Nueva Democracia: 0CT 14 20 ND SIT EC y POL

0CT 14 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

HERE ARE THE 4 ELECTION SCENARIOS FOR MARKETS, AND HOW TO TRADE THEM

Deflation, Elevation, Expansion and Stagnation.

While the latest Fund Manager Survey from BofA revealed that a vast majority of investors are concerned about a contested election, and the resulting volatility this may entail especially if (when) the Supreme Court is called in to decide the next president...

See Chart:

Do you think the US election outcome will be contested? Yes: 60%

https://www.zerohedge.com/s3/files/inline-images/contested%20election_1.jpg?itok=Z8IIbmrB

.. no matter the ultimate outcome, investors are curious how to trade - and hedge - the various possible outcomes, so much so that BofA's Jared Woodard writes that the impact of various election scenarios is the "top question investors are posing."

So, in the latest note from BofA's Research Investment Committee, Woodard and team proceed to give an answer, highlighting that the most important consequence of the US election "will be the amount and composition of fiscal stimulus" and noting that since Congress controls the budget and the House majority is likely to stay Democratic, the Senate outcome is the most important one to watch. The 4 key scenarios are laid out in the chart below, whose investment implications BofA dissects next:

See Chart:

Likely US election scenarios and Macro implications

https://www.zerohedge.com/s3/files/inline-images/scenario%20outcomes.jpg?itok=LMdtxnvt

President Biden + Democratic Senate = Bullish Elevation

Unified governance (by either party) is also the key condition for BofA's bullish macro Elevation scenario, as continued CARES Act-style economic support can, at best, return the US economy to the levels achieved at the end of 2019. That was still lead to an environment of stagnant growth and scarce profits. As such, a step-change to 3%+ GDP & higher productivity requires major new investments in R&D, capex, and a broader base of household demand; such policy shifts "require bold leadership and a governing majority, not tepid incrementalism."

Next, Woodard claims that the timing is certainly right, citing a new IMF study which found that public investment is most effective in periods of high uncertainty, like this one. Using data across 107 countries over the last 30 years, the study found that, on average, new public investment worth 1% of GDP raised economic growth over the subsequent two years by 2.7%, private sector investment by 10%, and employment by 1.2% (Chart 4).

See Charts:

a-Bond market pricing in pro growth. Pro-inflation policy

b-Public Investment is most effective in certain time

https://www.zerohedge.com/s3/files/inline-images/BofA%20scenario%201.jpg?itok=U-r1fU-F

Trades: as has already been widely priced in by the market, expect a continued 2016-style "rowdy rotation" away from crowded secular stagnation beneficiaries (large caps, defensives, tech, bonds) and toward inflation assets (small caps, cyclicals, financials, commodities).

Likely winners: renewable energy, advanced industrials, electric vehicles, telecommunications, banks and silver;
Likely losers: health insurers, mega-cap tech, for-profit education, and media (NY Times +326% since Trump win vs. +4% in the 4 years prior).

2. President Biden + Republican Senate = Bearish Gridlock

Hardly "rocket surgery", if Republicans retains the Senate they are very likely to block further stimulus under a Democratic President, which BofA says would be bearish for economic growth, corporate profits and financial markets (but it would be bullish for more stimulus from the Fed). In any case, as BofA sarcastically puts it, "after $21tn of monetary & fiscal stimulus in 2020, $0 of follow-on support would be deflationary."

Indeed, political parties historically have used obstructionist tactics when out of power to thwart key legislation, most often through the “rediscovery” of commitments to “fiscal discipline”. As an example, BofA cites the budget austerity during 2012-2015 as a major reason for the slow economic recovery.

Trades: "in this scenario investors should prepare for lower returns and higher volatility. Raise cash and buy Treasuries, munis, and high-quality corporate bonds."

3. President Trump + Any Senate = Uncertain Stagnation

This is the "status quo" scenario: after the election, basic support packages may be easier to pass, but BofA doubts whether President Trump and a Democratic House would find enough common ground to pass transformative, pro-growth legislation. The case of infrastructure is instructive: both parties agree on the need for more resources for transportation, energy security, etc., but talks have always broken down over “red line” issues like immigration. That said, with a GOP Senate, investment may come more easily for R&D and industries relevant to national security.

However, the risk of volatile stagflation also rises with a divided government. Policies that have increasingly bipartisan appeal, such as regulating Silicon Valley or countering the threat from China, would require massive (and in this case, unlikely) domestic public investment to offset related frictions.

Trades: long stagnation winners e.g. tech, consumer discretionary, large caps, IG bonds…but with less leverage and lower market beta.

4. Contested election = Buying Opportunity

Contrary to various doomsday predictions for what happens on Nov 4, BofA's Nitin Saksena points out that options markets imply a move of 3.6% in the S&P 500 the day after November 3rd, only modestly above the recent historical average of 2.9%. However, instead of focusing on the day after, markets are pricing in greater odds of a contested election than ever before, with more volatility possible through December (although forward vol has certainly declined substantially in recent weeks).

See Chart:

Term structure of VIX futures contracts

https://www.zerohedge.com/s3/files/inline-images/fwd%20viw.jpg?itok=jlggDimZ

According to BofA, "there are several unusual but plausible scenarios and no real historical precedent." The bank does note that in 2000 the Supreme Court decided the election, but it suggests returns from that period are hardly analogous "since the set of possible outcomes now is wider and more politically fraught."

That said, according to Woodard, the most important thing to know is that "the same features of the US economy that made every investor in the world desperate to buy US assets in 2020 will still exist in 2021, no matter the election outcome: the deepest and most liquid financial markets, strong institutions, the rule of law, and the most productive, creative workforce".

BofA's recommended trades for a contested election: treat any market decline on a contested election as an opportunity to buy risky assets and sell volatility (and if the worst case scenario happens, investors can just hope that they get a bailout... just like America's banks.)

….

SOURCE: https://www.zerohedge.com/markets/here-are-4-election-scenarios-markets-and-how-trade-them

----

THE MAD, MAD WORLD:

BANKS BLOODBATH, BONDS BID, DOLLAR DROPS & GOLD POPS

Mnuchin's "difficult to get a deal done before the election" prompted weakness in stock markets but a glance at Nasdaq and it would seem that as op-ex looms on Friday, the 'gamma-squeezers' have backed off...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/bfmA73C.jpg?itok=7t8C7sIK

The Dow and Small Caps back into the red for the week...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/2020-10-14_13-00-03_0.jpg?itok=Nwe3QQ78

Banks were battered again...

See Chart:

S&P Financial sector

https://www.zerohedge.com/s3/files/inline-images/bfmB3BB.jpg?itok=rGCgFSjc

Led by BofA and Wells Fargo...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/bfm9D2A_0.jpg?itok=JEfXA9WC

Financials continue to track the Treasury curve...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/bfm96D0.jpg?itok=8D4F-7Iy

HY bond spreads reached back to their tightest since COVID...

See Chart:

US HY Corporate Bond OAS

https://www.zerohedge.com/s3/files/inline-images/bfm97E6.jpg?itok=E0Qd2Bye

Treasury yields were modestly bid today, led the long-end

With UST 30Y back at 1.50%...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/bfm8AFE.jpg?itok=d7SWk25n

The B-dollar index dumped today (as cable rallied), erasing yesterday's gains...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/bfm393F.jpg?itok=xKGI4olk

Gold futures rallied back above $1900...

See Chart:

https://www.zerohedge.com/s3/files/inline-images/2020-10-14_12-21-31.jpg?itok=tahnRoZO

Finally, "do you even lift?"

See Chart:

Nautilus Inc

https://www.zerohedge.com/s3/files/inline-images/bfmADEE.jpg?itok=h_rUCfVG

….

SOURCE: www.zerohedge.com/markets/banks-bloodbath-bonds-bid-dollar-drops-gold-pops

----

THE GAMMA UNWIND AND AMAZON'S POST PRIME-DAY FIZZLE

We may see another $50/share decline in AMZN, at which point the Nasdaq Whale will likely re-emerge, and repeat the gamma pump and dump, making a quick few million in the process.

Two days ago we discussed Tuesday's berserk, 4% meltup in the Nasdaq, which was the result of a double whammy as both dealer gamma (which was net short) and net spec NQ futures positioning (which was extremely short), were squeezed sending the tech index 4% higher.

See Chart:

Nasdaq vs “Most shorter” stocks Index

https://www.zerohedge.com/s3/files/inline-images/bfm7351.jpg?itok=z_M0f_xS

But while readers are by now familiar with how the Nasdaq whale forces a market-wide squeeze at will, some have asked how gamma manifests itself at the single stock level.

To answer that we go to a case study from SpotGamma released today, which looks at Amazon.com stock, which "is interesting here after the prime day fizzle."

As SpotGamma notes, on Monday there was huge call volume with over 300k calls trading, as the stock exploded higher..

See Chart:

AMZN

https://www.zerohedge.com/s3/files/inline-images/amzn%2010.14.jpg?itok=8QcGQiZr

... while yesterday this collapsed by nearly 50%, to just 190k, resulting in a directionless drift in the stock.

These are significant volumes as total call OI in the name is 490k. It also means that the call buying likely brought gamma hedging that pushed the stock up (something SoftBank is all too aware of when it loads up on billions in costless call spread).

However, as those calls decay and dealers unwind, hedging flow is now reversing.

What does this mean for levels? According to SpotGamma, "we look at 3300 support due to that strike being the largest concentration of calls. Going into Friday 55% of the stocks gamma expires and 30% of the outstanding delta which likely adds to the volatility over the next several days."

See Chart:

https://www.zerohedge.com/s3/files/inline-images/amzn%20spot%20gamma.png?itok=q3AED8Nx

In short, we may see another $50/share decline in AMZN, at which point the Nasdaq Whale will likely re-emerge, and repeat the gamma pump and dump, making a quick few million in the process.

….

SOURCE: https://www.zerohedge.com/markets/gamma-unwind-and-amazons-post-prime-day-fizzle

----

US DOMESTIC POLITICS

Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio

WHY WE'RE DOOMED: OUR DELUSIONAL FAITH IN INCREMENTAL CHANGE

Authored by Charles Hugh Smith via OfTwoMinds blog,

Better not to risk any radical evolution that might fail,

and so failure is thus assured..

OPEN THIS STATEMENTS & ENJOY ITS CONTENTENS

When times are good, modest reforms are all that's needed to maintain the ship's course.

Since stability has been the norm for 75 years, institutions and conventional thinking have both been optimized for incremental change.

Absent any big changes in their environment, organisms' genetic programming remains stable.

Nature has such a process: punctuated equilibirium.

Organisms which have lost the ability to adapt to rapid change die off once they encounter instability

Alas, human organizations and conventional thinking have no such closet of fast-evolution tricks.

Therein lies the fatal problem: radical adaptation is never absolutely necessary in human organizations and conventional thinking until it's too late

In other words, what's absolutely necessary to human organizations and conventional thinking is the suppression of potentially dangerous novel ideas

Unfortunately for human organizations and conventional thinking, novel challenges demand precisely what they're incapable of: risky rapid evolution.

Since this loss is viewed as catastrophic by those at risk, they will fight with everything they have to stymie any radical reforms

As the crisis deepens, the default setting in organizations and conventional thinking is that incremental changes and reforms will be enough, because they've been enough for four generations

I've prepared a chart of the delusional faith in incremental change showing how each new crisis is met by incremental institutionalized defaults

Each stage of the crisis draws whatever conventional response causes the least pain.

But rifts open in the leadership as the farsighted few demand rapid, radical adaptations and the conventional risk-averse crowd digs in their heels.

A reshuffling of leadership evokes hope that the modest reforms will work magic.

As everything runs to failure, the only acceptable path is to do more of what's failed spectacularly

The delusional faith in incremental change guarantees systemic failure.

See Chart:

The delusional faith in incremental change

https://www.zerohedge.com/s3/files/inline-images/incremental-delusion10-20.gif?itok=aA1p9Czg

….

SOURCE: https://www.zerohedge.com/markets/why-were-doomed-our-delusional-faith-incremental-change

----

ELIZABETH WARREN LASHES OUT AT DISNEY FOR 28,000 LAYOFFS THAT HAPPENED AS A RESULT OF GOV'T-MANDATED SHUTDOWNS

"I would like to know whether Disney’s financial decisions have impacted the company’s decision to lay off workers."

====

More evidence of our inhumane imperial country. Time to go beyond empires

DELIVERY OF 2 MILLION FLU VACCINES TO IRAN BLOCKED BY US SANCTIONS ON BANKS

Shahr Bank said to be responsible for foreign-currency purchases of drugs

====

Fascism is more real, more violent and terrorist not only inside but at world-level

ANTIFA IS REAL, IT'S VIOLENT, AND YOU NEED TO PLAN FOR IT...

This willful ignorance of the undercurrent coursing its way through the Western world will not save anyone from the destruction it brings...

====

More evidence that big Corp & crook banks profit from COVID-19

WELLS FARGO FIRES OVER 100 EMPLOYEES FOR ILLEGALLY POCKETING VIRUS RELIEF FUNDS

"We have terminated the employment of those individuals and will cooperate fully with law enforcement,”

====

VEN is 1 latino country that suffer brutal blockage and sanctions= US fascist terrorism

A QUICK REMINDER OF HOW VENEZUELA RAN OUT OF FOOD: DOES THIS LOOK FAMILIAR?

...when you look at the things which happened there and compare them to our situation, you may notice some uncanny similarities.

====

Los clint-p-pillos se aman aunque no son de la misma elite en descomposición

POMPEO CLAIMS STATE DEPARTMENT DOING 'EVERYTHING WE CAN' TO RELEASE UNSEEN HILLARY CLINTON EMAILS

"We will do everything we can to make sure that the American people get a chance to see as much as we can equitably produce."

….

Por eso demoran y esconden evidencias de la pedófila Clinton. Dirty business among them? Who knows. She stole Gold from Libya & can buy any corrupt m. Hay gente honesta en la CIA, uno de ellos denuncio a la pedofila. No todos son

====

Ella es un ser muy humano y Juez bien calificada pero cometió 1 error: no esperar

MERRIAM-WEBSTER REDEFINES WORD AFTER MANUFACTURED WOKE OUTRAGE

This is important...words no longer mean what is defined in an ostensibly impartial dictionary. They now mean what politically über-correct social justice warriors say they mean...

….

No importa si es conservadora o no. Ella adopto 2 niños: y eso si vale. Si es electa en la Corte Suprema, allí tendrá la oportunidad de rectificar errores.

====

WATCH LIVE: DAY 3 OF JUDGE BARRETT'S SUPREME COURT CONFIRMATION HEARINGS

...and all without the help of copious notes...

====

LAS VEGAS' LARGEST CASINO CUTS HOURS AS COVID KEEPS CUSTOMERS AT BAY

Encore's new operating schedule will continue indefinitely "until consumer demand for Las Vegas increases."

====

Inefficiency under attack:

CORONAVIRUS COUNTERFACTUAL: A TRUE ENEMY WOULD HAVE ALERTED US IN 2019

With the coronavirus, the most frustrating counterfactual of all is to think about how much better off we all would have been if politicians had done nothing...

====

She got mental contagious from Tramp: both has to be removed

REP. DOUG COLLINS INTRODUCES RESOLUTION TO REMOVE NANCY PELOSI FOR LACK OF MENTAL FITNESS

"Pelosi has started to demonstrate a decline in mental fitness..."

====

BILL GATES WARNS "WORLD WON'T RETURN TO NORMAL" UNTIL "SECOND GENERATION" OF COVID-19 SUPER-VACCINES ARRIVES

And who knows when that will be?

====

MORE THAN HALF OF ALL AMERICANS "PLAN TO STOCKPILE FOOD AND OTHER ESSENTIALS" FOR THE CHAOTIC MONTHS AHEAD

There was a time when preppers were relentlessly mocked, but nobody is laughing now...

====

US-WORLD ISSUES (Geo Econ, Geo Pol & global Wars)