0CT 22 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
THIS CRISIS SCALATES QUICKLY
PELOSI OPTIMISM TRIGGERS MASSIVE VALUE ROTATING SHORT SQUEEZE
Markets continue to be transfixed by every twist and turn in the stimulus sage, whose latest installment today came form Nancy Pelosi who said that we are "just about there" on resolving a key piece of a coronavirus relief package, even as she again admitted that there are significant differences still being negotiated. And in what was otherwise a boring day for stocks, the real action was below the surface with the most shorted names surging higher by 2.5%.
See Chart:
Most Shorted stocks vs SPX
https://www.zerohedge.com/s3/files/inline-images/most%20shorted%20vs%20spx%202.jpg?itok=A2k66tge
And in a world where everyone hates value stocks, the squeeze meant that value was on a tear today, while growth sank in early trading and has been depressed...
See Chart:
Growth vs Value
https://www.zerohedge.com/s3/files/inline-images/growth%20vs%20value%20oct%2022.jpg?itok=ZNZ5BHBh
... largely as a result of a continued push higher in yields across the entire curve as the 10Y hit 0.85% this morning...
See Chart:
TSY Intraday Move
https://www.zerohedge.com/s3/files/inline-images/TSY%20intraday%20.jpg?itok=wRrWb0KQ
... pushing the 2s10s curve to what will either be a triple top just below 0.70%, or if this is breached, then the curve will likely steepen to the 78bps level hit in March.
See Chart:
2s 10s
https://www.zerohedge.com/s3/files/inline-images/2s10s%2010.22.jpg?itok=haMreoDg
Looking at individual sectors, the jump in yields and the return of the reflation trade, meant that banks and energy stocks surged rebounding from a prior day selloff.
See Chart:
Intraday Sectors
https://www.zerohedge.com/s3/files/inline-images/sectors%2010.22.jpg?itok=qdgLNFlJ
This however leads to the question we first asked yesterday when yields shot up overnight and hit risk assets: are we finally approaching a level in yields that catalyzes a stock selloff? To be sure, the nominal 10Y may rise as high as 0.96% high seen in June, especially if fiscal stimulus is miraculously passed by Congress in the 11th hour.
However, as Bloomberg's Richard Jones writes, beyond those yield and curve levels, "stocks will probably struggle for further upside" as even higher yields and steeper curves "could start to eat into the excessively supportive rates backdrop underpinning equities" as the equity risk premium is hit. Of course, if stocks do begin to sell off on these dynamics, this will drive flows into bonds and those yields will drop along with equities, short-circuiting the process. Ultimately, as Jones concludes, "much depends on stimulus timing and the election result, and additional upside for yields may not be as forthcoming as in recent weeks. Nonetheless, the reflation trade has driven both stocks and bond yields higher won’t last forever."
Meanwhile, looking below the surface of the move higher in nominal yields we find a continuation of the recent convergence between real rates and breakevens...
See Chart:
Real Yields vs. Breakevens
https://www.zerohedge.com/s3/files/inline-images/real%20vs%20breakeven%2010.22.jpg?itok=xZ6muTTb
... both of which have continued to move higher ending the "bizzare" divergence which as Goldman observed two days ago lasted for a record 7 consecutive months after the March crash.
See Chart:
https://www.zerohedge.com/s3/files/inline-images/real%20vs%20breakeven%20goldman_0.jpg?itok=Z2pdkGq2
It was the move higher in real rates that also explained much of the drop in gold today (real rates inverted in chart below).
See Chart:
https://www.zerohedge.com/s3/files/inline-images/real%20vs%20gold%2010.22.jpg?itok=LmPZ4ucw
Today's rotation into value stocks also meant that the VIX dropped sharply after its recent gains, and was last below 28 after briefly rising above 30 yesterday.
See Chart:
VIX
https://www.zerohedge.com/s3/files/inline-images/VIX%2010.22.jpg?itok=kVj_-gcn
The decline was not just in spot, but across the entire term structure which eased from yesterday levels to one week low.
See Chart:
VIX Term Structure
https://www.zerohedge.com/s3/files/inline-images/VIX%20term%20structure.jpg?itok=3k71nfW3
Yet even so, the divergence that we discussed earlier between equity and credit VIX and which Boaz Weinstein is hoping to profit from as it converges, continues apace.
See Chart:
VIX vs. CDS IG
https://www.zerohedge.com/s3/files/inline-images/VIX%20vs%20CDX.jpg?itok=ThEImQeF
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SOURCE: https://www.zerohedge.com/markets/pelosi-optimism-triggers-massive-value-rotating-short-squeeze
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THERE ARE DECADES WHEN NOTHING HAPPENS, AND WEEKS WHERE DECADES HAPPEN
The ongoing economic transformation serves to make many assets obsolete and to devalue the debt held against those assets...
Authored by Tad Rivelle, CIO at TCW,
In real estate there is a saying that time kills all deals. Hopeful forecasts for a V-shaped recovery following in the wake of 45- or 60-day “lockdowns” have ceded to a different reality: notwithstanding monstrous QE, titanic Federal deficits, stimulus checks, CARES Act, tightening credit spreads, and a booming stock market, unemployment and business conditions for many remain sobering.
Bizarrely, this has been the one, the only recession where, at least initially, disposable incomes rose, and net worths have grown. This has encouraged many to gain comfort with the possibility that a sustainable recovery has taken, or shortly will take hold, relegating the pain and suffering of 2020 to the history books.
Is it realistic to believe we stand on the precipice of prosperity? Perhaps given that nothing that has happened this year could have, from the perspective of one short year ago, appeared plausible, maybe we should revert to Voltaire’s advice to just “tend our own gardens.” But, no, we will offer our perspective, if for no other reason than giving us all the opportunity, one years’ hence, to wonder how we missed what we will inevitably have missed during these uncertain times.
Let’s begin at the beginning: the pandemic was – and remains – a shock, a catalyst. But recessions are not so much shortfalls in demand, as they are transformations of demand. And, since producers are continually dancing to the tune of demand side realities, businesses re-position and re-size accordingly. But since capital and labor does not reposition on a dime, frictions result. It takes time for producers to figure out what their new markets might be and what the earnings power of theirs, and others, assets will be. Unemployment is the inevitable result.
True, the massive spike in the “temporarily” out of work category has fallen in sync with the hope of the V-shaped crowd. Yet, more ominously, many companies are beginning to confront the changed realities of their businesses, and this is forcing an expansion in the ranks of those permanently unemployed:
Unemployed: On Temporary Layoff
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-01.png?itok=v4x7rWE-
Unemployed: Permanent Job Losers
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-02.png?itok=34nX4AbJ
As we all recognize, the pain of the economic adjustment has disproportionately fallen on the industries in the eye of the social distancing storm:
Net Change In Jobs Since February 2020
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-03.png?itok=d_Ulisuk
Yet, if recessions are periods of transformation, there can be no going back to the pre-COVID economy. But what then will take its place? While it is perhaps just a bit glib to say it this way, I believe we are witnessing the birth of the economy of 2030 before our very eyes. Businesses that blithely and perhaps habitually assumed that professional office work meant retaining the physical layouts of say the past two decades have been woken from their slumber.
Now, how many tech, finance, legal, accounting, public relations, and advertising workers may follow in their wake? Surely not 100%. And surely not none. On this subject as in so many issues of our day, arguments on both sides abound while the future facts remain unformed and in dispute.
Delinquency Rates: Retail and Hotels
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-04.png?itok=L2UMBLTh
Delinquency Rates: Multi-Family and Office
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-05.png?itok=bz7--p9X
John Lennon famously song that life is what happens when you’re busy making other plans. While governments plan their next stimulus and executives update their strategic plans, the grass root choices of employees, consumers, and competitors will largely determine how the next decade’s worth of changes take place over the next 12-months.
U.S. E-Commerce Penetration (% of all retail sales)
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-06.png?itok=aF9hYb7d
Industrial CRE Delinquency Rate
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-07.png?itok=ylQ2MTT5
These choices are very much evident in the growth of e-commerce (where roughly what had been one years’ worth of penetration is happening every month), in the rising delinquencies of CRE loans, and in the apparent migration out of the hip and high growth urban centers to the placid and more affordable suburbs.
Home Prices
See Chart:
Suburban vs. More densely populated Urban
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-08.png?itok=bYk3nLmi
Two Bedroom Apartment Median Rent Price YoY Changes as of October 2020
See Chart:
https://www.zerohedge.com/s3/files/inline-images/101520-TradingSecrets-09.png?itok=9Ovh3h8t
Historically, with every recession, this question emerges: what will we do with all the production facilities that are no longer needed and with all the workers who once worked there? In the ’70s, it was aerospace. In 1982, the plight of the steel industry was front and center. In 1990, it was S&Ls and the many white elephants they financed.
While it is still too early to call out what that future will be, we share the following observations and conclusions from the capital markets:
- Massive and continuing stimulus cannot be sustained without ultimately severe and unpalatable consequences.
- The Fed will, nonetheless, suppress rates – especially front end rates – and volatility with all its might.
- The ongoing economic transformation serves to make many assets obsolete and to devalue the debt held against those assets.
- COVID is the catalyst, but the changes set in motion will prove to outlast the pandemic. As such a full V-shaped recovery is a dubious proposition.
Strategically, this suggests a fixed-income investment strategy that is supported by these pillars:
1. Risk based assets, such as credit, that have largely returned to pre-COVID pricing levels should be downsized.
2. Agency mortgage assets that benefit from the Fed’s big bear hug should be embraced as a means to add yield and carry.
3. Non-agency mortgages will continue to provide idiosyncratic opportunities, in both the non-QM as well as legacy space.
4. Value destruction in CRE and CMBS has yet to be realized. The “fat” pitches will be coming, but probably not until banks inevitably initiate a round of foreclosures.
5. Maintain liquidity as a means to opportunistically invest when surprises inevitably happen during this time of opacity.
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HOW TOTAL SPEND BY U.S. ADVERTISERS HAS CHANGED, OVER 20 YEARS
Much of the top 10 biggest advertising spenders are in the telecommunications industry, but it is retail giant Amazon that tops the list with an advertising spend of almost $7 billion.
With an advertising economy worth $239 billion in 2019, it’s safe to say that the U.S. is home to some of the biggest advertising spenders on the planet.
The graphic below uses data from Ad Age’s Leading National Advertisers 2020 which measures U.S. advertising spend each year, and ranks 100 national advertisers by their total spend in 2019.
See Graphic
Let’s take a look at the brands with the biggest budgets.
2019’s Biggest Advertising Spenders
Much of the top 10 biggest advertising spenders are in the telecommunications industry, but it is retail giant Amazon that tops the list with an advertising spend of almost $7 billion.
In fact, Amazon spent an eye-watering $21,000 per minute on advertising and promotion in 2019, making them undeniably the largest advertising spender in America.
Explore the 10 biggest advertisers in 2019 below:
See Table:
https://www.zerohedge.com/s3/files/inline-images/top%2010%20ads.jpg?itok=zZ8EmZNX
Even though advertising spend is expected to nosedive by almost 13% in 2020, this figure excludes political advertising. When taking that into account, the decline becomes a slightly more manageable 7.6%
Moreover, according to industry research firm Kantar, advertising spend for the 2020 U.S. election is estimated to reach $7 billion—the same as Amazon’s 2019 spend—making it the most expensive election of all time.
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SOURCE: https://www.zerohedge.com/markets/how-total-spend-us-advertisers-has-changed-over-20-years
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US DOMESTIC POLITICS
Seudo democ duopolico in US is obsolete; it’s full of frauds & corruption. Urge cambio
FDA APPROVES GILEAD'S REMDESIVIR TO TREAT COVID-19 DESPITE DATA SHOWING DRUG DOESN'T WORK
The FDA first granted the drug emergency authorization in May, allowing hospitals and doctors to use the drug even though by all accounts it wasn't that widely used.
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ABSTENTION will defeat Reps & REFERENDUMS will politically kill them
REPUBLICANS' BEST PLAYBOOK: CREATE NON-VOTERS
Rather, in a rare situation, this election will be determined by each candidate’s ability to create non-voters – the always stubbornly substantial number of “stay-at-homes.”
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ABSTENTION not only will defeat Trump, also Biden his twin. None of them represent the nation but the billionaires behind them. After the fiasco election, the Nation will create REAL DEMOCRAY with REFERENDUMS
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"BIAS, HATRED, & RUDENESS" - TRUMP POSTS FULL RAW '60 MINUTES' INTERVIEW, THEN POSTS PENCE'S
"Look at the bias, hatred and rudeness on behalf of 60 Minutes and CBS."
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Top & Bottom 20 Funds of 2020?
2020'S BEST PERFORMING HEDGE FUND WARNS OF "INCREDIBLE MOVE" AROUND THE ELECTION
"It’s like a calm before the storm"
Sure, there are probably a handful of hedge funds who have generated even higher returns, but for the purpose of this post we are going off the latest HSBC hedge fund weekly report, according to which Boaz Weinstein's Saba Capital is the best performing hedge fund of 2020 with a staggering 72% YTD return.
See Table
Top & Bottom 20 Funds of 2020
https://www.zerohedge.com/s3/files/inline-images/saba%20oct%202020_0.jpg?itok=QLa2qdSm
Speaking during a Bloomberg Front Row interview, Weinstein turned the fear factor up to '11', warning ominously that it feels "like a calm before the storm"
“Equity volatility is almost inescapably high. Is that a good form of insurance? The payoff profiles are nothing like they were back in January. Whereas in credit, we’re almost back to where we were in January.”
As the relative-value expert notes, "something has to give"
See Chart:
Equity risk VIX vs Credit risk (IG CDX)
https://www.zerohedge.com/s3/files/inline-images/bfm53A.jpg?itok=lZtfqQ7w
Finally, as Bloomberg reports, when pressed on the timing of the "incredible move," Weinstein suggested the election could be a catalysts but that any Fed reaction may delay the inevitable...
“What I’m doing right now is trying to think hard about a negative outcome in the market, and it won’t be because the Fed backs off - the Fed has really been holding the market up - but if the second wave of infections is even worse than people think, if we have a contested election, on and on,” he said.
“Or even in ways that are unknown unknowns. The chance for a very significant move is there.”
Of course, it is possible that Weinstein is simply wrong, and painfully so, with his compression trade leading to massive losses: after all the very simple reason why credit vol has collapsed is because the entire corporate bond market is explicitly backstopped by the Fed - which is buying both IG and HY single bonds and ETFs in the open market - while stocks are still only implicitly supported by Powell, something we have discussed time and again. As a result, while equity vol can and probably will continue to be dangerously higher well beyond the election as the following chart from Goldman shows...
See Chart:
SPX term structure is about flat beyond election day implying high volatility
https://www.zerohedge.com/s3/files/inline-images/GS%20extended%20vol.jpg?itok=2sCX2T8u
... it would take a crushing loss of faith in the Fed for credit vol to stage a similar dramatic move.
In July, the former Deutsche Banker warned that "markets are at an unstable place right now. I look out at the next five months, and there are lots of known unknowns,” pointing to everything from the course of the pandemic to the U.S. election and relations with China.
"There are dislocations today that are as large as they were three months ago" Weinstein said, predicting that there will be more moves to make as default rates mount.
Then again, Weinstein's results in 2020 speak for themselves: Saba has raised about $1.25 billion of new money since March and now manages $3.3 billion, evenly split among the flagship, a strategy offering tail-risk protection and a closed-end fund vehicle.
Watch the full interview here:
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IF debat is to build peace & Nat unity: is OK. IF for re-afirm war & chaos=post-M debate
DEBATE POST-MORTEM: "MALARKEY" TAKES ON "401K'S IN HELL" IN INFORMATIVE BUT FIREWORK-FREE SPECTACLE
This won't change anyone's mind...
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WATCH LIVE: SECOND AND FINAL PRESIDENTIAL DEBATE BETWEEN TRUMP AND BIDEN
Strap in...
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Tech competit -if fare- give the upper hand to Huawei. I said before & confirmed now
HUAWEI "OUTHUSTLES TRUMP" BY SUCCESSFULLY STOCKPILING ENOUGH CHIPS FOR 5G ROLLOUT
Took advantage of tight window to stockpile millions of units...
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Trump is going to be defeated. IF declare war to Iran-RU-CH worse for him & our nation
DON'T VOTE FOR A PSYCHOPATH: TYRANNY AT THE HANDS OF A PSYCHOPATHIC GOVERNMENT
"That a small minority of human beings literally have no conscience was and is a bitter pill for our society to swallow - but it does explain a great many things, shamelessly deceitful political behavior being one..."
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Trump-Biden are twins ABSTENTION is the right choice. We’re ready to make peaceful demonstration with ‘posters’ & silence. We have the right to do so: there is not 3rd choice and voting for lesser evil is anti-democratic move. Real democracy has to be re-build via REFERENDUMS post-election. We will win against FASCISM. We are not in favor of violence & less in name of nazi ‘order’. This election is full of fraud & only benefit the billionaires. Vitiate-vote is OK but it validates the corrupt system. Is preferable not to vote= ABSTENTION.
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WALMART'S REDESIGNED AIRPORT-STYLE STORES WILL TRACK EVERYONE
What have corporations learned from the post 9/11 era? Apparently a lot
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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
Vision trapped by XENOFOBIA?
"PROBABLY A HYPERSONIC MISSILE" - VIDEO SHOWS CHINESE BOMBER WITH LARGE ROCKET
"...looks almost to feature an DF-17 like hypersonic glide vehicle (HGV) on top the rocket."
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The “probably” save this assumption. So: better wait. Otherwise all weapon manufacture is ‘probably a sign of WW3’. So the solut is ‘nuke dismantle asap’
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Feeding ‘debate’ with garbage:
"Related to business in Romania, China, Russia, Kazakhstan, Ukraine, Czech Republic, or any other countries..."
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IF no one supported with ‘evidence’ then 2+2=5. Or: lie + lie = FALSE
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Since Roman Empire.. no one is eternal. All is a matter of going beyond neo-liber
...the US is waking up the The Deep State's destruction... the endgame for the once-great US Empire is now underway, and over the next few years,we shall bear witness as it tumbles downhill...
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The US Nation is not represented by big billionaires profiting from this system
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All nuke-sites in the US should be tested.. There were people claim of radiation around
RADIATION 'SNIFFER' HELICOPTER TAKES FLIGHT ABOVE WASHINGTON, DC
The low-flying flights across the District will continue through Nov. 6, at a rate of about two per day. The agency wants to survey and update its radiation maps in the event of a nuclear or radiological incident.
See add:
Pre-war measure at stake? Perhaps. Read this
“While NNSA indicates the radiation sniffing helicopter is being deployed for matters related to the presidential inauguration - maybe - or perhaps - there are more imminent threats situated around or after the Nov. 3 elections.
SOURCE: https://www.zerohedge.com/political/radiation-sniffer-helicopter-deployed-above-washington-dc
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I don’t trust Turkey intrusion in this riddle: it is pro-war, not pro-peace
ARMENIA LAUNCHES BALLISTIC MISSILES ON AZERBAIJAN AMID RETREAT IN NAGORNO-KARABAKH REGION
Meanwhile, Turkey’s Vice President Fuat Oktay repeated an earlier claim of the Turkish leadership that his country is ready to openly send its forces to support Azerbaijan if needed.
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CHINA BLASTS US AS "EMPIRE OF HACKING" AFTER DAMNING NSA REPORT SPOTLIGHTS BEIJING
Tuesday's NSA advisory identified "vulnerabilities" in US systems that have been “recently leveraged, or scanned-for, by Chinese state-sponsored cyber actors” — for example bugs in software like Microsoft Windows or Citrix Systems.
But now China’s Foreign Ministry has slammed the NSA report, calling out the spy agency's 'hypocrisy' and shining a light on vast US domestic surveillance exposed years ago by Edward Snowden. Ministry spokesman Zhao Lijian on Wednesday slammed the United States as an “empire of hacking” and specifically cited the 2013 Snowden revelations.
Zhao called the US and specifically the NSA as “among the worst offenders of mass surveillance” in his fiery comments.
Zhao also expressly denied widespread allegations that Beijing is involved in the exact same thing which has gotten major firms like Huawei banned in the US and parts of the West, and which has placed particular Chinese apps and software under the spotlight.
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US press said that Trump plan to hit IRAN soon. So, this deal has to do ASAP
IRAN TO IMPORT NORTH KOREAN MISSILES IN 25-YEAR MILITARY DEAL WITH CHINA
...this military component may now also feature the deployment in Iran of North Korean weaponry and technology, in exchange for oil...
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Preventing war with war is the LAW.. then Iran’ll prevent WW3 IF armed soon
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RUSSIA GIVES EDWARD SNOWDEN PERMANENT RESIDENCY & 'PATH TO CITIZENSHIP'
His lawyer expressly denied that Snowden would ultimately pursue citizenship.
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SPUTNIK and RT SHOWS
GEO-POL n GEO-ECO ..Focus on neoliberal expansion via wars & danger of WW3
- Final Trump-Biden Presidential Debate: Election Meddling, Healthcare, and More
- Netizens Troll Biden After He Refers to Proud Boys as 'Poor Boys'
- NASA Astronaut Rubins Votes in US Presid Elect From International Space Station
- Military Regains Control Over Village Occup by Terroris for Two Weeks in Cent Mali
- Iranian Ambas on Karabakh Conflict: Tehran Will Not Tolerate Aggres Near Borders
- India's Durga Idol Dazes Netizens for Depict China Pres Xi as Slaughtered Demon
- 'As Confused as Joe Biden?' Kamala Claims 220 Million Amer Died From COVID-19
- Indian Navy Anti-Ship Missile Exhib Pinpoint Accur as It Sinks Target Frigate in Trial
- Will Modi Respond to BFF? Trump Stirs Controversy After Calling India's Air 'Filthy'
- Biden Mocked Online for Comparing Kim Jong-un to Hitler
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