Thursday, May 28, 2020

"The Last Time [Société Générale's] Albert Edwards Saw 'Nonsense' Like This Was 2008: This Is How It Ended"

Following up on this afternoon's "Société Générale's Albert Edwards Is Perplexed".
And just a heads-up: in 2008 Albert made one of the most astoundingly accurate and timely market calls in history. More after the jump.
From ZeroHedge:
Albert Edwards admits he is "perplexed."

Writing in his latest Global Strategy report, the SocGen strategist admits that "until recently (ie the last few days), I had thought that the 35%+ rally in the S&P from its 23 March 2190 low would stall at around 2980 - the 62% Fibonacci Retracement level, as occurred in the previous two (2001 and 2008) bear markets. Hence, I was genuinely surprised to see the S&P climb above the technically important 2980 level, and yesterday power above its 200-day moving average."

Instead, the S&P is now less than 10% from February’s all-time high, and with the US unemployment rate heading towards 20%, Edwards asks rhetorically: "At what point does the stark disconnect between Wall Street and Main Street become a political embarrassment for the Fed? Maybe never."

Maybe never, but most likely soon: as Bank of America's Michael Hartnett wrote last Friday, the absolute limit of bear market rallies in 1929, 1938, 1974 was a 61% rebound from lows (after an avg 49% drop), which would take the S&P500 to 3180 this rally, so another 120 points which at this rate means another 3-4 days of gains. 

Edwards does not look that far back, however, and instead he reminds is that the rally from the March lows is similar to last year’s rally, which similarly was narrowly concentrated on the large cap ‘growth’ stocks aka the FAANGs (Facebook, Apple,  Amazon, Netflix and the stocks formerly known as Google, but now called Alphabet).

And while the bearish strategist offers a mea culpa, saying "I have been very wrong as I had expected to see a collapse in the FAANG stocks and ‘tech’ generally, as the recession exposed large parts of the tech universe as cyclical stocks masquerading as ‘growth’ stocks, ... but how wrong I was, as the stay-at-home nature of this coronavirus-induced recession has instead given the FAANG and tech stocks a whole new impetus", he advises his clients that he, too, has been here before, in the first half of 2008 to be specific.
Cast your minds back. The S&P had topped out in October 2007 - the bear market had begun and the US economy had slipped into recession. Do you remember the mantra that emerging markets had de-coupled from the global downturn and commodities would remain resilient as a result? Do you remember the touting of ‘BRIC’ EM investing? So, for most of H1 2008, commodity prices soared.
At the time Albert said this talk of de-coupling was nonsense, and is "what behaviourists call a bubble of belief as Fed liquidity had funnelled into this asset class as a last refuge from the cyclical meltdown."

Fast forward to today when Edwards saying the current decoupling of tech/growth/momentum, or generally - the FAANG rally - too "will end in collapse in the same way EM and oil did in H2 2008. Indeed, the title and first paragraph above are taken  directly from my weekly of 5 March 2008 with FAANG replacing commodities and EM." And just to make his point, we notes that his lead in sentence was taken directly from his weekly of 5 March 2008 with FAANG replacing commodities and EM.
I have a high conviction that before the end of this year the EMs FAANGs will be unravelling, as the structural arguments supporting these bubbles turn to cyclical sand.
For those who prefer visual reminders, this is what the S&P did for the 6 months after the recession of 2007 had started:
Shifting to the here and now, Edwards then writes that in the run-up to the current recession, "US tech price outperformance far outstripped relative EPS performance." As the SocGen strategist elaborates, "I felt this was yet another Fed inspired, liquidity driven bubble that would burst in the coming recession - like the late 1990s Nasdaq bubble." It's not just him though: even Goldman recently warned that the FAAMGs have gone far too far, and a moment of reckoing is coming as a result of the record concentration in just a handful of stocks as market breadth has plunged to near all time lows.
However, what both Goldman's David Kostin and Albert Edwards missed, is that the unusual stay-at-home nature of this coronavirus-driven recession has boosted IT and media related expenditures generally in a way that could not have been anticipated. Interestingly, US tech sector profits have only really outperformed decisively in the past few months (see chart below), but rather than profits merely catching up with previous heady price outperformance, IT stocks have continued to surge higher relative to the market, especially in the rally since March.
This is not the first time we have seen this pattern: in the late 1990s, Edwards writes, tech stocks also enjoyed a period of massive outperformance that had hugely outstripped what was also a moderate outperformance of their EPS relative to the market (see chart below), "and just like recent times, what propelled US tech valuations to stratospherically high valuations back then was ample Fed liquidity and a bubble of belief."
Then the 2001 recession hit, and many tech stocks suffered a "totally unexpected" fall in profits. These were not growth stocks at all and shouldn't have been on 40x+ PEs. "These were in reality cyclical stocks trading on peak multiples on peak cyclical earnings when they should have been trading on top of the cycle, single-digit PEs" Edwards booms, but of course it is easier to make such observations in retrospect when the frenzy is long gone. Of course, when the market "discovered" these stocks were on the wrong PE ratings based on the wrong forward earnings, the Nasdaq bubble collapsed. And even the true growth tech stocks collapsed in price as all around them earnings bombs were exploding. At that point, "investors rushed for the hills throwing their true growth tech babies out with the bathwater", gloomy Albert concludes.....
....MUCH MORE

*From 2016's Société Générale's Albert Edwards Not His Usual Jolly Self

A couple of the commenters on this post appear to have turned into ahistorical dolts, including the fellow who styles himself

Electric Dragon  
Albert Edwards has successfully predicted nine of the last zero collapses of civilisation.
Actually, Albert made one of the timelier collapse-of-civilization market calls I can remember:

On September 5, 2008 we posted "Meltdown"-Société Générale" which linked to Albert's research note of a couple days earlier:

***Alert****Economic and equity market meltdown imminent****Alert***

On September 7, 2008 Fannie Mae and Freddie Mac were placed into conservatorship.
On September 14, 2008 Merrill Lynch agreed to be acquired by Bank of America to avoid a net cap shutdown.
On September 15 Lehman filed their bankruptcy petition.
On September 16 AIG became a 79.9% subsidiary of the U.S. Treasury.

Within 10 more days the Nation's largest thrift, WaMu was seized and five days later Wachovia was gobbled up.
That's a good call.

Albert is better at credit markets than he is at equities and like many bears, Gluskin Sheff's David Rosenberg being a prime example, Albert doesn't put enough weight on the efforts of the Central Banks to change reality more to their liking.

Whether in the long run those efforts succeed or not, they should inform ones wagers in the present.

Meanwhile in Minneapolis USA


 

A Look At Yara's Autonomous Electric Container Ship

Following up on May 14's "Development of First Fully Autonomous Ship, Yara Birkeland, Put on Hold Due To Coronavirus" we don't want to leave the impression that the history-making vessel is not going to happen, it has happened, at least to the fitting-out stage.
From Yara's Yara Birkeland press kit:

Yara Birkeland status
The hull of the Yara Birkeland vessel was launched to sea in Romania in February 2020 and is expected to arrive at the Norwegian shipyard in May where she will be fitted with various control- and navigation systems and undergo testing before delivery to Yara. Due to the Covid-19 pandemic and the changed global outlook, Yara has decided to pause further development of the vessel and will assess next steps together with its partners....MORE
https://cloud.brandmaster.com//fr/gallery/12632/images/lowres/202028e04b4048cda383d0e5101b0994.png

Top Chinese Politicians and Their Networks At Your Fingertips

A personal aide-mémoire as much as anything, which was one of the original purposes of this blog, things I wanted to remember but probably wouldn't so let's make them searchable on the nets.
Turns out other folks had interests that intersected with the ones we posted and we were off.
Some say very off.

From Macro Polo:
The Committee

The Central Committee of the Chinese Communist Party (CCP) is the locus of political power in China. It includes the rulers of today and the leaders of tomorrow. This product currently contains bilingual biographical data for all committee members, as well as work histories and career overlaps for full committee members only. You can also filter or search for members based on demographic criteria. MacroPolo’s analyses of Chinese politics can be found here. The Committee is a work in progress that will continue to be updated and have new features added over time. For more details, see the Overview.

The 19th Central Committee, selected in 2017 and likely to serve until 2022, initially had 203 full members and 172 alternate members (currently 373). Alternates attend committee meetings but cannot vote on its decisions. Within the Central Committee are 25 members who constitute its Politburo, whose 7-member Standing Committee contains China’s most powerful politicians, including the CCP General Secretary. Major personnel turnover occurs every five years at the CCP National Congress....
.....MUCH MORE

373 entries sortable by age, gender, nationality, ethnicity, ancestry and rank.

EIA Natural Gas Storage Report, May 28, 2020

First up, the estimates via FX Empire:
....US Energy Information Administration Weekly Storage Report Estimates
Natural Gas Intelligence (NGI) is reporting that ahead of the release of the government data, a Bloomberg survey of three analysts produced a range of estimates from 99 Bcf to 126 Bcf, with a median of 103 Bcf. Reuters polled 16 analysts, who had the same range of estimates but arrived at a median of 106 Bcf. NGI projected a 110 Bcf build, which is on par with last year’s 110 Bcf injection but well above the five-year average build of 93 Bcf.

Working gas in storage was 2,503 Bcf as of Friday, May 15, 2020, according to EIA estimates. This represents a net increase of 81 Bcf from the previous week. Stocks were 779 Bcf higher than last year at this time and 407 Bcf above the five-year average of 2,096. At 2,503 Bcf, total working gas is within the five-year historical range
And the report from the Energy Information Administration:
for week ending May 22, 2020   |   Released: May 28, 2020 at 10:30 a.m.
...Summary
Working gas in storage was 2,612 Bcf as of Friday, May 22, 2020, according to EIA estimates. This represents a net increase of 109 Bcf from the previous week. Stocks were 778 Bcf higher than last year at this time and 423 Bcf above the five-year average of 2,189 Bcf. At 2,612 Bcf, total working gas is within the five-year historical range....MUCH MORE
And the price action via the NYMEX (one week of 30-minute bars):
1.840 down 0.046 last

https://www.tradingview.com/x/4R10bWaY/ 

Société Générale's Albert Edwards Is Perplexed

From Markets Now:
SocGen’s Albert Edwards is perplexed:
I'm perplexed. Until recently (ie the last few days), I had thought that the 35%+ rally in the S&P from its 23 March 2190 low would stall at around 2980 - the 62% Fibonacci Retracement level, as occurred in the previous two .... Hence, I was genuinely surprised to see the S&P climb above the technically important 2980 level, and yesterday power above its 200-day moving average. We are now only 10% from February's all-time high, and with the US unemployment rate heading towards 20%, one might ask: At what point does the stark disconnect between Wall Street and Main Street become a political embarrassment for the Fed? Maybe never.
The rally from the March lows is similar to last year's rally. It is narrowly concentrated on the large cap ‘growth' stocks - aka the FAANGs (Facebook, Apple, Amazon, Netflix and the stock formerly known as Google, but now called Alphabet).
Though if we’re honest he’s not that perplexed:....
....MUCH MORE

Models and Modelling: We May Have Just Made A Big Mistake

I've mentioned that we probably have as many posts on models as any generalist site on the internet.
It goes with the territory: weather and economics and markets are all so complex they require modeling just to facilitate comprehension but models are not reality:
October 18, 2012
Modelling vs. Science
A subject near and dear to our jaded hearts, some links below.
If an experiment is not reproducible it is not science.
If an hypothesis is not falsifiable it is not science.

Finally, our two guiding principles regarding models:
"The map is not the territory"
-Alfred Korzybski
"A Non-Aristotelian System and its Necessity for Rigour in Mathematics and Physics" 
presented before the American Mathematical Society December 28, 1931
....................................................................................................................................................................

"All models are wrong, but some are useful"
-George E.P. Box
Section heading, page 2 of Box's paper, "Robustness in the Strategy of Scientific Model Building"
(May 1979)
One last point:
The current generation of modellers seem never to admit error.
Their hubris and lack of humility are not just ridiculous but dangerous yet they blithely move from academe into government and back without so much as an acknowledgement, much less an apology.

From FT Alphaville's Jemima Kelly:
Is the “science” behind the lockdown any good? 
We should all be pretty familiar with the narrative by now. An arrogant, exceptionalist British government was until mid-March pursuing a reckless strategy of herd immunity that would have callously allowed a huge number of old and vulnerable people to die and the health system to be overwhelmed. Then came a “bombshell” from Imperial College London: a “doomsday report” predicting there would be 500,000 deaths if we were to carry on down that road, prompting a sudden government U-turn, and ultimately the decision to lock the country down.

Gone was the Machiavellian Dominic Cummings plan of “letting old people die”; in was STAY AT HOME; PROTECT THE NHS; SAVE LIVES. (The notion that it was Cummings who was pushing for the herd immunity idea has since been disputed, while the notion that Cummings was into the staying-at-home idea has also since been, er, disputed.)

But then, after all that, it turned out that the computer code Imperial had relied on to predict the future in that March 16 paper (“Report 9”) was outdated, full of bugs, and based on flimsy, unscientific assumptions. The code was simply totally unreliable. All academic epidemiology should be defunded immediately. The lockdown, surely, could no longer be justified.

As the Telegraph put it in their headline on May 16, this could be “the most devastating software mistake of all time”! It could “supersede the failed Venus space probe” in terms of economic cost and lives lost!
The question is: is any of this true? Did the modelling, as the Daily Mail put it last Saturday, “single-handedly (trigger) a dramatic change in the government’s handling of the outbreak”? If the code is so bad, does that render the modelling useless? And would shoddy modelling remove the justification for the lockdowns in place across much of the globe anyway?

How much did the Imperial paper really matter?
During a virtual panel at the Institute of Art and Ideas over the Bank Holiday weekend, commentator Toby Young argued that states “across the world were completely unjustified in suspending our liberties based on a few weak computer models”. He was referring to the Imperial modelling, which he said had “panicked” governments into shutting down their economies. This came on the back of a couple of posts on Young’s “Lockdown Sceptics” blog, written by a pseudonymous writer, who called the code underpinning the modelling “unusable”.

Actually, though, the Imperial report did not single-handedly trigger a change in government policy at all, as Imperial have themselves made clear. When we spoke to the head of Imperial’s modelling team Neil Ferguson, who had authored the report, in early April, he told us that “a much wider range of scientific advice and modelling advice” had been given to government in the two weeks leading up to the report, all of which pointed in a similar direction.

Research by the London School of Hygiene and Tropical Medicine (LSHTM), for example, whose scientists also sit on the government’s Scientific Advisory Group for Emergencies (SAGE), had come up with similar numbers in their modelling. Indeed the Scientific Pandemic Influenza Group (SPI-M), which reports to SAGE, had already produced a report on March 2, which warned of more than 500,000 deaths in an “unmitigated reasonable worst case scenario”.

And before Imperial had even given their numbers to the government, they had been discussed with the others on SPI-M. As LSHTM’s head modeller John Edmunds made very clear to us on a phone call last week:
There are four groups independently looking at this. I think there’s a misperception here that Imperial are running the country. They’re not. They’re one of many groups and there’s a process whereby they feed their results into SPI-M, SPI-M looks at it, we come to a consensus, it goes up to SAGE, then SAGE looks at it.
Why this narrative and this pouncing on the report, then? Partly, it’s because we wanted a narrative to cling onto.

Fleeting heroes and invisible villains....
....MUCH MORE, come for the exposition, stay for the comments.

Someone should also look at the University of Washington Institute for Health Metrics and Evaluation (IHME) model which seems not to even be able to predict the past but it won't be me.
I have to model today's natural gas storage report, model the market's dawning realization that at 24 times sales Beyond Meat's valuation might be a bit rich and model something to eat before manifesting it in my tummy.

Wednesday, May 27, 2020

Russia Prepares To Test Nuclear Powered Doomsday Drone Torpedo

From The Barents Observer:

Russia's 'doomsday drone' prepares for testing
One year after the fatal accident with a nuclear-powered missile in the White Sea, Russia's weapon designers say a test launch the Poseidon nuclear powered underwater drone will take place this fall. 
The test-launch will take place from the “Belgorod” submarine, a source in the military-industrial complex told RIA Novosti.

The drone, formed as a giant torpedo, is built to carry a several megatons nuclear warhead and is described by weapons analysts as a “doomsday nuke”. Powered by a small nuclear reactor, the Poseidon has a believed range of 10,000 km across the world’s oceans.

Launched from the Barents Sea or other waters in the Arctic, the drone can autonomously cross the North Atlantic. If detonated outside the east coast of the United States, the nuclear warhead could create a several tens of meters high tsunami wave additional to damage caused by the nuclear blast itself.

The Barents Observer first reported about the existence of the weapon in 2016. In March 2018, President Vladimir Putin confirmed the existence of the upcoming giant underwater drone.
Poseidon was one of six new strategic nuclear weapons presented by the President.
In July 2018, Russia’s Ministry of Defense released a video showing the workshop where the drone was assembled and an animated film demonstrating how the drone potentially could be used in a real warfare situation.

One of Kremlin’s controlled media, Radio Sputnik, on Tuesday aired an interview with former GRU colonel Aleksandr Zhilin who elaborates on the drone’s advantages....
....MUCH MORE

Shipping: "World’s Biggest LNG Engine Approved for CMA CGM Megaships"

CNA CGM has made such a huge bet on LNG powered ships that they would really, really like to see them mandated.
By the UN, the IMO, somebody.
From gCaptain:
The biggest and most powerful LNG-fueled engine ever built has been approved for use on board the first vessel in a series nine 23,000 TEU containerships owned by French shipping giant CMA CGM.
The X92DF engine, developed by WinGD, is the most powerful two-stroke dual fuel engine ever built, delivering a whopping 63,840 kW of power.

The engine is fitted on board CMA CGM’s future flagship, named CMA CGM Jacques Saadé, which is currently under construction by China State Shipbuilding Corp.
The engine recently received type approval from Class society Bureau Veritas following extensive full-load tests in diesel and gas mode.

“The certification process of WinGD’s 12X92DF engine was a long process due to the size and complexity of the engine,” said Olivier Cartier, Technical Vice President at Bureau Veritas. “We mobilized our worldwide teams of engine specialists, especially in China, in France and in Germany, at each of the critical phases of the certification process. Progressive Type Approval Tests were necessary where at each test significant progress and refinement were noted, so that we remained confident that final certification at 100% of the power using gas as fuel was an achievable objective – and this has now been achieved.”...
....MUCH MORE

India: As China Invades In the Northeast The Locusts Have Arrived From the West

First up, as can be seen on this map from GlobalSecurity.org, May 26, it is obviously Bhutan's fault:

Or:
https://cofda.files.wordpress.com/2013/10/china-india-border-dispute.jpg

And from Al Jazeera, May 25:

Crops destroyed as India faces 'worst locust attack in 27 years'
Insects damage seasonal crops, devastating farmers already struggling with the impact of coronavirus lockdown.
Huge swarms of desert locusts are destroying crops across western and central India, prompting authorities to step up their response to the country's worst plague in nearly three decades.
Drones, tractors and cars have been sent out to track the voracious pests and spray them with pesticides. The locusts have already destroyed nearly 50,000 hectares (125,000 acres) of cropland....
....MORE

As the man said, at least there haven't been any inbound comet sighting, yet.

Oh.
Also at Al Jazeera, May 27:
'All-out combat' feared as India, China engage in border standoff

Comet, I said "comet", not "combat".

"Japan enacts high-tech 'super city' bill"

Meanwhile in the U.S. the politicians have built and rule over pestilential cesspits.
From The Japan Times:
The government hopes to utilize cutting-edge technologies to address issues such as depopulation and the aging of society.

The Diet enacted a bill Wednesday to create "super cities" where artificial intelligence, big data and other technologies are utilized to resolve social problems.

The bill revising the national strategic special zone law passed the House of Councilors by a majority vote with support mainly from the ruling coalition.

The revision stipulates procedures to speed up the changing of regulations in various fields to facilitate the creating of such smart cities.

The government hopes to utilize cutting-edge technologies to address issues such as depopulation and the aging of society.

In such cities, data-linking platforms to collect and organize various kinds of data from administrative organizations and companies will be established for autonomous driving, cashless payments, telemedicine and other services.

Under the revised law, local governments to be selected will launch forums with the central government and private companies, draw up city development plans and make applications to the state after winning understanding from local residents....
....MORE

Probably related:
January 9
"Toyota to build 'city of the future' at the base of Mount Fuji" 
South Korea has one of these, it does not look like a happy place. I'll see if it's in the link-vault....
*****
...Have I mentioned hydrogen?
Why yes, yes I have.  

January 9
75% Of Young People Want Out Of Korean Techtopia 
Following up on the post immediately below, "Toyota to build 'city of the future' at the base of Mount Fuji"
First up, from CityLab, June 22, 2018:...

You Thought The World Was Through With Forums, Conferences, and Panels? Ha!

As seen in "Is This The End Of The Insight-Industrial Complex?": 
Yesterday's trip down to the link-vault for the sunspot post immediately below resulted in a bit of happy serendipity as on the same (metaphorical) shelf was a tweet with the annotation:

This is Why Izabella Is the Best
Which reminded me of this 2018 post and got me wondering about the future of panels, TED talks, and the conference biz in the post coronavirus world..... 

And although I have a sneaking suspicion that is not the point of her latest post, I have had a slowly-dawning realization that the panels, like the poor, will always be with us.

From FT Alphaville's editor:
Censortech strikes again
We suggested a few weeks ago that “censortech” had spun out of control, with platforms starting to flag even mainstream dissent of the government-imposed lockdown strategy as problematic and in need of suppression.
Well, it seems, the faceless mandarins governing what does and does not make the grade on social media sites were only getting started.

News comes our way on Wednesday that a clip of an Institute of Ideas virtual panel featuring The Spectator’s Toby Young -- who happens to be the general secretary of the “Free Speech Union” -- has been removed from YouTube* for daring to question lockdown strategy.

We appreciate that the views of Toby Young are not everyone’s cup of tea. But until recently we lived in a society that had the capacity to process opposing view points and make its own mind up about them. Those who don’t like the views of The Spectator don’t have to buy The Spectator. And if the majority of people agree -- perhaps because those views really are too distasteful for any collective to absorb -- the market will silence the miscreants by imminently making the publication fail.
The People’sTube told Young they had taken the clip down because of an investigation triggered by a single complaint, with the social media platform concluding the clip violated its community standards.

We’ve watched the panel and the decision is very hard to rationalise. The only justifiable case against the clip, which was only showing Toby Young’s comments, is that it was decontextualised from the counter-arguments expressed in the wider panel. His key argument, by the way, is that the strongest case against lockdown isn’t the economic case but rather the civil liberties case and the bad precedent it can set. But if decontextualisation is to be considered a thought crime worthy of deletion from the web, must not every media outlet shutter itself immediately?

Young wasn’t the only lockdown critic on the panel. Nobel-prize winning biophysicist Michael Levitt also presented the case that governments may have rushed into lockdowns when more targeted measures may have been more effective. The other two panellists’ views were slightly ambivalent, with each seeing some potential benefits from the lockdown strategy but also acknowledging the downsides. In other words, there were actually counter-arguments.

If you watch the clip, which Young has now posted on Bitchute, you will -- we think -- agree that the views being expressed could not really be considered extreme in any way.
Which requires us to be blunt. What’s happening here is literally the sort of thing we, the free press, are used to bemoaning in authoritarian states elsewhere.

We seem to have forgotten that a society that does not permit the questioning of government policy or consensus cannot be classified as a free society. By that measure it is not a liberal society either....
....MUCH MORE 

Huzzah! The Meat Shortage Has Ended (now there's a lack of demand)

From Bloomberg, May 21:

US meat squeeze eases on plant revival, slack in demand 
The squeeze on U.S. meat is easing. Wholesale prices are falling as slaughterhouses recover from Covid-19 related shutdowns and traders brace for lower demand than usual over the Memorial Day holiday.

Enough workers returned to American slaughterhouses that pork and beef plants through Wednesday were operating at 85% and 81%, respectively, of year-ago levels. That’s a rebound from late in April, when production of each meat fell by more than 30%.

While the uptick means more product will be available to grocers, the pandemic remains an issue for the unofficial start of summer grilling season with limitations on group gatherings still intact.
“It’s prime time for grilling and social events and you’re not seeing the meat features that you typically do,” Don Roose, president of U.S. Commodities in Iowa, said by phone. “So it’s disappointing from a demand standpoint.”

Wholesale beef prices have declined six straight days, dropping 15% from a record of $475.39, the biggest such drop since 2011, U.S. Department of Agriculture data showed Wednesday.
Pork prices climbed for the first time in four days but are still 18% below a five-year high of $121.66 per 100 pounds. Tuesday’s decline of 9% was the largest drop since 2017.
https://img-s-msn-com.akamaized.net/tenant/amp/entityid/BB14nLHF.img?h=450&w=799&m=6&q=60&o=f&l=f
Grocers, weeks ago, facing smaller supplies and higher prices for red-meat started hawking other proteins including turkey, seafood and plant-based meat while consumers also pushed back against higher prices. “We’re looking at sticker shock,” Roose said....
....MORE

I always appreciate when chartmeisters supply arrows for we, the directionally challenged.
On the other hand I was a bit leery about the "U.S. Meat Squeeze" headline.

If interested here are some of our posts on strange Bloomberg headlines.

Whoosh...There Goes Beyond Meat (BYND)

No news, just a quick follow-up.
The stock is down $10.33 (7.77%) at $122.54.

BYND Beyond Meat, Inc. daily Stock Chart
Recently:
May 20 
"Beyond Meat Gets a New Fan Who Says the Stock Can Rise 24%" (BYND)
And if governments begin mandating you eat their stuff, even higher.
(I'm just crabby because it was looking like a breakdown a couple days ago)
May 18
Questions Americans Want Answered: Will The Bump In Beyond Meat's Sales Continue? (BYND)
May 14
Thinking Of Saying Goodbye To Beyond Meat (BYND)  
Dear BYND, it's not you, it's me.
A bearish engulfing day yesterday followed by an uninspiring pre-market move higher today:

"Hydrogen Primed For Key Role in World’s Greenest Stimulus Plan"

"Hi, do you have a moment to learn about the potential of hydrogen and/or ammonia?"

https://cottagelife.com/wp-content/uploads/2017/05/vgpyn8diytxduj0kpgvn.jpg
Bear via Cottage Life
Caption idea by way of the incomparable Paul Bronks
We've been banging this drum* so long I feel I have to at least try to keep patient, yet wary, reader amused.
From Bloomberg, May 26:

Europe is betting on emissions-free electricity for big industry in its economic recovery package, drafting measures to scale up the production of hydrogen.
The world’s most climate-ambitious stimulus package to be unveiled on Wednesday is poised to earmark tens of billions of euros for hydrogen technology as well as infrastructure for clean energy.
European Commission President Ursula Von Der Leyen is set to build her coronavirus economic rescue plan around the Green Deal that aims for climate neutrality by 2050.

Hydrogen is emerging as a fuel of the future in a growing number of European countries, including the Netherlands, Germany and Portugal. The region is well positioned for it thanks to its natural gas infrastructure, which can be used to transport hydrogen. The European Union’s growing renewable energy output could also be used for emission-free production of the fuel.

“The goal of net-zero emissions in 2050 implies basically a full decarbonization of the economy,” Noe van Hulst, the hydrogen envoy for the Dutch government, said in an interview. “Clean hydrogen is an indispensable climate-neutral energy carrier, in addition to green electricity.”
The EU economic package will include a proposal for the bloc’s next trillion-euro budget for the years 2021-2027 and a “recovery instrument” of at least half-a-trillion euros designed to cushion the economic blow from the coronavirus outbreak.

It’s poised to be greener than most national bailouts, with many of the biggest member states stopping short of attaching sustainability conditions to public aid despite encouragement from the commission.
The EU proposal will be subject to unanimous approval by the EU’s 27 governments. With varying national interests, the strength of industries and the extent of reliance on fossil fuels, member states are set for negotiations that could take months to conclude.

Hydrogen currently accounts for less than 1% of Europe’s energy consumption and is mainly used as feedstock in the chemical sector. When burned, hydrogen leaves only water vapor and can produce ultra-high temperatures needed in industrial processes.

The catch is the cost. Most of the hydrogen used as fuel is derived by splitting it off from molecules of natural gas, which requires a good deal of energy and also produces carbon dioxide.
What’s changing is the development of electrolysis, the process of sending an electric current through water to split hydrogen atoms from oxygen. And if the electricity comes from renewables, the hydrogen is made without any greenhouse gases. Industrial gas maker Air Liquide SA, steelmaker ThyssenKrupp AG and the oil major Royal Dutch Shell Plc have some of the highest profile demonstration projects.

EU member states are already advancing plans and eying partnerships on hydrogen. The Netherlands has a production target of 500 megawatts of electrolysis capacity by 2025 and is planning to scale it up to 3,000-4,000 megawatts by 2030....
....MORE 
*For example, last night: 

"Student Housing, One of the Most Hyped Asset Classes, Runs Out of Students"

Just as every generation thinks that they are the ones who discovered sex, so every real estate cycle produces its can't miss deals and promoters. [no idea who to credit on the sex line, probably some Cro-Magnon parent]
Just a year ago the only thing more talked-about in the R.E. biz was WeWork.
From Wolf Street, May 24: 

Here’s the story of two student housing REITs in the UK that crashed.
Wolf here: In recent years, student housing, a subcategory of Commercial Real Estate, became one of the hottest asset classes in the US, in the UK, and elsewhere. Big money piled in. Wall Street raked in the fees by securitizing the mortgages into commercial mortgage-backed securities (CMBS). Large firms spun off their portfolios of student housing buildings into publicly traded REITs. The article below is about two of those REITs in the UK, but the issues are the same in the US. This asset class is risky even in good times because students are not stable renters. Last fall, long before Covid-19 showed up, delinquencies and special servicing rates on US student housing CMBS already spiked. The pandemic has now been heaped on top of it.

By Nick Corbishley, for WOLF STREET:
When it comes to over-priced acquisitions at peak hype, there is no worse time than just before a financial crisis. The UK’s largest student housing real estate investment trust (REIT) Unite Group fell into that trap. In November 2019, it spent £1.4 billion to buy up privately-owned student housing provider Liberty Living Group plc, from the Canada Pension Plan Investment Board. In the process, it more than doubled its net debt, from £856 million to £1.88 billion. The day after the deal was sealed, Unite’s CEO said the enlarged group would “be well positioned to meet the growing need for affordable, high quality student accommodation in university towns and cities where demand is strong.”

That need, instead of growing, has all but vanished. Since March 11, all UK university campuses have been closed due to the virus outbreak. Most students have gone back home.

In late April, Unite Group informed investors that it had been inundated with cancellation requests since offering to waive rents for students who did not plan to occupy their rooms in the final term. Based on requests received up to that point, between 43,000 and 46,000 students would not pay rent this semester, the company said. The total number of vacated beds is the equivalent of 65% of Unite’s portfolio.

As a result, the company said it expected a fall in income from the 2019/20 academic year of 16-20% on a Group share basis, or £125 million, which it said was an improvement on its previous forecasts. But that was before Cambridge University’s bombshell announcement last Thursday that it was cancelling all face-to-face lectures for the entire 2020-2021 academic year, fueling speculation that many students will stay away next year too.

“Given that it is likely that social distancing will continue to be required, the university has decided there will be no face-to-face lectures during the next academic year,” the university said in a statement. “Lectures will continue to be made available online and it may be possible to host smaller teaching groups in person, as long as this conforms to social distancing requirements.”

Given Cambridge University’s import and influence, the move is likely to trigger a cascade of similar announcements from other higher education institutions. If that happens, student life in the UK is set to be a more insular experience for the foreseeable future, dealing a massive blow not only to students, professors, lecturers and other university staff but also to the businesses and communities that have come to depend on the income they generate....
....MUCH MORE

Bringing to mind this bit, last seen in 2014's "George Goodman, aka Adam Smith, Has Died":
....Adam Smith noted it in the 'sixties bull market (The Money Game via Contravest, January 22, 2000):
There is one wonderful chapter where the consummate pragmatic speculator, the Great Winfield, is lamenting his performance problems in a wildly speculative bull market.
“My boy,” said the Great Winfield over the phone. “Our trouble is that we are too old for this market. The best players in this kind of a market have not passed their twenty-ninth birthdays. Come on over and I will show you my solution.
So Adam Smith goes over and finds three new faces in the Great Winfield’s office.
My solution to the current market,” the Great Winfield said. “Kids. This is a kids’ market. This is Billy the Kid, Johnny the Kid, and Sheldon the Kid.” The three Kids stood up without taking their eyes from the moving tape, shook hands, and called me “sir” respectfully.
“Aren’t they cute?” the Great Winfield asked. “Aren’t they fuzzy? Look at them, like teddy bears. It’s their market. I have taken them on for the duration.”
Winfield then describes how much money Billy the Kid is making in computer leasing stocks like Leasco Data Processing and Randolph Computer that he has heavily leveraged with bank borrowing....

And the really spooky bit, for me anyway, SHALE:
...Sheldon the Kid waved his hand for recognition.

“This one will really take you back,” said the Great Winfield. “Sheldon’s Western Oil Shale has gone from three to thirty.”


“Sir!” said Sheldon. “The Western United States is sitting on a pool of oil five times as big as all the known reserves in the world – shale oil. Technology is coming along fast. When it comes, Equity Oil can earn seven hundred and fifty dollars a share.


It’s selling at twenty-four dollars. The first commercial underground nuclear test is coming up. The possibilities are so big no one can comprehend them.”


“Shale oil! Shale oil!” said the Great Winfield. “Takes you way back, doesn’t it. I bet you can barely remember it.”


“The shale oil play,” I said dreaming. “My old MG TC. A blond girl, tan from the summer sun, in the Hamptons, beer on the beach, ‘Unchained Melody,’ the little bar in the Village.”


“See? See?” said the Great Winfield. “The flow of the seasons. Life begins again. It’s marvelous. It’s like having a son! My boys! My Kids!”


The Great Winfield had made his point. Memory can get in the way of such a jolly market, that malaise that comes with the instantly gone, flickering feeling of déjà vu. We have all been here before.

“The strength of my kids is that they are too young to remember anything bad, and they are making so much money they feel invincible,” said the Great Winfield.


“Now you know and I know that one day the orchestra will stop playing and the wind will rattle through the broken window panes, and the anticipation of this freezes us. All of these kids but one will be broke, and that one will be the multi-millionaire, the Arthur Rock of the new generation. There is always one, and maybe we will find him.”
...MORE 

Tuesday, May 26, 2020

BIMCO: Tanker shipping – Sky high freight rates replaced by reality of falling oil demand

From Singapore's Manifold Times, May 26:

Peter Sand, Chief Shipping Analyst at BIMCO, on Monday (25 May) published an update on the full impact of falling fuel demand worldwide on the shipping industry now that tensions in the trade war are being allayed:  
Overview
Geopolitical tensions have now eased, leaving freight rates to feel the full effects of the weak underlying market and falling demand. Tanker shipping looks set to be under pressure for the rest of the year.
Demand drivers and freight rates
The tanker shipping industry was once again caught in a whirlwind, as freight rates skyrocketed with little regard to the poor market fundamentals before the latter once again caught up with rates. Geopolitics continues to dominate the headlines when it comes to the tanker market, and developments in the supply of oil overshadow the steep drop in demand caused by the Covid-19 crisis. Floating storage has also increased primarily due to the mismatch between oil production and oil demand, tightening tonnage availability in the market and further supporting freight rates.
This drop in demand is illustrated by the collapse in oil products being supplied in the US: gasoline fell by 37.7% from 3 January to 3 April, a loss of 3.1 million barrels per day (bpd), but has since recovered some of that lost supply and, as of 15 May, stands at 6.8m bpd (down 16.5% from 3 January). The supply of jet fuel has fallen by 62.5% since the start of the year, standing at 0.6m bpd on 15 May (down from 1.6m bpd on 3 January).

April was certainly a month to remember, with the biggest oil-producing nations setting off a price war and flooding the market with millions of extra barrels each day – at the same time as demand was collapsing.

The OPEC+ (an expanded alliance of countries collaborating to control the world production of crude oil) production cut that was eventually agreed, and has now come into force is, however, still not enough to balance the oil market after lockdown measures around the world cut demand for all oil products.

The chartering spree from Saudi Arabia, as it prepared to flood the market with its cheap oil in April, led average Very Large Crude Carrier (VLCC) earnings to soar to USD 279,259 per day on 13 March, with rates staying high until the end of April. However, since then, as oil production has been cut and the reality of an oversaturated market hit home, rates have dropped to USD 42,547 per day on 22 May. Rates will continue to fall, as the global economy is unable to provide the demand needed to keep them elevated.
As is often the case, rates for the smaller crude oil tankers followed the paths of the VLCCs with Suezmax earnings peaking at USD 120,870 per day before falling to USD 30,992 on 22 May. Aframax earnings peaked later, reaching USD 83,921 per day on 24 April before falling to USD 26,959 per day on 22 May.....
....MUCH MORE

Shipping: ABB and Hydrogene de France To Produce Fuel Cells To Power Oceangoing Vessels.

From The Driven, April 13:

ABB moves step closer to megawatt-scale fuel cells for ships
Swiss-Swedish electronic manufacturing giant ABB has signed a Memorandum of Understanding with French hydrogen technologies specialist Hydrogène de France to jointly manufacture megawatt-scale hydrogen fuel cell systems for ocean-going vessels.

As industry and nations around the globe look for ways to transition to a more sustainable means of energy and power, the global shipping industry – accounting for 2.5% of the world’s total greenhouse gas emissions – is under increasing pressure to similarly transition to more sustainable power sources.
The UN’s International Maritime Organization, responsible for regulating global shipping, has set a global target to cut annual emissions by at least 50% by 2050 based on 2008 levels.
As such, shipping and technology companies are looking for ways to cut emissions for ocean-going vessels – a bigger task than simply sticking a battery into your hatchback.

Hydrogen – specifically green hydrogen, which is hydrogen made using renewable energy to power the hydrolysis process – is one of the most favoured options for transitioning the shipping sector to a more sustainable power sources, with hydrogen fuel cells converting its chemical energy into electricity through an electrochemical reaction.

Currently, hydrogen fuel cells are already capable of powering ships sailing short distances, as well as supporting the auxiliary energy requirements of larger ocean-going vessels....MORE
On May 21st ABB announced some smaller stuff:
ABB to enable world’s first hydrogen-powered river vessel

"China is testing a national digital currency — one piece in Xi’s bid for global influence"

The writer, Fred Kempe is the President and Chief Executive Officer of the Atlantic Council, about as wired-in, Davos style as you can get.
I have to get this out of my head. When we saw this on Monday:
I couldn't help wondering how Madame Peng would address concerns about here husband's influence on the WHO as she was out Goodwill Ambassadoring. I mean looking at her in the uniform: she appears, in a word, formidable.
But then I saw the picture below and it struck me: she IS formidable and I wouldn't put it past her to tell her Davos-style audiences "Oh don't mind Pooh Bear, he just talks tough."

https://mottomedia.files.wordpress.com/2017/04/xi-jinping-wife-pe_2517570b.jpg?w=620

Okay, enough with the family stuff, here's CNBC, May 23:
  • Chinese President Xi Jinping’s  move to impose new national security laws on Hong Kong  is just one of his many calculated wagers designed to leverage Covid-19′s disruptions for greater domestic control and global gain.
  • Most intriguing and least noticed, “China became the first major economy to conduct a real-world test of a national digital currency,” wrote Aditi Kumar and Eric Rosenbach this week in Foreign Affairs.
  • The impact of that move, over time, could have greater global impact than anything Beijing does in Hong Kong or even to Taiwan.
This is the way new eras unfold – gradually at first and then suddenly.

Chinese President Xi Jinping’s apparent rolling of the dice on Hong Kong ahead of this week’s National People’s Congress is just one of his many calculated wagers designed to leverage COVID-19′s disruptions for greater domestic control, regional influence and global gain.

China’s move to impose new national security laws on Hong Kong, the most serious threat yet to the city’s democratic self-governance and territorial autonomy, prompted a 5.6% decline in the Hang Sang Index (the worst one-day performance in five years).

Beyond that, the decision could ignite new Hong Kong pro-democracy protests, it should raise new concerns about Taiwan’s sovereignty, it will feed the growing deterioration of U.S.-Chinese relations, and it may contribute to anxiety among world democracies about what values a Chinese-led world order might reflect.

Seen in isolation, some analysts see the surprise Hong Kong move as reckless.
Put the decision beside other recent actions, however, and the pieces fit neatly together into President Xi’s long-standing strategic purpose: strengthening the party’s domestic hold, solidifying China’s regional power and expanding its international influence – all in a sharpening competition with the United States.

Those recent actions include, but aren’t limited to, new technology investments of an estimated 10 trillion yuan ($1.4 trillion) over six years to 2025, reports that China’s defense budget will grow by up to 9%, and its increased efforts to influence multilateral institutions as the Trump administration retreats, most recently through Beijing’s $2 billion contribution to the World Health Organization.
Most intriguing and least noticed, “China became the first major economy to conduct a real-world test of a national digital currency,” wrote Aditi Kumar and Eric Rosenbach this week in Foreign Affairs. They describe a pilot project in four large Chinese cities which the authors see as putting China years ahead of the United States in developing this “central component of a digital world economy.”

The impact of that move, over time, could have greater global impact than anything Beijing does in Hong Kong or even to Taiwan.

“U.S. policymakers are unprepared for the consequences,” Kumar and Rosenbach write. In general, digital currencies weaken the power of U.S. sanctions and the ability of U.S. officials to track illicit financial flows. More specifically, a digital yuan combined with China’s advanced electronic payment systems may provide a more effective platform for future influence than a fleet of aircraft carriers.

I argued in this space three weeks ago that President Xi and his Chinese Communist Party, by emerging as the first major world economy to end virus lockdowns and restore growth, were seizing a window of opportunity – one that could close as rapidly as it had opened.

“Great historical progress always happens after major disasters,” President Xi said recently at Xi’an Jiaotong University, telling professors and students of Chinese sacrifices of the past and the possibilities of the moment. “Our nation was steeled and grew through hardship and suffering.”...
....MUCH MORE

With JP Morgan Up 7.10%, Bank of America Up 7.15% and Citigroup Up 9.23% On the Day, Let's Talk Cantillon Effect (JPM; BAC; C)

I know a lot of this stuff is junior high school material for many of our readers but talking about currency in the post immediately below got me thinking about money more broadly and I might have a shot at a sustainable business model for a pitchfork manufacturing business if gentle reader indulges me.
There are arguments whether Cantillon's observations only apply to a gold standard or also to fiat but we will leave that for another day.
First up, Matt Stoller at his BIG Newsletter last month
April 9
The Cantillon Effect: Why Wall Street Gets a Bailout and You Don't
Hi,
Welcome to BIG, a newsletter about the politics of monopoly. If you’d like to sign up, you can do so here. Or just read on…
Today I’m going to try and explain why the Fed and Congress, while attempting to throw money at everyone, disproportionately tends to aid certain narrow financial actors. 

The Cantillon Effect
Three weeks ago, the government passed a giant multi-trillion dollar bailout. Supposedly, it was money for a host of stakeholders, including hospitals, states, Wall Street banks, big business, the unemployed, and small businesses. Today the Federal Reserve built on top of Congress’s framework, announcing yet another multi-trillion dollar set of facilities, on top of what it already put out, to help cities, states, small businesses, main street businesses, and so on and so forth.
So what has happened so far? This is today’s change in stock price of a real estate venture run by one of largest private equity funds in the world.
Image
A thirty five percent jump in a day is… a lot. The reason the stock skyrocketed is because investors believe the new measures from the Federal Reserve will bailout the debt of this private equity fund. There’s a ‘monetary bazooka’ aimed at the economy. And yet there’s a puzzle. If there’s money for the entire economy, why is that normal people and small businesses can’t access unemployment insurance and lending programs? To put it another way, why is the money meant for everyone only showing up in the stock market?

The reason is because money has to travel through institutions, and right now, the institutions for the powerful function well, and those for the rest of us are rickety and broken. So money gets to the rich first. Eventually, some money will get to the rest of us, but in the interim period before that money fully circulates, the wealthy can use their access to money to buy up physical or financial assets.
An 18th century French banker and philosopher named Richard Cantillon noticed an early version of this phenomenon in a book he wrote called ‘An Essay on Economic Theory.’ His basic theory was that who benefits when the state prints a bunch of money is based on the institutional setup of that state. In the 18th century, this meant that the closer you were to the king and the wealthy, the more you benefitted, and the further away you were, the more you were harmed. Money, in other words, is not neutral. This general observation, that money printing has distributional consequences that operate through the price system, is known as the “Cantillon Effect.”

In Cantillon’s day, the basis of money was gold, so he wrote about what happened when a nation-state discovered a gold mine in its territory. Increasing the amount of gold in the realm would not just increase price levels, he observed, but would change who had wealth and he didn’t. As he put it, “doubling the quantity of money in a state, the prices of products and merchandise are not always doubled. The river, which runs and winds about in its bed, will not flow with double the speed when the amount of water is doubled.”

Cantillon went on to discuss how money would flow, basically noting that rich people near the mine would spend it on 18th century luxuries like servants and meat pies, prompting a general rise in prices. Eventually the money would get out to the populace, but until it did, working people would have to pay higher prices without access to the new money that mine owners had. So there would be inflation, with uneven distribution of purchasing power.
There’s also a China angle. Cantillon noted that a kingdom discovering gold would in the long-run erode its own manufacturing base, that the non-neutrality of money also had geopolitical consequences.

Here’s how he put it:...
....MUCH MORE

And from some Austrians (real Austrians: Jasomirgottstrasse 3/12, 1010 Vienna):
Austrian Economics Center 

The Cantillon Effect and Populism
Monetary policy and everything concerning it has to be one of the most interesting topics out there. With monetary economics, there are quite a few interesting concepts which come with it. One is the so-called Cantillon effect.

Richard Cantillon was an economist in the 18th century who mainly wrote about money and how it circles around the economy.

The so-called Cantillon effect describes the uneven expansion of the amount of money. If a central bank pumps more money into the economy, the resulting increase in prices does not happen evenly. The Austrian economist Friedrich August von Hayek compared this monetary expansion with honey. If you pour honey into a cup, it won’t spread out evenly. It will clump in the middle of the cup first before spreading out.....
*****
.... This theory doesn’t imply that money creation is always biased towards the powerful, only that how money travels matter. There is no inherent money neutrality, such neutrality must be constructed by institutional arrangements. Much of the New Deal in the 1930s and 1940s was designed to build alternative channels for lending so that small business, industry and individuals could have access to money as quickly as big banks.....
....MUCH MORE

There are currently no pure-play pitchfork manufacturers and it has been a long-cherished dream (since 2008!) to fill the void and/or live up to my junior high school personal file description: the instigator was....

"King Dollar Be Could Double Topping..."

Mr. Kimble's headline continues "...Commodities Would Benefit If It Does!" but he is using a shorthand for "Would benefit in dollar terms" because if the dollar is weakening some other currency elsewhere is strengthening and hence commodities in those terms are getting cheaper, what's your numéraire?
From Kimble Charting Solutions, May 26:

https://kimblechartingsolutions.com/wp-content/uploads/2020/05/king-dollar-could-be-double-topping-at-2017-highs-may-26-1.jpg
The U.S. Dollar has been a pillar of strength for the past 12-years, at it created higher lows starting in 2008, near the 70 level. Since these lows, it has rallied nearly 50%.
The 102 level was resistance for nearly 13-years (1987 to 2000) until an upside breakout took place....
....MORE

Spot DXY 99.0510 down 0.8120 (-0.81%)

The FT In London May Have Bad News For Democrats In The U.S.

Actually not-so-much the FT but Bryce de Londres.
And he is more the layer of the foundation than even the messenger, so don't shoot him.
First up, and this is important, from Markets Now, May 26:
....Here’s Exane BNP Paribas to set out the argument in favour:
The recession has likely ended…
Our high frequency indicators are turning higher. In Europe, toll traffic, high street footfall, electricity usage and restaurant & AIRBNB bookings have started normalising. In the US, driving and housing activity has recovered, with nascent improvements in SME, restaurant and bar spending. And in China, car and housing sales have normalised, while hotel bookings remain subdued.
We study the experiences of countries with lighter lockdowns and find that industrial activity could return surprisingly quickly. However, the recovery in consumer spending is likely to be more nuanced. Spending on Handsets, Cars and Housing goods/ materials is likely to be the first to normalise. Spending in Restaurants, Flights and Holidays will undoubtedly take longer to recover.
Earnings could be back at 2019 levels quicker than we feared…
... driven by 1) early signs from high frequency indicators; 2) our work suggesting that fiscal stimulus (CARES, EU Green package etc) eventually flows back to corporate profits; and 3) the easiest financial conditions ever seen during a recession. The risk here is another wave of lockdowns. But so far, EU countries that have eased restrictions haven’t seen a spike in cases.
Investors have been reluctant to play the recovery trade
Cyclicals vs defensives has been flat since the lows. However with the next batch of data likely to hint towards sequential improvement, perhaps this hesitance might change. We think Cap Goods, Construction, Mining, Semis and Autos are likely to see a quicker normalisation in earnings.
The upshot here is that driving volumes have normalised in the US, China and early un-lockdowners like Germany and Austria. Online spending has thundered back from March lows, housing activity’s been recovering in most places, China’s coal consumption’s back on trend and in Germany there’s improvement in olde-worlde metrics like high street footfall. Yet equities have been dead money for a month:
Exane uses Oxford Uni’s lockdown stringency tracker to guess at recovery times from here, using Sweden as the benchmark. It’s all stewed into charts like these, for driving, industrial production and both types of retail:

".... We probably don’t need to highlight the extremely obvious risk factor....."

....MUCH, MUCH MORE

I repeat, do not shoot Bryce, he's only the messenger.
If you are going to take potshots, aim your blunderbuss toward Boston and Harvard's Jason Furman.

From Politico:

The general election scenario that Democrats are dreading
In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.

Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.

“We are about to see the best economic data we’ve seen in the history of this country,” he said.
The former Cabinet secretaries and Federal Reserve chairs in the Zoom boxes were confused, though some of the Republicans may have been newly relieved and some of the Democrats suddenly concerned.

“Everyone looked puzzled and thought I had misspoken,” Furman said in an interview. Instead of forecasting a prolonged Depression-level economic catastrophe, Furman laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and gross domestic product growth ever.
Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.

Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”

And top policy officials on the Biden campaign are preparing for a fall economic debate that might look very different than the one predicted at the start of the pandemic in March. “They are very much aware of this,” said an informal adviser.

Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.

Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound. 

The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industrywide catastrophe like the Gulf of Mexico oil spill....
....Furman noted that there is one major obvious caveat: “If there’s a second wave of the virus and a really serious set of lockdowns, I wouldn’t expect to see this. But I think the most likely case is the one I just laid out.”....
....MUCH MORE

As for how to bet:
It looks like we're going to have a second wave.
And perhaps Ruth Bader Ginsburg has to get deathly ill to mobilize the base.
And a market crash.
Hurricane season looks to be above average.
Maybe Iran is convinced it might help to shoot at something.
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