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    - Tyler Durden

    Black Monday, 1987: Inside The Birth Of Stock Market Moral Hazard, 34 Years Ago Today Authored by Liam McPherson via Global Macro Monitor, Originally posted October 19, 2020. The following exchange took place between President Reagan and reporters after the market close on Black Monday, October 19, 1987.  Leaving to visit the First Lady in the hospital, President Reagan spoke just after the market lost over 20 percent of its value on the day. Q: What about the market? Tomorrow will it go down again? President Reagan:  I don’t know. You tell me. Q: Is the market your fault? President Reagan: Is it my fault? For what, taking cookies to my wife? Q: Reaganomics? President Reagan:  I just told you. Good Lord, we reduced the deficit over last year by $70 billion. And all the other things I’ve told you about the economy are as solid as I told you. So, no, I have no more knowledge of why it took place than you have. Thirty-four years ago today, now infamously known as Black Monday, my grandfather, M. Peter McPherson, was Deputy Secretary of the U.S. Treasury and acting Secretary that day, while Treasury Secretary James Baker was in the air traveling to Europe. McPherson was the most senior Treasury official left in Washington to handle the crisis. The stock market had already peaked in August after an almost 100 percent rally in the prior two years.  By late August, the DJIA had gained 44 percent in a matter of seven months, raising concerns of an asset bubble, and had become very volatile as interest rates had been rising rapidly since bottoming in September of the prior year. Similar to 1929, where the stock market peaked in early September, the markets had already begun to unravel, foreshadowing the record losses that would develop that Monday in October. As the markets around the world began to crash, my grandfather convened with the U.S. Treasury’s Undersecretary of Domestic Finance and the Department Chief of Staff to discuss the government’s appropriate response.  The Dow Jones eventually closed 508 points down, or a 22.61 percent, almost double the historic Crash of 1929, where the Dow fell 12.8 percent in one day. Government Kicks Into Action According to my grandfather, the situation demanded that his team put together a plan to calm the markets. The economy was doing fine, and there were no signs of recession.  Real GDP growth came in at 3.5 percent in 1987. Jitters about the U.S. trade deficit, rising interest rates, and the path of the U.S. dollar during the Plaza Accord are oft-cited as the fundamental reasons that triggered the crash, but nobody knows for sure.  Trees don’t grow to the sky, and neither do markets.  Stocks markets do what stocks markets do, keep their own schedule, and march to their own drummer. The team’s conclusion at Treasury that day was the market was under severe strain for technical reasons and complicated by the new computerized program trading related to portfolio insurance.  Nevertheless, the steep losses were causing significant dislocations in the financial markets. Many large firms were under heavy liquidity pressure and were dangerously close to not making their margin calls and on the brink of failure. My grandfather and his team placed a call to the then-new Federal Reserve Chairman, Alan Greenspan, only a month into the job, to encourage the issuance of a Fed statement that it would do whatever it takes to provide the liquidity to keep markets functioning. It wasn’t the time to think about the policy’s broader economic implications, such as the potential moral hazard, as the plane was on fire and going down and desperately needed a rescue plan. It was also clear Greenspan had been thinking along similar lines. Fed officials drafted much longer statements for release, but Greenspan reasoned that a short, clear message would do the most to stabilize markets. It is also important to point out that when Secretary Baker arrived in Europe late that day, he immediately began communicating with key finance ministers, such as those from Germany, Japan, France, and the UK to coordinate a global response to the financial crisis. October 20 Greenspan issued his statement the next morning, October 20, “The Federal Reserve, consistent with its responsibilities as the Nation’s central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system.” – FRB In typical Greenspan fashion, the statement was vague in methodology yet resolute in purpose. The market opened down and continued falling, there were no buyers and it appeared, at one point, the global financial system was headed for a complete meltdown. “Tuesday was the most dangerous day we had in 50 years,” says Felix Rohatyn, a general partner in Lazard Freres & Co. “I think we came within an hour” of a disintegration of the stock market, he says. “The fact we didn’t have a meltdown doesn’t mean we didn’t have a breakdown.  – WSJ Then at about 12:38 pm, with many stocks not trading and pressure growing to close the markets a miracle seemed to happen. With the closing of the Big Board seemingly imminent and the market in disarray, with virtually all options and futures trading halted, something happened that some later described as a miracle: In the space of about five or six minutes, the Major Market Index futures contract, the only viable surrogate for the Dow Jones Industrial Average and the only major index still trading, staged the most powerful rally in its history. The MMI rose on the Chicago Board of Trade from a discount of nearly 60 points to a premium of about 12 points. Because each point represents about five in the industrial average, the rally was the equivalent of a lightning-like 360-point rise in the Dow. Some believe that this extraordinary move set the stage for the salvation of the world’s markets. – WSJ  The rest, as they say, is history. My grandfather felt that the Treasury’s phone call contributed to Greenspan’s thinking and as he made the decision to issue a statement to calm the market.  The statement was the most critical event in stabilizing the markets and preventing substantial economic damage to the U.S. and the global economy. My grandfather spoke about how the simplicity of the message prevented speculation while instilling confidence.  Not unlike ECB President Mario Draghi’s, “whatever it takes” July 2012 speech, which saved the Euro currency, the European banking system, and ultimately the European Union during their debt crisis in 2011-12. The Birth Of Stock Market Moral Hazard    Some argue, including one of the regular authors on this website, the Fed’s response to Black Monday ushered in a new era of faux investor confidence and the moral hazard that the central bank will always backstop falling markets.  Thus, forever distorting market risk and real price discovery and contributing to the current boom-bust asset market cycle the global economy now experiences and will be extremely difficult to reverse. Global Macro Monitor (GMM) often argues, which is not necessarily my own opinion, what was supposed to be a one-off market intervention in 1987 has now become the norm, which monetary policymakers will find it impossible to extract itself from, ultimately resulting in a major market and economic dislocation.  We shall see. President Reagan’s Confidence And Sense of Calm During the crisis, President Reagan, whose administration my grandfather served several key roles in, was an excellent communicator and never once conveyed a sense of panic in October 1987. Though not having a financial background, President Reagan did have a degree in economics and understood the nature of markets and how they coveted a sense of calm and leadership from the government during such a crisis. The following video is President Reagan speaking to the press at the White House on Black Monday as he is preparing to board Marine One to visit the First Lady in the hospital. Skip to the dialogue, which starts 5:40 minutes in. Note President Reagan’s incredibly calm demeanor and sense of confidence after the most massive stock market crash in U.S. history. [ZH: Of course, it's different this time... Source: Bloomberg Excerpted from Art Cashin's reminisces of that day in 1987 (rings a lot of bells for 2021)... The first two-thirds of 1987 on Wall Street was nothing short of spectacular... Fear seemed to disappear, and junior traders laughed at their cautious elders. The brash youngsters told each other to “buy strength” rather than sell it, as each buying wave was soon followed by another. [ZH: Robinhooders?] One thing that helped banish fear was a new process called “portfolio insurance.” It involved use of the newly expanded S&P futures. Somewhat counterintuitively, it involved selling when prices turned down. [ZH: Nasdaq Whale buying calls, driving dealer gamma to extremes] The rally topped out about Aug. 25, with the hitting 2,722 (less than a tenth of its current numerical value). Interest rates had begun creeping up amid concerns of early signs of inflation. [ZH: Rally topped a week after that in 2021] ... On Wednesday, Oct. 14, there were widely discussed rumors of a new punitive tax on takeover profits. [ZH: Worries over Biden's tax plan or the IRS crackdown?] ... Now that would be an 'October Surprise'... Tyler Durden Tue, 10/19/2021 - 13:25

    - Tyler Durden

    Notorious Haitian Gang Demands $17 Million Ransom For Kidnapped Missionaries A local gang that days ago kidnapped a group of 17 American and Canadian missionaries in Haiti, among them children, is demanding a $17 million ransom to obtain their release, or $1 million for each person. Since the Saturday kidnapping which drove world headlines, the group has been identified as the powerful and notorious "400 Mawozo" gang. The 16 Americans and one Canadian were in Haiti as part of the Ohio-based Christian Aid Ministries, and include five men, seven women, and five children. FBI agents are now reportedly on the ground in Port-au-Prince, while representatives of the Ohio Christian ministry are said to be in contact with the hostage-takers, after the gang contacted the US-based organization in order to conduct a ransom negotiation. The FBI is said to be advising the missionary group during the phone calls. Via AP: Christian Aid Ministries in Berlin, Ohio  An FBI official recently confirmed to CNN: "The FBI is part of a coordinated US government effort to get the Americans involved to safety. Due to operational considerations, no further information is available at this time." The missionaries had been visiting and working at a local orphanage in Port-au-Prince when they were taken. The ransom demand was confirmed via Haiti's justice minister, according to reports: Justice Minister Liszt Quitel said the gang was demanding $1 million per person. Quitel did not immediately return messages for comment, but he also confirmed the figure to the New York Times. The Journal said he identified the ages of the abducted children as 8 months and 3, 6, 14 and 15 years. In recent years Haiti's rapid descent into complete government and infrastructure breakdown has made the country incredibly dangerous for missionaries and foreign aid workers. Some reports show half of Port-au-Prince is controlled by criminal gangs. The country has suffered years of political chaos as kidnappings have recently erupted.  Port-au-Prince, AFP via Getty Images In the first eight months of 2021, 328 kidnapping victims were reported to Haitian police, compared with 234 for all of 2020, according to United Nations Integrated Office in Haiti known.  What's made the violence worse is the assassination of president Jovenel Moise in July and a devastating earthquake in August that killed more than 2,000 people. It seems the Biden administration has another crisis on their hands. Hopefully, they won't ignore this one as they've with the one along the Mexico–US border.  Tyler Durden Tue, 10/19/2021 - 13:13

    - Tyler Durden

    Dip-Buyers Pile Into Crypto, FundStrat Forecast Bitcoin $168k From Expected ETF Flows Update (1300ET): "Sell the news" has morphed into "buy the dip" as BITO and Bitcoin surge back towards the highs of the day... And Bitcoin is pushing up to $63,500...   *  *  * Update (1030ET): "Sell the news"? After an initial burst of euphoria higher, both BITO and spot bitcoin is tumbling... BITO broke below its opening price... And Bitcoin dived... Dragging the rest of the crypto space with it... The seemingly endless flip-flopping of Guggenheim's Scott Minerd continues with him now appearing to be positive once again on the crypto space: *MINERD: BITCOIN ETF COMPELLING FOR INVESTORS TO BYPASS WALLETS *MINERD SAYS BIG WINNERS IN CRYPTO STILL REMAIN TO BE SEEN *MINERD: CENTRAL BANKS CAN'T SIT BY ON CRYPTO WITHOUT GETTING IN Bloomberg's Eric Balchunas notes that BITO has officially passed BUZZ in opening day volume with over $440mm traded so far, making it the biggest new launch of 2021 by that measure. It is now number 7 on the all-time list (and number 1 if you filter out the massive seed ones). All that in under an hour. *  *  * The first US Bitcoin ETF has just started trading. ProShares Bitcoin Strategy ETF (BITO) tracks bitcoin via actively-managed exposure to future contracts. image courtesy of CoinTelegraph ProShares CEO Michael Sapir said the launch marks an important milestone for cryptocurrency ETFs in the U.S. following several years of effort to list one on an exchange: “BITO will continue the legacy of ETFs that provide investors convenient, liquid access to an asset class. 1993 is remembered for the first equity ETF, 2002 for the first bond ETF, and 2004 for the first gold ETF. 2021 will be remembered for the first cryptocurrency-linked ETF.” Sapir went on to say that the Bitcoin ETF’s debut on NYSE unlocks massive exposure for investors in traditional financial markets. “BITO will open up exposure to Bitcoin to a large segment of investors who have a brokerage account and are comfortable buying stocks and ETFs, but do not desire to go through the hassle and learning curve of establishing another account with a cryptocurrency provider and creating a Bitcoin wallet or are concerned that these providers may be unregulated and subject to security risks,” he said. BITO opened at 40.88 and is trading higher...That opening price is over 2% above the $40 reference price. Spot Bitcoin prices just broke above $63k... The futures-based Bitcoin ETF could attract more than $50 billion in inflows in its first year given the hype around it, according to noted Bitcoin bull Tom Lee, co-founder of Fundstrat Global Advisors. With bitcoin block rewards at $10 million per day, the equilibrium between the supply and demand of bitcoin will not be balanced unless the price of bitcoin moves significantly higher. "The equilibrium price to clear this, based on analysis by our data science team, is $168,000," Fundstrat said. However, as we detailed yesterday, caveat emptor just a little on this futures-based ETF, given its contango-heavy structure. Which makes it painstakingly obvious that the approved ETF is not suitable for long term investment, and serves only as yet another way for day traders to partake in the exact ‘highly speculative’ activity that Gary Gensler regularly criticizes. And since ‘uber-wealthy’ Gensler, ex-Goldman Sachs, (how else would he have gotten his current position) knows all too well how this contango effect plays out, one has to wonder what exactly his angle is in approving such a product. Meanwhile, Grayscale Investments LLC said Tuesday its filing as soon as Tuesday to convert the world’s biggest Bitcoin fund into an ETF. While the Securities and Exchange Commission has allowed a derivatives-based product to launch, it has yet to permit the kind of structure used by Grayscale, which directly holds the largest cryptocurrency. Finally, it is worth noting that despite all the FUD, bitcoin's price is up 50% since China banned crypto. As CoinTelegraph reports, it’s been 150 days since China banned Bitcoin (BTC) mining - and BTC price action has only benefited as a result. Tyler Durden Tue, 10/19/2021 - 13:06

    - Tyler Durden

    They Insist Everything Will Be Fine As We Face Shortages Of Chicken, Coffee, Diapers, Fish Sticks, Frozen Meals, Carbonated Drinks... Authored by Michael Snyder via TheMostImportantNews.com, Officials in Washington continue to assure us that we don’t have anything to be concerned about, but meanwhile the shelves just continue to get even emptier.  On Friday, #BareShelvesBiden was the number one trending topic on Twitter, and I am sure that the Biden administration must have been thrilled by that.  Biden insists that he and his team are on top of things, but so far nothing that they have done has worked.  In fact, this crisis just seems to keep getting worse and worse.  And because we are facing such a “hydra of bottlenecks”, there aren’t going to be any easy solutions… When you look closely at all of the small fractures that have contributed to the world’s supply chain crackup, it really can begin to look maddeningly complex. As the Atlantic’s Derek Thompson put it, global commerce is currently being choked by “a veritable hydra of bottlenecks.” China’s “zero tolerance” policy for the coronavirus led it to shut down a major shipping terminal after a single infection and has slowed traffic at other ports. Lately, rolling power outages in the country have closed factories. Vietnam’s clothing and shoe plants, which companies like Nike rely on, were paralyzed by COVID lockdowns earlier this year. The world has also been bedeviled by shipping container shortages, made worse by bizarre pricing incentives that have led companies to send the boxes back from the U.S. to Asia empty, leaving American agricultural exporters in the lurch. Meanwhile, the world’s semiconductor shortage has lingered on, stalling car and electronics production; earlier this week, it was reported than Apple is expected to cut iPhone production by 10 million because it simply can’t get enough chips. We can’t control what is going on in other nations, but we can certainly do something about what is happening within our own borders. On the west coast, it appears that part of the problem is simply sheer laziness… “In 15 years of doing this job, I’ve never seen them work slower,” said Antonio, who has spent hours waiting at Los Angeles County ports for cargo to be loaded. “The crane operators take their time, like three to four hours to get just one container. You can’t say anything to them, or they will just go [help] someone else.” The Washington Examiner spoke to six truck drivers near the Long Beach/Terminal Island entry route, and each described crane operators as lazy, prone to long lunches, and quick to retaliate against complaints. The allegations were backed up by a labor consultant who has worked on the waterfront for 40 years. None of the truckers interviewed for this story wanted to provide a last name because they fear reprisals at the ports. As one of my friends pointed out to me the other day, we have gone from being a “can do” nation to a “can’t do” nation. Over the course of my lifetime, our culture has been totally transformed, and the national work ethic that helped make America into an economic superpower is disappearing a little bit more with each passing day. Our society has become a festival of sloth, inactivity and incompetence, and at this point things have gotten so bad that our supply chains are breaking down on a very basic level. The shortages continue to intensify, and we are being told that they will be even worse by the time the end of December rolls around.  According to USA Today, the following are in particularly short supply right now… Ben & Jerry flavors Carbonated drinks Chicken Coffee Diapers Fish sticks Frozen Meals Heinz ketchup packets Marie Callender’s pot pies McCormick Gourmet spices Rice Krispie Treats Sour Patch Kids Toilet paper How hard is it to make toilet paper, put it in a truck and drive it to stores around the country? It seems like we have been talking about toilet paper shortages for nearly two years now. When is it going to end? To me, the food shortages are particularly alarming.  Earlier today, I was stunned to learn that one school district in Alabama says that it can’t feed the students because it can’t get enough food delivered… How bad are the shortages across the country getting? One Alabama school district is literally running out of food.  Alexander City Schools have started asking parents to feed their children breakfast at home or to send them to school with snacks because the district hasn’t received its normal food deliveries from vendors, according to AL.com. “Alexander City Schools, like many schools across the nation, is experiencing supply chain issues with our food vendors,” the district wrote on Facebook. This is the United States of America. This sort of thing is not supposed to happen here. But it is happening. And virtually every industry is being affected.  In the old days, getting vehicle parts was never a problem, but now some Americans are having to wait two or three months to have their vehicles fixed… In the Seattle suburbs, garage owner Bryan Kelley waited on parts for 60 to 90 days on two separate occasions while fixing pick-up trucks. One of the parts, a crankshaft position sensor, used to take a half hour to get from the distribution center, said Kelley, owner of Valley Automotive Repair and Electric. The wait got so long that the customer was ready to give up on his Dodge Ram 1500, he said. Even more alarming is the fact that so many farmers are having such difficulty getting their farm equipment fixed. As Ethan Huff has pointed out, this potentially threatens their ability to plant and harvest crops… “You try to baby your equipment, but we’re all at the mercy of luck right now,” says Cordt Holub, a fourth-generation corn and soybean farmer in Buckingham, Ia, who now locks his machinery up inside his barn every night after thieves robbed hard-to-find tractor parts from a local Deere & Co. dealership. Tractor tires, semiconductors and other vital components needed in the industrial farming sector are just not available like they once were, which threatens the ability of farmers to not only continue planting food but also harvesting it. If the shortages get a lot worse, and I believe that eventually they will, we will be facing things in this nation that we have never faced before. But don’t worry, because Transportation Secretary Pete Buttigieg has finally returned from paternity leave and he says that he will get things fixed. However, he is also admitting that supply chain disruptions “will continue into next year”… Also on Sunday, Buttigieg warned that the supply chain disruption will continue into 2022. ‘Certainly a lot of the challenges that we have been experiencing this year will continue into next year,’ Buttigieg told State of the Union host Jake Tapper. Do you have confidence that Biden, Buttigieg and the rest of the bureaucrats in Washington will turn things around in 2022? We shall see what happens. But meanwhile the shortages continue to intensify, and the American people are starting to get quite restless. *  *  * It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon. Tyler Durden Tue, 10/19/2021 - 12:45

    - Tyler Durden

    FBI Raids D.C. Home Of Russian Billionaire Energy Tycoon Known For Putin Ties On Tuesday morning the FBI has raided the home of billionaire Russian oligarch and energy tycoon Oleg Deripaska in a posh Washington D.C. neighborhood. His name began appearing in US media over the past years based on his ties to Paul Manafort. He's also widely considered part of Vladimir Putin's "inner circle".  An NBC correspondent posted video of the FBI "court-authorized law enforcement activity" in progress, however it's as yet undisclosed why they're after Deripaska - who is founder of Basic Element, among Russia's largest industrial groups - or exactly what it is US authorities are looking for. By the looks of it, multiple dozens of agents and police are present for the large high-profile raid. Nothing like an FBI raid in a DC NW neighborhood on a beautiful fall morning. @nbcnews @PoPville⁩ pic.twitter.com/KVaN0t9dxU — Laura Strickler (@strickdc) October 19, 2021 According to Reuters, "NBC’s Tom Winter said federal agents were outside the property and restricting access. Federal Bureau of Investigation representatives could not immediately be reached to comment on the report." FBI and local police have so far kept mum, but the powerful Russian oligarch's checkered past is already causing speculation to mount: Deripaska became widely known in the U.S. for his ties to Paul Manafort, the former Trump campaign chairman who was convicted on fraud charges stemming from former special counsel Robert Mueller’s probe of Russian interference in the 2016 presidential election. Then-President Donald Trump pardoned Manafort in his final month in office. In 2018, the Trump administration imposed sanctions on Deripaska and about two dozen other oligarchs and Kremlin officials with ties to Russian President Vladimir Putin’s inner circle. Deripaska sued over the sanctions, but a U.S. judge in June dismissed his lawsuit. Getty Images The 53-year old's prime home residence is in Moscow, and Forbes recently estimated his net worth at about $5 billion. That's no way to treat Christopher Steele's client! https://t.co/LXOxOjanza — Chuck Ross (@ChuckRossDC) October 19, 2021 Deripaska is among the 800 wealthiest people on the planet, and pre-2008 was briefly in the top ten. Here's a quick review major stories centered on the Russian oligarch via Forbes:  Oleg Deripaska is the founder of Basic Element, a Russian industrial group with interests in aluminum, energy, construction, agriculture and more. In April 2018, the U.S. Department of the Treasury's Office of Foreign Assets Control imposed sanctions against Deripaska and some of his companies. In January 2019, OFAC lifted sanctions on En+ Group, UC Rusal and Eurosibenergo, and Deripaska agreed to permanently reduce his stake to 44.95%. He was the richest person in Russia and the 9th richest in the world in 2008 before nearly losing it all due to crashing markets and heavy debts. In an IPO in November 2017, En+ Group, which combined Deripaka's stake in UC Rusal and assets in the electric power industry, raised $1.5 billion. Reminder: In 2012, Lawyer Adam Waldman hired Steele’s firm, Orbis Business Intelligence, on Deripaska’s behalf in order to assist Deripaska against a lawsuit filed “by a business rival” [likely Michael Cherney]. Steele brought up Deripaska's VISA Case to Bruce Ohr in early 2016. https://t.co/B2Cgx9nUk6 — Jeff Carlson (@themarketswork) October 19, 2021 Getty Images developing... Tyler Durden Tue, 10/19/2021 - 12:30

    - Tyler Durden

    Chicago Begins Placing Police Officers On "No-Pay Leave" Status Amid Vaccine Showdown The Hill is confirming that the Chicago Police Department has begun placing officers on unpaid leave on Monday night into Tuesday for not being in compliance with the department's Covid mandate to disclose vaccination. Perhaps wishing to avoid the kind of crime spree chaos sure to unfold by mass firings of officers (even more so than "typical" weekends that see high numbers of shootings), which the police union predicted will be as much as 50% of the force, Mayor Lori Lightfoot has so far indicated a "very small number" of officers have been placed on "no-pay status". Likely the city's strategy is to fire small groups of officers in piecemeal fashion in hopes of avoiding the kind of large-scale revolt that's coming. Image source: ZUMA24.com Lightfoot claimed they've had "multiple opportunities" to come into compliance, after the last Friday deadline has come and gone for officers to upload their individual vaccination status to an online city portal, which many also say is a violation of personal medical freedom. She's since dramatically accused the union of leading an "insurrection". Fraternal Order of Police President John Catanzara, who was issued a "gag order" by a city court over the weekend in attempts to prevent the union from encouraging officers to resist Lightfoot's dictates, has said that about 50 officers have been placed on unpaid status so far as of Tuesday morning. Chicago's NBC 5 has interviewed a pair of officers who were just placed on unpaid leave. They said the following: “It was emotional for everyone, especially for me,” Officer Elizabeth Alaniz said. Alaniz has been on the Chicago police force for more than 20 years, but Monday she turned in her badge after refusing to report her vaccination status. "I was given a direct order to do so, and I said I would not comply with that direct order," she said. Turn in your weapon & your badge per @chicagosmayor & @Chicago_Police pic.twitter.com/sEKqqnN5RF — Ald. Raymond Lopez (@RLopez15thWard) October 18, 2021 And further: "These are rights that our union is fighting for, and if we let them take this from us, what else will they take away?" the officer said. Most of the officers disciplined Monday were assigned to the department’s headquarters and to fugitive apprehension. Disciplinary action has not yet been taken against patrol officers. The police union is still mulling options for legal action pushing back against the city's mandate.  "The collective bargaining agreement has always been at the heart of this," police union chief Catanzara said. "The demand for arbitration was given to the city 10 days ago, and they chose to ignore it." Tyler Durden Tue, 10/19/2021 - 12:15

    - Tyler Durden

    Interest In Store Credit Cards Plunges By Marianne Wilson, editor-in-chief of Chain Store Age Summary: Only one in three consumers with a store card said they currently have debt associated with that card, down from 49% in 2020.  Twenty-nine percent of consumers would be more likely to pay with a store card this holiday season, while 21% would turn to buy now, pay later financing. Nearly four in 10 people with a store card today have regretted opening one in the past. Consumer interest in-store credit cards is on the wane this holiday season. Only 29% of consumers said they are likely to apply for a store credit card this holiday season compared to 44% in 2020, according to a report from LendingTree. However, consumers are still slightly more likely to use store cards to shop during the holidays versus using a buy now, pay later option. In other findings, 42% of consumers have closed a store credit card and an additional 13% have had a store card closed by the issuer. The main reasons for voluntary closures were no longer shopping at the store (46%) and high-interest rates (35%).  The average APR on a new retail credit card offer was 24.27%, up very slightly from 2020’s 24.24% in 2020. “The average store credit card APR is still several points higher than the average for all credit cards,” the report stated,  “For example, we found eight cards from six retailers with APRs of 29.99%. A bit of good news: For the second straight year, no store card that we reviewed had an APR of 30% or higher.” More retailers offer store credit cards than buy now, pay later loans, though many offer both. Sixty-seven of the 126 retailers’ websites reviewed by LendingTree offered a store credit card, while 56% offered buy now, pay later. However, 42 retailers made both options available. available. Among Gen Z, 32% said they’d be more likely to use buy now, pay later — the same percentage that would use a store credit card. But only 9% of baby boomers said they’d be more likely to use buy now, pay later, versus 19% who said store credit cards. Tyler Durden Tue, 10/19/2021 - 11:59

    - Tyler Durden

    Jen Psaki Says Empty Shelves And Rising Prices Are Due To "Increasing Demand" This past weekend Jake Tapper spoke to White House Press Secretary about inflation and the effects of rising prices in the U.S. Part of their discussion was prompted by White House Chief of Staff Ron Klain re-tweeting a Tweet from days prior saying that rising prices and inflation were "high class problems".  "Most of the economic problems we're facing (inflation, supply chains, etc.) are high class problems," Jason Furman wrote on October 13th. Klain re-tweeted his tweet with two fingers pointing down at the original tweet and simply said: "This".  When Psaki took to Tapper's show on CNN to try and defend the White House Chief of Staff's response, she tried to make the case that rising prices were good because it meant more people were buying things. And, like everyone else in the world, she blamed Covid.  "Inflation is skyrocketing," Jake Tapper says to Psaki. "Doesn't it seem tone deaf to say rising prices and empty grocery store shelves are 'high class problems'? Isn't that a bit dismissive?," Tapper asked. Psaki responded by saying: "The fact is that the unemployment rate is half of what it was about a year ago." "More people have jobs, more people are buying goods, that's increasing demand. That's a good thing. At the same time, we know supply is low because we're coming out of the pandemic," Psaki answers. "What people should know is inflation is going to come down next year, economists have said that, they're all projecting that," she continued. "Chief of Staff Ron Klain, back when he was a private citizen, went after the Trump White House for efforts to dismiss price rises," Tapper continued. "Why did Ron Klain think rising prices were a serious concern under Trump but not under Biden?" "I can tell you from sitting in meetings with Ron Klain, he is obsessed with lowering costs for the American people," Psaki responded. You can watch the full exchange here: Jen Psaki Defends Rising Prices: 'Good Thing' Because it Means 'More People are Buying Goods' pic.twitter.com/IaKVYVSCbR — Jason Rantz on KTTH Radio (@jasonrantz) October 15, 2021   Tyler Durden Tue, 10/19/2021 - 11:40

    - Tyler Durden

    Trafigura Revealed As Culprit Behind Copper Market Mayhem Update (1130ET): It appears the culprit for the chaos in the copper markets has been identified. Bloomberg reports, citing 'people familiar with the matter' that Trafigura Group was behind a significant proportion of the orders to withdraw copper from London Metal Exchange warehouses. It’s not unusual for physical traders to withdraw metal from the exchange to ship to their customers, and Trafigura isn’t the only trading house to have taken metal off the exchange in recent months, the people said. And the move comes against a backdrop of very low inventories globally. Still, total requests to withdraw more than 150,000 tons of copper from LME warehouses in the past two months have all but drained the available stocks on the exchange, and Trafigura represents a significant proportion of those, the people said. This is not that much of a surprise since during the pandemic, Trafigura emerged as one of the most high-profile bulls in the global copper market, with head trader Kostas Bintas predicting that prices will hit $15,000 in the coming years as the industry witnesses a new supercycle underpinned by booming demand in electric vehicles and renewable energy. Additionally, Trafigura traded 4.4 million tons of copper last year, one million tons more than its largest rival, Glencore. *  *  * The chaotic moves in various energy markets around the world have spread to the metals markets with copper inventories available on the LME plunging to the lowest on record (since 1974), in a dramatic escalation of a squeeze on global supplies that sent spreads spiking and helped drive prices back above $10,000 a ton. Copper tracked by LME warehouses that’s not already earmarked for withdrawal has plunged 89% this month after a surge in orders for metal from warehouses in Europe. Source: Bloomberg As Bloomberg reports, the last time that type of dynamic developed was during a historic squeeze in 2006, when a buying spree early on in China’s industrial boom drained LME on-warrant inventories to a near-record low. LME inventories are now at even lower levels than was the case then, while Chinese inventories also dropped Friday. “If more metal doesn’t make it into the exchange, then it really is in a difficult position,” Michael Widmer, head of metals research at Bank of America, said by phone. “Right now the LME is running a physical contract that effectively is not really backed by physical metal.” And that 'difficult position' just showed up in a huge way in the copper spread as spot/cash contracts on the LME traded at more than a $1,000 premium to those maturing in three months, the widest spread since at least 1994, surging higher in recent days as freely available stock on the London bourse dwindled... Source: Bloomberg “The LME notes recent price activity in the copper market. We will continue to closely monitor the situation, and have further options available to ensure continued market orderliness if these are required,” the exchange said in an emailed statement to Bloomberg. Is another oil-esque delivery debacle here? Tyler Durden Tue, 10/19/2021 - 11:30

    - Tyler Durden

    Squid Game By Michael Every of Rabobank I presume most readers will have watched or are familiar with ‘Squid Game’ on Netflix. It is excellent: the kind of high-quality, realistic-yet-fantastic drama Hollywood used to make before it focused solely on underpants-and-politics-on-the-outside productions: and wait until its scripts are run through the Gina Davis AI, which can “identify character representation and percentage of dialogue by gender, race, sexual orientation, disability, age and body type.” If only there were an AI for good/original script ideas too. Anyway, I mention Squid Game today for several reasons. One is that while Netflix is American, much of the best content on it is not, underlining what we argued in “The World in 2030” last year - that US cultural hegemony would decline (and it would turn away from neoliberal orthodoxy, as in USTR Tai’s argument for managed trade, for example.) Another is that Squid Game is perceived to about inequality. (A little, perhaps, but it has far larger doses of well-acted character-driven narrative - and buckets of shocking ultra-violence.) Inequality comes to mind when Fed data show 89% of US stocks are now owned by the top 10%, and 54% are owned by the top 1%: so why do the rest of us care what these indices do or don’t do? Likewise, given rising inflation *and* taxes, and labor militancy, is the Bank of England really sure it wants the market to price for future rate hikes so aggressively? Curve flattening is a trend all over, and not one that suggests a happy ending for many players. The RBA minutes today certainly stuck to their script – no rate hikes until 2024. What, apart from a love of unaffordable housing (which they admit higher rates would slow, at the cost of fewer jobs) do they see that the RBNZ and BOE don’t? Another Squid Game analogy is the battle for position within one’s own team. As alluded to before, someone is gunning for the Fed Chair, and yesterday saw news Powell sold up to $5m worth of stock options just before the Dow Jones tanked last year. His on-line betting odds on getting the Chair again keep slipping, and Brainard’s keep rising. That internecine struggle surely also runs through a host of other US media stories of late: “China is ahead of the US in AI”; “China has new hypersonic weapons”; “John Kerry has $1m holdings in a Chinese firm tied to alleged forced labour in China”; “Uighur forced labor is being used outside Xinjiang”; and “US troops are in Taiwan”, etc. The New York Times, both venue and player, has a good summary in an article about why Hollywood never has Chinese villains (‘James Bond Has No Time For China’), noting that within the US: “On the left now you see several impulses. There is an irrelevant but fascinating fringe of very online ‘tankies’ --a reference to the Communists who justified the USSR sending in the tanks to Hungary-- actively championing the Beijing regime. There is a Bernie Sanders left that wants to critique the Chinese regime on trade and human rights, but fears anything that seems like warmongering. And there is a left that thinks the existential stakes of climate change require deep cooperation with Beijing. The center, meanwhile, has lost its optimism about China turning into a democracy. But it’s not sure whether to pivot to confrontation and try to disentangle our economies, or whether globalization makes that disentanglement impossible and so we need, with whatever nose-holding, to deepen ties instead. (This divide runs through President Biden’s cabinet.) The right includes several tendencies as well. There’s a Cold War 2.0 mentality, which fears China as a sweeping ideological threat, a fusion of old-model Communism with 21st-century surveillance technology that promises to make totalitarianism great again. There’s a realist perspective that regards China as a traditional great-power rival and focuses on military containment. And there’s a view that sees China and the US as actually converging in decadence - with similar problems, from declining birth-rates to social inequalities to internet-mediated unhappiness. But for some on the right, that last view comes with a wrinkle, where the Chinese state is almost admired for trying to act against this decadence --as in its attempt to wean young people off the ‘spiritual opium’ of video gaming-- in a way that liberal societies cannot.” The latest New York Times story on this front --'Washington Hears Echoes of the '50s and Worries: Is This a Cold War With China?’-- underlines the views of the hold-the-nose camp, who argue the US and China must not view their struggle as military, and must “compartmentalize”, e.g., co-operate on climate while “jousting for advantage” in the South China Sea. This geostrategic illogic astounds many international relations observers, as does the lack of recognition of what relative defense spending is doing. It’s not the trade logic espoused by USTR Tai either, if she gets a say: a recent Asia Times article argues the recent pattern of US-China trade resembles “the sort of import dependency economists associate with Third World countries dependent on former colonial powers.” (As US industrial production fell 1.3% in September.) But that does not mean the hold-your-nose crowd won’t push more co-operation, as Beijing is already flagging. Meanwhile, Congress is walking a different path, this time pushing a bipartisan bill to counter Chinese economic coercion. That your partner can suddenly become your opponent is another key theme in Squid Game: and it is worth considering given the strain in global supply chains, and the pains over Northern Ireland, where EU olive sausages were perhaps not enough, and now everything needs to be imperial rather than metric just to muddy the waters. The Northern Ireland Protocol is problematic, says BoJo, but “we’ll fix that.” How – via a game of marbles, perhaps? Lastly, Goldman Sachs has now taken 100% ownership of its China securities venture, following JP Morgan’s lead. Goldman is notoriously the firm Matt Taibbi described as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” It certainly knows how to swim: e.g., in the Global Financial Crisis suddenly becoming a bank holding company so the Fed could stand behind it. However, it is now in new waters, and just as China’s GDP growth is slowing: everything that hit Q3 will be worse in Q4, and well into 2022, while the China Beige Book is talking about 2% GDP growth rates in future years, and are not alone. Moreover, common prosperity, which will officially last until 2050, means “coordinating finance with the real economy”, rebalancing between rich and poor regions *and* rich and poor people, while “adjusting high incomes” via floated consumption, income, capital gains, and property taxes. The US this is not. Plus, of course, the Chinese capital account is largely closed, and underlying pressure on the none-shall-pass CNY exchange rate continue to build as structural debt and demographic problems loom. So, back to the Squid Game and market “Red light, green light…” Tyler Durden Tue, 10/19/2021 - 11:10

    - Tyler Durden

    Winter Is Coming: Russia Signals No Extra Gas For Europe Without Nord Stream 2 The big picture was clear to anyone who bothered to keep their eyes open: back in August, when we first reported that Russian supplies of nat gas via the Yamal pipeline had collapsed and when the first stirrings of the upcoming surge in nat gas prices were emerging, we said to "call it a perfect storm of declining supplies, lack of sufficient inventories and ongoing geopolitical posturing as Russia piles pressure on EU authorities to approve the dual-pipeline Nord Stream 2 project through the Baltic Sea and into Germany, while gas shippers are running low on time and, indeed, options to keep Europe adequately supplied this winter." Specifically, we also warned that "a worst case scenario could see European gas prices explode to suborbital levels that would make Jeff Bezos proud should the continent fail to stock up on sufficient nat gas amounts." Indeed, that's precisely what happened in the ensuing two months But more importantly, even though Europe is now facing a devastating cold winter with widespread blackouts, Europe's unelected bureaucrats still refuse to accept the reality in which Putin calls all the shots. So perhaps to make it very clear what it would take to avoid a miserable, freezing winter, today Russia signaled that it won’t go out of its way to offer European consumers extra gas to ease the current energy crisis unless it gets something in return: regulatory approval to start shipments through the Nord Stream 2 pipeline. In exchange for upping supplies, Bloomberg reports citing people close to state-run gas giant Gazprom and the Kremlin - that Russia wants what was clear to anyone - i.e., to get German and European Union approval to begin using the pipeline to Europe. “We cannot ride to the rescue just to compensate for mistakes that we didn’t commit,” Konstantin Kosachyov, a top pro-Kremlin legislator in the upper house of parliament, said in an interview, without specifying what Russia is seeking. “We’re fulfilling all our contracts, all our obligations. Everything on top of that should be a subject for additional voluntary and mutually beneficial agreements.” Well, Russia clearly has good lawyers to find all the loopholes that allow it to ship far less gas than it has recently while remaining in compliance with its contractual terms. To underscore the point, Nord Stream 2 said Monday its first line is full of so-called technical gas and ready to begin operation, though it can’t ship it until regulatory approval is granted. That announcement came hours after European gas prices spiked on news that Gazprom had again bid for only a small amount of capacity to ship the fuel to Europe via other routes. Amusingly, Bloomberg spins the narrative as if it is somehow Moscow's responsibility to keep Europe warm saying that "as surging fuel costs have caused increasing economic havoc, pressure has grown on Russia, Europe’s largest supplier, to pump more. Extra Russian gas is seen as the main way to avoid an even deeper supply crunch in the middle of the winter." Actually, the truth is that if energy prices don't plunge - and soon - the pressure will grow on Europe's politicians to find gas at any price or meet an angry mob. As for Russia, as long as it complies with its contract, if it is willing to forego on marginal profits for additional gas exports well that's entirely it's decision. Meanwhile, amid deep sanctions targeting the Kremlin which has emerged as the "biggest western enemy" as a distraction for Hillary Clinton's catastrophic failure to win the 2016 presidency, the Kremlin has zero appetite to do any favors. Although exports to Europe are up this year from last year’s depressed levels, they lag those seen in 2019, according to the Oxford Institute for Energy Studies. Daily flows have dropped in October and Gazprom has been slow to refill storage facilities it owns in Europe, adding to upward pressure on prices. Russia has blamed an overly hasty shift to relying on spot markets and alternative energy sources for the crisis. Mocking the gullible Europe, last week President Vladimir Putin suggested at an energy conference that Russia could offer more gas. But he also lamented the slow progress on getting approval for Nord Stream 2, a process that could take until well into next year. German regulators are currently reviewing its application for certification but have said their initial decision could come only in January, after which the European Commission would also have to give the go-ahead. “If we could increase deliveries through this route, this would substantially ease tension on the European energy market,” Putin said. “However, we cannot do this so far because of the administrative barriers.” In other words, if Europe freeze this winter it has nobody to blame but itself... and the ESG lobby of course, whose impact has led to a collapse in traditional fossil fuel investments and a decimation of Europe's legacy energy infrastructure. Tyler Durden Tue, 10/19/2021 - 10:55

    - Tyler Durden

    Not Breaking: Manchin Rejects Centerpiece Of Biden's Climate Agenda... Which Progressive Dems Insist On Update (1118ET): Manchin reiterated on Tuesday morning that he's not in favor of a carbon tax, and that he wasts the $1.2 trillion infrastructure bill passed first. Manchin tells a group of us he’s NOT in favor of a carbon tax. And that’s not being discussed right now. Says he wants infrastructure billl passed and talks ongoing — Manu Raju (@mkraju) October 19, 2021 Manchin: “a carbon tax is not on the board right now” — Burgess Everett (@burgessev) October 19, 2021 Meanwhile, Sinema was spotted earlier in the day arriving at the White House to meet with President Joe Biden. Sen. Kyrsten Sinema arrived at the White House moments ago to meet with the President (spotted by @Kevinliptakcnn). As @Phil_Mattingly lays out this morning, it's time to close the deal: https://t.co/EMR1npEtcQ pic.twitter.com/Y4DxQoAYM5 — Betsy Klein (@betsy_klein) October 19, 2021 *  *  * In what's being framed as some 'new development' in the standoff between moderate and progressive Democrats, Sen. Joe Manchin (D-WV)'s refusal to back the centerpiece of President Biden's climate agenda 'puts the Democrats' entire infrastructure and social spending agenda at risk,' as The Hill describes it. Senate Majority Leader Charles Schumer’s (D-N.Y.) two-track strategy for passing Biden’s agenda was based on the expectation that Manchin would give ground to progressives in exchange for their support of the hard infrastructure bill that he and Sen. Kyrsten Sinema (D-Ariz.) negotiated with Republicans. But Manchin’s infrastructure bill, including billions of dollars in new money for West Virginia’s needs — such as the Appalachian Development Highway System — has passed the Senate and he’s still not signing on to the climate investments that are a key demand of progressive Democrats. His staunch opposition to a $150 billion clean electricity plan that was supposed to be the backbone of Biden’s transition to clean energy puts what was supposed to be a grand bargain between moderate and progressive Democrats in danger. But wait - this isn't some new bombshell Manchin just dropped on his fellow Democrats to kill Biden's gargantuan spending bill - it's what he's been saying all along - and gave no indication he'd waver on. This 'grand bargain' and 'expectation that Manchin would give ground' was always implied. As Punchbowl News' Jake Sherman notes: "Manchin isn’t changing, really. he’s had these long-held positions for months and has been saying them." Here’s what he’s been saying consistently since the summer He isn’t willing to spend much more than $1.5 trillion. He believes vital programs like Medicare and Social Security are in danger of insolvency and wants to save them rather than expanding them. — Jake Sherman (@JakeSherman) October 19, 2021 Manchin isn’t changing, really. he’s had these long-held positions for months and has been saying them. A lot of people in town have decided to ignore what Manchin says and believe he has a hidden set of priorities he’s waiting to unveil. — Jake Sherman (@JakeSherman) October 19, 2021 And of course, without Manchin - and Arizona Sen. Kyrsten Sinema (D), Democratic leaders won't be able to pass the $1.2 trillion infrastructure package that advanced from the Senate months ago - yet which progressive Democrats refuse to let pass without the $3.5 trillion 'social spending package' that Manchin refuses to support without significant cutbacks. Progressives led by Sens. Sheldon Whitehouse (D-R.I.), Ed Markey (D-Mass.) and Jeff Merkley (D-Ore.) have warned for months they would not support a massive budget reconciliation package if it did not include bold reforms to cut carbon emissions. “At the end of the day, we’re going to have a deal and it’s going to be good enough on climate or it won’t go,” Whitehouse said last month. Sen. Tina Smith (D-Minn.) is now warning she won’t support the reconciliation bill unless it includes major environmental reform. The Build Back Better budget must meaningfully address climate change. I’m open to different approaches, but I cannot support a bill that won’t get us where we need to be on emissions. There are 50 Democratic senators. Every one of us is needed get this passed, she tweeted -The Hill "The longer we wait, the less likely that we’re going to produce a product that the American people are anxious to receive," warned Senate Majority Whip Dick Durban (IL), noting that his  colleagues are feeling "anxious," while expressing dismay that Manchin won't support the climate proposals. "I support the clean electricity approach and I’m sorry that Sen. Manchin’s opposed to it." Durbin admitted that a failure to include climate legislation would be considered a 'major failure.' Manchin, meanwhile, defended himself from accusations that he's the lone reason Democrats can't pass their bills. "There are 52 senators who don’t agree, OK? And there are 52 senators who don’t agree, and there are two who want to work something out if possible, in the most rational, reasonable way," he said, while also raising doubts about an Oct. 31 deadline for a deal - telling reporters "I don't know how that would happen." Again, this is nothing new, as Manchin has been steadfast in his opposition to what he views as reckless spending. Tyler Durden Tue, 10/19/2021 - 10:50

    - Tyler Durden

    Exactly As Trump Predicted: "Racist" Jefferson Statue To Be Removed At NYC Council Authored by Steve Watson via Summit News, A 200-Year-Old Thomas Jefferson statue is to be removed from the chambers of the New York City council after a unanimous vote by the nine members of the Mayoral appointed Public Design Commission. Several lawmakers testified that the statue is ‘offensive’, with Democratic Assemblyman Charles Barron of Brooklyn even declaring that Jefferson was a “slaveholding pedophile.”  Barron added “I think it should be put in storage somewhere, destroyed or whatever.” A statue of Thomas Jefferson will be removed from the City Council chambers in New York after a debate over his legacy and association with slavery. https://t.co/24p8qloLdn — The New York Times (@nytimes) October 18, 2021 Barron continued, “How the hell can people see as a hero someone who had hundreds of enslaved Africans, someone who was a racist and who said we were inferior and someone who was a slaveholding pedophile?” He further proclaimed that “For [Jefferson] to be canonized in a statue is incredible — incredibly racist.” The New York Post notes that in 1834 the statue was given to the city by Uriah Phillips Levy, “the nation’s first Jewish Naval commodore and an admirer of Jefferson’s belief in religious freedom.” The New York Times notes of the statue that “The painted plaster version was later donated to New Yorkers and arrived at City Hall around 1834. When it first arrived in New York, Levy charged to view it and used the proceeds to feed the poor. It was installed in the City Council Chamber in the 1910s.” NYC votes to remove statue of Thomas Jefferson This shows the distorted perspective in current debate on history. To even contemplate that simply owning slaves outweighs writing the Declaration of Independence is beyond absurd. It's an assault on America.https://t.co/LADCepu3HY — Save Our Statues -Robert Poll (@_SaveOurStatues) October 18, 2021 A local ABC affiliate reports that the statue is “expected to go on ‘long term loan’ to the New-York Historical Society by the end of the year, where it would be included in educational exhibits with the proper historical context that likely will include discussion of Jefferson’s slave ownership.” NYC Mayoral candidate Curtis Sliwa expressed opposition to the move, asking “Do we suddenly wipe out the images, the markings, the names of all those great patriots because they were slaveholders and slave holding was quite common at that time?” Republican City council member Joe Borelli also accused NYC Mayor Bill de Blasio of waging a “progressive war on history.”  “The de Blasio administration will continue the progressive war on history as he, himself, fades away into a portrait on a City Hall wall,” the Staten Island member told the New York Post.  Back in 2017, after statues of Confederate figures were targeted, President Trump predicted that soon enough it would be statues of Jefferson and Washington that would face the axe. “This week it’s Robert E. Lee. I noticed that Stonewall Jackson is coming down. I wonder, is George Washington next week and is it Thomas Jefferson the week after? You really do have to ask yourself: ‘Where does it stop?’” Trump asked at the time. https://t.co/N8JBQX9nNY pic.twitter.com/pRHOIEnF9X — Greg Price (@greg_price11) October 18, 2021 The media said Trump was overreacting and pointing to a ‘false slippery slope’. John Oliver devoted an entire segment to mocking Trump over the statement: 2017: So-called comedian John Oliver mocks President @realDonaldTrump for suggesting statues of Washington and Jefferson would be next. Trump was right. pic.twitter.com/wV5SkslFMw — Yanky (@Yanky_Pollak) June 21, 2020 Wrong. Trump was 100% correct. Again. It hasn’t stopped. History is being systematically erased. Earlier this year we reported on the woke mob succeeding in influencing a MUSEUM in New York to remove a statue of former President Theodore Roosevelt. Called it. Now the statues can't even be part of museums. https://t.co/SXs5toe4Vw — Paul Joseph Watson (@PrisonPlanet) June 21, 2020 *  *  * Brand new merch now available! Get it at https://www.pjwshop.com/ In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support our sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Also, we urgently need your financial support here. Tyler Durden Tue, 10/19/2021 - 10:31

    - Tyler Durden

    Facebook Chooses Coinbase As "Custody Partner" For Digital Wallet Ahead Of Stablecoin Launch With crypto markets in the green and equities still riding high on their latest comeback rally, Coinbase has just dropped a bombshell update about Facebook's great attempt to seize control of the global monetary supply (or at least a slice of it) thanks to its nearly 3 billion monthly users who would have immediate access to whatever monetization options they are provided. Facebook revealed Tuesday that it has chosen Coinbase as its "custody partner" for its Novi "pilot program," which will focus on creating new digital wallets for enabling users to send and receive money abroad instantly and securely, with no fees. Crypto markets have always struggled with this last bit, and Facebook CEO Mark Zuckerberg thinks it'd be a better idea if we just let Facebook handle all remittance payments from global migrant workers, a morass of capital slowly trudging its way from the developed world to the developing. It's just a pilot program (for now, at least). But the fact that the company is making this announcement suggests that something even bigger is coming: Facebook is about to move ahead with the first stage in imposing Zuck's grandiose vision for a stablecoin fiat replacement - Diem - which could be one of the biggest steps since Zuck first announced it half a decade ago (and which as we explained previously, could become the de facto FedCoin in due time). But Zuck isn't just unleashing his grand vision on the world in the hopes that we will use it: he is doing his best to impose it on the world, and the first step is to manufacture demand. So it has chosen the not just the perfect partner companies but the perfect partner country: Guatemala. Here's what Coinbase says: Facebook has chosen Coinbase as its custody partner for its pilot of Novi, a new digital wallet that enables people to send and receive money abroad instantly, securely, and with no fees. For the pilot, Coinbase is supporting Novi via Coinbase Custody, which keeps user funds secure with our proprietary, fully segregated cold storage capability for managing private keys. Novi users who can participate in the pilot can acquire Pax Dollar (USDP) through their Novi account, which Novi will hold on deposit with Coinbase Custody. Novi users will then be able to transfer USDP between each other instantaneously. Novi users’ funds will be held within Coinbase Custody Trust Company, a qualified custodian and a New York limited purpose trust company. Coinbase Custody Trust Company is regulated by the New York Department of Financial Services and is a fiduciary under New York state banking law. Novi users also benefit from Coinbase Custody’s leading insurance program, which includes a $320 million commercial crime policy. Coinbase Custody is a leading crypto-native platform and custodian that securely manages $180 billion (as of 6/30/21) of crypto assets on its platform. Over the past nine years, Coinbase has developed deep expertise in secure and scalable crypto infrastructure, which we initially built to power our own first party applications. It's pretty clear that Facebook is 100% committed to this project and David Marcus says the pilot program between the US and Guatemala -which Facebook is handling in partnership with Coinbase and Paxos - will be available, for no fee, very soon. But what is perhaps most important in today's announcement, and what investors appear to have ignored, is that according to Facebook's David Marcus, the company hopes the pilot program will "show a use-case for a stablecoin". This, as a reminder, is the holy grail that Facebook has been going after all along, first with Libra and now, with Diem. Remarkably, the news sparked a selloff in shares of Silvergate Bank, as some algos appear to be very confused assuming that Facebook has dumped Silvergate as its Diem launch partner. As a reminder, the tiny, $3 billion market cap Silvergate will be the exclusive issuer of Facebook's Diem once the world's largest social network launches it. And no, Facebook has not dumped it in favor of Coinbase, on the contrary: it is merely using Coinbase as a platform to set the stage for Diem, whose launch will send Silvergate shares soaring. As such today's bizarre dump is truly a perplexing move... ... and shows just how little understanding of the fast-moving development in the crypto sector marginal investors actually have. Tyler Durden Tue, 10/19/2021 - 10:12

    - Tyler Durden

    What The SEC Got Wrong In Its Meme Stock Report Late on Monday, the SEC released a watered down report suggesting popularized retail brokers lured investors to increase their trading via mechanisms like payment for order flow and gamified user interfaces. The report comes after speculative commentaries on online social media fueled a price rise in shares of highly-shorted meme stocks, before the risk management of clearing agencies resulted in brokers imposing synthetic supply imbalances. Moreover, the report found that the “act of rebellion,” on the part of retail market participants, did not result in markedly high amounts of short-covering by institutions. Additionally, the report found that the price rise was “not consistent with a gamma squeeze.” Well, in keeping with the SEC's abysmal track record of publishing catastrophically wrong post hoc "analysis" - like finding that the entire May 2010 Flash Crash the work of one solitary basement-dwelling spoos trader, Nav Sarao - the agency best known for Sucking Elon's C**k has just unleashed another steaming pile of horseshit, and our friends at SpotGamma have fundamentally disagree with the report's conclusion that options were not a major catalyst to the aforementioned price rise. The report concludes with the staff identifying areas of market structure and our regulatory framework for potential study and additional consideration. These include: Forces that may cause a brokerage to restrict trading; Digital engagement practices and payment for order flow; Trading in dark pools and wholesalers; and The market dynamics of short selling. BUT WHERE IS THE SQUEEZE? Tune in for full analysis from SpotGamma on the role that the options market played and the mechanics behind a gamma squeeze that made GameStop (GME) the poster child for the meme stock mania in early 2021. The SpotGamma team will be going live today at 10:30 AM ET to unpack what the SEC got WRONG in its 45-page meme stock analysis (or use this link). Tyler Durden Tue, 10/19/2021 - 10:10

    - Tyler Durden

    The Bullish & Bearish Market Case Authored by Lance Roberts via RealInvestmentAdvice.com, We dig into the bullish and bearish case for the market as we head into the end of the year. Currently, investors face a conundrum between year-end seasonality and the Fed starting to taper its bond-buying program. Such was evident in a recent email I received from a reader: “I am holding a lot of cash, and am worried about a deeper correction. While I understand that you recently got more aggressively allocated due to improving short-term technicals, the risk of the Fed beginning to taper their bond-buying seems to be problematic. What do you think I should do?” It’s a great question, and one that I think represents many of our readers. One of the biggest challenges investors always face is allocating capital to markets once a correction has occurred. The concern is purely emotional as investors worry the market may continue to decline. While specific reasons suggest a deeper correction is possible, other factors are supporting a more positive outcome. In the longer term, it is only fundamentals that matter. So what is happening between the economic and earnings data is all you need to know if you are a long-term investor. Unfortunately, you aren’t. Despite all of the protestations that you are a long-term investor, most are not. The emotional biases of being either bullish or bearish, primarily driven by the media, keep you from truly focusing on long-term outcomes. Instead, you either worry about the next downturn or are concerned you are missing the rally. Therefore, you wind up making short-term decisions that negate long-term views. Understanding this is the case, let’s look at the markets from both a bullish and bearish perspective. From there you can decide what to do next. The Bullish Case 1) Seasonality With the recent correction in October now behind us, the market is entering into the “seasonally strong” period between November and May. While this period does not always provide positive returns, the statistical tendencies favor increased equity exposure. The chart below from TheMarketEar shows the average return profile from October through the end of the year. Importantly, notice the corporate stock “buyback” window that opens on November 1st. 2) Corporate Share Buybacks A significant source of liquidity over the last several years, and in this year, in particular, has been the record levels of cash utilized by companies to repurchase their shares. Such has provided underlying support to asset prices as corporations provide a consistent bid for stocks. “In Q4, the GS buyback desk estimates +$230B repurchases, this is broken down by +$70B in October during the blackout window using 10b5-1 plans and +$160B in November and December.” – Zerohedge “According to GS Research, November is the best month for buyback executions, November plus December is the best two month period of the year for executions. November 1st is the defacto start to the buyback season with 65% of corporations in the open window. That is followed by November 8th where 90% of corporates are in the open window.” – Zerohedge 3) Money Flows Remain At Historic Highs Of course, it is not just corporate share buybacks supporting asset prices currently, but record global inflows of capital at a pace never before seen in history. Now at $982 billion, and counting, the flood of liquidity globally into equities is unprecedented. “Global equity inflows surpassed $774.5 billion on a year-to date basis. It is the best year on record by a mile. In the 190 trading days ending on October 6th. This will be roughly $1 Trillion worth of inflows for 2021. That is approximately +$4.1 billion worth of [retail] demand every single day of 2021.” – Goldman Sachs The bulls are carrying solid arguments for being long equities currently. With earnings season underway, sentiment reversed from recent bullish extremes, and an ongoing flood of liquidity, there is an inherent bias to the upside. However, while the bulls case is strong, the bears have equally valid arguments for remaining cautious. The Bearish Case 1) The Fed Is Set To Taper The most obvious concern for the “bears” is the Fed reducing their bond-buying activity starting in November. While many argue that “QE” has no impact on financial markets, as shown below, the “psychological” link between the Fed and the financial markets is apparent. Such is known as the “Fed put.” The chart below shows the correlation between the monthly change in the S&P 500 Index and the Fed’s balance sheet. At 82%, there is a sufficient correlation to suggest a direct link between the markets and monetary policy. With such a high correlation, it is not surprising that periods of a contraction in liquidity corresponds with increased market volatility and corrections in the markets. Thus, the grey shaded bars highlight the periods where the Fed’s balance sheet contracted in size. 2) Profit Margins Another concern is the surging level of inflation in the economy currently. Between supply line disruptions, inflationary pressures, and rising wages, corporations will face margin compression. Thus, the considerable risk to the bullish argument is that earnings fail to support currently high valuations. Peaks in real (inflation-adjusted) profit margins correspond with peaks in financial markets. However, with profit margins currently elevated due to the $5 trillion in “pandemic relief” in 2020, the current contraction in fiscal policy supports combined with higher inflation could well deteriorate profits into next year. 3) Economic Growth Continues To Weaken While over the short-term markets can certainly rally on hope and optimism, there is a high correlation between economic growth, revenue, and stock market returns in the longer term. Early this year, estimates were for extraordinary rates of economic growth in 2021. However, as the months progressed and fiscal liquidity ran dry, economic growth rates are quickly reverting to the long-term means. At the begging of Q2, the Atlanta Fed pegged economic growth at 13.5%. By the time GDP got reported by the Bureau of Economic Analysis, it was just 6.5%. The Atlanta Fed has ratcheted down Q3, which will get reported later this month, to just 1.2%. So far, while hopes are for more robust economic growth in Q4, there is a high probability of disappointment. For the bearish view, the implications of substantially weak economic growth are broad. Consumer sentiment will continue to remain weak, and increased inflationary pressures will further undermine consumption. The impact on earnings will leave the bulls disappointed. You Don’t Have To Pick A Side So what do you do? As we discussed previously, we believe there is enough to the bullish case to warrant additional equity exposure in portfolios. However, the longer-term dynamics are bearish.  But here is the crucial point – you don’t have to “choose.” While many think you have to be either “bullish” or “bearish,” the reality is you don’t. In the short term, we can be “bullish” with our equity positioning. However, we can also be “bearish” in our longer-term views. Regardless of whether you are bullish or bearish, we noted guidelines to increase your odds of successthis past weekend. Move slowly. There is no rush in making dramatic changes. If you are under or over-weight equities, DO NOT try and fully adjust your portfolio allocation in one move.  Begin by selling laggards and losers.  Add to sectors, or positions, that are performing with, or outperforming the broader market. Move “stop-loss” levels up to recent lows for each position. Managing a portfolio without “stop-loss” levels is foolish. Be prepared to sell into the rally and reduce overall portfolio risk. Not every trade will always be a winner. Get rid of losing positions as redeploy capital as needed. If none of this makes any sense to you – please consider hiring someone to manage your portfolio for you. It will be worth the additional expense over the long term. For now, we remain optimistic about the markets due to liquidity, seasonality, and a reversal in bullish sentiment. However, we remain concerned about the broader macro risks, which keep us cautionary. There is little value in trying to predict market outcomes. The best we can do is recognize the market environment for what it is, understand the associated risks, and navigate accordingly to achieve the desired outcome. Tyler Durden Tue, 10/19/2021 - 09:50

    - Tyler Durden

    Biden Secretly Flying In Underage Migrants To NY, Spreading Border Crisis Across US Late last night, the New York Post published a story about what appears to be a federal program secretly moving undocumented migrants arrested at the border - who are mostly teens and young adults - to shelters and other "resource centers" in suburban communities in New York, Connecticut and elsewhere. The story, which is almost too crazy to believe given what's going on right now at the southern border, was, quite frankly, as long as it was shocking. And what was almost as surprising is that the Biden Administration has been carrying on with the program - with complete acquiescence from local Democratic Party officials in New York - since at least mid-summer - potentially since as early as April - without saying anything to the press, or anywhere, in any official record. According to the Post, the flights originate in Texas, where the border crisis has overwhelmed local resources once again, and land at a Westchester County Airport, where the detainees who are being transported are sometimes driven as far away as Florida, according to what the Post has observed. And, most critically, the Post has also been able to confirm that 2,000 migrants arrested after sneaking into the US from Mexico have arrived at the airport on 21 flights since Aug. 8.  These flights apparently made quite a disturbance in the neighborhood around the airport, since they were almost always carried out in the middle of the night when the airport was supposed to be closed. Last week, The Post saw two planes land at the Westchester County Airport, where most of the passengers who got off appeared to be children and teens, with a small portion appearing to be men in their 20s. Westchester County cops stood by as the passengers — whose flights arrived at 10:49 p.m. Wednesday and 9:52 p.m. Friday — got off and piled into buses. Some of them were later seen meeting up with relatives or sponsors in New Jersey, or being dropped off at a residential facility on Long Island. Official data also shows that the CBP has nabbed nearly 38K unaccompanied minors at the border during July and August alone. A source at the airport told the NYP the new arrivals are typically sent by car or bus out to Connecticut or somewhere Upstate. Although at least some of the migrants have been moved to a shelter in Syosset, Long Island. Around 12:30 a.m. Saturday, it stopped in Syosset, Long Island, at the campus of MercyFirst, a nonprofit sponsored by the Catholic Sisters of Mercy that provides housing and services for “children and adolescents who are the victims of societal problems,” according to its website. But wait a second. This isn't some Catholic charity organization. MercyFirst has a contract with the federal government to provide services related to "the emotional and physical needs of children and adolescents who are the victims of societal problems". The company's CEO didn't return a request for comment, according to the New York Post. Florida's Republican Gov. Ron DeSantis, told the Post he was outraged by the Biden Administration carrying out such an operation in such a cloak-and-dagger fashion, and apparently not telling anybody in Florida, or New York, about the operation (but we'll get to New York's "leaders" and what they have to say later). Some of the children who were flown out to Westchester were ultimately driven as far south as Tallahassee, per the Post. Republican Florida Gov. Ron DeSantis expressed outrage at The Post’s findings, with a spokeswoman saying: "If the Biden Administration is so confident that their open-border policy is good for our country, why the secrecy?" "Why is the Biden Administration refusing to share even the most basic information about illegal alien resettlement in communities throughout our state and the entire country?" spokeswoman Christina Pushaw said. “Washington DC sets immigration policies that do not affect them, and states — that lack information about migrant resettlement and do not have the authority to change federal immigration policy — are expected to bear the brunt of Biden’s reckless open-borders agenda.” Apparently, whoever is running this program isn't practicing very strong operational security. Most of the minors were seen being placed on buses, and some were eventually picked up by individuals in plain clothes who didn't appear to be employees or agents of the federal government. On Wednesday, The Post also saw two buses leave the Westchester airport carrying about 100 passengers who arrived on a McDonnell Douglas MD-83. One bus stopped at the Thomas Edison Service Area off the New Jersey Turnpike in Woodbridge, where the migrants got off around 12:45 a.m. Thursday. Over the next two hours, they were driven away in cars by people who met them there — without anyone appearing to have to show identification to the officials overseeing the operation. The Post even spoke to a woman who lives nearby, and she confirmed that the flights appear to have been happening for weeks, forcing her family to become accustomed to the sounds of airplanes landing overhead in the middle of the night, since the "middle of the summer". A woman who lives near the airport told The Post on Monday that a flight arrived there “around 3 or 4” that morning “and it was shaking the house” and awakened her 8-month-old baby boy. "He’s been waking up for the last month around 2, 3, 4 because of the noise," she said. "I got used to the regular airport noise but these planes or jets sound different. Lower, more bass. And they’re coming in the middle of the night!" The neighbor also said that she “can see the airport perfectly from my upstairs” and has noticed “a few buses that say ‘Out of Service’ hanging around” that aren’t the usual county buses or airport shuttles. And she said the airport has lately been “much darker than usual” overnight. “I liked the way it looked like a little city — blue and white lights,” she said. “But since the middle of this summer, they are all off, except one or two of them on the top of the Flexjet hangar…I guess so you can’t see what’s going on.” They also spoke to former Westchester County Exec Rob Astorino, the GOP candidate vying to run for governor, who said he learned about the program after locals complained about curfew violations. He's saying that the operation has been going on since at least April, and what started with "smaller planes" has evolved into planeloads of presumably unaccompanied migrants - at least 50 to 75 who appear to be mostly men older than 20. "No one has explained where they’re going and who they are,” he said. "The Biden administration is systematically spreading the southern border crisis to communities all around the country, often shrouded in secrecy and under the cloak of darkness." At this point, we would like to know: what's going on here, Joe? A spokeswoman for the Democrat currently running Westchester County said the program is "nothing new" and that it was similar to something that President Trump would have done. If that's true, then it looks like President Biden is caught in a real bind here - politically speaking. Is he "like Trump" on immigration? Or isn't he? After all, this isn't the first time we have seen this come up. Tyler Durden Tue, 10/19/2021 - 09:11

    - Tyler Durden

    Evergrande Makes Onshore Coupon Payment As Offshore Creditors Brace For Official Default One month ago, when the world was gripped by the crisis involving China's 2nd largest property developer Evergrande, we said that "Beijing will pay local bondholders and soft nationalize Evergrande, but will avoid allegations of backsliding on tightening/deleveraging promises and and "common prosperity" by stuffing foreign creditors." Brilliant: Beijing will pay local bondholders and soft nationalize Evergrande, but will avoid allegations of backsliding on tightening/deleveraging promises and and "common prosperity" by stuffing foreign creditors. — zerohedge (@zerohedge) September 22, 2021 Since then, that's precisely what has happened with the company making one onshore coupon payment while withholding all payments to offshore creditors. Then, overnight, Reuters reported that Hengda Real Estate Group, Evergrande's flagship unit, has remitted funds to pay an onshore bond coupon of 121.8 million yuan ($19 million) due on Tuesday. Citing sources, Reuters noted that the company needs to prioritize its limited funds towards the domestic market where the stakes are much higher for the country's financial system. And while Evergrande scrambles to squeeze every last drop of liquidity as it seeks to at least repay local creditors and holders of WMPs, things are going from bad to worse for the company whose deal to sell a 51% stake in its property services unit has been put on hold, Reuters also reported, "in a blow to the embattled developer's hopes of avoiding a potentially disruptive default." The company had been in talks to sell the stake in Evergrande Property Services to smaller rival Hopson Development Holdings for around HK$20 billion, sources previously told Reuters. However, the deal, which was set to be the biggest asset sale for the company, has been put on hold as it has yet to win the blessing of the Guangdong provincial government, which is overseeing Evergrande's restructuring, one of the people said on Tuesday. While, it was not immediately clear why the Guangdong provincial government has not approved the Evergrande Property Services transaction, some of Evergrande's offshore creditors had also opposed the deal, Reuters sources added. Another source said the announcement of the deal will be delayed, pending China's regulatory approval. The deal has already won Hong Kong Stock Exchange's special approval. In more bad news for Evergrande, last week Chinese state-owned Yuexiu Property pulled out of a proposed $1.7 billion deal to buy Evergrande's Hong Kong headquarters building over worries about the developer's dire financial situation. Yet while Evergrande has been careful not to impair local creditors, offshore bondholders have little to look forward to: an Evergrande bond due March 23, 2022 will officially be in default on Oct 23 when the 30-day grace period for a missed coupon payment that had been due on Sept. 23 expires. Still, and somewhat paradoxically, the wider offshore bond market has responded positively despite a crippling slowdown in China's property market after soothing words from China central bank's and coupon payments by two other major developers. An index of China high-yield debt which is dominated by property developer issuers, has seen spreads tighten from last week's record levels to around 1,484 points on Tuesday. The move was catalyzed in large part by another local property giant, Sunac China, which has a $27.14 million payment due Tuesday, and which has paid its bondholders, a source with knowledge told Reuters. At the same time, Kaisa Group said on Monday it had also paid a coupon due Oct. 16 and it plans to transfer funds for a coupon worth $35.85 million due Oct. 22 on Thursday. Bonds from Chinese developers that gained on Tuesday included Modern Land's 2022 bonds which bounced over 8% to 40.250 cents on the dollar, while Central China Real Estate's 2024 bonds climbed over 5% to 44.843 cents. It was not all good news, however, and on Monday, smaller developer Sinic Holdings defaulted on $246 million in bonds as expected; It had previewed the default last week, saying it did not have sufficient financial resources In an attempt to ease mounting concerns about China's sudden property deep freeze, in the past few days, the People's Bank of China has said spillover effects on the banking system from Evergrande's debt problems were controllable and that China's economy was "doing well". Just like what we heard around the time Lehman failed.  Tyler Durden Tue, 10/19/2021 - 09:06

    - Tyler Durden

    Doctors Can Prescribe Ivermectin, Hydroxychloroquine Off-Label For COVID-19: Nebraska AG Authored by Mimi Nguyen Ly via The Epoch Times, Nebraska Attorney General Doug Peterson issued a legal opinion saying that his office won’t seek disciplinary action against doctors who prescribe hydroxychloroquine or ivermectin as off-label medicines to treat or prevent COVID-19, as long as they are not engaging in any misconduct. The opinion (pdf), issued on Oct. 15, was in response to a request from Dannette Smith, CEO of the state’s Department of Health, which licenses and disciplines doctors. Smith asked whether it would be “deemed unlawful or otherwise subject to discipline” for doctors to prescribe ivermectin, hydroxychloroquine, or other “off label use” medications to treat or prevent COVID-19. The Republican attorney general said in the opinion that his office finds “the available data does not justify filing disciplinary actions against physicians simply because they prescribe ivermectin or hydroxychloroquine to prevent or treat COVID-19.” Health care providers in general may be subject to discipline if they “neglect to obtain informed consent, deceive their patients, prescribe excessively high doses, fail to check for contraindications, or engage in other misconduct,” wrote Peterson. He said his office is not recommending any particular treatment options for COVID-19, but only the off-label early treatment options as raised by the health department “and conclude that the available evidence suggests that they might work for some people.” The opinion continues, “Allowing physicians to consider these early treatments will free them to evaluate additional tools that could save lives, keep patients out of the hospital, and provide relief for our already strained health care system.” The legal opinion also noted that there may be other promising off-label medicines to tackle the CCP (Chinese Communist Party) virus, which causes COVID-19. Hydroxychloroquine, an anti-inflammatory and anti-malarial medication, gained prominence and heavy scrutiny after former President Donald Trump said he was taking it as a prophylactic. Last year, medical journal The Lancet initially published a paper condemning hydroxychloroquine before retracting it after more than 100 medical professionals raised major issues with the study. Facebook, Twitter, and YouTube in July 2020 removed videos of a group of doctors who advocated for its use as early treatment and prophylaxis amid the pandemic. A study published in the American Journal of Medicine on Jan. 1 found that hydroxychloroquine helped lower mortality in the early treatment of COVID-19. The World Health Organization in March advised against the use of hydroxychloroquine for COVID-19. Ivermectin, a generic medicine widely used against some parasitic worms as well as to treat scabies, lice, and rosacea in humans, has been praised by some doctors as a life-saving early treatment for COVID-19. Two groups, the Front Line COVID-19 Critical Care Alliance and the British Ivermectin Recommendation Development Group, have urged for the off-label use of ivermectin for COVID-19. There are at least 63 studies, of which 45 are peer-reviewed, on the treatment of COVID-19 with ivermectin. The American Medical Association, the American Pharmacists Association, and the American Society of Health-System Pharmacists, said in a joint statement in September they were against its use outside of a clinical trial as a COVID-19 drug. In Australia, the therapeutics regulator has restricted the prescription of ivermectin for COVID-19 and other off-label use only for certain specialists, including infectious disease physicians, dermatologists, gastroenterologists, and hepatologists. *  *  * Jarrad Winter, via AmericanThinker.com, has broken down a few key sections from the AG's lengthy opinion. As to the question of ivermectin as a treatment option: The Mahmud study–a CRT that explored ivermectin as an early treatment for 363 individuals–concluded that “patients with mild-to-moderate COVID-19 infection treated with ivermectin plus doxycycline recovered earlier, were less likely to progress to more serious disease, and were more likely to be COVID-19 negative on day 14. And Niaee’s research team found that ivermectin can help even hospitalized patients. That group conducted a “randomized, double-blind, placebo-controlled, multicenter clinical trial” with 180 hospitalized patients diagnosed with COVID-19. They concluded that ivermectin “reduces the rate of mortality and duration of hospitalization in adult COVID-19 patients,” and the improvement of other clinical parameters showed that the ivermectin, with a wide margin of safety, had a high therapeutic effect on COVID-19. What initially made ivermectin a target for all the inexplicable slander? Why would ivermectin’s original patent holder go out of its way to question this medicine by creating the impression that it might not be safe? There are at least two plausible reasons. First, ivermectin is no longer under patent, so Merck does not profit from it anymore. That likely explains why Merck declined to “conduct clinical trials” on ivermectin and COVID-19 when given the chance. Second, Merck has a significant financial interest in the medical profession rejecting ivermectin as an early treatment for COVID-19. As to the question of hydroxychloroquine as a treatment option: In 2004, long before the COVID-19 pandemic began, a lab study revealed that chloroquine "is an effective inhibitor of the replication of the severe acute respiratory syndrome coronavirus (SARS-CoV) in vitro" and thus that it should be "considered for immediate use in the prevention and treatment of SARS-CoV infections". The following year, another paper explained that "chloroquine has strong antiviral effects on SARS-CoV" and "is effective in preventing the spread of SARS[-]CoV in cell culture." It is widely recognized in the medical community that hydroxychloroquine is generally safe, so safe in fact that it may be prescribed to pregnant women and "children of all ages." What made hydroxychloroquine controversial in the first place? A striking example features one of the world’s most prestigious medical journals–the Lancet. In the middle of the COVID-19 pandemic, the Lancet published a paper denouncing hydroxychloroquine as dangerous. Yet the reported statistics were so flawed that journalists and outside researchers immediately began raising concerns. Then after one of the authors refused to provide the analyzed data, the paper was retracted, but not before many countries stopped using hydroxychloroquine and trials were cancelled or interrupted. The Lancet’s own editor in chief admitted that the paper was a “fabrication, a monumental fraud,” and “a shocking example of research misconduct in the middle of a global health emergency." Interesting note about ivermectin and hydroxychloroquine hesitancy: As for professional associations' and physician groups' views on hydroxychloroquine, it appears they generally adopt the same position they did on ivermectin. Those like the AAPS who support ivermectin as an option for early COVID-19 treatment generally support hydroxychloroquine too, while those like the AMA, APhA, and ASHP that oppose one typically resist the other. The AG's conclusion: Allowing physicians to consider these early treatments will free them to evaluate additional tools that could save lives, keep patients out of the hospital, and provide relief for our already strained healthcare system. *  *  * Read the full opinion below: Tyler Durden Tue, 10/19/2021 - 08:45

    - Tyler Durden

    US Housing Starts, Building Permits Plunge In September Following August's surprisingly large jump, building permits and housing starts were expected to slow down significantly in September, and slow-down they did. After the 5.6% MoM surge (revised down from +6.0% MoM) in August, Building Permits plunged 7.7% MoM in September (dramatically worse than the 2.4% MoM drop expected). Housing Starts were dramatically revised lower in August (from +3.9% MoM to +1.2% MoM) and September saw starts tumble 1.6% MoM (considerably worse than the 0.0% expected). Source: Bloomberg Permits are at their lowest level since September 2020 and Starts are at 6-month lows... Source: Bloomberg Multi-family permits plunged 21% SAAR from 630K to 498K while single-family permits slide to 1.041MM, the lowest since July 2020. Single-family home starts were unchanged at 1.080MM while multi-family starts dropped 5.1% SAAR from 492K to 467K All of which is odd given that NAHB sentiment just rebounded strongly... Maybe homebuyers know better after all. Tyler Durden Tue, 10/19/2021 - 08:38

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