COVID-19 notes:
Wall Street
Explains Why Despite A "Second Wave" In COVID Cases, Deaths Have
Barely Budged
How the
Coronavirus Attacks the Brain
Ed Yong: America
Is Trapped in a Pandemic Spiral
The
Pandemic’s Most Treacherous Phase
Regular Related Fare:
NPR Poll:
Financial Pain From Coronavirus Pandemic 'Much, Much Worse' Than Expected
EPI: A huge jobs
deficit remains, by any measure
JOLTed: US
Hiring Unexpectedly Plunges By Most On Record Despite Surge In Job Openings
The good news:
the bad news:
the worse news:
What is remarkable is that even as the number of job openings surged by
more than 600K, there was an unexpectedly plunge in hiring, and after the BLS
reported of 7 million hires in June, in July this number unexpectedly plunged
by a record 1.183 million to just 5.787 million in July, the lowest since
April. This suggest that an odd bifurcation has opened up in the US labor
market, where hiring is tumbling even as the number of job openings reverts
slowly to pre-crisis levels.
This chart shows the one-month flows
of temporary layoff workers. Between June and July, the combined flow to
permanent layoff and out of the labor force was larger than the flow to
employment.
Opportunity Insights: Track the Recovery.
OECD Exposes 15
Trillion Reasons Why US Schools Need To Open Now!
The Organization for Economic Cooperation and Development (OECD) is out
with a dire prediction, saying that America's economy is facing down a $15
trillion hit.
Some random charts courtesy of SoberLook
Oil Market
Buckles Under Pressure of Pandemic’s Second Wave
Regular Fare:
Stabilization to
Accommodation, Brainard's Policy Transition
With the culmination of their strategic review, the Fed showed the
interesting duality they find themselves in. On the one hand, it is clear the
Fed will not be preemptively hiking rates in this new framework, something we
have known since they initiated this review in 2019.
The Fed wants to allow the economy to recover and accentuate that
recovery by remaining accommodative for longer than it traditionally has. That
is of course dovish. And despite some missteps in the communique with regard to
what exactly inflation overshoots will look like, the bigger message should not
get lost, they will be allowing inflation overshoots and FAIT is the end of the
“bygone” era.
However, this sets up two camps for the Fed going into the post covid
recovery.
On the one hand, if this Fed backdrop is accompanied by a continued
substantial fiscal response and an inevitable vaccine, it is rocket fuel for
risk assets. As we saw in Brainard's July speech, the Fed's degree of monetary
accommodation will expand with the recovery. That is when forward guidance is
so powerful.
On the other hand, a problem the Fed has right now is especially in
regard to this framework, they are fiscal dependent in terms of creating the
conditions they desire in an outcome sense. By itself, despite opening up
policy space with the balance sheet and forward guidance, the Fed will struggle
to generate "good" economic outcomes on their own given the lower
bound constraint. As Brainard effectively put it in her July speech, the Fed is
very capable in preventing left tail outcomes via their balance sheet, however
in terms of "accommodation" that will largely come in a pro-cyclical
fashion given the lower bound constraint.
One of the things that Bernanke noted in his January AEA speech, L4L
(lower for longer) policies can only do so much if neutral rates are below 2%.
And this is where the Fed likely finds themselves.
“if the nominal neutral rate is much lower than 2%, then model
simulations imply that new monetary tools while still providing valuable policy
space can no longer fully compensate for the effects of the lower bound.”
If neutral rates are too low, L4L can't overcome ELB by itself most of
the time.
Bubble Fare
This US Stock
Bubble "Could Rank Among Biggest In History"
Just as soaring price-to-book ratios signalled massive speculative risk
in Japan in the late 1980s, where assets were all the rage, so today in the US
insanely high price-to-sales ratios highlight the total lack of realism
embedded in the hottest growth stocks.
The point is that price-to-sales ratios in the stratosphere do not stay
there, any more than a tulip bulb in 17th-century Holland was able to maintain
a price of $100,000. This gets at the troubling thing about bubbles. They do
not simply undergo smooth and endogenous shrinkage until they disappear.
Instead, they continue to expand until they burst. This is why their bursting
is more often than not shocking, spectacular and disorderly.
Bruising stock
selloff underscores market risk during coronavirus turbulence
“The premiums being paid, the volumes that we've been looking at, they've
taken out the insanity of the tech bubble of 2000,” said Jim Bianco
A Permanent
Shift in Valuations?
During extended bull markets, rationalization becomes commonplace to
justify overpaying for value. One such rationalization is the permanent shift
in valuations higher due to changes in accounting rules, share buybacks, and
greater adoption by the public of investing (aka ETFs.)
1)
The “median” CAPE ratio is 15.24 times
earnings from 1871-1980.
2)
The long-term “median” CAPE is 16.52 times
earnings from 1871-Present (all-years)
3)
The “median” CAPE is 22.91 times earnings from
1980-Present.
There are two critical things to consider concerning [this].
1)
The shift higher in MEDIAN valuations was a
function of falling economic growth and deflationary pressures; and,
2)
Increasing levels of leverage and debt, which
eroded economic growth, facilitated higher prices.
… [as per Ed Easterling of Crestmont Research:] “Therefore, since future
economic growth is expected to be slower, it is only consistent that the future
average for the market P/E will be lower. The new normal growth rate (i.e.,
slower) for the economy will drive slower overall earnings growth. Such slower
growth will drive market P/E lower, just as previously higher growth supported
the market’s P/E at a higher level.”
Jesse Felder: Master
The Art Of Doing Nothing
(not just) for the ESG crowd:
Federal Report
Warns of Financial Havoc From Climate Change
A report commissioned by
President Trump’s Commodity Futures Trading Commission issued dire warnings about
climate change’s impact on financial markets.
Oh Crap, Major
UN Climate Study Finds… Transformational
Action Needed for Paris Agreement Targets - United in Science Report
Emissions Are
Already Heading Back to Pre-Pandemic Levels
It’s a Race
Against Heat, and Humanity Is Losing
Ocean salinity:
Climate change is also changing water cycle
This result has important
implications for future climate. This sensitivity to global warming implies an
amplification by 4~8% in a world warmed by +2°C. This amplification will be
even stronger if the aerosol impacts are smaller in the future than today (i.e.
if the air pollution can be controlled). Consequently, there will be stronger
evaporation: the drier regions will get even drier and further increase the
odds of worsening drought.
Ice Sheet
Melting Is Perfectly in Line With Our Worst-Case Scenario, Scientists Warn
"We need to come up
with a new worst-case scenario for the ice sheets because they are already
melting at a rate in line with our current one"
Mammal
Extinctions Are Speeding to an Unprecedented 'Second Wave', Scientists Warn
More than 1
billion people face displacement by 2050: report
LA Times: California Wildfires Map
Not just south of the
border:
Wildfire burning
'out of control' at Vancouver Island ecological reserve
Brazil's Amazon
fires worsen in September, threaten virgin forests
Charting the
Flows of Energy Consumption by Source and Country (1969-2018). interactive version
Comparing CMIP5
& observations
Earth barreling toward 'Hothouse' state not seen in 50 million years, epic new climate record shows
Fun Fare:
The evolution of
NBA playoff scoring:
Quotes of the Week:
“From start of 1999 through NASDAQ’s March 2000 peak, there were no fewer than FIVE separate 10% pullbacks, all of which were followed by new all-time high”
Adam Tooze, re world’s central banks: “a
hybrid assemblage that combines market mechanisms with massive intervention
& limitless credit. Its Frankenstein quality is undeniable, but what kind
of monster it is, remains to be seen.”
Tweets of the Week:
For all of us bears out there, who need to keep our eyes covered…
In other news, a bear with a box on his
head managed to sneak into one of the Turkish military bases and climb onto the
tower.
After taking a vacation for
a month, Senate Republicans released a "skinny relief" bill that
provides:
$0 for rent
$0 for mortgages
$0 for food
$0 for hazard pay
$0 for healthcare
$0 for transportation
$0 to prevent mass layoffs
$161,000,000 in corporate welfare for big coal
For Halloween I’m going to go as a normal
person with no mask since that seems to scare the shit out of everyone.
Pics of the Week:
Other Fare:
Notes on good judgement and how to develop it.
The
Plot Against Libya. An Obama-Biden-Clinton Criminal Conspiracy
The scorching desert sun
streams through narrow slats in the tiny window. A mouse scurries across the
cracked concrete floor, the scuttling of its tiny feet drowned out by the sound
of distant voices speaking in Arabic. Their chatter is in a western Libyan
dialect distinctive from the eastern dialect favored in Benghazi. Somewhere off
in the distance, beyond the shimmering desert horizon, is Tripoli, the jewel of
Africa now reduced to perpetual war.
But here, in this cell in a
dank old warehouse in Bani Walid, there are no smugglers, no rapists, no
thieves or murderers. There are simply Africans captured by traffickers as they
made their way from Nigeria, Cameroon, Chad, Eritrea, or other disparate parts
of the continent seeking a life free of war and poverty, the rotten fruit of
Anglo-American and European colonialism. The cattle brands on their faces tell a story more
tragic than anything produced by
Hollywood.
These are slaves:
human beings bought and sold for their labor. Some are bound for construction
sites while others for the fields. All face the certainty of forced servitude,
a waking nightmare that has become their daily reality.
This is Libya, the real Libya. The Libya that has been constructed from the ashes of the US-NATO war
that deposed Muammar Gaddafi and the government of the Libyan Arab Jamahiriya.
The Libya now fractured into warring factions, each backed by a variety of
international actors whose interest in the country is anything but
humanitarian.
But this Libya was built not by Donald Trump and his gang of degenerate
fascist ghouls. No, it was the great humanitarian Barack Obama, along with
Hillary Clinton, Joe Biden, Susan Rice, Samantha Power and their harmonious
peace circle of liberal interventionists who wrought this devastation. With
bright-eyed speeches about freedom and self-determination, the First Black
President, along with his NATO comrades in France and Britain, unleashed the
dogs of war on an African nation seen by much of the world as a paragon of
economic and social development.
Other (KDJ-inspired) Fare:
Politics and
Violence Go Hand in Hand
Question: has power
corrupted politicians? Or did those politicians seek and obtain power because
they were corrupt?
According to Adams, the
common thread between why so many people believe these claims to be true
without any evidence (or even in the face of
counterevidence) could be
that they simply have no sense of humor. … “he is the most successful stand-up
comedian in the history of humanity. His rallies with gigantic audiences are
literally stand-up comedy. He does it to entertain. He literally says funny
things and his audience laughs. And they go because he will say funny things
that will make them laugh. He's literally the most successful stand-up comedian
in the history of civilization if you look at the numbers of people who go in
person”
Let’s Give Trump
Some Credit—On Labor Day He Threw Down the Gauntlet to the Corrupt Military
Brass
Trump said that the Pentagon
brass don’t love him, “because they want to do nothing but fight wars so that
all of those wonderful companies that make the bombs and make the planes and
make eveything else stay happy.”
President John F. Kennedy
was assassinated by the military/security complex for making the same point. The
US military/security complex has had its crosshairs on Trump since his first
presidential campaign when he said that he was going to normalize relations
with Russia. I don’t think Trump realized
what a massive NO-NO this is. Trump was
telling the military-security complex that he was going to take away their
concocted enemy that justifies the lucrative $1,000 billion annual budget paid
by American taxpayers.
This enormous sum enriches a
large number of companies along with the CIA’s power and budget. To tell a
powerful institutionalized force that you are going to take away their
justification for diverting increasingly scarce American resources into their
bank accounts is to ask for assassination. President Trump is in the process of
being assassinated, but it is not by bullets. Not even dumbshit Americans will
believe another “lone assassin” story.
Trump is being assassinated with a coup. The military/security complex responded to
Trump’s policy of normalizing relations with Russia with “Russiagate,” an
orchestration initiated by CIA director John Brennan and FBI director Comey. The CIA has had the media in its pocket since
Operation Mockingbird dating back to 1950. The CIA’s “Russiagate” attack on
President Trump served the interests of Hillary Clinton and the Democrat
Party. The corrupt Democrats quickly
joined forces with the CIA and the CIA’s media whores. The attack on Trump was underway and has not
stopped since. …. The Atlantic is part of the CIA’s media assets. … The purpose
of the CIA story handed to Goldberg is to discredit Trump with his patriotic
supporters, those who wave the flag, and especially the retired military. … Goldberg’s
sources, he says, are anonymous. But they are not. His “sources” are his military/security
masters. Goldberg knows who they
are. Remember, the entire four-year long
attack on Trump has relied on anonymous sources. With anonymous sources, you can make up
anything. There is no one to confirm, deny, or to hold accountable. It is fake news.
Why A Biden
Presidency Will Disappoint Progressive Democrats
Joe Biden, by any measure,
is a poor candidate for the office. After almost half a century in politics,
he’s had a career mostly as a political hack who would support any issue that
seemed popular at the time. Similarly, his voting record in the Senate has been
that of a man who supported whatever bill would please his peers and further
his career. Seemingly, he either has no inner core of belief, or he’s been
willing to sacrifice it at a moment’s notice, if it might help his next
election. After forty-seven years of elected office, he’s not regarded as
having a commitment to… well, anything. And yet he became the choice of the
Democratic party as one candidate after another dropped out of the presidential
race. Clearly this was a party that was not only leaderless, but couldn’t even
seem to invent a leader for the sake of the election.
Kamala Harris, his
presumptive vice president, dropped out of the presidential race in December
2019, when her popularity amongst democrats dropped to 3.4%. Since democrats
make up roughly half of the population, this means that less than 2% of
Americans would have wanted her as their president.
And yet, as stated above,
candidate Biden announces, “Look, I view myself as a bridge, not as anything
else.” That’s quite curious. He apparently is stating that his only purpose is
to win the election, then pass the baton to the next leader. Presumably, his
vice president.
… And that leads us to the
possibility that the deal has already been brokered – that Mr. Biden would win
the election, then have, let’s say, a “medical emergency,” at which point he
would pass the reins to the new president – Kamala Harris. Clearly, Ms. Harris
could not have been elected on her own merit, as even democrats found her to be
fundamentally lacking last December. Even the more radical elements of the
party have sensed that she is untrustworthy and even dangerous.
At this point in America’s
history, there’s much debate as to whether the president is the supreme leader,
or whether he or she is merely the face presented by the Deep State, who run
the country from the background and give the president his marching orders. Either
way, this eventuality would not bode well for the US.
Edward Curtin: From
Terrorists to Viruses: Dystopian Progress
Quotes of the Week:
Glenn Greenwald: “In 2016, Americans got to choose as
President between the two most unpopular candidates in modern US history.
In 2020, they get to choose
between two candidates believed by a majority to be “mentally unfit.” Why do so
many Americans choose not to vote? A huge mystery.”
W.J. Astore: “There is a unique ideology to our fourth
world country. Our two main parties, the Democrats and Republicans, agree that
to invest in society is socialism, but to “invest” in weaponry and wars is the
height of prudence and sanity. I know: a few Democrats like Bernie Sanders and
AOC make noises, more or less sincere, about helping workers and investing in
people, but they are shunted aside by the corporate Democrats whose main job it
is to keep “socialists” like Bernie out of power. It’s the one thing they’re
good at, led as they are by those icons of charisma and homespun goodness,
Nancy Pelosi and Chuck Schumer.”
Johnstone: “We are ruled by monsters.”
UnEthical (sick-to-my-stomach…-and-brain) Fare:
This should be required viewing (and listening!)
for anyone who eats meat.
And this.
And this.
And this.
And this.
And this.
And, yes, this too.
As well as this.
And this.
All of those videos are
examples of why govts feel the need to enact laws aiming to hide animal abuse on farms and by BigAg.
Ontario law
banning activists from interfering with livestock trucks takes effect
But
Major shift to plant-based food could offset years of CO2 emissions
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