0CT 11 20 ND SIT EC y POL
ND denounce Global-neoliberal debacle y propone State-Social + Capit-compet in Eco
ZERO HEDGE ECONOMICS
Neoliberal globalization is over. Financiers know it, they documented with graphics
IS THE NEXT "OCTOBER SURPRISE" AN UNEXPECTED MOMENT OF CLARITY?
"Some emerging information could quickly turn into trends on two key US policy debates. This would give investors some unexpected, and underpriced, clarity." - Morgan Stanley
Last weekend, in its Sunday Start note, Morgan Stanley raised some eyebrows across Wall Street when it global strategist Andrew Sheets suggested that the 2020 market cycle was actually quite "normal", with economic data leading risk assets, and that the recovery would continue in a "normal" way, with inflation expectations rising, yield curves steepening further, small caps continuing to outperform and defensive stocks have lagging (even as yields have remained range-bound). This is what Sheets concluded:
Twists and turns as the US election nears, the uncertainty regarding additional US fiscal stimulus, a rise in global COVID-19 cases and a still-unresolved Brexit saga all create significant uncertainty, and should keep markets volatile and range-bound over the next month. But amid that volatility, we maintain our central tendency – this cycle is more normal than appreciated, and should be treated as such until proven otherwise.'
Today, Michael Zezas, says the bank makes another contrarian argument, namely that – traders may instead be rewarded with a "brief moment of policy clarity giving investors a reprieve from the chaos of 2020" and offer them "some unexpected, and underpriced clarity."
To be sure, Morgan Stanley is not the first to suggest that the market is overly obsessing over the potential vol surge around the election as a result of it getting drawn out into a contested election: two weeks ago, Nomura's x-asset strategist Charlie McElligott recommended selling the "kink" in the Nov-Oct VIX spread...
See Chart:
VIX Nov-Oct Futs spread (Across Election)
https://www.zerohedge.com/s3/files/inline-images/bfm445C_0_0.jpg?itok=kDpfFw9p
... saying the market had priced in more than a fair amount of election risk, and said that "some brave vol traders will try to take advantage as a perceived “generational” opportunity to sell this POST-NOV election “richness” (Dec / Jan)" which "could be a career “maker or breaker,” with the potential to see monster returns if the event were to pass and all that crash is puked back into the ether" although as he also hedges, conversely returns could "be turned to dust into a God-forbid realization of chaos, with civil disorder, dual claims to the throne etc."
He explains why in The Next 'October Surprise': A Moment of Clarity?
To conclude that:
Our base case remains ‘Election Week’ (70%), but we’re increasing the chances of ‘Silent Night’ (20%) and reducing for ‘Election Month’ (10%).
See Table:
Vote by mail data from slow to know States
https://www.zerohedge.com/s3/files/inline-images/vote%20by%20mail%20data.jpg?itok=dhEDDFKh
The final conclusion:
In our view, key markets are not geared for such a moment of policy clarity should it emerge before year-end, presenting opportunities for some proactive and reactive tactics: We detail these dynamics in our most recent collaboration with Morgan Stanley’s cross-asset strategy team. One proactive idea that stands out for its asymmetrical response is being short duration in USD fixed income, the 30-year in particular. Despite its strong move last week, it should still be a bellwether for clearer expectations on deficit expansion and a continued V-shaped recovery in the US. A more reactive idea is in US equities, where a dip-buying opportunity could emerge. For example, if a Democratic sweep outcome in the election becomes known quickly, markets could initially reflect concerns about rising taxes before giving way to the benefits of fiscal expansion and, perhaps more importantly, an economy that remains in the recovery phase of the cycle.
There is just one problem with Morgan Stanley's reco to short the 30Y: everyone and their grandmother is already in it, and in fact, one can argue that the entire Morgan Stanley line of thought is not contrarian at all, with markets now appearing to fully price in a reflation trade.
See Chart:
New record short in 30Y Futs by speculators and leveraged funds
https://www.zerohedge.com/s3/files/inline-images/30Y%20net%20shorts.jpg?itok=384HZDHo
In fact, for those betting on outcomes, the best upside/downside risk-adjusted trade is to fade the reflation trade which in the past 3 weeks has allowed Russell stocks to strongly outperform their Nasdaq-based deflationary proxies. In further fact, for those cynics among us, one could almost argue that Morgan Stanley is merely hoping to take the other side of the trade that it is pitching to its clients. The next few days of trading should reveal the answer if the unprecedented 30Y short and heavy positioning into further curve steepening can continue, or will punish the momentum-chasing macrotourists.
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SOURCE: https://www.zerohedge.com/markets/next-october-surprise-unexpected-moment-clarity
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One more comic story on US Economics:
This dynamic will persist, until there are consequences. Which will first be felt in the markets, then reverberate through the economy, and circle back to our political parties. And when such dynamics reverse, they do so fast, ferociously.
And while such massive numbers are unprecedented outside of wartime, so far, there have been no negative consequences. Rather, quite the opposite.
See Chart:
Percentage of Gross Domestic Product
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
7 PREDICTIONS: HOW 2020 COMES TO AN END
Authored by Daniel Bobinksi via UncoveredDC.com,
America is at a crossroads with revolution on our doorstep. On one side are the Patriots; those who seek to preserve, protect, and defend the Constitution. On the other side are Marxist insurrectionists; those who believe that America is evil and the cause of so many problems in world.
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'ADJUSTMENT DAY' LOOMS AS AMERICA'S HEADED FOR VIOLENT CIVIL WAR
It’s hard to believe, but the scenario envisioned by Chuck Palahniuk in Adjustment Day is becoming more plausible with each passing week..
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With robots: are we ready for WW3? What the protection for our Nation?
US ARMY TO RECEIVE "ASTONISHINGLY POWERFUL" ELECTRIC ROBOT TANK
"mission ready"
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What the protection for our Nation?
“Think about moving the equivalent of a C-17 payload anywhere on the globe in less than an hour...”
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WHO SURVIVES? ...IT'S A NEW MORNING IN HELL
Who survives? Amazon, Netflix, Google, Comcast, Facebook, et al. Those who control the screens control the world... It is a new morning in hell.
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US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)
Global depression is on…China, RU, Iran search for State socialis+K-, D rest in limbo
WHO FLIP-FLOPS: URGES WORLD LEADERS TO STOP USING LOCKDOWNS TO FIGHT COVID CONTAGION
“We in the World Health Organization do not advocate lockdowns as the primary means of control of this virus,”
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ESCOBAR: WILL CONFUCIUS MARRY MARX IN CHINA?
Modern China’s deviation from traditional Confucian values has seriously damaged its 'Mandate of Heaven'...
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CHINA'S LENINIST CLIMATE PLEDGE
...the only morality it recognized was “what will further their cause, meaning they reserve unto themselves the right to commit any crime, to lie, to cheat...”
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars & danger of WW3
-New Three-Tier COVID Lockdown Set to Carve Up UK Frays Relat With Nort England
- Afghan Forces Carry Out Attack on Taliban in Helmand Province, Local Author Say
- Denver Shooting Suspect Worked as Security Guard in Violation of Law
- Danish Quran-Burner Pledges to Use His Swedish Citizp for More Incendiary Action
- Over 9.3 Million US Voters Have Already Cast Ballots - US Elections Project
- 'Good, Strong Look': Trump Doubles Down on Intention to Look Into UFOs
- Explosions Heard in North Baltimore, Firefighters, Police on Scene
- At Least Two People Die in Louisiana Because of Hurricane Delta
- Support Workers Losing Jobs from Covid19 Restrictions
- Fauci Says His Words Used Inaccurately in New Trump Campaign Ad
- US-Based Video App Triller Slams TikTok For 'Bullying'
- Australian Study Reveals Where Coronavirus Can Survive Best
- Israel Touts its Own Antibody Cocktail as Better Than Trump's
- Militia Groups Offer US Truce in Iraq If Washington Withdraws Troops
- Portland Police Make Sweeping Arrests Minutes After Protest Begins
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