China Reveals First Glimpse Into Its Economic Plans For Next Five Years

China Reveals First Glimpse Into Its Economic Plans For Next Five Years Tyler Durden Thu, 10/29/2020 - 19:25

On Thursday, the Fifth Plenum of China's 19th Party Congress which was held to discuss the proposals for the 14th Five-Year Plan, concluded after 4 days of discussions and China unveiled the first glimpse of Beijing's economic plans for the next five years, promising to build the nation into a technological powerhouse as it emphasized quality growth over speed.

The post conference communique released today provided a brief summary of the proposals. The summary reiterated the direction towards higher quality growth, laid out non-numerical goals over the long term, and particularly highlighted the importance of innovation and a push for market reform. A more detailed report on the 14th Five-Year Plan will be released during the National People's Congress (NPC) in March 2021

As previewed on Monday, the Communist Party’s Central Committee Thursday stressed the need for sustainable growth and also pledged to develop a robust domestic market. Of note: the communique released by state media following a four-day closed-door meeting did not specify the pace of growth policy makers would target, a first for a nation which in past was obsessed with its goalseeked GDP number.

Yet even though the plan doesn’t mention a specific rate of growth for gross domestic product, analysts said the government remains ambitious in its outlook: "The leadership still expects the size of the economy, household income as well as GDP per capita to reach a ‘new milestone’ by 2035," said Raymond Yeung, chief greater China economist at Australia and New Zealand Banking Group quoted by Bloomberg. "China did not abandon GDP targeting, it’s just expressed in a more subtle way."

Below are the main points from the plenum, via Goldman Sachs:

  1. The summary reiterated the increasingly challenging environment for development and rising uncertainties in external conditions, and highlighted major problems at the current phase of development, including development still unbalanced and insufficient, the lack of innovation, still substantial income inequality, and further room for improvement in environment protection.

  2. In contrast to the 13th Five-Year Plan where a “doubling income” goal was emphasized, the summary of the 14th Five-Year Plan today didn't mention any specific numerical goal, and re-emphasized the direction towards “higher quality growth." Regarding key economic goals for the 14th Five-Year Plan, the proposals particularly highlighted the importance of innovation and a push for market reform, facilitation of internal circulation through expanding domestic demand strategy and supply-side structural reform, significant improvement in household income and narrower income inequality in urban and rural areas, and “high-quality opening up” (trade and financial liberalization). The summary also mentioned long-term goals through 2035, for instance, GDP per capita reaching the level of middle-income developed economies and expansion in middle-income population.

  3. The key elements highlighted in the summary are not new and have been mentioned previously by policymakers. From an economic perspective, this means boosting total factor productivity and rebalancing economic development across sectors/regions. Although the Chinese government has been calling for a transition in the development model for a number of years, given that the broad external and domestic environment has changed, we think the government is likely to accelerate the pace of relevant reforms in the next five years, to achieve sustainable, balanced and high quality growth and enter the high income group from the upper middle income group.

  4. Over the coming months, the National Development and Reform Committee (NDRC) will consult specialists and other government ministries to prepare a more detailed draft of the 14th Five Year Plan. It will be submitted to the National People’s Congress (NPC) for final approval during the “Two Sessions” in March 2021, which would be the next key event to watch out for. Detailed plans on a sectoral level from ministries will likely be released several months after the “Two Sessions”.

The "Adults In The Room" With Trump Weren't Adults At All

The "Adults In The Room" With Trump Weren't Adults At All Tyler Durden Thu, 10/29/2020 - 19:05

Authored by Doug Bandow via TheAmericanConservative.com,

When President Donald Trump took office, his aides promised there would always be adults in the room. Especially when it came to foreign policy, learned, stable professionals would ensure responsible and intelligent actions.

Except the adults turned out to be idiots. They fought the president at every turn when he sought to withdraw from endless wars. They insisted that Washington remain allied to the worst of the worst, supporting the vile Saudi regime in its aggressive and murderous war against Yemen. They urged policies that treated Russia as a permanent enemy. They backed American dominance of every existing alliance and relationship, infantilizing America’s friends and maximizing Washington’s obligations.

Now former national security adviser H.R. McMaster has reminded Americans that many members of the infamous Blob, the foreign policy elite, are brain dead. Their thinking about the world ended decades ago. They mouth hypocritical platitudes while seeing everything through an antiquated prism.

For instance, McMaster recently charged that Tehran, a political, economic, and military wreck, has “hegemonic designs.” He made this claim after serving at the center of foreign policymaking in the world’s dominant power which is determined to be the global hegemon in control of every region on earth, essentially imposing the Monroe Doctrine on every continent. Supportive policymakers insist that the U.S. should intervene everywhere while no one else can intervene anywhere. Indeed, in their view America is entitled to meddle at any time for any reason.

Within the administration, McMaster orchestrated American support for Saudi Arabia, which did far more than Tehran to play regional hegemon. The antediluvian royals invaded one neighbor, deployed troops in a second, supported jihadist rebels against a third, kidnapped the prime minister of a fourth, launched a diplomatic/economic offensive against a fifth, and are promoting a civil war in a slightly more distant sixth. Riyadh’s behavior is reckless, dangerous, criminal, and, yes, hegemonic.

But it is in deploying the Munich comparison that McMaster, once thought to be an innovative military thinker, demonstrated that his time in government apparently killed off some of his once-abundant gray matter. In this he is not alone. Virtually every minor dictator in the most distant and underpopulated lands has been compared to Nazi Germany’s Adolf Hitler at least once. If we avert our glance for merely a moment, we are warned, Dictator X in Country Y is likely to launch a campaign of conquest across Continent Z. Or something similar. Thus only American intervention can prevent the onset of a new global dark age.

McMaster has been on a book tour promoting his latest tome with its utterly conventional demand for a harder line against, well, everyone. And why not? After all, surely America has money to burn after running a $3.1 trillion deficit during the 2020 fiscal year. With the federal debt already over 100 percent of GDP. Another $2 trillion or more in red ink expected in 2021. And the total “COVID deficit” predicted to run between $8 trillion and $16 trillion. But why worry: it’s only money!

Anyway McMaster was asked about President Donald Trump’s negotiation with Afghanistan. Is it America’s “Munich agreement” and “a policy of appeasement with Taliban”? Yes, replied McMaster.

It is hard to believe that McMaster doesn’t understand the concept of appeasement or know Munich’s circumstances. More likely, he doesn’t care about the facts and preferred to take a cheap shot at Trump, always an easy target.

First, appeasement is a time-tested and oft-successful strategy. It usually is better to make a deal than go to war. A little more appeasement before World War I involving Austro-Hungary and Serbia, which armed the gang that assassinated the Hapsburg heir, an obvious casus belli, might have forestalled a global conflict that consumed around 20 million lives and ultimately led to the Munich agreement and the far deadlier and more destructive World War II.

Second, on its face, Munich was a sensible attempt at appeasement. It redressed the World War I injustice of treating millions of ethnic Germans as pawns in a global chess game. At the Versailles Treaty conference, the oh-so-moral allies grabbed territorial plunder here, there, and everywhere, while prattling about self-determination. Hitler did not arise in a vacuum; allied avarice and myopia helped bring him to power.

Munich was a tragedy because the allies sought to appease the one person in Europe who could not be satiated. The pact transferred from Czechoslovakia to Germany the Sudetenland, which was taken by Prague from the long-gone Austro-Hungarian Empire against the wishes of its ethnic Germans residents. Berlin won, yet Hitler was irritated that the settlement denied him the war he desired. He invaded Poland the following year. However, Germany was not as well prepared for conflict in 1938 and Hitler might have been removed by his own military, which was contemplating a coup because of his apparent recklessness.

The short lesson of the agreement: the problem was Hitler, not appeasement. Most Europeans probably believed that preserving the continent’s peace warranted shifting to Germany territory filled with people who should not have been given to Czechoslovakia in the first place. In the abstract, Britain and France had good reason not to back Prague in a war over what were frankly ill-gotten gains. Unfortunately, London and Paris didn’t understand who and what they were dealing with—but they were not alone in sharing that delusion.

As for Afghanistan, one must hope that McMaster is not confused by the difference between Nazi Germany and the insurgent Taliban. A generation earlier, the Germans demonstrated their ability to wreak continental and even global murder and mayhem. In contrast, the Taliban’s motley mix of Islamists and opportunities at most threaten to gain control over additional territory in an impoverished, isolated land, located thousands of miles from America, which never had a strong central government to begin with.

Nevertheless, McMaster declared that “We will pay the price, and we’ll be back. We’ll have to go back, and at a much higher cost.” Why? Central Asia has no intrinsic value for America. The Taliban want to rule their villages and values, not threaten the U.S. at home.

Moreover, Afghanistan has no inherent connection to terrorism; the link was Osama bin Laden, who was initially involved there fighting the Soviets. After the U.S. intervened, he fled to and operated from Pakistan, a nominal American ally. And of course, he now is dead. Al-Qaeda’s remnants could operate anywhere, as do many of its spin-offs today. Al-Qaeda in the Arabian Peninsula, located in Yemen, has long been viewed as the most dangerous affiliate.

In any case, the region matters far more to the powers nearby, which have an incentive to promote a reasonably stable if not liberal Afghanistan. They do not want to see the return of terrorism. In fact, Christian Russia, Hindu India, and Shia Iran all have been targeted by Sunni terrorists. Communist China, busy locking up Sunni Uyghurs in reeducation camps, could be next on the terrorists’ target list. This gaggle of states has the makings of a good coalition to guard against growth in the Islamic State and revival of al-Qaeda, neither of which is in the Taliban’s interest, which would not want to trigger another round of U.S. retaliation.

As for humanitarian considerations, America has spent more than 19 years at war trying to create a liberal, centralized government where none previously existed. That is more than enough commitment of American lives and wealth.

McMaster’s strategic judgment is no better than his historical analysis. He complained that Trump’s exit plan “renders the war unjust, because we no longer have defined a just end.” It’s not clear why he believes leaving makes the conflict unjust. The U.S. got in for good reason, to retaliate against both al-Qaeda and the Taliban for the 9/11 attacks, sending the clear message that attacking America and hosting terrorists that strike America is a very bad idea. Washington foolishly stuck around for another 18-plus years trying to make Afghanistan into a better place, a theoretically moral but highly imprudent objective. And now, years late, an administration is finally trying to stop wasting American lives and wealth.

In the end, McMaster sounds like just all the other policymakers who misled the public over faux progress in Afghanistan year after year. As the Washington Post reported in its devastating “Afghanistan Papers” project nearly a year ago: “U.S. officials constantly said they were making progress. They were not, and they knew it.” Yet upon these claims, Washington wasted thousands of lives and trillions of dollars.

That is the true immorality, the shocking injustice, the criminal misconduct.

President Trump has gotten much wrong. But on Afghanistan he is far closer to the truth than the faux adults who surrounded him throughout his time in office. During McMaster’s next PR event for his book, he ought to be asked why purported leaders like him have so much trouble confronting their own failures.

New Research Points To The People's Liberation Army Hospital In Wuhan As Origin For Global Coronavirus Pandemic

New Research Points To The People's Liberation Army Hospital In Wuhan As Origin For Global Coronavirus Pandemic Tyler Durden Thu, 10/29/2020 - 18:45

A paper published on Zenodo (DOI 10.5281/zenodo.4119263) by Dr. Steven Quay, M.D., PhD., head of two COVID-19 therapeutic programs at Atossa Therapeutics, illuminates new scientific observations and conclusions documenting that the SARS-CoV-2 pandemic began at the General Hospital of Central Theater Command of People’s Liberation Army (PLA Hospital) in Wuhan, China, located at 627 Wulon Road, Wuchang District, Wuhan.

According to the paper, international biospecimen data repositories indicate as early as December 10, 2019 COVID patient records were being created by PLA personnel, weeks before the Chinese government informed the WHO of the pandemic.

The paper documents four patients from the PLA Hospital that have the earliest genetic signature of direct human-to-human coronavirus transmission. It also includes the patient whose coronavirus is genetically closest to a bat virus from the Wuhan Institute of Virology (WIV) that WIV scientists call “the closest relative of 2019-nCoV.”

The PLA Hospital is three kilometers from WIV and both are located on Line 2 of the Wuhan Metro System. The paper documents an analysis of the hospitals where the earliest COVID patients were seen, between December 1, 2019 to early January, and shows that all these hospitals were also located on the Metro Line 2.

This is the first paper in the world to observe that Line 2 is uniquely positioned to have been the worldwide human-to-human COVID pandemic conduit as it carries five percent of the population of Wuhan every day, allowing rapid spread throughout Wuhan and the entire Hubei Province; it includes the high-speed rail station, allowing rapid spread throughout China; and it terminates at the international airport station, allowing rapid spread throughout the world.

Line 2 also services the Hunan Seafood Market, previously suggested to be associated with the origin of the pandemic.

The full paper can be read below (pdf link)

'ALICE' Doesn't Work Here Anymore

'ALICE' Doesn't Work Here Anymore Tyler Durden Thu, 10/29/2020 - 18:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

What the political class and the Financial Nobility don't yet grasp is that ALICE will never go back to her insecure, low-wage job, ever.

Meet ALICE: Asset Limited, Income Constrained, Employed, at least she was employed until the pandemic presented impossible choices between taking care of her children and their education, and her aging parents, and keeping her demanding, low-wage job.

Though it doesn't fit in with the cute mythology of "capitalism" that apologists love to promote, ALICE wasn't working to get ahead--she was working to barely survive in an economy where wages have stagnated for decades and recently lost ground at an alarming rate as costs for everything from rent to childcare to utilities have soared while her hours have been cut.

This is the neofeudalism I've often described here: the modern-day equivalent of the landless (i.e. owns no capital) serf is a landless (i.e. owns no capital) debt-serf with student loans, an auto loan and credit card debt and income that is constrained by globalization, financialization and the scarcity of high-paying work that isn't reserved for insiders and the privileged few who chose their wealthy, well-educated, socially connected parents wisely.

Lacking capital and any realistic means of acquiring any, the debt-serf has only labor to sell, and in a globalized world in which everyone selling their labor is competing globally for work producing tradable goods and services, ordinary labor has lost purchasing power for the past 45 years.

The dominance of Big Tech monopoly platforms has created new fields for the exploitation of ordinary labor in the low-paid gig economy and fulfillment centers. The traditional neofeudal fiefdoms (retail outlets, hospitality and restaurants) have been hit by the pandemic pullback in consumer spending, and the other low-wage fiefdoms (fast food and domestic service) have been in structural decline for years.

Meanwhile, the owners of the Financial Nobility's fiefdoms and Big Tech monopolies have enjoyed unprecedented gains in income and wealth as wages' share of the economy has declined for decades, in effect transferring trillions from labor to the Financial Nobility.

This neofeudal arrangement is about to change as Universal Basic Income (UBI) or its equivalent becomes the accepted status quo solution to neofeudalism's soaring inequality. Since there's no limit to how much currency can be created by the Federal Reserve, then why not distribute enough "free money" to the serfs to tamp down the brewing revolt?

What the political class and the Financial Nobility don't yet grasp (due to their complete disconnect from neofeudal daily life) is that ALICE will never go back to her insecure, low-wage job, ever. No matter how meager the UBI, permanent unemployment, stimulus or whatever the political class calls the distribution of "Fed free money," ALICE will find a way to escape the bonds of neofeudal serfdom.

As I've noted here many times, the cash / informal economy beckons. All sorts of labor arrangements can be made on ALICE's terms, not the Big Tech monopolies' terms. No wonder the Financial Nobility is so desperate to eliminate cash. But other currencies may fill the need if the Neofeudal Overlords try to eliminate cash dollars.

Liberty and freedom are not just lofty academic abstractions; what matters is being freed of the neofeudal chains of Big Tech monopoly platforms and the Financial Nobility's other fiefdoms.

*  *  *

My recent books:

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

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

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

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

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



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Futures Tumble, Erase Day's Gains After Tech Earnings Turmoil

Futures Tumble, Erase Day's Gains After Tech Earnings Turmoil Tyler Durden Thu, 10/29/2020 - 18:23

After a surprisingly exuberant day in the stock market, filled with hope at all the optimistic awesomeness that the mega-tech hegemons would "told you so" to any naysayers who weren't already balls-deep long these over-valued and over-hyped names, things have gone just a little bit turbo after hours.

It wasn't pretty with only GOOGL shares higher...

Twitter sinks in late trading after user growth expectations were off. The company added 20 million new users in Q2. It added just 1 million new users in Q3. Expectations were that Twitter would report growth of 9 million new users in the quarter so this is a definite miss. The company also said there will be a delay in its MAP direct response ad product.

Facebook’s shares are modestly lower. Revenue blew past estimates as the company weathered the ad boycott from big advertisers. Also, user growth over overall exceeded expectations, but the company lost traction in the U.S. and Canada. Also, Facebook said it will be investing heavily on employees and new technology.

Amazon shares are down despite reporting profit and net sales that beat quarterly estimates. The retailer sees up to $121 billion in fourth-quarter sales. Bezos expects an “unprecedented” holiday season. CFO says Covid-related expenses will go up to $4 billion.

Apple sales plunge 29% in China, grow in other regions. IPhone revenue falls short of analysts’ estimates. Lack of revenue forecast dissapoints some observers. Shares fall, dragging suppliers down in late trading.

Alphabet returned to growth in the third quarter after a decline in the previous period, fueled by digital advertising that has rebounded along with the American economy. The shares rose about 6% in extended trading.

All of which sent futures tumbling...

Erasing all the day's gains in the S&P and Dow...

Of course, it's early yet and we would strongly expect some dip-buyers to charge in. Just bear in mind that "large lot" sellers have been active all week...

Trade accordingly.

 

Daily Briefing - October 29, 2020

Daily Briefing - October 29, 2020

Tyler Durden Thu, 10/29/2020 - 18:10
Managing editor, Ed Harrison, welcomes Stephen Kalayjian, chief market strategist of Ticker Tocker, to discuss the elevated levels of volatility and his forward outlook for markets over the coming months. With the U.S. election coming up in less than a week, Kalayjian describes how not only are markets are being worn down by the torrent of uncertainty surrounding policy outcomes with each respective administration, but also by how the sensitivity of this year’s election and the events that will unfold in the coming weeks are keeping markets on edge with COVID-19 exacerbating tensions further. He explains where he sees the opportunities and downside risk in U.S. equities in light of these circumstances and why the perception of economic growth in large cap tech stocks will propel their prices up further for the rest of 2020 through the beginning of 2021. Real Vision reporter Haley Draznin analyzes the U.S. economy's record GDP growth, but explains the real obstacles going forward that will slow the recovery, perhaps severely.

Report Alleges Trump Quashed Criminal Probe Into Turkish Bank That Funneled Billions To Iran

Report Alleges Trump Quashed Criminal Probe Into Turkish Bank That Funneled Billions To Iran Tyler Durden Thu, 10/29/2020 - 18:05

Prior bombshell claims in former national security advisor John Bolton's book released last summer alleging that President Trump had agreed to quash a federal probe into a Turkish state-owned bank as a personal favor to Recep Tayyip Erdoğan just got a major boost.

Bolton wrote of scandal-hit Halkbank that in a 2018 phone call after Erdoğan insisted the bank was innocent of sanctions-busting by funneling billions of dollars in cash and gold to neighboring Iran: "Trump then told Erdoğan he would take care of things, explaining that the [New York] southern district prosecutors were not his people but were Obama people, a problem that would be fixed when they were replaced by his people," according to the book.

Trump last summer slammed Bolton's presentation of events as "misleading" and "manipulative" but now a fresh New York Times investigation is spotlighting the scandal with new details of the fierce confrontation between top federal prosecutor in Manhattan Geoffrey Berman and Attorney General William Barr.

File image via AP

Berman balked when he was pressed by Barr to allow the Turkish state bank to cut a sweetheart deal despite key individuals - some with close ties to Erdogan himself - still being under active investigation. The pressure from the US administration was also unusual given the strong suspicions Halkbank was secretly helping finance Iran's alleged push to obtain nuclear weapons

The NY Times details:

When Mr. Berman sat down with Mr. Barr, he was stunned to be presented with a settlement proposal that would give Mr. Erdogan a key concession.

Mr. Barr pressed Mr. Berman to allow the bank to avoid an indictment by paying a fine and acknowledging some wrongdoing. In addition, the Justice Department would agree to end investigations and criminal cases involving Turkish and bank officials who were allied with Mr. Erdogan and suspected of participating in the sanctions-busting scheme.

Mr. Berman didn’t buy it.

"This is completely wrong," Berman later complained to DOJ lawyers. "You don’t grant immunity to individuals unless you are getting something from them — and we wouldn’t be here."

"This is not how we do things at the Southern District," he would also tell Barr directly amid the negotiations in which top bank officials seemed to think that Trump and Erdogan's relationship gave them immense leverage. 

"That is not how we do things in the Southern District."

Berman's reported reaction when Barr pressured him to drop charges against Erdogan's cronies, including the Turkish strongman's ex-economy minister Zafer Caglayan.

Caglayan got up to $50M in bribes, per a key govt witness pic.twitter.com/4rnUR9tQrK

— Adam Klasfeld (@KlasfeldReports) October 29, 2020

According to the Times report:

Among the defendants with charges pending were Halkbank’s former general manager, Suleyman Aslan, and Turkey’s former economy minister, Mehmet Zafer Caglayan.

The suggestion that the Justice Department would offer Turkish officials protection from criminal charges, even without their agreement to assist in the investigation, was unacceptable and unethical, Mr. Berman argued, according to lawyers close to the investigation. Justice Department policy specifically says that criminal conduct by individuals is not resolved when a company admits wrongdoing.

At one point Barr argued that settling the issue without charges would help enforce US sanctions law while also ensuring the positive American-Turkish relationship at a moment of multiple sensitive national security priorities at risk in the Middle East. This was also at a moment of intense Turkish lobbying on capitol hill which had already been in full swing for years.

Berman pushed through undeterred and announced charges against Halkbank in Oct. 2019, saying the "bank’s audacious conduct was supported and protected by high-ranking Turkish government officials, some of whom received millions of dollars in bribes to promote and protect the scheme." The indictment listed charges of money laundering, bank fraud and conspiracy to violate the Iran sanctions

It was considered a direct affront to Erdogan and the special relationship with Trump.

A Halbank branch in Istanbul, via Bloomberg

As the Times writes further, "In June, eight months after the indictment was returned, Mr. Trump fired Mr. Berman. Justice Department officials cited his handling of the Halkbank matter, including his blocking of the proposed global settlement, as a key reason for his removal."

Strangely, the whole episode and pressure exerted from the administration in what was perceived as ultimately an attempt to please Erdogan ran completely counter to what otherwise has been the White House's top foreign policy priority of 'maximum pressure' on Iran. Bolton had previously described the apparent contradiction in priorities in his memoir as Trump giving "personal favors to dictators he liked" so that favors would be returned at key junctures down the road. 

These contradictions were somewhat resolved once the US and Turkey clashed over Syria and the fate of US-backed Kurds. "In the case of Halkbank, it was only after an intense foreign policy clash between Mr. Trump and Mr. Erdogan over Syria last fall that the United States would proceed to lodge charges against the bank, though not against any additional individuals," NY Times concludes. "Yet the administration’s bitterness over Mr. Berman’s unwillingness to go along with Mr. Barr’s proposal would linger, and ultimately contribute to Mr. Berman’s dismissal."

Chicagoans Categorically Reject Progressive/BLM Demands To Defund The Police

Chicagoans Categorically Reject Progressive/BLM Demands To Defund The Police Tyler Durden Thu, 10/29/2020 - 17:45

By Ted Dabrowski, John Klingner and Julie Schmidt of Wirepoints

While Chicagoans share many concerns over the city’s policing practices, 79% want the police to spend the same amount of time or more in their neighborhoods. That’s one of the key findings of a new Wirepoints/Real Clear Opinion Research poll that looked at a range of attitudes in Chicago on policing, race and Mayor Lori Lightfoot’s performance.

The desire for more police holds true across the city’s North (76%), South (80%) and West Sides (85%), as well as across whites (79%), blacks (77%) and Hispanics (87%).

Only 15% of blacks and 10% of Hispanics citywide said they want the police to spend less time in their neighborhoods.

The Wirepoints/RCOR poll surveyed 895 registered voters in Chicago from September 26th through October 4th using a mixed phone and online methodology. The margin of error is +/- 3.28 percentage points at the 95% confidence level.

Although Chicagoans overwhelmingly indicated they want more police, they were also very clear in their desire for better-quality policing. Half (51%) of all Chicagoans polled said they believe the Chicago Police Department is currently handling its job badly. More than six out of ten black residents (63%) held that view.

More than a third (35%) of all respondents felt they would not be treated respectfully in an encounter with police, a percentage that jumps to 54% among black residents.

The polling also finds that while 61% of residents approve of the job that Mayor Lightfoot is doing, some of her lowest issue performance ratings come in how she is dealing with police reform, gun violence and violent crime.

Chicagoans support both BLM and more policing

George Floyd’s death and the subsequent protests expanded the influence of Black Lives Matter across the country, including in Chicago. Unsurprisingly, more than three-quarters (76%) of surveyed Chicagoans reported they strongly support or somewhat support BLM. Black Chicagoans maintained the highest support for BLM (86%), followed by whites (74%) and then Hispanics (61%). Geographically, South Side support of BLM is the highest (83%).

But when Chicagoans were asked directly if they support defunding the police, only 39% said they were in favor, while 51% were opposed. Opposition to defunding exceeded support in every region, with North Side residents expressing the most opposition (57% oppose / 36% support).

Along racial/ethnic lines, opposition exceeded support slightly among blacks (46% oppose / 45% support) and most strongly among Hispanics (55% oppose / 30% support).

The support for BLM has also failed to translate into political support for wholly disbanding the CPD. Only 26% of Chicagoans polled would be more likely to vote for city council members that support disbanding the police, while 37% would be less likely to vote for them. Even fewer South Siders (21%) would be more likely to vote for members supporting disbanding.

By race, whites and Hispanics were most opposed to politicians supporting disbanding the CPD, with 43% and 41% saying they would be less likely to vote for a council member that pushed disbanding, respectively. Black residents were at 27%.

Instead of less police presence, most Chicagoans polled want more officers on the street. A vast majority (79%) of voters indicated they wanted police to spend more or the same amount time in their neighborhood.

The desire for additional policing was strongest on the South and West Sides, with more than half (57%) of residents in both areas wanting more police presence in their neighborhoods despite their concerns about current CPD practices. The number of Chicagoans polled who want police to spend less time amounted to less than 15% of those surveyed. On the West Side, only 9% of those polled wanted less police.

Chicagoans want better-quality policing

When questioned on a variety of topics, including job performance, systemic racism, police behavior, general safety and more, a majority or sizable minority of Chicagoans showed they have negative opinions of and/or have suffered negative encounters with Chicago officers.

Chicagoans’ overall negative rating of the CPD (51%) varied widely by geography. More than half of citizens from the North Side (54%) and the West Side (51%) said the CPD was doing a good or excellent job, while only 32% of voters from the South Side said the same.

When asked what needs to be reformed in the department, systemic racism or a few bad apples, nearly half of all those polled (45%) chose systemic racism. Hispanic residents were least likely to say systemic racism (33%) while black residents were the most likely (57%).

When asked how they thought they would be treated by officers, more than a third of Chicagoans (35%) said they were not very or not at all confident they would be treated with courtesy and respect. And in a similar vein, one in five of those surveyed (19%) said that seeing a police officer made them feel less safe.

In summary, while white and Hispanics ultimately have a mixed view of the city’s police force, black residents report more negative opinions/experiences:

Mayor Lightfoot has her work cut out for her on race and public safety

Of the 61% of respondents who approve of the job Mayor Lightfoot is doing, Chicago’s white residents gave her the highest marks (68%), followed by blacks (63%) and then Hispanics (48%).

Her biggest support came from the West Side, where 69% of responders approved of her performance. South Side residents favored her performance the least, giving an approval rating of 57%.

On individual issues, Mayor Lightfoot achieved her best ratings on her handling of the Coronavirus (58% excellent or good; 39% not so good or poor) and economic development (50% excellent or good; 37% not so good or poor). However, her ratings on those related to race relations and public safety are lower.

Lightfoot’s handling of public safety has an approval rating of 46%. Her overall approval on racial justice is 44%. On police reform, 39%. And just 31% on gun violence.

Her lowest approval ratings come from black Chicagoans. Just 26% approve of the way the mayor is handling both violent crime and gun violence.

DoubleLine: Digital Currencies Will End The Dollar's Status As The World's Reserve Currency

DoubleLine: Digital Currencies Will End The Dollar's Status As The World's Reserve Currency Tyler Durden Thu, 10/29/2020 - 17:25

We most recently described the Fed's stealthy plan to deposit digital dollars to "each American" during the next crisis as an unprecedented monetary overhaul, but more importantly, a truly stealthy one: there has barely been any media coverage of what may soon be a money transfer by the Fed - a direct stimulus to any and all Americans - bypassing the entire Legislative branch in an attempt to spark inflation after years of losing the war with deflation.

That's why two weeks ago we we delighted to read that none other than Jeff Gundlach's DoubleLine, one of the highest profile asset managers today, published a paper authored by fixed income portfolio manager Bill Campbell exposing what it called "The Pandora's Box of Central Bank Digital Currencies", in which it echoed our claims, writing that "such a mechanism could open veritable floodgates of liquidity into the consumer economy and accelerate the rate of inflation. While central banks have been trying without success to increase inflation for the past decade, the temptation to put CBDCs into effect might be very strong among policymakers. However, CBDCs would not only inject liquidity into the economy but also could accelerate the velocity of money. That one-two punch could bring about far more inflation than central bankers bargain for."

Alas, that was not enough to bring the topic of central bank digital currencies into the mainstream financial media, which is perhaps understandable for two reasons: i) everyone's attention is glued to the outcome and the implications of the election and ii) most media members think of CBDCs as some useless version of bitcoin, when nothing could be further from the truth.

So perhaps in hopes of attracting much needed attention to just how profound the monetary overhaul that is quietly taking place behind the scenes, Doubleline's resident digital currency expert, Bill Campbell has penned a follow up note to his original report, in which he explains in stark and vivid clarity what is about to happen. In a nutshell, "the world’s central banks and the Bank of International Settlements (BIS) envision a network of multiple cross-border payment systems featuring direct bilateral exchanges in the world’s different currencies. Such a regime would discard the decades-long mediation through the world’s reserve currency, the U.S. dollar." In short, central banks are preparing to launch cross-border payment systems which represent a new global order which poses a "major threat to the dollar and its status as the world’s reserve currency."

Below we republish the full note in whole due to its accurate and succinct assessment of how profoundly CBDCs will change the existing monetary architecture once they are launched in a few years (or earlier):

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Bilateral Digital Currency Payments and the Twilight of the Dollar

by Bill Campbell, fixed income Portfolio Manager at DoubleLine (link)

If launched, central bank digital currencies (CBDCs), as I have recently warned, will put at risk the independence of monetary policy and what little is left of fiscal discipline within their borders of circulation.1 Central banks are not stopping at the replacement of money as we have known it. In conjunction with their developmental work on digital currencies proper, monetary authorities are devising a new structure for electronic payments to sweep aside the decades-long framework for payment settlements, both domestic and international. The world’s central banks and the Bank of International Settlements (BIS) envision a network of multiple cross-border payment systems featuring direct bilateral exchanges in the world’s different currencies. Such a regime would discard the decades-long mediation through the world’s reserve currency, the U.S. dollar. This paper examines implementation plans for cross-border payment systems and the threat this new global order would pose to the dollar and its status as the world’s reserve currency.

King Dollar: A Brief History

The dollar has stood as the world’s reserve currency since taking that crown from the British pound in 1944. In July of that year, delegates from 44 nations met in Bretton Woods, N.H., convening the United Nations Monetary and Financial Conference, where they reached a series of agreements for the post-WWII international monetary system. The dollar formed the monetary linchpin of the new order. Participating nations pegged their currencies to the U.S. dollar and in exchange received the privilege to redeem dollars in gold from the U.S. (the world’s largest holder of gold reserves) at the congressionally set rate of $35 an ounce. This started a period of “exorbitant privilege” for the U.S., to quote former French Presidents Charles de Gaulle and Valéry Giscard d’Estaing. Ever since then, thanks to the dollar’s reserve status, the U.S. can run a balance-of-payments deficit without the need to adjust domestic policy in order to settle its international trade bill. Because most international trade is transacted in dollars, which I explain in more detail below, in the most-extreme cases, the U.S. can print dollars to settle its balance of payment needs.2 All other nations must purchase dollars to fund their imports, and one way to attract foreign capital is with high real interest rates (interest rates above the domestic rate of inflation). On the margin, tighter monetary policy slows growth and compresses imports while attracting foreign capital. The U.S. doesn’t face that trade-off thanks to the dollar’s privileged status as the world’s reserve currency.

By the end of the 1960s, rising inflation and a surplus of overseas dollars had made dollar-gold convertibility unsustainable, and President Richard Nixon unilaterally canceled it on Aug. 15, 1971.3 The “closing of the gold window” effectively doomed the system of fixed currency exchange rates elaborated at Bretton Woods. By 1973, the regime of fixed exchange rates gave way to free-floating exchange rates. Despite de facto nullification of Bretton Woods, the U.S. dollar has remained unquestioned as the world’s reserve currency. Most of the world’s trade is transacted in dollars, with the majority of commodities traded in dollars. According to the International Monetary Fund, the dollar plays a dominant role in global invoicing. Through April 2020, the BIS reported, “The US dollar retained its dominant currency status, being on one side of 88% of all trades. The share of trades with the euro on one side expanded somewhat, to 32%.” The Japanese yen ranked third, with the currency being used on one side of 17% of all trades.4

The grumblings of French heads of state and other critics notwithstanding, a reserve currency is useful. (Figure 1) It facilitates global transactions, investments and international debt issuance, and interest payment and repayment by acting as a common denominator accepted by all countries. However, new conditions might be converging to depreciate the dollar in the forex markets and even one day topple its crown as the world’s reserve currency. In that event, the past of the British pound might not be prologue for the dollar. If central banking and the BIS dethrone King Dollar, I suspect no single currency will seize the crown of reserve currency. Instead, cross-border payments would be mediated by a conglomeration of bilateral arrangements.

Admittedly, for countries outside the U.S., such a system offers a very positive, even compelling feature: All countries would be able to settle their import bills in their own currencies, a privilege afforded predominantly to the United States and, to a lesser but noteworthy extent, the 19 countries constituting the eurozone and Japan. Even these countries, however, are obliged to settle payments for certain non-U.S. imports, notably oil and other commodities, in dollars.

SWIFT and Usurpers in the Wings

A key to the longevity of the dollar’s reign as the world’s reserve currency is its occupation as the principal medium of exchange by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the dominant provider of cross-border payment settlements. On May 3, 1973, which is to say, around the time fixed-rate forex regimes gave up the ghost, SWIFT was founded in Brussels with the support of 239 banks in 15 countries. Today, according to its website, the company connects more than 11,000 banks, securities organizations, market infrastructures and corporations in 200 countries. With the propagation of blockchain and cryptocurrency technologies, SWIFT faces fair and inevitable competition from new players in the private sector as well as older competitors in the business of the settlement of cross-border payment orders.5 SWIFT has been updating its infrastructure as well. In January 2017, the company rolled out its global payments innovation (gpi). In 2019, cross-border transfers via gpi exceeded $77 trillion, accounting for 56% of all cross-border payments for that year and 65% of SWIFT’s total cross-border payments, making gpi by far the most-used messaging system for international payment in the world.6

Whatever its resilience or vulnerability to private-sector challengers, SWIFT’s dominance faces a serious threat from outside the private sector – namely, the central banks, coordinated by the BIS. In a recently issued paper, the BIS and cosignatories, including the U.S. Federal Reserve Board of Governors and the European Central Bank, stated, “Central bank innovation is an opportunity for cooperation. Simultaneous research and exploration of CBDC by central banks could inform ways to improve cross-border payments.”7 The BIS has been spearheading research into “faster, cheaper, more transparent and more inclusive cross-border  payment services [which] would deliver widespread benefits for citizens and economies worldwide, supporting economic growth, international trade, global development and financial inclusion.”8 The BIS has acknowledged that, despite technological advances in creating a new cross-border payments infrastructure, some of these central bank initiatives “are still in their design phase and others remain theoretical.”9 In a working paper published by the BIS, authors Raphel Auer, Giulio Cornelli and Jon Frost wrote, “Central banks are considering multiple technological options simultaneously, current proofs-of-concept tend to be based on distributed ledger technology (DLT) rather than a conventional technological infrastructure.”10 However, the landscape is quickly changing as more central banks scale up research into payment systems.

We have already started to see movement on these initiatives. China and Russia have already rolled out competing settlement systems to SWIFT, and both are looking into more bilateral settlement capabilities with their trading partners. In 2014, Russia implemented an alternative to SWIFT called the System for Transfer of Financial Messages (SPFS). SPFS was seen as a response to the U.S. using its dominance in the global financial system to implement sanctions on Russia, its companies and individuals. In 2015, China launched its Cross-Border Interbank Payments System (CIPS). Stung like Moscow by U.S. financial sanctions, Beijing is encouraging its financial sector to make the switch from SWIFT. As more central banks work on their own settlement systems, Russia and China have shown that implementation can be a realistic goal.

“Uneasy lies the head that wears a crown.”

I foresee several big implications of the implementation of a new global payments system based on the bilateral regimes, all of which would put structural pressure on the dollar.

First, such a decentralized global payments system would take the world a big step toward removing the need for the dollar, or for that matter any other currency, to remain as the world’s reserve currency. Cross-border counterparties would settle payments in bilateral transactions in their own currencies, bypassing the dollar as an intermediary. The U.S. imports much more than it exports. These large current-account deficits create the need to have foreigners put their excess savings into U.S. assets to help stabilize the dollar. If foreign savings cease flowing into the U.S., the dollar will depreciate unless the import-export imbalance is corrected. (Figure 2)

Second, global central banks would no longer need to stockpile dollars and instead could diversify their foreign exchange (FX) reserves to a mix more commensurate with the countries with which they trade and conduct financial transactions. Dollar debt remains a large source of financing for many countries around the globe, but sovereign, corporate and other institutional borrowers have already begun to move some of this external financing into other denominations such as the euro and the yen.

Third, disintermediation of the dollar in cross-border payments could erode the greenback’s central role in pricing commodities and invoicing global trade. This would reduce a structural buyer of dollars. Outside the U.S., central banks have been forced to build up their dollar FX reserves in order to prevent a disorderly sell-off if exporters do not repatriate their dollar profits. In addition, in a reversal of norms in place since Bretton Woods, non-U.S. central banks might look to increase their holdings of gold relative to their dollar reserves.11 Central banks might increase the portion of their reserves allocated to gold, whose finite supply could help reduce debasement fears with respect to infinitely creatable CBDCs.

The End of a Single World Reserve Currency?

With the exception of two world wars in the first half of the 20th century, the world’s financial systems since 1815 have calibrated their international payments and banking reserves to a single reserve currency, first the British pound and the U.S. dollar since 1944. The nearly 80-year absence of viable alternatives has left Americans complacent about the dollar’s perpetuity as the world’s reserve currency. Outside the U.S., however, central banks and governments appear to foresee a future untethered from the dollar. The technology for such a delinking is here or soon will be. Central banks will possess the infrastructure to match their FX reserves to the currency mix and weightings of their balance of payments – and one day displace the dollar without the need to crown a new reserve currency.

Policymakers continue to steer intently into the uncharted waters of central bank digital currencies and decentralized global payment systems. Despite most of these initiatives still being in their theoretical design phase, global coordination among central banks will speed up their development and potential implementation. Armed with these currency and payment technologies, the world could rescind the exorbitant privilege the U.S. has enjoyed as printer of the world’s reserve currency and place structural pressure on the dollar to depreciate.

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Citations:

1    Bill   Campbell,   “The   Pandora’s   Box   of   Central   Bank   Digital   Currencies,”   DoubleLine.com,  Oct.  6,  2020.  https://doubleline.com/dl/wp-content/uploads/The-Pandoras-Box-of-CB-Dig…

2  The balance of payments includes all transactions made between entities in one country and the rest of the world over a defined period of time.

3    “Foreigners’  liquid  gold  claims  on  US  dollars  increased  tenfold  from  around  $7 billion in 1953 to around $70 billion in 1971. Over the same period US gold reserves  fell  from  over  $22  billion  to  less  than  $11  billion.  The  inescapable  decision facing the US authorities was taken on 15 August 1971 when the convertibility of the dollar at the fixed price of $35 per ounce of gold was ended,”  Glyn  Davies,  A  History  of  Money (4th edition: revised by Duncan Connors; 2016), pp. 465-466. University of Wales Press

4  Triennial Central Bank Survey, p. 3, Monetary and Economic Department, Bank for International Settlements (BIS), Sept. 16, 2020. https://www.bis.org/statistics/rpfx19_fx.pdf

5  See, for example, Martin Arnold, “Ripple and Swift slug it out over cross-border  payments,”  Financial  Times,  June  5,  2018.  https://www.ft.com/content/631af8cc-47cc-11e8-8c77-ff51caedcde6

6  “SWIFT gpi Transferred Over $77T In 2019,” Global Payments, February 11, 2020. https://www.pymnts.com/news/international/global-payments/2020/swift-gp…

7  “Central bank digital currencies: foundational principles and core features,” Oct. 9, 2020, p. 3. Bank of Canada, European Central Bank, Bank of Japan, Sveriges Riksbank, Swiss National Bank, Bank of England, Board of Governors Federal Reserve System and the Bank for International Settlements. https://www.bis.org/publ/othp33.pdf

8  “Enhancing cross-border payments: building blocks of a global roadmap,” Committee on Payments and Market Structures, BIS, July 2020. https://www.bis.org/cpmi/publ/d193.pdf

9  Ibid, page 4.

10  Raphael Auer, Giulio Cornelli and Jon Frost, “Rise of the central bank digital currencies: drivers, approaches and technologies,” BIS, August 2020, p. 5. https://www.bis.org/publ/work880.pdf

11   See  Bill  Campbell,  “The  Pandora’s  Box  of  Central  Bank  Digital  Currencies,”  DoubleLine.com,  Oct.  6,  2020.  https://doubleline.com/dl/wp-content/uploads/The-Pandoras-Box-of-CB-Dig…

Columbia Prof Says American Flag Is A "Symbol Of Genocide"

Columbia Prof Says American Flag Is A "Symbol Of Genocide" Tyler Durden Thu, 10/29/2020 - 17:05

Authored by Ben Zeisloft via Campus Reform,

A Columbia University School of Social Work adjunct lecturer said that the American flag is a symbol of genocide.

Responding to a tweet stating that “the hammer and sickle is a symbol of genocide” and comparing the communist emblem to the swastika, Anthony Zenkus placed the American flag in the same category.

“The American Flag is a symbol of genocide,” said Zenkus.

“Unless centuries of slavery and the vanquishing of Native American nations doesn't figure into your equation.”

The American Flag is a symbol of genocide. Unless centuries of slavery and the vanquishing of Native American nations doesn't figure into your equation. https://t.co/cSmea0zcNX

— Prof Zenkus (@anthonyzenkus) October 16, 2020

Zenkus’ faculty profile explains that he is an “activist on issues of racial justice, income inequality, and climate justice.” He was additionallytrained by Vice President Al Gore as a presenter in his Climate Reality Project, and has been an organizer with Occupy Wall Street, the fight for a $15 minimum wage, and an ally in the Movement for Black Lives.”

Similarly, a postdoctoral researcher at Brown University, Carycruz Bueno, tweeted that vacation rental company Airbnb “doesn’t understand the trauma” of Trump signs for a Black person, as previously reported by Campus Reform. A Virginia Tech professor also recently suggested that Vice President Mike Pence's use of the phrase "the American people," during the vice presidential debate was also racist.

The researcher even said that the American flag can be “used in many places to scare Black people."

Campus Reform reached out to Zenkus to ask for additional comments but did not receive a response in time for publication. 

AAPL Plunges After iPhone Sales Miss, China Revenues Plummet, Lack Of Forecast

AAPL Plunges After iPhone Sales Miss, China Revenues Plummet, Lack Of Forecast Tyler Durden Thu, 10/29/2020 - 16:52

Moments after earnings disappointments by Twitter and Amazon, the world's largest company, Apple whiffed when it reported Q4 revenue and earnings that beat expectations, but a big miss on iPhone revenues, a collapse in Chinese sales and the lack of guidance is why the stock is tumbling after hours.

Below are the highlights from Q4:

So far so good. But where things got ugly was the breakdown in unit sales and here there was a rather painful miss in iPhone revenue which came in at $26.44 billion, below the estimate of $27.06 billion, and down 21% from the $33.3BN a year ago. Wall Street was not amused. Other segments generally did better than expected as follows:

And visually, it is becoming quite clear that the star of the iPhone - which peaked in 2017 - has now set.

One wonders if the peak in iPhone sales isn't also the peak of the company's revenues, as the following chart would suggest.

And while AAPL's service revenue was clearly impressive, surging to a record $14.55BN, and above the $13.87BN estimate...

... this was more than offset by another major flashing red alert, namely the collapse in China revenues, which plunged a whopping 29% in Q4...

... from $11.134BN to just $7.9BN, the lowest for the region since at least 2015.

And another way to visualize the plunge in China sales in context:

And one final reason why investors were less than excited: for yet another quarter, AAPL refused to provide a forecast, suggesting that the covid storm has much more to go.

"Our outstanding September quarter performance concludes a remarkable fiscal year, where we established new all-time records for revenue, earnings per share, and free cash flow, in spite of an extremely volatile and challenging macro environment,” CFO Luca Maestri said in the statement.

Echoing the enthusiasm, CEO Tim Cook was also upbeat, saying that "Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and Services,” and adding that “despite the ongoing impacts of COVID-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5Genabled iPhone lineup, has been tremendously positive.”

However, as Bloomberg predicts, "pretty much every question on the upcoming call is going to focus on the iPhone outlook and what happened in China." Cook’s briefest of references to the early response to “all our new products, led by our first 5G enabled iPhone lineup, has been tremendously positive" is likely going to need a lot of expanding on.

And indeed, shareholders did not see things even remotely as optimistically as Tim Cook, and the stock plunged as much as 5% after hours No forecast, weak iPhone revenue and a very bad quarter in China are what’s giving investors pause here.

 

Peter Schiff: The Fed Has Never Been Right

Peter Schiff: The Fed Has Never Been Right Tyler Durden Thu, 10/29/2020 - 16:43

Via SchiffGold.com,

Peter Schiff delivered a key-note speech at the Virtual Investor Day Conference. He walked through the history of the Federal Reserve’s monetary policy over the last several decades and explained the inevitable outcome. Peter’s recap of Fed history leads you to an undeniable conclusion: the Federal Reserve has never been right. And it has set us up for an even bigger crisis.

Peter opened his talk saying that he thinks we are entering the final chapter of the book Alan Greenspan started to write.

And I have a feeling he had an understanding of how badly it was going to end. But unfortunately, a lot of people who have been adding pages or chapters to that book since Greenspan resigned really don’t have any idea what’s coming.”

Greenspan started the book by unleashing the loose money policy that blew up the dot-com bubble.

When that bubble popped, instead of admitting his mistakes, Greenspan ignored them and tried to revive the economy by inflating a bigger bubble in the real estate market than the bubble that had just popped in the stock market. And the Fed succeeded in inflating that bubble. But that was not a success. It was a failure.”

Peter reminds us that he warned that the Fed policy was distorting the economy. He knew that it was creating a bubble economy. People were using the inflated value of their homes as ATMs and that drove consumer spending. People were living beyond their means. Nobody was saving.

So, the whole economy was distorted by the malinvestments and bad decisions that were being made as a result of artificially low interest rates.”

When the Fed tried to normalize, the bubble popped, the mortgage market blew up, and that gave us the Great Recession.

In the wake of the 2008 financial crisis, the Federal Reserve repeated the process, dropping interest rates to zero and launching quantitative easing. Ben Bernanke promised QE was just temporary – that the Fed was not monetizing the debt. He promised the Fed would shrink its balance sheet once the crisis passed. At the time, Peter said it was impossible. He said even if the Fed tried to normalize rates and shrink its balance sheet, it would fail.

Everything the Fed said about their ability to normalize rates and shrink the balance sheet was wrong. I said they were wrong as they were saying it. They never were able to normalize interest rates. They never came close to returning the balance sheet to pre-crisis levels.”

In Q4 2018, the Fed abandoned rate hikes at about 2.5% – not even close to normal. They called off quantitative tightening. By 2019, the Fed was back to rate cuts and the launched QE, all the while claiming it wasn’t QE. The Fed told us the pivot back to loose monetary policy was only temporary, calling it a “midcourse correction.”  But Peter said we were going back to zero and that’s exactly what happened.

And here we are today with the central bank running QE infinity and saying rates will stay at zero for years.

We are now the banana republic that Ben Bernanke assured us we would never become.”

Peter said he went through the history of Fed failures to make a point that should be pretty obvious.

The Federal Reserve has never been right. Everything they have said about the efficacy of their policies, what their policies would create, and their ability to reverse them or unwind them, has been wrong. And it’s amazing how consistently wrong they have been.”

And now they are pushing toward the logical conclusion.

We are headed for a US dollar crisis and a sovereign debt crisis. The magnitude of this crisis will be unlike anything we’ve ever experienced. Because this is not just mortgages blowing up. This is the credit of the United States government. This is the risk-free asset becoming the most toxic asset on the planet. And it’s not just US Treasuries that are going to collapse, but it’s the entire US-denominated bond market which is built on top the foundation of US Treasuries. So, Treasuries go — it all goes — corporate bonds, muni bonds, mortgages. Any debt instrument that is denominated in US dollars is going to collapse.”

So where will people run?

Gold.

The world is going to return to gold-backed paper money.”

'Massive Traffic Jams' Across Paris As People Flee Ahead Of Second COVID Lockdown 

'Massive Traffic Jams' Across Paris As People Flee Ahead Of Second COVID Lockdown  Tyler Durden Thu, 10/29/2020 - 16:32

On Wednesday, French President Emmanuel Macron announced that France would enter a full lockdown from midnight on Thursday until the end of November due to the second wave of the coronavirus pandemic. 

With hours to go before the month-long national lockdown takes effect, videos have surfaced on Twitter, showing massive traffic jams of people trying to escape the city as lockdowns go into effect. 

"Traffic is barely moving in every direction as far as the eye can see. Lots of honking and frustrated drivers," said one Twitter user. 

Incredible traffic jam in Paris as people try to leave the city before 9 pm curfew and before confinement begins at midnight. Traffic is barely moving in every direction as far as the eye can see. Lots of honking and frustrated drivers. pic.twitter.com/6Zn2HCxuPl

— Michael E. Webber (@MichaelEWebber) October 29, 2020

Another Twitter user suggests "traffic jams around Paris tonight" could be due to "people leaving the capital before lockdown."

Repeating in English - lots of traffic jams around #Paris tonight. Not clear but could be people leaving the capital before #LockDown2 kicks in. #France #confinement2 pic.twitter.com/UGa13x8JVe

— S Kar-Gupta (@SKGLondonTown) October 29, 2020

Using real-time data to confirm, that, in fact, the videos posted by citizen journalists in Paris are accurate - TomTom traffic data shows much of the city is in serious gridlock. 


TomTom real-time data shows a massive spike in Traffic Thursday night, the highest congestion so far this week, as lockdowns are only a few hours away. 

While people flee Paris ahead of lockdowns, it wouldn't be shocking if anti-lockdown protests flared up across the city this weekend. 

Amazon Slides Despite Crushing Expectations, Guiding Sharply Higher On AWS Growth, Margin Concerns

Amazon Slides Despite Crushing Expectations, Guiding Sharply Higher On AWS Growth, Margin Concerns Tyler Durden Thu, 10/29/2020 - 16:24

Heading into today's earnings call juggernaut which sees over $5 trillion in market cap report among just 4 companies (AAPL $1.9TN, AMZN $1.6TN, GOOGL $1.1TN, FB $800BN) Amazon had once again emerged as the one FAAMG stock that was viewed as the cleanest clean shirt among the uber-mega-cap techs (unlike Facebook and Google it has no risky ad exposure; unlike Apple it has no risky China exposure, unlike Microsoft its upside isn't capped) especially with its consensus eearnings estimates rising sharply in recent months...

... helping the stock soar 75% in 2020 hitting a new all time high, and a near record market cap of $1.6 trillion, roughly where it was during its Q2 earnings calls (which saw the company report blockbuster earnings and guide sharply higher) on expectations that the online retailer would be the biggest beneficiary of the transformation in US society to one where most work from home and just order random stuff online while conventional retailers rush to file for bankruptcy.

So was all this optimism - and stock price surge - justified? Well, apparently yes and bigly so because the company not only smashed earnings expectations for the second quarter in a row, but also reported net sales for the second quarter that beat the highest analyst estimate.

In other words, Amazon smashed both top and bottom line expectations. Not only that but Amazon's also delivered an impressive outlook:

Yet despite the stellar numbers the stock is lower after hours. How come?

One possible reason is that AWS revenue in Q3 was of $11.6BN, which while hitting estimates, resulted in a profit margin of 30.5%, slightly below the 31.0% in Q2. In recent months, analysts had been asking Amazon about investments in news sales efforts related to cloud computing, and it looks like Amazon is having to spend a bit more to sustain AWS revenue growth, which can worry investors about profitability. AWS profits help subsidize the rest of Amazon operations.

Another possible reason for the drop in shares after hours is that as Boomberg notes, "investors are worried about spending and profitability in the busy holiday quarter. Besides Covid-related expenses, Amazon will have to spend a lot expanding its delivery capacity to meet demand. Investors know customers will be spending. They are worried how much Amazon will have to spend to meet demand."

Meanwhile, AWS revenue growth continues to slow modestly:

That said, Amazon's projected Q4 revenue growth of 33.2% (taking the midline) was clearly just as impressive and indicates the company does not expect any headwinds, at least on the topline, although the company's operating income guidance which hints at a sharp drop in margins, is concerning.

And speaking of profit margins, after hitting 6.6% last quarter, the second highest in recent history, in Q3 margins dipped a bit to 6.0%...

... with Amazon's guidance suggesting that this number will drop further in Q4.

Some other highlights from the quarter:

Commenting on the results, Jeff Bezos said that “we’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season. Big thank you to our employees and selling partners around the world who’ve been busy getting ready to deliver for customers this holiday."

In a separate press release, Amazon says it hired over 400,000 people since the beginning of the year. It’s hiring and investing around the globe throughout the pandemic and is gearing up for the holiday season.

In kneejerk reaction, after initially jumping, AMZN stock has since slumped modestly after hours.

Twitter Tumbles After Massive User-Growth Miss

Twitter Tumbles After Massive User-Growth Miss Tyler Durden Thu, 10/29/2020 - 16:24

At first glance, Twitter's numbers look solid with big top- and bottom-line beats (notable after disappointing revenue in both Q1 and Q2):

But...there is a big red flag here, and that is Twitter’s user growth.

After adding 20 million new users in Q2, Twitter added just 1 million new users in Q3, and that’s despite the fact that most pro sports are back and we have a massive election in five days. Expectations were that Twitter would report growth of 9 million new users in the quarter so this is a definite miss.

This sent the stock down hard after hours...

In its earnings release, Twitter raises more concerns about the post-election environment::

As we approach the US election, however, it is hard to predict how advertiser behavior could change. In Q2, many brands slowed or paused spend in reaction to US civil unrest, only to increase spend relatively quickly thereafter in an effort to catch up. The period surrounding the US election is somewhat uncertain, but we have no reason to believe that September’s revenue trends can’t continue, or even improve, outside of the election-related window.

And additional concern is that Twitter says the new version of its MAP ad product (Twitter’s direct response ad product) has been delayed until 2021. The company said this was a top priority after Q1.

Developing...

Facebook Shares Pump'n'Dump Despite Crushing Earnings, Warns Of "Significant Uncertainty"

Facebook Shares Pump'n'Dump Despite Crushing Earnings, Warns Of "Significant Uncertainty" Tyler Durden Thu, 10/29/2020 - 16:16

Facebook shares pumped'n'dumped after hours following a dramatic top- and bottom-line beat by the social media company,  dismissing any concerns about social justice ad-spend boycotts.

"We had a strong quarter as people and businesses continue to rely on our services to stay connected and create economic opportunity during these tough times," said Mark Zuckerberg, Facebook founder and CEO.

"We continue to make significant investments in our products and hiring in order to deliver new and meaningful experiences for our community around the world."

Facebook’s revenue (3Q Rev. $21.47B, +22% Y/Y, Est. $19.84B) shows that the ad boycott from hundreds of big advertisers didn’t have a major impact. The company really relies on a lot of small advertisers, who don’t have many other places to place ads during covid. 3Q EPS also crushed it, printing $2.71 vs. $2.12 Y/Y, Est. $1.91

On the user side, Facebook claims the positive trends are continuing...

However, there was a user slip in the U.S. and Canada, its most lucrative ad market...

The CFO added that

"We expect our fourth quarter 2020 year-over-year ad revenue growth rate to be higher than our reported third quarter 2020 rate, driven by continued strong advertiser demand during the holiday season..."

But while FB shares initially spiked higher, they are fading fast now, perhaps after the CFO commented: "Looking ahead to 2021, we continue to face a significant amount of uncertainty."...

And this is with the help of a mere 4% effective tax rate...

One important thing from Facebook’s press release: The company received a big boost from the shift to online commerce, saying that online commerce is Facebook’s largest ad vertical. The CFO warns that if this changes, it would be a “headwind” for Facebook moving forward.

NY COVID-19 Hospitalizations Top 1,000, France Outlines Plan To Blunt Lockdown's Economic Impact: Live Updates

NY COVID-19 Hospitalizations Top 1,000, France Outlines Plan To Blunt Lockdown's Economic Impact: Live Updates Tyler Durden Thu, 10/29/2020 - 16:05

Summary:

* * *

Update (1546ET): New York Gov Andrew Cuomo has just reported that the state saw 2,499 new cases in the last 24 hours, while total hospitalizations broke above 1,000 to 1,085.

Today's update on the numbers:

Of the 168,353 tests reported yesterday, 2,499 were positive (1.48% of total).

Total hospitalizations are at 1,085.

Sadly, there were 19 COVID fatalities yesterday. pic.twitter.com/rRBMBlPrBJ

— Andrew Cuomo (@NYGovCuomo) October 29, 2020

The test positivity rate in the focus areas under NY's Micro-Cluster strategy is 3.24%.

The statewide positivity rate excluding these focus areas is 1.25%.

We continue to take strong action to respond to outbreaks and to stop the spread.

Mask Up.

— Andrew Cuomo (@NYGovCuomo) October 29, 2020

Meanwhile in France, Finance Minister Bruno Le Maire has promised the French people that the government will seek to limit the economic fallout from the new partial lockdown. Compared with the 30% slide during the first lockdown, Le Maire said the government is targeting a contraction from about half as much.

"The economic support of the state will be even stronger," Le Maire promised, adding that the government will make payments to struggling businesses out of a solidarity fund with €7 billion  and €6 billion fund for unemployment benefits. Businesses will also be able to delay payback of government loans by a year. Furthermore, all companies and retailers with 50 employees or fewer will be eligible for up to €10,000 in assistance.

* * *

Update (1040ET): A player for the New York Giants has tested positive for COVID-19. The player is self-isolating, according to a statement from the team, and contact tracing is being carried out. The rest of the team is practicing as normal on Thursday.

Here's the official statement:

"Late last night, we were notified that a Giants player tested positive for COVID-19. The player was immediately self-isolated, and the contact tracing process was initiated. All of the player's close contacts were identified and were informed to remain home today. Those individuals will participate in meetings remotely. We are working closely with the NFL's Chief Medical Officer regarding next protocol steps. Quest Diagnostics Training Center will remain open, and the rest of the team will follow their normal practice and meeting schedule."

* * *

Update (1000ET): Once again, Disneyland Paris is planning to close at the end of the day as the French government's new restrictions take effect.

Disneyland Paris will be taking reservations from between Dec. 19 and Jan. 3 as the company hopes the park will be open based on prevailing conditions and government guidance at that time.

Disneyland Paris reopened in July with additional health and safety modifications in place. Paris is the second Disney park forced to close a second time. Hong Kong Disneyland also reopened over the summer, but was forced to close a second time after cases in China began to rise. However, it reopened Sept. 25.

* * *

After Germany and France unveiled their plans to return to the most restrictive 'partial lockdown' conditions since the springtime quarantine period ended yesterday, a group of smaller European nations are following suit with Greece introducing a one-month lockdown after two days of record new cases.

"Tomorrow I will announce a new one-month action plan," said Greek Prime Minister Kyriakos Mitsotakis. Elsewhere in Europe, more restrictions are likely coming, with many looking toward Italy, where PM Giuseppe Conte has said he wants to use the next week to assess the efficacy of the most recent set of restrictions before deciding whether to take further action. But as things stand, with Italy reporting another record jump in new cases yesterday, many expect it to follow France and Germany into quasi-lockdown, while Spain sticks to a nationwide emergency order allowing local officials to manage their own restrictions.

Poland reported 20,156 new COVID-19 cases in the past day, a 7% jump from the prior record set one day earlier, and the third all-time record reached this week. Another 301 deaths were reported, bringing the total to 5,149, according to the Polish health ministry.

Source: Bloomberg

Romania also reported another record jump in cases, while Belgium reported a record number of virus hospitalizations.

With 5,924 COVID-19 patients currently hospitalized for COVID-19, Belgium has surpassed its springtime peak from April 6, as a record 743 patients were admitted on Wednesday, following a revised 690 on Tuesday.

Of those, 993 were in the ICU, which is still 20% below the peak of the first wave. Belgian health officials reported more than 100 deaths for the second day in a row.

In response, Brussels has ordered all nonessential hospital work to be postponed as the country's health system struggles to deal with the influx of patients. Croatia, in the Balkans, is asking doctors to come out of retirement to help treat the sick.

In the UK, where pressure is growing on the government to tighten restrictions even further, the number of new cases being reported daily is doubling every nine days or thereabouts. An estimated 960,000 people are carrying the virus on any given day in England. British health authorities said that the reproduction rate climbed to 1.6, from 1.2 when these figures were last published on Oct. 9. BoJo is trying to unveil a mass screening plan relying on rapid saliva tests to try and arrest the spread without resorting to another lockdown, but the pressure is growing nonetheless, led by government scientists with predictions showing untrammeled spread by December.

Globally, the world is on the cusp of topping 45 million confirmed cases, with 1,174,007 deaths confirmed as of Thursday morning in the US. The world saw more than 530k new cases confirmed during the 24 hours to Wednesday, according to Johns Hopkins data.

Europe is still reporting far more cases per day than the US.

Source: JPM

Here's some more COVID-19 news from Thursday morning and overnight:

Although daily case numbers have slowed from the peak seen in September, India has passed 8 million total cases after adding 49,881 confirmed cases in the past 24 hours, according to government data. The country has suffered the largest outbreak in the world after the US, and its death toll of 120,527 trails only the US and Brazil. However, talk about India surpassing the US as the worst-hit country in the world has subsided as US cases have surged once again, pushing the US close to the 9 million case mark as of Thursday morning (Source: Newswires).

China's biggest COVID-19 outbreak in months has reportedly been contained, according to Caixin. The outbreak in Kashgar, part of the northwestern Xinjiang region, where China's mass-detention program for million of ethnic Ughyer Muslims has been carried out. The infections were linked to a local garment factory, and authorities have ruled out the possibility of further spread (Source: Caixin).

South Korea confirms 125 new cases, down from 103 a day earlier. Total infections reach 26,271, with 462 deaths (Source: Nikkei).

Australia's COVID-19 hot-spot state Victoria reports only one new infection on Thursday, a day after it lifted a four-month lockdown in the city of Melbourne (Source: Nikkei).

Coronavirus infections in Iran have set a daily record of more than 8,000 new cases, official figures showed Thursday, after two straight days of record deaths from the pandemic (Source: AFP).

Iran reports 8,293 new coronavirus cases, by far the biggest one-day increase on record, and 399 new deaths (Source: Newswires).

China reports 47 new confirmed cases for Wednesday, up from 42 a day earlier and the highest daily increase in more than two months (Source: Nikkei).

Taiwan marked its 200th consecutive day without local transmission (Source: Newswires).

Singapore will lift border restrictions for visitors from mainland China and Victoria State in Australia from Nov. 6 as both regions “have comprehensive public health surveillance systems and displayed successful control over the spread of the COVID-19 virus,” according to a statement from the city-state’s civil aviation authority (Source: Bloomberg).

Moderna received $1.1 billion in customer deposits for the shots during the third quarter, which were booked as deferred revenue. The company is only slightly behind Pfizer Inc. and its partner BioNTech SE in the race for a Covid vaccine and has completed enrollment its 30,000-patient trial (Source: Bloomberg).

Stocks, Dollar, & Bitcoin Jump; Bonds & Black Gold Dump After Record GDP

Stocks, Dollar, & Bitcoin Jump; Bonds & Black Gold Dump After Record GDP Tyler Durden Thu, 10/29/2020 - 16:00

A better than expected record rebound in GDP prompted traders to buy the 'rumor' ahead of tonight's explosive set of earnings from FB, TWTR, AAPL, & AMZN with stocks running stops through gamma pivot levels, technical levels, and rolling over... At around 1315ET, the algos went wild...but a weak close as month-end looms...

As investors rushed in for FOMO...

But no bounce in Europe...

Source: Bloomberg

S&P Futs ran above the 3300 pivot and then took out yesterday's opening ledge stops before rolling over, tumbling back to that Gamma pivot...

Small Caps cluing to their 50DMA, S&P bounced off its 100DMA, Dow bounced off its 200DMA, Nasdaq remains below its 50DMA...

Momentum faded today as value rose marginally...

Source: Bloomberg

XOM held its dividend steady for the first time in decades (but didn't cut it) leaving its yield (in absolute and spread terms) at record highs...

Source: Bloomberg

FANG Stocks soared ahead of tonight's earnings extravaganza...

Source: Bloomberg

As opposed to yesterday's "Sell it all" day, today saw bonds dumped as stocks pumped...

Source: Bloomberg

But bonds made the headlines as an ugly 7Y Auction and reports of a big offering from Boeing (~$5bn) which would require rate-locks sparked a considerable spike in yields, basically erasing the week's yield drop...

Source: Bloomberg

10Y pushed back above 80bps but we can't help but a sense of deja vu all over again as after Boeing's issuance, we will see this pressure unwind...

Source: Bloomberg

Real yields soared higher today (gold largely shrugged it off) to its highest since July (still negative though)...

Source: Bloomberg

The Dollar jumped to 3-week highs before rolling over a little...

Source: Bloomberg

10Y Yields reversed at their 200DMA once again...

Source: Bloomberg

As the Euro tumbled on ECB promises of more money-printing...

Source: Bloomberg

EURUSD's drop stalled perfectly at the 100DMA however...

Source: Bloomberg

Cryptos were mixed today with ETH and BTC higher...

Source: Bloomberg

Bitcoin bounced higher off $13,000 once again...

Source: Bloomberg

WTI crashed to a $34 handle - 5 month lows...

Gold futures extended their losses below $1900...

 

Finally, we note that the market's fear of a contested election has subsided significantly...

 

UPS Suddenly Locates "Lost" Biden Evidence, Returning Docs To Tucker Carlson

UPS Suddenly Locates "Lost" Biden Evidence, Returning Docs To Tucker Carlson Tyler Durden Thu, 10/29/2020 - 15:45

Authored by Jack Phillips via The Epoch Times,

Delivery giant UPS confirmed Thursday it found a lost trove of documents that Fox News’ Tucker Carlson said would provide revelations in the ever-growing scandal involving Joe Biden’s son Hunter and his overseas business dealings.

UPS Senior Public Relations Manager Matthew O’Connor told Business Insider on Thursday afternoon that the documents are located and are being sent to Carlson.

“After an extensive search, we have found the contents of the package and are arranging for its return,” he said in a statement.

 “UPS will always focus first on our customers, and will never stop working to solve issues and make things right. We work hard to ensure every package is delivered, including essential goods, precious family belongings and critical healthcare.”

It came after Glenn Zaccara, UPS’s corporate media relations director, confirmed Carlson used the company to ship the materials before they were lost.

“The package was reported with missing contents as it moved within our network,” Zaccara said before they were located. “UPS is conducting an urgent investigation.”

During his Wednesday night broadcast, Carlson said that a UPS employee notified them that their package “was open and empty … apparently, it had been opened.”

“The Biden documents never arrived in Los Angeles. Tuesday morning we received word from our shipping company that our package had been opened and the contents were missing,” Carlson also remarked. “The documents had disappeared.”

On Tuesday night, Carlson interviewed former Hunter Biden associate Tony Bobulinski, who claimed that the former Democratic vice president could be compromised by the Chinese Communist Party due to Hunter and brother James Biden’s business dealings in the country.

Joe Biden has not responded to Bobulinski’s allegations. Last week during his debate with President Donald Trump, he said he had “not taken a penny from any foreign source ever in my life.”

Biden’s campaign earlier this month said Biden never had a meeting with an executive at a shady Ukrainian gas company, Burisma Holdings, while he was the vice president and his son sat on the board of the firm. A report from the New York Post, citing alleged Hunter Biden emails, suggested Hunter Biden had arranged a meeting between him, the executive, and Joe Biden.

It’s now possible that a special counsel will investigate Joe Biden should he win the presidency.

“You know, I am not a big fan of special counsels, but if Joe Biden wins the presidency, I don’t see how you avoid one,” Senate Homeland Security Chairman Ron Johnson (R-Wisc.) said. “Otherwise, this is going to be, you know, tucked away, and we will never know what happened. All this evidence is going to be buried.”

UPS did not provide further details about the apparent mishap.

Record Early Voting In Texas Gives Democrats Hope Of Flipping State Blue

Record Early Voting In Texas Gives Democrats Hope Of Flipping State Blue Tyler Durden Thu, 10/29/2020 - 15:30

A massive surge in early voting across Texas has given Democrats hope that they can flip the historically red state blue.

The Lone Star sate - which has seen a flood of Californians over the last several years, has seen voting records shattered in major cities. From Austin to Houston, polls suggest that Joe Biden may be within striking distance of President Trump - something which hasn't happened in Texas since 1976.

And according Wednesday's Cook Political Report, Texas has now moved from "leans Republican" to "toss up" - which comes as Biden running mate Kamala Harris embarks on a tour of Houston, McAllen and Fort Worth this week. 

Almost 8.5 million Texans had cast ballots by Wednesday, representing about 95% of the entire vote in 2016. Rapidly growing and increasingly diverse suburbs are the sites of some of the biggest upticks in early voting, and Democrats point to a surge in female voters as cause for optimism. Unmarried women make up a third of the Texans voting in this election who didn’t cast a ballot in 2016, the party’s state headquarters said earlier this week. -Bloomberg

"We as Democrats are voting like our lives depend on it," said Cynthia Ginyard, Fort Bend Democratic Party chair, a fast-growing county which includes sprawling Houston suburbs.

Across the country, nearly 80 million early votes have been cast - including 27.5 million in-person votes and 51.3 million mail-in ballots. There are currently 39.6 million mail-in ballots outstanding. Texas, California and Florida have led the charge.

Graphic via electproject.gitbub.io

In Travis County, TX - which includes Austin and its suburbs, early voting has already exceeded the total of all ballots cast in 2016, while Democratic Dallas County is on track to do the same.

For more than a quarter-century, Texas was firmly conservative, producing gun-toting, church-going politicians like President George W. Bush and Rick Perry, a former governor and U.S. energy secretary. Dallas, Austin, Houston and San Antonio were liberal blips on an expansive red radar. But a population boom driven by immigrants and newcomers has put the state’s politics up for grabs. -Bloomberg

the state's shift to blue coincides with an influx of outsiders, along with corporations such as Apple and Toyota Motor Corp. In Harris County, the most common surname of in-person voters so far has been Nguyen.

That said, according to liberal pollster Nate Silver, citing an Asian American Voter Survey, Vietnamese voters largely favor Trump.

Most common surnames of in-person Harris County (#Houston) voters so far (994k total)
- Nguyen 8.8k
- Smith 8.0k
- Williams 7.6k
- Johnson 7.4k
- Jones 6.0k
- Garcia 5.7k
- Rodriguez 5.7k
- Martinez 5.1k
- Brown 5.0k
- Davis 4.8k
🗳️☑️🇺🇸
(We can tell you how many with your name!)

— Zach Despart🖊️ (@zachdespart) October 28, 2020

Former Presidential candidate Mike Bloomberg has spent $15 million to support Biden in Texas and Ohio - with his Texas Independence USA PAC will air TV ads in both English and Spanish slamming Trump over the coronavirus.

And as Bloomberg notes, "Even if Biden falls short, cinching competitive races for the state House of Representatives could give Democrats a strong hand in redistricting after the census."

That said, University of Texas professor Jim Henson cautions liberals not to get too excited just yet.

"You have to be impressed by the volume," said Henson, adding "But at the same time, I think until we see what the actual Election Day numbers look like, it’s not clear whether or how much this is going to carry through."

Red counties have also seen a spike in early voting, with Denton, in North Texas, reaching 60% turnout as of Wednesday. In suburban Dallas, closely watched Collin County, which has emerged as a battleground even though Trump won it by double digits in 2016, saw turnout of 62%.

After converging to show Trump and Biden as even over the weekend, an updated average of 2020 polls by FiveThirtyEight widened slightly this week, with Trump holding a 1-point lead as of Thursday. And the state’s senior U.S. senator, Republican John Cornyn, is running well ahead of his Democratic challenger, former U.S. Air Force helicopter pilot MJ Hegar. -Bloomberg

Hispanics are key

According to the report, a key decider of whether the state flips blue for Biden are Latinos, which make up 30% of all eligible voters in Texas. Notably, Latino early voting is up double what it was in 2016 on a national level, with the majority expected to vote Democratic. That said, it's still a toss-up.

"In Texas, the Latino vote has tended to lean Democratic, but that’s exactly it: It leans Democratic," said Renée Cross, senior director at the Hobby School of Public Affairs at the University of Houston. "I don’t think there’s any doubt that the majority of Hispanics will vote for Biden, but the question is how many of the ones who vote Republican will vote for Trump."

Netflix Shares Soar As Company Capitalizes On COVID-19, Hikes Prices

Netflix Shares Soar As Company Capitalizes On COVID-19, Hikes Prices Tyler Durden Thu, 10/29/2020 - 15:20

Just in time for the next round of lockdowns, Netflix is raising prices for its standard and premium plans, sending its shares surging more than 4% during the last hour of the trading day.

The company's share price broke back above $500, which it lost after its disappointing Q3 earnings report earlier this month.

Here's the Verge, which explains how the price hikes will impact Netflix's standard and premium plans. 

The new pricing for the standard plan is a $1 price increase (from $13 a month), while the new premium tier cost is a $2 increase (from $16 a month). New subscribers will have to pay the updated monthly fees, while current subscribers will see the new prices over the next few weeks as they roll out with customer’s billing cycles.

Industry insiders have long anticipated another round of price hikes at Netflix, which last increased subscription fees in the United States in January 2019. Recently, Netflix increased the cost of some plans in Canada. Netflix rolls out price changes on a country-by-country basis and the change “in the US does not influence or indicate a global price change,” a Netflix spokesperson told The Verge.

The hikes are only for US subscribers, and it comes on the heels of a price hike in Canada. Netflix told the Verge that it rolls out price changes on a country-by-country basis, and this latest hike "in the US does not influence or indicate a global price change."

Higher prices aren't a complete surprise, as one Wall Street analysts said a couple of weeks ago that the price hikes in Canada could portend hikes in the US in the very near future, according to MarketWatch.

"The Canadian price increase supports our view that broader price hikes are probable in the near-term,” Jefferies analyst Alex Giaimo said in an Oct. 8 note that reiterated a Buy rating and price target of $570, and estimated that Canada, with about 7 million subscriptions, accounts for 4% of Netflix’s user base worldwide . “[Netflix] typically adjusts pricing every 2-3 years.”

Netflix wasn't the only stock to move on the news; Disney also moved higher, presumably on the notion that it the price hikes make the price of Disney's 'Disney+' streaming service even more competitive.

To be sure, anybody who is familiar with the company's massive content-related cash burn understands that this price hike was probably inevitable, as growth in paid subscribers starts to slow, how else will Netflix finance a content budget that has grown every year?

Interestingly, as the Verge points out, Netflix's new "standard" price is just $1 less than HBO Max's $15 price point, which Wall Street analysts once complained was too high for a streaming service. By comparison, Disney+ charges $7 a month, or $70 a year.

Finally, the price hike comes as NFLX's users have been spending even more time on the platform thanks to the coronavirus. The company, of course, needs to invest in improving and maintaining its platform, another reason the company couldn't avoid a hike for more longer.

COVID-19 May Have Helped This New Unicorn

COVID-19 May Have Helped This New Unicorn Tyler Durden Thu, 10/29/2020 - 15:00

Submitted by Market Crumbs

Markets were a sea of red yesterday as Covid-19 continues to dominate the news with the U.S. reporting its third consecutive record in average daily cases and Europe imposing additional lockdowns.

While publicly traded equities were selling off on Covid-19 fears, privately held Whoop announced it raised $100 million in Series E funding at a $1.2 billion valuation. Whoop, which sells fitness trackers and offers a monthly subscription plan, has actually seen a boost in sales as a result of the coronavirus pandemic.

The membership, which begins at $30 per month, includes the Whoop Strap 3.0 for monitoring vitals such as sleep and movements as well as a coaching platform. The company says customers who wear the device for more than one year experience longer and more consistent sleep, improved physiology and enhanced physical performance.

"We will continue to make Whoop the best product experience for measuring and improving health," Whoop Founder & CEO Will Ahmed said. "Human performance is a new category and Whoop has emerged as both the pioneer and market leader. We're proud to partner with IVP and other prominent investors who share our vision."

Whoop made the news earlier this year after PGA Tour player Nick Watney saw his respiratory rate jump on the Whoop app, prompting him to get a Covid-19 test. Watney tested positive despite not showing any of the symptoms. Whoop is even working with researchers from the likes of Harvard Medical School, Brigham Health, and CQUniversity to understand how its products could help with Covid-19.

The funding round was led by IVP and includes a handful of notable athletes such as Kevin Durant, Patrick Mahomes, Eli Manning and Rory McIlroy. SoftBank Vision Fund 2 and Two Sigma Ventures are among the notable participating investors in the round.

Whoop has now raised more than $200 million since its founding and has more than 330 employees, with more than 200 of them hired this year. The funds will be used to improve the membership through additional coaching tools and to expand globally.

"I've always loved Whoop the product, but I learned that Whoop the business was just as good. I'm proud to be investing again in this round of financing and very excited about the company's prospects," McIlroy said.

As Whoop becomes the latest member of the unicorn club, it's the latest example of money flowing into the health and fitness space following the likes of Peloton and Lululemon's $500 million acquisition of Mirror.

The Intercept Responds To Greenwald Resignation, Says He's 'Throwing Tantrum' Over 'Dubious' Biden Claims

The Intercept Responds To Greenwald Resignation, Says He's 'Throwing Tantrum' Over 'Dubious' Biden Claims Tyler Durden Thu, 10/29/2020 - 14:45

Update 1650ET: In a post with comments disabled, the editors of The Intercept have responded to Greenwald's decision to leave - writing "The narrative Glenn presents about his departure is teeming with distortions and inaccuracies — all of them designed to make him appear as a victim, rather than a grown person throwing a tantrum."

They suggest that Greenwald was "attempting to recycle the dubious claims of a political campaign — the Trump campaign — and launder them as journalism."

We assume they're referring to the undisputed contents of the Hunter Biden laptop, along with evidence from two former Biden associates, implicating Joe Biden in numerous corrupt acts involving his son Hunter.

The Intercept includes several low-blows in their response;

"We have the greatest respect for the journalist Glenn Greenwald used to be"

"We have no doubt that Glenn will go on to launch a new media venture where he will face no collaboration with editors... — such is the era of Substack and Patreon "

Read it here.

Perhaps allowing divergent opinions would help the beleaguered outlet's traffic, which appears to have been cut in half over the last six months.

 

*  *  *

The Intercept co-founder Glenn Greenwald resigned from the outlet on Thursday, after 'editors censored an article I wrote this week, refusing to publish it unless I remove all sections critical of Joe Biden, the candidate vehemently supported by all Intercept editors involved in this effort at suppression.'

"The final, precipitating cause is that The Intercept’s editors censored an article I wrote this week, refusing to publish it unless I remove all sections critical of Joe Biden, the candidate vehemently supported by all Intercept editors involved in this effort at suppression."

— Glenn Greenwald (@ggreenwald) October 29, 2020

More:

3) Given their claims, I'm going to publish -- along with the censored article -- the emails about it so people can decide for themselves if it was censored.

4) I understand TI's editors will slam my journalism as "changed"; I wish they had had the courage to do it before today.

— Glenn Greenwald (@ggreenwald) October 29, 2020

5) Like I said in my statement, The Intercept does still have some great journalists and publishes good things. I hope they can figure out how to induce some people to read it.

6) This is the CIA-mimicking paragraph I referenced that I was shocked to see at The Intercept: pic.twitter.com/q9jILPwret

— Glenn Greenwald (@ggreenwald) October 29, 2020

Greenwald writes at his new home (greenwald.substack.com):

The censored article, based on recently revealed emails and witness testimony, raised critical questions about Biden’s conduct. Not content to simply prevent publication of this article at the media outlet I co-founded, these Intercept editors also demanded that I refrain from exercising a separate contractual right to publish this article with any other publication.

I had no objection to their disagreement with my views of what this Biden evidence shows: as a last-ditch attempt to avoid being censored, I encouraged them to air their disagreements with me by writing their own articles that critique my perspectives and letting readers decide who is right, the way any confident and healthy media outlet would. But modern media outlets do not air dissent; they quash it. So censorship of my article, rather than engagement with it, was the path these Biden-supporting editors chose.

Apparently he's also blocked from publishing the article elsewhere, though he's "asked my lawyer to get in touch with FLM to discuss how best to terminate my contract."

What did The Intercept do in response to Greenwald leaving? They're attempting to raise money off of it!

Greenwald has found support across the political spectrum for his decision to walk.

.@ggreenwald and i have disagreed about lots of things over the years -- he's taken shots at me and vice versa -- but i have always respected his mind, courage and voice. today, i respect him even more. https://t.co/MyWWy7W3S6

— Andrew Ross Sorkin (@andrewrsorkin) October 29, 2020

Much respect for the principled move, Glenn.

It's been a tragedy to see The Intercept increasingly abandon adversarial reporting and adopt Democratic orthodoxy, especially in its international coverage of Washington-appointed bogeymen.

I look forward to seeing your future work.

— Ben Norton (@BenjaminNorton) October 29, 2020

It's sad that it's come to this. As I've said, I do not always agree with you, but you are one of very few people who says exactly what they believe and can be trusted to call things exactly how you see them without fear or favor. That is rare and vital. I wish you all the best.

— Ali Abunimah (@AliAbunimah) October 29, 2020

US Might Not See Life Get "Back To Normal" Until 2022, Dr. Fauci Warns

US Might Not See Life Get "Back To Normal" Until 2022, Dr. Fauci Warns Tyler Durden Thu, 10/29/2020 - 14:32

With Larry Kudlow back in front of the cameras on Thursday talking up Thursday's record-breaking GDP report and promising - with a newsman's confidence - that the American economy will have made a "full recovery" by the Spring of next year.

Though he acknowledged that his take was "optimistic", he reiterated that the president doesn't want to shut down the economy again, adding that he doesn't think shutdowns are "helpful".

It's unsurprising to see the White House dispatch Kudlow to carry out a string of TV interviews: Because as the Trump Campaign pushes its message that Trump's response to the pandemic wasn't as fatally flawed as critics have claimed, Dr. Fauci is on the other end, claiming that President Trump's projections for when a vaccine might be approved are fanciful. And as the outbreak has accelerated these past few weeks (with Europe hit much harder than the US), the good doctor has been pushing his estimates for when we might expect a vaccine to be widely available further and further back.

On Wednesday evening, Dr. Fauci appeared on CNBC for an interview with Shep Smith, the latest Fox News refugee to try his luck as restarting his career, only to be hectored by the reporter who repeatedly pressed Dr. Fauci to unreservedly declare that a mandatory mask order must be passed across all of the US.

Nationwide, Covid has never been this bad. "This is going to get worse," Dr. Fauci told us last night. Follow the latest pandemic news here: https://t.co/zjSdSomZ5F #FollowTheFauci pic.twitter.com/bBHImV5LpF

— The News with Shepard Smith (@thenewsoncnbc) October 29, 2020

After acknowledging last night that he "hasn't spoken to the president in quite a while", on Thursday, Dr. Fauci is cranking up his warnings to '11', claiming that life in the US might not go "back to normal" until 2022, or late 2021 at the very least, and that mask wearing would likely continue until around this time next year.

That is, unless Americans change things up and start taking the virus more seriously. The comments were apparently made during a live virtual interview held by the NIH "in cooperation with Facebook and Twitter live".

I will be joined by my colleague @NIAIDNews Director Dr. Anthony Fauci for a LIVE Q&A today (10/29) at 12:00 pm ET to provide updates on the #COVID19 @Moderna_tx #clinicaltrial, other vaccine research, & answer questions about vaccine safety. Tune in on @NIH & #NIH’s Facebook! pic.twitter.com/C3UBiSuG7e

— Francis S. Collins (@NIHDirector) October 29, 2020

Earlier, some news outlets reported that Dr. Fauci has just come out in favor of a national mask mandate - Joe Biden's stated preference for combating COVID-19 - for the first time, which is of course nonsense. He's essentially been advocating for a national mandate since it became clear that restrictions and enforcement would vary dramatically from place to place.

When it comes to evaluating how much faith we should place in Dr. Fauci's warnings, just remember, we've been here before...

1. Fauci doing all he can to sabotage Trump election with endless dire predictions; the same Fauci who failed the American people by saying early on the coronavirus wasn't any worse than a flu and told the public not to wear masks;

— Mark R. Levin (@marklevinshow) October 29, 2020

2. and to this day has not even commented on the decision by Cuomo and others to send coronavirus positive patients into nursing homes. The same Fauci who blew the swine flu in 2009 with his buddies Obama and Biden. He's a disgrace and a political hack. https://t.co/4xSJx9PqTo

— Mark R. Levin (@marklevinshow) October 29, 2020

As Dr. Joseph Ladapo argued in a commentary piece published Thursday by WSJ, data garnered so far shows that widespread mask wearing has made little difference (one widely cited study claimed just a 2% difference in the rate of growth. Though compounding is certainly a factor, the circumstances of the study are hardly definitive. As Dr. Lapado writes: "By paying outsize and scientifically unjustified attention to masking, mask mandates have the unintended consequence of delaying public acceptance of the unavoidable truth. In countries with active community transmission and no herd immunity, nothing short of inhumane lockdowns can stop the spread of Covid-19, so the most sensible and sustainable path forward is to learn to live with the virus."

Disney Just Laid Off Thousands Of Additional Workers

Disney Just Laid Off Thousands Of Additional Workers Tyler Durden Thu, 10/29/2020 - 14:15

It was less than a month ago that we reported Disney was laying off 28,000 employees as a result of continued economic pressure and lockdowns resulting from the Covid-19 pandemic.

Now, "thousands of cast members" - which include workers in Entertainment, Transportation, Merchandise, and Food & Beverage - are being hit with "another wave of layoff emails", according to Walt Disney News Today

“As heartbreaking as it is to take this action, this is the only feasible option we have in light of the prolonged impact of Covid-19 on our business,” Josh D’Amaro, the chairman of the parks division, said in a memo to workers in late September.

The late September cuts spanned across the company’s various businesses including theme parks, cruise ships and retail businesses. While the layoffs also include executives, they were focusing on part-time workers: 67% of those getting a pink slip are part-time workers.

As part of its farewell package, Disney offered benefits to the workers being cut, including 90 days of severance. The 28,000 layoffs followed the furloughing of a massive 43,000 workers in April, when the company was first impacted by the pandemic. 

In July, Disney triumphantly reopened several of its shuttered parks, including in Florida, although visits were a fraction of their pre-pandemic levels. Disney still hasn’t received clearance to restart operations at its two theme parks in Anaheim, California.

Before the pandemic, Disney’s domestic parks alone employed more than 100,000. And, as we noted back in September, while one can "understand" the plight of management, which is scrambling to boost cash flow after it saddled the company with record debt in recent years...

...it probably would make all those soon-to-be-laid off workers feel a little bit better if most of that newly issued debt hadn't gone to pay for stock buybacks the benefited upper management.

"Disneyland Park and Disney California Adventure Park remain closed and will reopen at a later date, pending state and local government approvals," the website says as of October 29, 2020. 

Meanwhile, Disney had restored the salaries of its senior executives back in August, while thousands of employees remained furloughed.