kong flu of 1968 also much higher at .027%, Asian Flu of 1957/58 still higher at .070%, the Spanish flu of 1918 a ravaging 2.73%. The global economy persevered, the world progressed and moved on to fresh prosperity through all of these. Just yesterday we read the sheer collapse of GDP in the US has eliminated the last 5 years of growth in one fell swoop in a matter of months.

For those who relish historical comparisons, the true pandemic “terrors” were the Black Death of 1347–51 with 42.11% as a percentage of global population and the Plague of Justinian 541–542 with 28.51%. Doubtless the rudimentary understanding of medicine in those eras was a sharp contributing factor to the exponential growth of the respective contagions.

The Perpetuation of Fraudulent Panic-Mongering

Though mass congested protests are seemingly of no “superspreader” concern through some unexplained medical voodoo (pandering for political advantage being one of the “vaccines” against public health nostrums it seems), when “panic” seemed on the wane, mainstream media stopped tracking “deaths” (despite even those being periodically miscounted as per the CDC or back-filled), and decided that all “infections” past or present would now be anointed “new cases.” And voila, the floodgates are open once more via some linguistic legerdemain.

Not sick? No problem! No symptoms? Easy. Symptoms which could be mild and seasonal? You dare not make light! Not dying? Give it time… stop society!

Then came the mask mandates. We all know about them, so let me simply make the point that they are far from settled science, and they are downright dangerous when exercising, as the deaths of several Chinese students while running a race during PE with these contraptions heart-breakingly revealed.

The Norwegian health authorities, not noted for their reckless or libertine ways (and with some of the best COVID stats in Europe), doubled down recently on their recommendation for those without symptoms not to wear face masks, arguing the number of infections in Norway made them moot.

Taking the most optimistic efficacy number, medical masks prevent roughly 40% of infections. Keep in mind that most of us outside the medical profession are not wearing medical masks. 200,000 would have to wear them to prevent one new infection per week in Norway. As the agency wrote,

“The number of people who experience undesirable effects (difficulty breathing, communicating when that is critical, or dropping other hygienic prudence being given a false sense of security) is likely to be much larger than the number of infections prevented.”

They concede that in congested community settings, public transport etc., there “might” be some benefit, but again largely with medical masks. They note even then, “However, study results vary greatly.” This meshes with the recent conclusion from the Dutch government indicating they will not require universal mask wearing as effectiveness of overall “masking” has not been demonstrated to their empirical satisfaction. Oxford University points out that no government should be able to mandate this usurpation of civil liberties for something that is not “settled science” by any stretch of the imagination, based on observational assertions. The suggestion is that “liberties” are not to be trifled with, or annulled absent overwhelming “evidence” not assertion.

The Great Lockdown Lacuna

There was a gaping policy hole that “lockdown” sought to furtively fill, the pseudo-scientific reflexive obeisance to untested modeling.

From the reliably inaccurate doomsday prognosticator Neil Ferguson had come the “second Spanish flu” prediction (which had led to 50 million deaths when the world’s population was a fraction of today’s, roughly 1.7 billion, one third of which became infected) re COVID, predicting 500,000 deaths in the UK alone, and if Sweden continued its flirtation with disaster, “at least” 80,000+ there. Since Sweden has less than 6,000 deaths with no lockdown and 75% of those were from nursing home cases which they tragically mismanaged, and as we have countries that have not locked down, which have not produced such torrents of mortality, perhaps we can leave the modelers alone at last?

Even by the end of February, the Diamond Princess Cruise Ship provided a perfect sample to extrapolate from. And this was evidence-based, not model-based. 3,711 passengers and crew, quarantined after a virus outbreak, with an average age of 58 were repeatedly tested. There were 705 cases (19% infection rate), 6 deaths (case fatality rate of 1%) by the end of March, eventually 14 in total, compared to the 116 that the Imperial model would have predicted.

Over half the cases were “asymptomatic” which, if you take it at face value, meant many more were infected or “had” been infected, and the tests were picking up residue of the virus (which we are told can be detected for up to two months after it is no longer “live”). Either way the mortality rate would then resemble “severe seasonal influenza” as a saner version of Anthony Fauci had himself written earlier in the New England Journal of Medicine.

Almost all the deaths on the Diamond Princess were in the over 70 age group. Later the USS Theodore Roosevelt produced one death and three hospitalized cases out of 1,156 infections (much younger and healthier profile, of course), no deaths out of 1,046 cases on the Charles de Gaulle either, and this pattern continued to repeat.

WHO itself had added to the panic due to a rookie computational error, asserting the population mortality risk to be 3.8%. They arrived at this by taking the then known Chinese deaths and dividing them by the number of confirmed cases, ignoring that likely only a small proportion of infected people had been tested, asymptomatic cases were likely not represented, and those who went in for testing were inevitably those with serious symptoms. This evident computational distortion contributed also to the policy errors relating to both hospital capacity and nursing home fatalities.

Deaths in care homes are now estimated to have accounted for half of all COVID related mortality. When it was suggested, looking at 96% of Italian mortalities, for example, coming from the elderly with comorbidities, that we isolate the vulnerable, and not shut down the planet, people said it was “unrealistic” and “had never been done.” As if closing down the world, putting the wider economy into enforced seizure with no possible available longer-term financial hedge by which to recover livelihoods and industries, was a sane alternative?

For perspective, 650,000 COVID deaths globally pale next to 33.4 million deaths to date roughly in 2020 overall, and for most of the population (under 65 with no pre-existing conditions), normal influenza, road accidents, suicides, and a host of other causes of death (TB, cancer, hypertension, diabetes) are statistically far more significant. But the newness of COVID and the frenzied, fevered, unrelenting media hype have stripped most people’s critical faculties of any proportionality on that front it seems.

Though Stockholm with 2.5 times the population density of New York State outperformed NY State on virtually any COVID metric you care to name overall, and at their respective peaks, and therefore still has a relatively open economy today, far more so that NY State, when facts made it evident the virus had all but disappeared from Sweden, there was from the media enablers and all the governments and who had clung feverishly to the “lockdown” mania, not a word, just deafening silence.

Researchers from the University of Toronto found that whether a country was locked down or not was “not associated” with the COVID-19 death rate. The noted journal Lancet cites,

“Government actions such as border closures, full lockdowns, and a high rate of COVID-19 testing were not associated with statistically significant reductions in the number of critical cases or overall mortality.”

They did plausibly keep, for an initial period, hospitals from being over-run, and that should certainly be evaluated in a focused way on that basis.

The Bad Science Round Up

Forcing people walking in parks to wear masks, when even the most fantastic assertions of aerosol transmissibility, which came from machines in lab settings, do not suggest in open air, a mere cough or exhalation magically can be infectiously propelled to unwitting passerby, is moronic.

Swedes and Danes and the Dutch have been enjoying social interaction in cafes and bars, but don’t let the Irish near those pubs (August 10th may see that finally relaxed). As one commentator mentioned, they doubtless have an obscure Irish custom we don’t know about and they need to be weaned off, that in riotous affection leads them to kiss each other’s noses and hack into each other’s throats whenever in pubs. Otherwise, what happens on “August 10th” that wasn’t true on “July 10th” seems quite inscrutable.

Melbourne has interrupted its last “Level 3” Lockdown to initiate a new six week “Level 4” Lockdown (replete with overnight curfew) due to the admitted concern of 600 or so cases of what they are calling “community transmission.” But the real precipitating panic during this “surge” was apparently the number of deaths in a 24 hour period. That number is “seven” during a 24 hour period (considered “recovery” numbers in much of the planet) and still the overall COVID ascribed death count for Australia is 208 from February across the entire country! Those seven, were 70, 80 and 90 years of age, with numerous pre-existing conditions. The fragility of the economy there does not suggest immunity to other shocks likely to flow from these overlapping, never ending lockdowns, particularly as it’s winter there, and viruses are known at times to naturally spike over that period.

And why don’t we finish yet another round-up of our fevered over-reactions with the precarious petulance of the “tests” by which these dire read-outs emerge at all?

Professor Carl Heneghan, Director of Oxford’s Centre for Evidence Based Medicine, provides a bracing corrective, indicating that at lower prevalence of the virus, “sensitivity” and “specificity” of the testing gets less precise.

You start first with the “sensitivity” of the test: the proportion of people who test positive out of those who actually have the virus. The second is “specificity” which is the proportion who test negative, out of those who should indeed have done so. The true specificity and sensitivity of the prevailing tests are not known, admitted to by the UK’s Office for National Statistics, owing to the newness of the virus, a tripwire shared globally.

Let us take the Professor’s operating theater of the UK and assume 1,000 people have the virus, say, .1% (current actual estimates are lower, hovering around 0.04%). Now, say, 10,000 random people go get tested. So, 10 people will have it at the 0.1% infection rate, and 9,990 will not. Estimates tell us 80% of those who have the virus test positive, says the Professor (easily corroborated), this is the “sensitivity” and the “specificity” for those who test negative may be as high as 99.9% with the best (rare) tests.

So, on this basis, eight people will be correctly identified, and two will receive a false negative.

Of the 9,990 that are actually negative, all but 10 will be correctly diagnosed as “negative.” But 10 will be told they have COVID-19 when they actually don’t. That gives us 18 positive tests; eight from those who have it, and 10 from those who don’t. So only 44% of the infections indicated are real. Hence, we have to say, alarmingly, the chance of accurately detecting the disease being less than 50% is fairly glaring.

This isn’t hypothetical, as current viral levels are lower than the above case study. The US Centers for Disease Control kits concede they can generate up to 30% false positives! With the top tests costing upwards of GBP 100 per test, developing countries necessarily opt for more affordable options, with tests where specificity could be as low as 95%.

Then in the 10,000 test scenario, there would be 500 false positives among the eight genuine positives, so the false positives would far outstrip the genuine results, providing an appearance of a “surge” in infections that seems mystifyingly disconnected from numbers of hospital admissions and deaths.

So, if at low prevalence, with false positives rising at the same time actual infections plummet, then even if COVID-19 completely disappeared (the aspired to promised land), then even with no actual positives, on the above example, ten people would be wrongly diagnosed as positive, and the official data would obstinately still show a 0.1% prevalence of COVID-19! Off the current testing regimes, we may be incessantly chasing a shadow, and we may endlessly perpetuate panic and social and economic meltdown over a veritable phantom as a result.


It’s time to restate terms of reference and redefine thresholds meriting panic. We must clarify actual mortality and not “caseloads” as the relevant metric and compare cost/benefit trade-offs rather than allowing ourselves to be economically devastated and medically cuckolded by episodic ephemera posing as data.

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[l] at 8/11/20 5:45pm
Facebook Cracks Down On 'Fake' Local News Networks Run By Political Operatives Tyler Durden Tue, 08/11/2020 - 19:45

After taking the unprecedented step of removing a post from President Trump's page for having the audacity to include a snippet from a Fox News interview where the president exaggerated how children handle COVID infection, Facebook is taking yet another step to crack down on non-mainstream voices on both the left and the right.

Since hard-core progressives are pushing for Facebook to deplatform all conservatives and even some centrists, a decision that could have grave consequences for FB's business, the decision isn't a surprise.

A report in the Columbia Journalism Review drew attention to this trend of  "pink slime" local news earlier this month, and since the 2016 election, a team of researchers has uncovered more than 1,200 'fake' local news sites that repackage community news with a political slant favoring the campaign that they are (often obliquely) backing.

The original Bernie Sanders Campaign helped mastermind this technique. But by blocking all such sites from accessing Facebook's "News Exemption", the social media platform is effectively bringing the same level of scrutiny that it already applies to "national" news platforms to "local news" platforms.

It's also notable because FB's decision comes just one week after the NYT quietly scrubbed "sponsored" news posts paid for by the Chinese government that essentially inserted what appeared to be news stories with a slant that heavily favored the Chinese government.

A local news outlet will be disqualified as "political" if it meets any of the criteria below, courtesy of Axios:

  • It's owned by a political entity or a political person (definitions below).
  • If a political person is leading the company in an executive position, such as a CEO, board member, chairman of its board, or a publisher or editor-in-chief.
  • If the publisher shares proprietary information about any of its Facebook accounts or account passwords, API access keys, and/or data about their Facebook readers - like location, demographics, or consumption habits - directly with a Political Person or Entity as they are defined below.
  • If the Page lists a political entity or a political person as its "Confirmed Page Owner" or "Confirmed Page Partner" on Facebook.

Meanwhile, Facebook defines a "political person" as "a candidate for elected office, a person who holds elected office, a person whose job is subject to legislative confirmation, or a person employed by and/or vested with decision-making authority by a political person or at a political entity." A "political entity" is "an organization, company, or other group whose predominant purpose is to influence politics and elections." These generally include PACs and Super PACs, and entities regulated as “Social Welfare Organizations” under Section 501(c)(4) of the US Internal Revenue Code.

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[l] at 8/11/20 5:25pm
The Father Of Modern Finance: "Inflation Is Totally Out Of The Control Of Central Banks" Tyler Durden Tue, 08/11/2020 - 19:25

Submitted by Christoph Gisiger of TheMarket.ch

Few economists have had a greater influence on the financial markets than Eugene Fama. According to his Efficient Market Theory, competition among investors is so intense that all information and expectations are immediately and correctly priced in. Therefore, it’s impossible to beat the market in the long-term.

Never shy of making pointed statements, the Professor of Finance at the University of Chicago doubts the power of the central banks. "The business of central banks is like pornography: In essence, it’s just entertainment and it doesn’t have any real effects", he says. In contrast, he warns that investors could begin to question the credit worthiness of governments because of the high national debt levels.

In this in-depth interview with The Market/NZZ, which has been edited and condensed for clarity, Prof. Fama explains why he welcomes the boom in passive investing and why he sees no problem in the high capital concentration at tech giants like Apple, Amazon or Microsoft. In his view, absurd price swings such as negative oil prices are no reason to doubt the rational behavior of markets.

Professor Fama, the efficient market hypothesis has revolutionized the way people invest. What goes through your mind when you look at the wild swings the stock market made this year?

The market seems pretty good. It held up even though the economy is deep in the bucket. This is a good example of how forward looking the market really is: It’s looking past what we are going through now, and it’s saying that the future doesn’t look that bad.

Do you think that’s the correct assumption?

If I could forecast, I wouldn’t be a professor.

Still, since the crash in February/March, we basically went from 1929 to 1999 in just a few months. What are the chances stocks are in a bubble?

Bubbles are things people see in hindsight. They don’t identify them in advance. Sure, you can look at the behavior of prices, and you may be able to identify cases where they are too high. But if you only look back and say: "Oh, stocks went down a lot, so that was a bubble", then that’s 20/20 hindsight. At the time, there was no evidence that there was a bubble.

On the other hand, sometimes there are obvious signs of excess. Let’s take the final stage of the great dotcom bull market of the late nineties as an example.

Let’s go back to that period before the crash. Alan Greenspan, the head of the Federal Reserve, made his famous "irrational exuberance" speech about the market being too high in early December 1996. But even after the crash, the market never went back to the level when he made that speech. So what do you think of that forecast?

Is there really no way to spot a bubble?

Here’s another example: In the fifties, there was a famous professor at Stanford who was an agricultural economist. He brought plots of agricultural prices into the faculty lounge and asked people to identify bubbles. Of course, they saw the ups and downs, and all of them identified bubbles. Afterwards, he told them that these were just numbers he had randomly generated. That tells you how good people are with identifying bubbles.

Against that backdrop, what do you make of the growing discipleship of behavioral finance which focuses on the influence of psychology on investment decisions and questions the efficiency of markets?

What I say is that we agree on the facts but we disagree on the interpretation. In my view, there is no such thing as behavioral finance. Essentially, it’s just a criticism of efficient markets. They don’t have a theory of their own. Hence, that makes me the most important person in behavioral finance. Without me, they don’t have anybody to disagree with. So I think behavioral finance is just a branch of efficient markets.

But what about factors like emotions, herd mentality or cycles? Aren't they important at all?

Tastes and behavior are important in economics. Nobody denies that. But you have to translate these things into something testable, so we can take the data and test it, looking forward and not looking backward. That’s my response to all that stuff. It never works out.

Yet, we also know that investors regularly mix up similar-looking stock tickers or company names and thereby cause absurd movements in stock prices. How is this rational behavior?

It isn’t. You can identify mistakes like that. It’s common that names confuse investors and as a result, you can get temporary price movements. But they are usually tiny and go away quickly. I don’t say markets are completely efficient, but they’re efficient for most questions that I address. Models are never a 100% true. If they were, we would call them reality, not models. But for almost all purposes, market efficiency is a very good approximation. I’ll go even further: Almost all investors should regard markets as efficient for their own investment decisions. If they do that, they will be better off in the long-term.

Still, recently we saw some truly strange things that are hard to explain rationally, like negative oil prices or credit spreads on fortress balance sheet companies like Apple exploding. Is this the way rational markets are supposed to behave?

It’s always foolish to look at individual cases because every individual case is different. I don’t know how to judge those particular events and I don’t get into the business of valuing individual companies. But the fact that the oil price went briefly negative tells you that all storages were full. Therefore, people weren’t able to buy oil since there was no place to put it. The negative price didn’t last very long, but it shows you that once you start producing oil, this stuff keeps coming out of the ground no matter what. That means the price can go negative, and someone who has storage capacity can make money at that point.

Would you ever have expected to see negative oil prices?

We’ve seen a lot of things that we thought could never happen before. But they did, like negative interest rates all over the countries in Europe.

Negative interest rates are turning the financial system upside down. Are markets still able to function efficiently when bonds are yielding less than zero?

Negative interest rates tell you that there is some cost to storing cash. That’s why you get negative rates, mostly in short-term bonds. The alternative to holding those bonds is to hold cash, but holding cash is apparently not costless. This means you’re bound by the cost of holding cash. So, what do you do with your cash? If we’re talking about a position of hundreds of millions of dollars you don’t want to have that in cash.

And what about the fundamental consequences of negative rates? How are they impacting the real economy?

I don’t’ think they impact the real economy, but it’s a problem for the financial system. What’s more, in 2008, in response to the financial crisis, the Fed started to pay interest on its reserves. But there is no interest on the currency, and currency is exchangeable for reserves on demand by the banks. So based on classic monetary theory, you don’t really know what’s determining inflation at this point. There is no control over the stock of what qualifies as money, since reserves aren’t really money anymore because they are paying interest. That means you can't control the currency supply. In other words: Inflation is totally out of the control of central banks.

In the coming months, the Fed is expected to make a major commitment to ramping up inflation soon. What would it mean for investors if we really get inflation?

Inflation and return on investments is a tough topic that’s been around since the early seventies. In principle, you can see the effects of inflation on long-term interest rates, but you can’t see them in stocks very well because the volatility is so high. Hence, we don’t know what effect inflation will have on markets. It depends on the effect on real activity: High, but stable inflation wouldn’t be a big deal. What’s really a big deal is when it gets unstable.

It’s not just the Fed, around the globe central banks are flooding the system with liquidity like never before. Is this a reason for concern?

Frankly, I think this is just posturing. Actually, the central banks don’t do anything real. They are issuing one form of debt to buy another form of debt. If you are an old Modigliani–Miller person the way I am, you think that’s a neutral activity: You’re issuing short-term debt to buy long-term debt or vice-versa. That’s not something that should have any real effects.

Then again, the financial markets sure seem to love it. At least it looks like that the S&P 500 is moving upwards in tandem with the expansion of the Fed’s balance sheet.

Every day we hear a story about the movement of stock prices. But the story is different each day. So basically, these stories are made up after the fact. But when we look at it systematically, we don’t see a big effect of Fed actions on real activity or on stock prices or on anything else. That’s why I use to say that the business of central banks is like pornography: In essence, it’s just entertainment and it doesn’t have any real effects.

But how about the effects of this "free money" on borrowing? Isn’t the record amount of corporate and government debt a real problem?

That really bothers me. We haven’t hit it yet, but there has to come a point where people start questioning whether government debt is really riskless. Piling on debt even in good times is a new thing: In the US, we cut taxes and increased the deficit as a consequence, but that happened when the economy was booming. How are we going to pay that back? It has to come out of taxes in the future. As a matter of fact, we didn’t really lower taxes. What we did was we lowered them now and raised them in the future, when we have to pay off that debt. That’s why I worry that investors will become skeptical of whether governments can actually pay off so much debt. Now, we’re piling on like crazy because of the Covid-pandemic. That was unavoidable, but it was avoidable in the past, when we did it in good times. When does the market say "enough"?

In recent years, we’ve also witnessed a revolution in passive investing. How does the amazing indexing and ETF boom impact valuations of stocks and bonds?

That’s a complicated question, and nobody knows the answer. For almost sixty years, I have been saying that there should be more passive investing since there’s no evidence that active managers generate a superior performance for their high fees. Finally, passive investing is catching on. Of course, you can’t go 100% passive because somebody has to determine prices.

But aren’t ETFs undermining the generic price discovery of markets? In principle, they just buy stocks mechanically and don’t care about prices or valuations.

They don’t but the people who buy ETFs pay attention. But here’s the key issue: Who are you knocking out of the market when you go passive? Are you knocking out bad active investors or good active investors? If you are knocking out bad active investors, you are making the market more efficient. If you are knocking out good active investors, you are making it less efficient. In general, there are very few good active investors. That’s what all the evidence says, going back fifty years now: It’s very difficult to find people who can beat the market.

How about Warren Buffett for starters?

The real question is: How do you pick Warren Buffett? The way you pick him is after the fact, since he has done very well. Now, suppose I take 100,000 investors and say: Let’s let them run for 30 years and pick out the winner. Because you roll the dice so many times, even if none of them is a good or bad investor, many investors will do well and many will do poorly purely by chance. Statistically there is also going to be a big winner, but solely due to chance. In other words: There will be extremely good outcomes and extremely bad outcomes, but you just can’t tell who is successful because of luck and who because of skill.

So you’re saying that Warren Buffett was just lucky?

The problem with picking a winner after the fact is you can’t tell. If you would have identified him fifty years ago and you looked at him and would have said: "That’s the guy!", then I would believe you that you can tell if someone’s going to be an investment genius. But you couldn’t do that fifty years ago, because there’s a statistical problem.

Another concern people are talking about is the extremely high market concentration. Today, five tech giants make up more than 20% of the S&P 500. What does this mean for the efficiency of the stock market?

In the past, it’s always been the case that the largest fifty companies account for more than 50% of the total value of the market. Now, we’ve got a technological revolution, and it turns out that there are five or six big winners, these trillion-dollar companies. They are a pretty large fraction of the market, but they did it through innovation, not through theft or any other illegal behavior. So I don’t know why that’s a negative. These are all new businesses that provide new services we didn’t have before.

In addition to that, more trades than ever are based on algorithmic high-speed trading. How does that impact the functioning of financial markets?

This has been an open question for around fifteen years. No one really knows what effect high speed trading has on prices. One of my colleagues has worked a lot on that topic. His suggestion is to slow trading down to something like a tenth of a second between trades and thereby kill the advantage of these fast traders. I don’t see any problem with that.

There’s also a fierce debate about factor investing. For example, value has underperformed growth for the past decade. Is value investing death?

Who knows? The problem is that you can’t tell from ten years of data. We don’t know if the last ten years are just a statistical blip or not, because the variance of returns is so high. Ken French and I recently published a paper called "The Value Premium". We basically say that it’s not just ten years. If you go back 28 years and compare that period to the previous 28 years, you cannot tell whether expected returns have changed, or whether the premium is zero, or equal to its historical value. The volatility is so high that you can’t make any statements like that. There is no way to know the answer. Besides, the value premium has done poorly in the US, but not in international markets.

What does this mean for investors?

The challenge in asset pricing is to come up with the right dimensions of risk and how they relate to expected returns. That’s been a challenge as long as I have been in the business. I suggested solutions every twenty years or so. None of them worked perfectly. Sometimes they work for a while, and then they don’t seem to work anymore. The problem is that we’re always buried in volatility which makes it hard to tell what’s right and wrong.

What exactly are these risks?

We’ve identified what we call the five potential dimensions of risks: Stocks relative to bonds, small relative to big stocks, value relative to growth stocks, high versus low profitability stocks, and high investment versus low investment stocks. All of these things seem to capture some of the variation in returns. But whether that’s the right breakdown or not is hard to tell.

What sort of lesson should investors take from that? For example, can we say that small stocks should theoretically perform better than large stocks over the long run?

It’s really hard to tell because you get buried in volatility. For instance, the January effect, which refers to a premium of small stocks in the first month of the year, was identified in hindsight. And, once it was identified, it wasn’t there anymore. That begs the question whether the value premium, the size premium, the profitability premium or the investment premium were also temporary. If they are not real dimensions of risks and if they are not things people are concerned about, then you would expect them to go away because that’s fundamental economics: If there is a profit opportunity out there, and it’s generating expected returns, people will bid up or down the price on those things so that they disappear.

Is there anything you now would watch out for specifically as an investor right now?

This experience we’re going through is totally unusual. If you go back in the past, we experienced the same kind of pandemic in 1918 towards the end of World War I. But at that time, we didn’t take the same measures we’re taking now, shutting down whole economies. So we really don’t know what the response will be if and when there’s a cure for this disease. For instance, what will the response of consumers be at that point? Everybody wants to know if we are going to get a V-shaped response. But nobody knows because you don’t know what people are going to do when this is over.

What’s your advice for investors in this environment?

I don’t do investment advice. But the general prescription is to decide how much risk you’re willing to bear and then let that be guiding your decision into how much to put in stocks versus bonds. Also, stay away from hedge funds because you’re going to lose a lot of money fast.

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[l] at 8/11/20 5:24pm
Peak Insanity: Tesla Adds $16 Billion In Market Cap After Announcing 5-For-1 Stock Split Tyler Durden Tue, 08/11/2020 - 19:24

There are only so many "positive news" levers a company can pull in the absence of consistently turning a legitimate profit: stacking up receivables, releasing and taking deposits for "new" products that may not ever materialize, pulling borrow and securing the float while mysterious out of the money call option purchases go off daily, selling regulatory credits to claim profitability while your core auto selling business loses money and adjusting warranty reserves to gear your accounting are a few examples.

This box of tricks, inclusive of most everything aside from just being a consistently profitable company, includes very few tactics that Tesla hasn't tapped. But today, the company pulled one more rabbit out of their hat with the announcement of a 5-for-1 stock split. 

And to prove the market has reached hysteria, Tesla's market cap is up by about $16 billion after hours. A stock split, of course, does nothing to add equity or value to a company - instead, it just multiplies the number of shares outstanding and divides the company up into smaller parts. 

Of course, those "sophisticated" enough to be buying shares in Tesla at a $250 billion valuation may not realize this - as they have added nearly half of General Motors' market cap to the company in the after market session on the news. 

$TSLA up $18B on stock split.
Even 1999 didn't provide that level of stupidity.

— Dean Sheikh (@DeanSheikh1) August 11, 2020

Meanwhile, we're sure the news has nothing to do with the fact that Tesla shares have lagged over the last couple of sessions - and we're double sure the news has nothing to do with Elon Musk watching Apple shares soar on their announcement of a stock split. 

"Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020," the company said in a corporate filing.

Though the split will make Tesla shares more "affordable", Charles Schwab and other online brokerages are already offering fractions of shares held on their balance sheets for as little as $5. So the idea of luring in more bagholders who have no clue what a market cap is to purchase a stock that appears to be cheaper may not work. 

So, why is Tesla going ahead with the stock split if retail investors are clearly having no trouble accessing the company's shares? 

We'll let you take a guess.

Looks like the stock needs a boost: #Tesla declared 5-1 stock split in form of stock dividend to make stock ownership more accessible to Robinhooders. Each stockholder of record on Aug21 will receive dividend of 4 additional shares. Trading will begin on split-adj basis on Aug31. pic.twitter.com/qe7690lFlu

— Holger Zschaepitz (@Schuldensuehner) August 11, 2020
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[l] at 8/11/20 5:05pm
CNN Is Hosed If Trump Loses: Former Exec Tyler Durden Tue, 08/11/2020 - 19:05

At CNN, orange man may be bad - but he's great for ratings. In fact, essential according to one former exec.

Former CNN president Jonathan Klein has told Digiday that the networks' fate is tied to whether President Trump is re-elected, because no more "bad guy" or "antagonist" will mean viewers won't be able to feed on the drama inside their leftist echo-chamber.

"Grandpa is a nice guy," Klein told the outlet, likely referring to Joe Biden, adding "Everybody might be relieved to not watch as much cable news anymore and go find a book to read, a garden to plant, or a socially-distanced walk to take."

Klein, who parted ways with the network in 2010, said that what Trump gave journalistic outlets "was an audience that felt the urgency" to watch, adding "that urgency among 70% of the audience might dissipate a little bit."

"I don’t think it was any more complicated than that Trump was good for ratings," he said, adding "Make no mistake, it’s a symbiotic relationship. The dramatic rise and relevance of CNN for better or worse is tied to Donald Trump."

And as Fox News' Joseph Wilfsohn points out, Klein's commments come "Despite the suggestion from CNN's chief media correspondent Brian Stelter on Sunday that anti-Trump news outlets don't exist," yet former CNN reporter Peter Hamby told Digiday that consumers have "confused ideas about journalism and think it’s supposed to be resistance-y."

If Trump loses, they'll always have war?

Now that Chris Cuomo admits CNN is a "Hyper-Partisan" News Network . .
Jim Acosta & Brian Stelter run for cover-
Looking at how to "Spin"
How to Blame Pres. Trump . .
And Blame #COVID19
Preventing Americans knowing Truth!

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[l] at 8/11/20 4:45pm
"The Greatest Pull-Forward In History": Why This Recession Is Different, Similar, & Worse Tyler Durden Tue, 08/11/2020 - 18:45

Authored by Eric Basmajian via EPBMacroResearch.com,

  • The COVID recession resulted in the most significant “pull-forward” of income growth in modern history.

  • An unprecedented amount of debt was used to plug a record output gap.

  • This recession is different because income growth increased as opposed to declined. The similarity comes from the use of debt capital to blunt the negative impact of deflation.

  • The outcome of the recession will ultimately be worse as the level of public and private indebtedness has breached all critical thresholds and will now have a non-linear impact on economic growth.

  • Overusing one factor of the production function, specifically debt capital, has diminishing marginal returns and will result in the weakest expansionary income growth in the years to come.

A long history of recessions, dating back to the founding of the republic, has allowed us to create a template for a typical downturn in the economy. The COVID recession, mostly thanks to unprecedented government action, has distinct differences from the historical recessionary outline.

While differences appear large on the surface, a more in-depth analysis reveals a consistent fact-pattern and one that clearly emphasizes why this recession will be more damaging. We know that the “shock” to the economy was among the worst ever experienced, but here I am referring to the recovery that will undoubtedly take place when discussing why this recession will be “worse.”

Typically, during recessions, income falls for the average population. 

The chart below shows seven recessions before the COVID recession with the annualized rate of real disposable income growth per capita during each recession. Prior to the COVID recession, the average recession brought income growth of -0.54%. In other words, incomes declined during the average recession. 

In 2020, due to one-time stimulus checks and massively boosted unemployment benefits, so far, we have seen 32% annualized growth in income during the recession. 

Real Disposable Personal Income Growth: Per Capita (Annualized Growth):

Source: Bloomberg, FRED, BEA, EPB Macro Research

This recession is clearly different because income growth went up as opposed to going down, a significant deviation from the standard recessionary outline. 

As noted, income growth soared due to government transfer payments, namely one-time stimulus checks and enhanced unemployment. Total government transfer payments reached a record 30% of total income during the crisis and has since cooled to about a quarter of total personal income. 

Government Transfer Payments As A % of Total Personal Income:

Source: FRED

At this point, we are all aware that this massive rise in income through transfer payments was facilitated by an enormous increase in public sector debt. Many have pointed out that this is akin to a “free lunch” as long as the Federal Reserve buys the debt issued to the public. This is a highly flawed analysis that disregards many core pillars of macroeconomics and a careful study of the existing problems associated with extreme levels of overindebtedness. 

Using assumptions which are likely too low, total nonfinancial debt as a % of GDP will surge to 310%, breaching the cumulative threshold outlined in the BIS paper, “The Real Effects of Debt,” the level at which debt starts to have a nonlinear negative impact on economic growth. 

It is important to note that the paper specifically excluded any mention of massive inflation as a result of overindebtedness and instead emphasized the drag on growth. 

In fact, there have been dozens of papers written about the impacts of extreme levels of debt; virtually none cite high inflation as the result unless the central bank’s liabilities become legal tender, something discussed at the conclusion of this note. 

Total Nonfinancial Debt As A % of GDP:

Source: Z.1 Financial Accounts, BEA, Bloomberg, EPB Macro Research

Furthermore, assuming that the Central Bank can buy the debt of the government, thereby allowing fiscal policy to generate inflation, disregards the well documented diminishing marginal returns proposition. 

The production function says economic output is determined by how technology interacts with the factors of production: land, labor, and capital. 

Overusing one factor of production has substantial evidence of diminishing marginal gains. 

With total nonfinancial debt to GDP soaring to 310%, the US has eclipsed all peaks in total debt dating back to the 1800s. 

Clearly, we are overusing debt capital, and more specifically, government debt capital. 

Government debt as a % of GDP has risen to levels that are significantly above the threshold for diminishing marginal returns yet we continue to believe that more is more, dismissing the evidence that more government debt, regardless of the use and the balance sheet on which it resides, will have a nonlinear negative impact on economic growth. 

Government Debt As A % of GDP:

Source: Z.1 Financial Accounts, BEA, Bloomberg, EPB Macro Research

Debt is simply a pull-forward of future consumption or rather an exchange of current consumption at the expense of future consumption. We are in the process of the greatest pull-forward of demand in history, and we continue to believe that because we are using “more” debt, or that because it is directed to a particular group of people rather than another group, that we can bypass the well-documented evidence of diminishing marginal returns. 

To see the evidence of diminishing marginal returns on full display, we can track the rate of real personal disposable income growth per capita, during only expansionary periods, throughout a period of time in which debt capital has been highly overused. 

From the 1960s through the early 2000s, real personal disposable income growth per capita increased at a 3.0% annualized rate during expansionary periods. After the turn of the century, we lost 36% of our trend income growth, falling to just 1.9%. Many factors contributed to this decline, but diminishing marginal returns and an overuse of debt capital are among the main culprits.

Real Disposable Personal Income Growth: Per Capita (Annualized Growth):

Source: Bloomberg, FRED, BEA, EPB Macro Research

Now, we have elevated debt as a percentage of the economy to levels we have not seen before in the United States. This development has made many uncomfortable and caused analysts to throw out various forecasts regarding inflation and a collapse of the currency. We have evidence from abroad, however, of total nonfinancial debt at levels above 300%. The results affirm the principle of diminishing marginal returns as excessive debt overhangs lead to disinflation, lower velocity, and weaker economic growth, regardless of the use. 

Using debt capital to boost income growth, even if the debt is swapped for overnight reserves by the Central Bank will fail to generate a sustained rise in velocity over many years to come as the private sector will be crowded out and get away with paying lower income growth as it is subsidized by the government. 

Furthermore, relying on government-based income will also then put the burden of “income growth” on the government. If the government starts to make $1,000 monthly payments a regular occurrence, in order to achieve 2% income growth at the end of ten years, these payments will have to exceed $1,200 per month. 

Unfortunately, economics is complex, and the existence of a Central Bank has never guaranteed a free lunch. The trend level of income growth during expansionary periods has steadily declined as the economy has become grossly over-indebted. 

Now that we have pulled forward income growth into the recessionary period to plug a record output gap, the economy will struggle to gain its footing independent of government support. 

A lack of investment in structures and equipment ensure that the velocity of money will remain weak as a negative net national savings rate coupled with a lack of investment will begin to erode our existing capital equipment. 

Private Nonresidential Fixed Investment: Structures & Equipment As A % of GDP:

Source: FRED

For many years, the solution to economic troubles has been bigger government stimulus packages. $1 trillion has become $2 trillion, and the last $2 trillion package lasted less than half a year. The evidence of diminishing marginal returns is again on full display as each stimulus effort is even more fleeting, requiring more extensive programs with greater regularity. 

As Dr. Lacy Hunt said in his recent podcast with Grant Williams, economics is not accounting. We have to grapple with nonlinearities.” 

Income growth has increased during this recession, a distinct difference from the normal recessionary template. The use of debt capital, specifically government debt capital, to blunt the impact of deflation is a page out of the same playbook the economy has been using for several decades. 

The resulting degradation of income growth during the next expansionary period will be worse than prior episodes as we have pushed the level of indebtedness passed all critical and well-studied thresholds. 

We should continue to prepare for anemic real income growth and the knock-on effects that dynamic will bring to asset prices. 

*  *  *

EPB Macro Research provides macroeconomic analysis on the most significant long-term and short-term economic trends, as well as the impact on various asset prices, including stocks, bonds, gold, and commodities. EPB Macro Research provides a low volatility monthly asset allocation model that translates the economic research into an actionable portfolio of ETFs. Click this link for a 14-day FREE TRIAL

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[l] at 8/11/20 4:25pm
Shares Of Jimmy Lai's Newspaper Soar As Hong Kong Vows To "Fight On" Against CCP Crackdown Tyler Durden Tue, 08/11/2020 - 18:25

Hong Kongers are literally using the financial markets, considered the beating heart of the global capitalist system, to fight the nominally "Communist" rulers in Beijing. One day after Hong Kong police arrested media Tycoon Jimmy Lai, who holds British citizenship as well, the stock of Next Digital, Lai's media company which owns Apple Daily, HK's most popular daily newspaper, and a frequent thorn in the side of the CCP.

After arresting Lai in April over allegations he fueled last year's pro-democracy unrest, police arrested him again yesterday in the first major arrest tied to the new national security law. The arrest of Lai, his sons and other pro-democracy figures, including youth activist Agnes Chow, who was released from jail on Tuesday. The arrests prompted Secretary of State Pompeo and top UK diplomats to denounce the latest "disturbing" strike against the freedoms ensconced in the "Basic Law".

But now that flooding into the streets in protests carries too much risk for the average Hong Konger (who is now facing COVID and laws conflating dissent with terrorism), many have found an interesting and innovative way to support the pro-democracy movement: buying shares in Next Digital, the parent company of "Apple Daily".

After shedding 20% of its value yesterday, Next Digital has surged on a flood of mom and pop orders.

In just one day, the stock rose 4x from peak to trough...

Hitting its highest level since 2013."

Shares closed on Tuesday at HK$1.10, up from its close of HK$0.255 just 24 hours before. The paper printed and sold more than half a million copies of yesterday's edition, 5x the normal number.

On Tuesday, the newspaper's front page showed an image of Mr Lai in handcuffs with the headline: "Apple Daily must fight on." It comes as the paper published extraordinary scenes, streamed live on Monday, of police leading a handcuffed Jimmy Lai through his newsroom as nearly 200 officers raided the building.

Many cited the escalating crackdown on dissent as "the day Hong Kong's press freedoms died". US Secretary of State Mike Pompeo complained China had "eviscerated Hong Kong’s freedoms".

In a clever display of support, Hong Kongers started lining up to buy Tuesday's print edition at around 0230 local time.

As copies quickly sold out, some bought multiple issues to hand out to passersby.

"(I bought these) to hand them out to others, I'm afraid a lot of people can`t get their copies," said one anonymous woman who spoke with a BBC reporter. She had bought 16 copies. Online subscriptions have soared by 20,000 just this week alone.

Pro-democracy activists are calling for supporters to buy the stock.

In a statement, the paper has promised to "fight on", and said the search warrant executed on its offices (not to mention Lai's arrest) will have no impact on the paper's operations.

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[l] at 8/11/20 4:05pm
Taibbi: The New Puritans Tyler Durden Tue, 08/11/2020 - 18:05

Authored by Matt Taibbi via taibbi.substack.com,

In 2011, Alex Morse looked like a progressive star. At age 22, he’d become the first openly gay mayor of Holyoke, Massachusetts, was the youngest person ever to hold the office, and soon after became the first Bay State mayor to endorse a recreational marijuana ballot initiative.

Bright, quick, and with a sense of humor, he appeared headed places.

His announcement last year that he was running for congress against Richard Neal, the House Ways and Means committee chair and a master collector of corporate cash, made him a focal point of the movement to remake the Democratic Party in a less donor-fattened image.  

Last week, Morse’s career took a dark turn. The College Democrats of Massachusetts sent him a letter telling him he was no longer welcome at any of their events. The group later released a letter accusing him of a variety of things, most particularly “having sexual contact with college students, including at UMass Amherst, where he teaches, and the greater Five College Consortium.” The College Dems claimed he met college students on apps like Tinder and Grindr; Morse taught a political science course at UMass-Amherst.

Morse acknowledged having “consensual adult relationships, including some with college students” but insisted he had “never used his power as Mayor or UMass lecturer for romantic or sexual gain,” adding that he “never violated UMass policy,” and “any claim to the contrary is false.”

UMass policy bans consensual sexual contact between faculty and “any students or postdoctoral researchers they teach, advise or supervise.” Although the College Democrats said Morse “abused his power for sexual relationships,” no one seems to be accusing him of sleeping with one of his own students. The issue here appears to lay entirely in the group’s conception of “power,” which reads like a parody of post-millenial paranoia.

The College Democrats explained that a major part of Morse’s offense was that he sought the contact information of students at their events:

Mayor Morse came to College Democrats of Massachusetts events and got to know our membership, and then sought out students that he met at our events privately on social media, in a manner widely understood by our generation to indicate intimacy. 

If you’re wondering if it’s possible that the College Democrats just defined communicating on social media as a kind of sexual act, you’re not wrong. It got worse. In their letter to Morse, the group explained that when Morse wrote to those adult students – who, of course, gave Morse their contact info voluntarily – they lacked the free will to ignore his communications:

We have heard ​countless​ stories of Morse adding students to his ‘Close Friends Story’ and Direct Messaging members of College Democrats on Instagram in a way that makes these students feel pressured to respond due to his status…

American college students, it seems, are so intimidated by someone with a political job title that they lack the agency to ignore an Instagram shout-out. The College Democrats elaborated (emphasis mine):

Mayor Morse is a widely-admired and well-connected gatekeeper to progressive politics in Massachusetts and nationally, which makes the task of refusing his advances fraught for college students who wish to enter progressive politics themselves… the Mayor’s various positions of power create a significant and undeniable power imbalance between himself and the college students he sought out… where such a lopsided power dynamic exists, consent becomes complicated.

This is not a sexual harassment issue in the classic sense of someone who actually has power over someone else, for instance in the workplace or in a classroom. The concept here is that students who might “wish to enter progressive politics” will feel uncomfortable refusing, or even just not answering, so mighty a personage as the Mayor of Holyoke, Massachusetts, for fear of what that might do to their job prospects someday, in a field they have not even chosen yet.

Read the rest of the report here.

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[l] at 8/11/20 3:55pm
Daily Briefing - August 11, 2020 Tyler Durden Tue, 08/11/2020 - 17:55 Senior editor, Ash Bennington, joins Tyler Neville to discuss secular stagnation and the financial chicanery happening in markets. With stocks rising above global GDP, Ash and Tyler consider how the increase in bond issuance has been electric all while yields aren’t rising. Tyler also argues how people look at markets through a political lens, but not a demographic lens, and how demographics can further shape an investor's understanding of what’s occurring. They also talk about the DXY in juxtaposition with the federal deficit, the relationship between spot gold and gold miners, and what the future holds for pension funds.
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[l] at 8/11/20 3:45pm
Surging Gun Sales Triggers Second Ammo Shortage Of This Year Tyler Durden Tue, 08/11/2020 - 17:45

The virus pandemic triggered a socio-economic bomb across major US metro areas resulting in one of the largest panic hoardings of guns and ammo by fearful consumers in quite some time, if not ever.

Gregory Ionadi, 75, the owner of gun shop Smoke N' Guns, located in Oakmont, Pennsylvania, told PJ Media

"Prior to the COVID outbreak, President Obama was the best gun salesman we ever had," said Ionadi. "Anytime he was going to ban this, ban that, there was a rush on gun sales. When President Trump was elected, the fear of a gun ban subsided, and sales were so flat that several gun manufacturers went out of business."

Ionadi said sales at his gun shop erupted during the pandemic. He said he made more gun and ammo sales from March to April than what was done in the last three years, calling the period absolutely "crazy."

He said once the social unrest spread across the country by late May into early summer, the second round of panic buying occurred. 

"You wouldn't believe the first-time gun buyers I've seen," said Ionadi. "I started seeing little old ladies — 70, 80 years old — wanting to defend themselves because of what was going on. So, I had to change my thinking. I had to start buying .22 Magnum revolvers. I have some revolvers here, but I had to start buying revolvers that women and older folks could use because they are easy to handle. Semi-auto and a revolver are two different things." 

Gun stocks soared this summer as gun background checks rose 79% in July year-over-year. 

The FBI ran over 3.6 million background checks through the National Instant Criminal Background Check System (NICS) last month - the third-highest on record, behind 3.9 million checks in June, and 3.7 million checks in March.

Surging gun sales also means increasing ammo sales. For the second time this year, first reported in March/April, ammo shortages are developing. 

Stories about "ammo shortages" have appeared on local and national media outlets in the last week. 

Brownells, Inc. co-chairman Pete Brownell, recently told FOX Business' Varney & Co that a supply shortage in ammunition is now unfolding. 

Brownell said the firearm industry recorded a 90% increase in gun sales since mid-March, with much of the sales seen in metro areas. He said ammo sales have risen by at least 30%. 

"We could receive truckloads of nine-millimeter [and] we can sell it in hours where it used to take weeks – weeks to a month," he said.

Brownell said the surge in weapon buying might not stop until 2H21.

Google search trend "ammo shortage" is rising for the second time this year.

There appears to be a nationwide shortage of 9MM ammo. 

Ammunition Depot: Sold out of 9MM

Ammo.com: Sold out of 9MM 

Target Sports USA: Sold out of 9MM

Ammo For Sale: Sold out of 9MM 

Good luck finding 9MM ammo. 

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[l] at 8/11/20 3:35pm
Liquidation: Stocks, Bonds, Bullion, & Bitcoin All Puked Tyler Durden Tue, 08/11/2020 - 17:35

Well that really did escalate quickly...

Today had the feeling of 'liquidation' (similar to March) as big-tech stocks (growth/value rotation), bitcoin, bonds, and bullion were all dumped unceremoniously.

While Nasdaq futs were bid along with everything else on Putin's vaccine headlines overnight, it didn't take long for the growth/value rotation pressure to kick in and send them lower as small caps (financial/energy dominant) surged... but late on things rolled over as the liquidations spread and the rest of the market tumbled lower on 'stalled stimulus' talks...

This 3-day losing streak for the Nasdaq is the worst in 5 months and the Dow/S&P broke its 7 day win streak.

The momo/growth vs value rotation continued to pick up...

Source: Bloomberg

Another serious quant-quake...

Source: Bloomberg

The early 'value' gains were erased in the last hour...

Source: Bloomberg

FANG stocks staged the typical BTFD effort after an initial tumble but accelerated lower later to foll the gap-up from July 31st...

Source: Bloomberg

VIX spiked 13 handles to 25 (after tagging a 20 handle intraday)...

Notably the S&P has a way to go until gamma flips (3218)...

Source: Nomura

But the Nasdaq's gamma just flipped negative...

Source: Nomura

However, it was precious metals that caught the eye today as gold saw its biggest daily drop sine April 2013...

And silver crashed by its most since Lehman (Oct 2008)...

Sending the gold/silver ratio spiking...

Source: Bloomberg

Gold's initial tumble tracked real yields perfectly but over-did as the yellow metal broke $2000 and ran stops...

Source: Bloomberg

So, Vladimir Putin (whose nation has been among the most avid buyers of gold for its reserves in recent years), announces a vaccine (which crushes the price of gold by the most since Lehman)? Does make you wonder eh?

But let's not over-react too much eh?

$1920 Gold July 27 vs. $1920 Gold Aug 11 pic.twitter.com/BBET4c6BGP

— Keubiko (@Keubiko) August 11, 2020

But it was not just gold and silver were clubbed like a bay seal. Bonds puked led by the long-end, but as stocks started to accelerate lower in the last hour, things turned around and bonds were suddenly bid (McConnell said 'stimulus talks are stalled')...

Source: Bloomberg

With 10Y exploding 9bps higher (the biggest absolute jump since March) to its highest since July 8th and tagged the 50DMA...

Source: Bloomberg

...and then reversed notably...

Source: Bloomberg

We are all in big trouble if this gap is really starting to fill - a surge in rates of that scale will kill America's balance sheet and a purge of that scale in stocks will be worse for sentiment still...

Source: Bloomberg

Simply put, The Fed is in a corner, it can't let rates run (debt loads) on the back of hope-filled 'reflation' and if the growth-to-value rotation escalates further it will create a flight to safety in bonds... which will hurt financials and thus leave the two legs of the growth/value rotation hurting.

Bitcoin was monkeyhammered...

Source: Bloomberg

The dollar ended marginally higher after another roller-coaster today...

Source: Bloomberg

Oil prices were higher early on, excited about Putin's vaccine but as the liquidation accelerated WTI was bashed back below $42...

And Dr.Copper also stalled and tumbled again at key resistance...


Finally, we note that today's reversal came at an interesting moment in mega-tech valuation... Combine Apple Inc. and Microsoft Inc. with the FANG stocks, and the result is a record valuation. The average price-sales ratio among the so-called FANMAGs climbed as high as 8.33 last week, according to data compiled by Bloomberg. Their peak just surpassed the previous mark of 8.32, set in June 2018.

Source: Bloomberg

And one wonders if the 'dead cat bounce' is over (if nothing else, today's reversal is interestingly timed)...

Source: Bloomberg

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[l] at 8/11/20 3:30pm
Watch Live: Trump Briefs Press As McConnell Says Stimulus Talks Hit "Stalemate" Tyler Durden Tue, 08/11/2020 - 17:30

Update (1750ET): Headlines from tonight's presser are rolling in.


* * *

Only a few hours after Mitch McConnell kicked the legs out from under the market by announcing that stimulus talks had reached a "stalemate", President Trump will brief the press again, in what looks to be a hopefully less-eventful rerun of last night's presser.

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[l] at 8/11/20 3:25pm
Majority Of Americans Think Biden Unlikely To Finish 4 Year Term In White House Tyler Durden Tue, 08/11/2020 - 17:25

Authored by Paul Joseph Watson via Summit News,

In another illustration of how many Americans are concerned about Joe Biden’s advancing age and declining mental faculties, a new Rasmussen poll has found that 59 per cent of likely voters don’t believe he’ll finish a 4 year term in the White House.

Broken down along party lines, 74 per cent of Republicans believe Biden won’t make it through his first term while 49 per cent of Democrats agree.

Just 14% of voters think it’s “not at all likely” that Biden’s running mate will become president before his first term ends.

Questions about Biden’s age and his alleged cognitive decline have dogged his campaign for months.

During an interview last week, Biden once again stumbled over his words while trying to assert that he didn’t need to be mentally tested.

Polls show that 38 per cent of American voters think Biden has “some form of dementia,” including one in five Democrats. 61 per cent of voters also think Biden should address the dementia issue publicly.

If the majority opinion holds true and Biden wins the election, that means his running mate, the just announced Kamala Harris, is virtually guaranteed to become president before 2024.

Additionally,  Jim Rickards' expectation now is that Biden won't even make it to The White house and will soon be replaced as the nominee soon.

Democratic insiders will probably force him out of the race in the next week or so.

They don’t want to risk exposing him to the American people before the election. For Democrats, the stakes are simply too high.

One public incident or serious slip-up is all it could take to kill his chances in the election. The American people simply aren’t going to elect someone who they feel is mentally unfit for office.

Many voters obviously dislike Trump. But, no one could credibly argue that he’s suffering from cognitive decline.

So what’s going to happen?

The Democrat power brokers (Tom Perez, Donna Brazile, Valerie Jarrett, Philippe Reins, AOC, John Podesta and a few others) will get in a room and pick a new nominee.

Biden will “release” his delegates, and party leadership will direct the super-delegates to support that choice. This will start a stampede among the former Biden delegates.

The Bernie Sanders delegates will already be onboard because they’ll be part of the consultation. Then the new nominee will pick a VP and  the “convention” will tidy things up. The race will continue from there.

Alternatively, the power brokers could allow Biden to get the nomination and then remove him as nominee before the debates. That’s even easier because there are no delegates involved. It’s just an executive committee decision the candidate cannot refuse.

Still, the process will be a shock to millions of Americans who’ve been expecting a Biden candidacy.

How much of a surprise would that really be?

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[l] at 8/11/20 3:11pm
After Trump Snubs States, Fed Improves Terms On Muni Bailout Facility Tyler Durden Tue, 08/11/2020 - 17:11

Just days after President Trump's four Executive Orders providing relief to Americans - and snubbing demands by Democrats and Governors for state bailouts - some might suggest The Fed just stepped up to the plate to 'help out'.

Perhaps the rates were just too high for states to want to partake? Or are they all expecting a direct handout, rather than a Fed-sponsored loan?

Fed Statement:

The Federal Reserve Board on Tuesday announced revised pricing for its Municipal Liquidity Facility (MLF).

The revised pricing reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes.

Today's changes will ensure the MLF continues to provide an effective backstop to assist U.S. states and local governments as they weather the pandemic.

The MLF was established under Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary.

It offers up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic.

Read the full term sheet here.


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[l] at 8/11/20 3:05pm
Sturgis Motorcycle Rally Kicks Off With Bang Amid Virus Controversy: 84 arrests, 226 Citations, 18 Crashes In 24 Hours Tyler Durden Tue, 08/11/2020 - 17:05

Sturgis meet coronavirus shutdowns: the world's largest annual motorcycle rally in Sturgis, South Dakota has been source of immense controversy this year after health officials warned it could be a 'super-spreader event'. 

Running from Aug. 7 to 16, it's expected to be the single largest gathering that's taken place since national virus-related shutdowns took effect earlier this year. Some 250,000 bikers are expected to descend on the town, which is still a much smaller number than recent years. 2015, for example, witnessed a record more than 700,000 people.

Sturgis rally, via Getty Images

With a reputation for attracting 'outlaw' biker types and gangs, the Sturgis rally goes back to 1938, but this year some angry locals have argued before the town council "it's a huge, foolish mistake" given current pandemic fears.

But the rally is already off to a wild start even with what's expected to be a smaller than average crowd, as CBS reports:

"The Department of Public Safety reported that police made 84 arrests for driving under the influence or drug-related offenses during a 24-hour period spanning from Saturday into Sunday morning. That's up from last year, when 76 people had been arrested in a similar time frame."

Police have also reported at least 18 crashes so far. It comes on the very week the US passed another grim milestone, surpassing five million confirmed COVID-19 cases, and as South Dakota may be witnessing a resurgence in cases similar to other states.

Regardless, as one person interviewed told CBS: "People are tired of being at home, you know. This is what this rally started about is freedom."

Via Medium.com

As expected, there's not much concern for social distancing either:

Attendees in Sturgis are being encouraged, but not required, to wear masks. Few appeared to be doing so.

So far, as the town's Main Street fills with bikes and bars fill with bikers, there is scant evidence of social distancing. Visitors to this 80th edition of the cycle rally already greatly outnumber the 6,000 residents of Sturgis, wedged into the South Dakota hills.

A massive motorcycle rally drew thousands of maskless riders to the streets and bars of Sturgis, South Dakota, despite the rise in coronavirus cases throughout the U.S. https://t.co/vRTRM5wrV1 pic.twitter.com/lqSVvjuP3Z

— CBS News (@CBSNews) August 10, 2020

While the majority of city residents, based on polls, are said to be against holding the rally this year, the city council approved by firm majority to move forward, given especially the event has generated some $800 million in total revenue in recent years, based on the state's Department of Tourism figures.

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[l] at 8/11/20 3:04pm
Texas Becomes Third State To Pass Half A Million Confirmed COVID-19 Cases: Live Updates Tyler Durden Tue, 08/11/2020 - 17:04


  • Texas becomes third state to pass 500,000 cases
  • Dutch impose mandatory quarantines on those 'exposed' to COVID
  • Arizona reports latest cases
  • Hawaii, South Dakota and Virgin Islands added to tri-state qurantine list
  • Nursing home cases on the rise in the US
  • Florida reports record COVID deaths
  • Cases in children have increased 137%, CNN says
  • Goldman weighs in on US outbreak
  • Auckland back on lockdown as first cluster of covid cases discovered in 102 days
  • Russia approves world's first COVID vaccine
  • Global COVID total tops 20 million

* * *

Update (1640ET): After seeing its positivity rate surpass 20% to hit new records amid a dropoff in testing (suggesting either the outbreak is spiraling out of control, or more of the people being tested are likely already exhibiting symptoms) Texas has just become the third state after California and Florida to pass half a million confirmed cases, public health authorities just confirmed in a report.

The state reported 220 more COVID-19 deaths, and 8,913 new cases. The exact number is 500,620, since the pandemic began. Meanwhile, there are 7,216 confirmed COVID-19 patients in Texas hospitals.

* * *

Update (1345ET): The Netherlands, after a startling rebound in new cases, has ordered that all people exposed to COVID be ordered to quarantine for 2 weeks, or face legal repercussions.


The decision comes amid a record-setting heat wave hammering the country, and just hours after one of the biggest cocaine busts in the country's history.

* * *

Update (1215ET): Arizona reported 1,213 new cases of the virus on Tuesday, while deaths bounced back to 45. The state's total case count climbed to 188,737 and 4,199 deaths.

ICU capacity declined again to 79%.

* * *

Update (1110ET): The tri-state area has reportedly added two more states and a territory to its COVID quarantine list, bringing the total number to roughly 34 (32 states and 2 territories), as four states were also removed.


Here's the complete updated list:

  • Alabama
  • Arkansas
  • Arizona
  • California
  • Florida
  • Georgia
  • Hawaii
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maryland
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • North Carolina
  • North Dakota
  • Oklahoma
  • Puerto Rico
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Virginia
  • Virgin Islands
  • Washington
  • Wisconsin

The mandatory quarantine order applies to any person that arrives from a state with a positive test rate higher than 10 per 100,000 residents over a seven-day rolling average, or a state with a 10% or higher positivity rate over a seven-day rolling average.

* * *

Update (1100ET): Just minutes after we warned about a rise in cases at nursing homes, which are populated with the most vulnerable COVID patients, Florida's case count bounced back on Tuesday (yesterday's was the lowest since June) with the state reporting more than 5,000 new cases and a record 276 deaths.

* * *

Update (1055ET): In a horrifying report from the American Health Care Association and National Center for Assisted Living, the number of confirmed COVID-19 cases in US nursing homes is rising again after a steady drop in June.

"As we feared and have been warning government leaders over the past couple months, the spike in COVID cases in the general population across the U.S. has led to increased cases in nursing homes," Mark Parkinson, president and CEO of the AHCA/NCAL, said.

According to a summary of the report from CNN, it relied on data from the Centers for Medicare & Medicaid Services, which in conjunction with the US Centers for Disease Control and Prevention compiles weekly statistics from nursing homes, to try and gauge infection trends nationwide.

These numbers show COVID-19 cases in nursing homes, and they rose to 8,628 for the week of July 19, from a low of 5,468 for the week of June 21, just a month earlier.

* * *

Update (1030ET): In Florida, the total number of cases in children 17 and under rose from 16,797 on July 9 to 39,735 on Aug. 9, an increase of 137%, as mainstream media outlets tout a surge in COVID cases among children as part of their agenda to try and keep schools shut.

However, across the country, the total number of COVID-19 cases among children rose from 179,990 on July 9 to more than 380,000 on Aug. 6, an increase of about 90%, according to a report published Monday by the American Academy of Pediatrics and the Children's Hospital Association.

Of course, testing of children between March and June was virtually non-existent beyond those showing symptoms since schools were shuttered.

While testing rates in Florida and Texas have fallen since the peak in Sun Belt cases, New York's rate of testing has increased, and cases have still declined, Gov Cuomo bragged.

More testing only uncovers more positives when there are positives to be found.

In New York, daily new cases have gone down as testing has gone up. pic.twitter.com/OXNlGe9B38

— Andrew Cuomo (@NYGovCuomo) August 11, 2020

Just wait until school starts.

* * *

Update (0920ET): Here's an excerpt from Goldman's latest daily COVID research, which again affirmed that case numbers in the US continue to decline: "The number of new confirmed coronavirus cases has been declining nationally over the past few weeks, but case levels remain elevated in much of the country. The positive test rate has ticked down from its peak in July."

"But looking at additional testing data clouds the picture somewhat. The US is now performing fewer coronavirus tests nationwide compared to a couple weeks ago, with Florida and Texas contributing much of this decline. In these states and a few others, cases rose to very high levels in the summer virus resurgence and have now fallen sharply. But over the past few weeks as cases declined so did the number of tests conducted, leaving the positive test rate very elevated."

* * *

They really thought they had it licked.

After surmounting what was at worst an extremely mild outbreak, New Zealand declared "victory" over the coronavirus two months ago, only to see a mild spike two weeks later.

Since the very beginning, New Zealand's COVID-19 response effort, led by progressive prime minister Jacinda Ardern, was infused with the pinch of "compassionate" social justice, as the island nation focused on using it as an opportunity to look into how to recalibrate society to make more time for leisure by adopting a 4-day work-week.

But in its desperation to establish New Zealand as a liberal (and polar) antithesis to President Trump's America, Ardern made what now looks to be one critical error: She lifted practically all of the country's COVID travel restrictions after her sweeping "victory" declaration.

That, and slowly allowing businesses to reopen, has apparently helped give the virus all it needs for another flareup which, however comparatively minor to what's going on just next door in Victoria, Australia, has forced Ardern to order a new lockdown, just as doubts about the efficacy of such lockdowns are growing.

New Zealand announced on Tuesday it would shut down Auckland, its largest city (though not the capital), after four new cases of the virus were confirmed in the city, the first sign of new domestic spread after 102 days without any domestic COVID cases.

NZ's Director General of Health Ashley Bloomfield said the four confirmed cases were all within one family living in South Auckland. One patient is in their 50s. The family had no history of international travel. Family members have been tested and contact tracing - which might actually prove pretty effective with such a small body of the infected - is being carried out.

News of the cases sent panic across the country with media reporting people rushing to supermarkets to stack up, and businesses preparing to shut.

Prime Minister Jacinda Ardern said Auckland would return to a "level 3 restriction" beginning at noon local time on Wednesday as a "precautionary approach," which would mean people should stay away from work and school, and gatherings or more than 10 people would again be restricted. Though, with so few cases, even these economically-constricting decisions might be overkill.

Though fortunately, these restriction would be applied for three days until Friday, which she said would be enough time to assess the situation, gather information and make sure there's enough widespread contact tracing.

Meanwhile, the world finally crossed a major COVID-19 threshold last night: 20 million confirmed cases, according to JHU. As we reported last night.

As expected, Johns Hopkins has just confirmed that the number of confirmed COVID-19 cases worldwide has surpassed 20 million since the start of the pandemic. Of those, more than 700,000 have died.

It comes just days after the US, the world's biggest outbreak, topped 5 million, and Brazil, the No. 2, topped 3 million.

Aside from this, perhaps the biggest COVID-related news of the day is coming out of Russia, where Vladimir Putin just hailed the approval of the country's - and the world's - first COVID-19 vaccine to be approved by a regulator.

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[l] at 8/11/20 2:45pm
Economic Prosperity Is No Longer The Priority. Guess What Happens Next... Tyler Durden Tue, 08/11/2020 - 16:45

Authored by Simon Black via SovereignMan.com,

Recently I held a live Q&A Zoom call with my friend Peter Schiff, and several dozen members of our Total Access group.

And towards the end of the call, one of our members asked– what do you think the future looks like for the US, and the West in general?

Peter went off into one of his classic tirades about how the US dollar is doomed because of how much money the central bank is printing.

And while I generally share Peter’s dim view about the dollar (were it not for all the other world currencies that are being printed into oblivion), my answer was a bit different.

In deference to the 20th century Danish Proverb– “predictions are hard, especially about the future”– I do think it’s possible to look at major trends to at least have a sense of direction.

So if you want to understand where things are going, just take a look at everyone’s priorities.

Most governments’ Covid reponses are an obvious example.

The economic destruction they’ve created is staggering. Tens of millions of people unemployed, countless businesses gone bust, trillions of dollars of wealth wiped out.

In the first wave back in March, they shut down the economy to protect us from the virus. Then they opened up again… but– shocker– the virus was still there.

What a surprise! Shutting down the economy did not eradicate a virus.

So what did a lot of these people do when the second wave hit? They started shutting down the economy again.

It didn’t work the first time, so let’s keep trying the same approach and expect a different result. It’s genius!

This is clearly economically destructive. But again, economic prosperity is no longer the priority. All that matters is force-feeding people a false sense of safety.

Governor Andrew Cuomo of New York probably captured this mentality the best when he said back in May,

“We don’t want to lose any lives [to reopen the economy]. We’ll figure out the dollars, and we’ll figure out the economic impact, but we’ll protect people in the meantime, and we’ll protect their health.”

This is total BS. The sad reality is that lives are lost all the time in the normal course of economic activity.

In New York City, two workers died during the construction of Freedom Tower. Plus there were dozens of life-altering injuries, like spinal fractures and paralysis.

The government knew the tower’s construction would likely cost human lives. But they approved the construction permit regardless, because they knew the benefit would outweigh the human cost.

Similarly, over 100 people died constructing the Hoover Dam in the early 1930s. The government knew that people would die. But the benefit outweighed the cost.

Today there can be no discussion of cost or benefit. There is one priority, and it’s no longer economic prosperity.

But the shift in priorities doesn’t stop there.

Basic fiscal responsibility is no longer a priority– and it hasn’t been for a long time.

Most western governments were racking up enormous debts even before Covid started.

In the US, even during the economic boom of 2015-2018, the federal government added at least $1 trillion to the debt each year.

Now the debt growth is completely insane: the US Treasury Department expects to add $5-$6 trillion to the debt this calendar year.

(That’s more than the entire national debt as recently as 2001!)

And not to be outdone, the Federal Reserve has conjured trillions of dollars out of thin air since the start of Covid and slashed interest rates, once again, to zero.

Plus, there’s a good possibility they’ll make interest rates negative. Just imagine how much prosperity you’ll achieve once you have to start paying your bank just to save money.

Of course, all of these tactics– printing money, going deeper into debt, negative interest rates, paying people $600/week to stay home and NOT work– are destructive to economic prosperity.

Then we have the rise of the Bolsheviks… a growing chorus of politicians (and voters) who despise capitalism.

Like Seattle city councilwoman Kshama Sawant, who claimed she wants to overthrow “the racist, sexist, violent, utterly bankrupt system of capitalism” and replace it with “a socialist world.”

A few years ago this was a fringe view. Now it’s mainstream fever.

They want to get rid of capitalism– the system that created the most prosperous nation in the history of the world– and replace it with the same economic model as Cuba and the Soviet Union.

And Joe Biden, of course, unveiled his economic plan last month, built around ending “the era of shareholder capitalism.”

He wants the government (and Twitter mob) to set the priorities and stakeholders in your business, rather than the market.

This, again, is an obvious reflection of priorities. And economic prosperity is clearly not on the list.

Economic prosperity also takes a backseat to social justice.

Yes, most reasonable people probably agree that the mistreatment of minority groups should change. But that’s not an excuse to go on a violent rampage.

Yet whenever angry mobs take to the streets and destroy private property, the media elite and their political allies justify criminality as necessary to end systemic racism.

Meanwhile, universities have turned into hotbeds of progressive radicalism to perpetuate white fragility and the evils of capitalism.

Corporate America has also caved. You can’t even sell beans anymore without things turning political.

Countless people who are talented, productive, and made valuable contributions to their companies have been fired because they used the wrong words or expressed some intellectual dissent from the Twitter mob.

Firing a rock-star employee because of his/her personal (and non-controversial) views would ordinarily be considered completely stupid. But now it’s the norm… because economic prosperity is no longer the priority.

This trend is obvious: several powerful movements have gripped the world… and most of them are economically destructive.

So it’s not terribly difficult to see where things are headed.

*  *  *

We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That's why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

[*] [-] [-] [x] [A+] [a-]  
[l] at 8/11/20 2:34pm
WTI 'Off The Lows' After Bigger Than Expected Crude Draw Tyler Durden Tue, 08/11/2020 - 16:34

Despite an early bounce on vaccine headlines, WTI reversed lower (again) at a key technical level (200DMA)...

“We still continue to have an overhang and a significant amount of spare capacity within OPEC,” said Bart Melek, head of global commodity strategy at TD Securities.

“It’s going to be tough to get out of that trading range.”

Additionally, as Bloomberg reports, OPEC and its allies will ease their historic output curbs this month in a test for a market already devastated by the pandemic; and finally, on the 'bearish side, U.S. crude oil production in 2021 is forecast at 11.14m b/d, compared with 11.01m b/d projected in July, EIA says in monthly Short-Term Energy Outlook.

For now, inventories are all that matters for the algos...


  • Crude -4.40mm (-3.2mm exp)

  • Cushing +1.073mm

  • Gasoline -1.31mm (-1.50mm exp)

  • Distillates -2.949mm (-100k exp)

Expectations were for a 3rd week of crude inventory draws and API reported a larger than expected drop of 4.4mm barrels (vs 3.2mm exp)...

Source: Bloomberg

WTI hovered around $41.50 ahead of the API print and lifted very modestly on the data...

"Oil could not ignore the big correction in precious metals," said Phil Flynn, senior market analyst at The Price Futures Group. The sharp selloff in gold and silver Tuesday "led to some trickle over margin selling on oil," he told MarketWatch.



As of 8/11/20 7:11pm. Last new 8/11/20 7:11pm.

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