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Covering (In) COT Blue

It was late on a Tuesday night, in the middle of last week, Christmas week of all weeks, with most people already checked out. Having finally obtained Congressional support and approval, the $900 billion plus “stimulus” (read: stipend) was on its…

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3 years ago

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It was late on a Tuesday night, in the middle of last week, Christmas week of all weeks, with most people already checked out. Having finally obtained Congressional support and approval, the $900 billion plus “stimulus” (read: stipend) was on its way to becoming reality after months of politically-motivated uncertainty. Not one to sit idly by while everyone else had their say, President Trump on that particular evening tweeted a shocking video where he declared the key (for the public) provision in it “a disgrace.”

I’m asking Congress to amend this bill and increase the ridiculously low $600 to $2000 or $4000 per couple.

Threatening veto, the entire bill – including the larger omnibus budget – was thrown into doubt leaving the Treasury days from perhaps shutting down. From a done-deal to complete chaos instantly, what would this have meant for the inflation-is-coming-because-of-fiscal-spending story? The big bond shorts, among others, have been betting heavily on just this very outcome, then, all of a sudden, gamesmanship at the last hour, practically the last minute, throwing a huge and unwelcome wrench into the whole thing.

Treasury bonds and notes sold off anyway first in futures and then heavily into the next morning’s trading session. It’s impossible to tell what moves a market in its daily maneuvering, but this wasn’t exactly the result maybe you’d expect given the setup. More political infighting leading to a possible serious delay wouldn’t seem to be helpful on the inflation side.




Of course, perhaps shorts are just shorting any news no matter what it is. Interestingly enough, yet another (minor) sell off hit the UST market’s longer ends just this morning – on information that President Trump won’t veto the bill after all. He’s going to sign the thing regardless of his former complaints about it.

Two intraday bouts of selling pressure (above), both on opposite news.

This has been the pattern for some weeks now. Vaccine, elections, whatever; any kind of substantial report has become the catalyst for negative Treasury market action. Interpretation appears to have mattered little or nothing, it’s just straight sell-button activity once anything hits the tape.

But it doesn’t last, at least it hasn’t to this point. These fits have been limited to single sessions and most of the time only discrete parts of them. At most a two-day move before the buyers (sorry Mr. Dimon) reappear and take up whatever’s on offer.

Going back to early November, long end yields in the Treasury market have moved very little overall. Conspicuously little. It had been building up to vaccines (which were always expected) and then dispelling severe election fears before this other round of massive fiscal aid (which was always expected), leaving the yield curve to move steeper drawing mainstream attention to it.




During that period dating back to early August, an historically massive bond short position had been gathered by leveraged money speculators in long bond (30s) futures. With the 30s thus setting the entire bond market narrative, clearly betting on Jay and his “money printing” machine combined with everything, it seemed, going in the right direction, including the US government’s rediscovered penchant for huge numbers, interest rates had nowhere to go but up.

While they did, they only went up a tiny amount despite such huge action all on that side. In fact, it’s more noteworthy how little the move really had been.

Nearly two months later, they’ve stopped going up at all in large part, it would seem, because the bond shorts aren’t nearly so historically sure about where interest rates might be going. Going back to the second week in November, the top in yields amidst vaccine-phoria, the leveraged money shorts have been covering.



It’s still a huge net short position, but not nearly so historical as it had been up to that crucial point. That’s why there are still these intraday selloffs that go nowhere; the impulse to interpret every news event as UST-negative remains considerable. But with so little to show for all the effort, it doesn’t take an Economist to figure out the risks might not be what the media (taking its opinions from Economists) always says about these things.

You have to wonder, as some of these speculators must be doing now, just why there’d be such an insatiable appetite for the safest, most liquid financial instruments given what has transpired over the past few months. It’s been a constant drumbeat of only positive developments.

March was eight and now nine months in the past and nothing’s gone legitimately, obviously haywire over that interim. No new Lehmans (at least as commonly understood). The world, finally, had everything going for it right down to what sure seems like an answer to the pandemic itself. The shorts should be winning huge.

Unless…




There are ebbs and flows, nothing ever goes in a straight line. But like the Treasury market in mid-2019 this one’s been limited to an atypically narrow range. Even this year’s August-November BOND ROUT!!!!! barely qualified as a market fluctuation. In the media, inflation’s guaranteed; done deal. I mean, Jay Powell and “digital money printing.”

Then again, we’ve heard this story before and not all that long ago. Inflation Hysteria #1 is near enough in the past to be easily recalled even by the shortest financial attention spans (Economists, including bank CEO’s, and those who uncritically parrot them). And that previous one had categorically more going for it than this. Even the Treasury futures market, the whole market, has at best been neutral this year; never once flipping reflationary like it had a few years back (above).

More than such reasonable doubt, however, if the shorts are doubting their own shorts, and it does seem that they are now, it might have quite a lot more to do with where things actually stand – and what that really portends for the near and intermediate terms. It was nice even fun to pretend for awhile that 2020’s gaping economic and monetary hole could be so easily covered by government-funded thirteen-digit numbers.

No. The reason the shorts never pushed things very far is that a very different scenario continues to beckon. And this one has not only stuck around while the temporary euphoria over vaccines and stipend-mania fades, it’s gotten stronger as the sense of long run (deflationary) damage relentlessly pounds the entire global scene.

And it has little or nothing to do with more lockdowns and new variants to COVID.

Inflation Hysteria #2 has somehow been even more hysterical.


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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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5 hours ago

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March 9, 2024

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

“When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

“It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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Walmart joins Costco in sharing key pricing news

The massive retailers have both shared information that some retailers keep very close to the vest.

Published

8 hours ago

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March 9, 2024

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As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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Walmart has really good news for shoppers (and Joe Biden)

The giant retailer joins Costco in making a statement that has political overtones, even if that’s not the intent.

Published

9 hours ago

on

March 9, 2024

By

As we head toward a presidential election, the presumed candidates for both parties will look for issues that rally undecided voters. 

The economy will be a key issue, with Democrats pointing to job creation and lowering prices while Republicans will cite the layoffs at Big Tech companies, high housing prices, and of course, sticky inflation.

The covid pandemic created a perfect storm for inflation and higher prices. It became harder to get many items because people getting sick slowed down, or even stopped, production at some factories.

Related: Popular mall retailer shuts down abruptly after bankruptcy filing

It was also a period where demand increased while shipping, trucking and delivery systems were all strained or thrown out of whack. The combination led to product shortages and higher prices.

You might have gone to the grocery store and not been able to buy your favorite paper towel brand or find toilet paper at all. That happened partly because of the supply chain and partly due to increased demand, but at the end of the day, it led to higher prices, which some consumers blamed on President Joe Biden's administration.

Biden, of course, was blamed for the price increases, but as inflation has dropped and grocery prices have fallen, few companies have been up front about it. That's probably not a political choice in most cases. Instead, some companies have chosen to lower prices more slowly than they raised them.

However, two major retailers, Walmart (WMT) and Costco, have been very honest about inflation. Walmart Chief Executive Doug McMillon's most recent comments validate what Biden's administration has been saying about the state of the economy. And they contrast with the economic picture being painted by Republicans who support their presumptive nominee, Donald Trump.

Walmart has seen inflation drop in many key areas.

Image source: Joe Raedle/Getty Images

Walmart sees lower prices

McMillon does not talk about lower prices to make a political statement. He's communicating with customers and potential customers through the analysts who cover the company's quarterly-earnings calls.

During Walmart's fiscal-fourth-quarter-earnings call, McMillon was clear that prices are going down.

"I'm excited about the omnichannel net promoter score trends the team is driving. Across countries, we continue to see a customer that's resilient but looking for value. As always, we're working hard to deliver that for them, including through our rollbacks on food pricing in Walmart U.S. Those were up significantly in Q4 versus last year, following a big increase in Q3," he said.

He was specific about where the chain has seen prices go down.

"Our general merchandise prices are lower than a year ago and even two years ago in some categories, which means our customers are finding value in areas like apparel and hard lines," he said. "In food, prices are lower than a year ago in places like eggs, apples, and deli snacks, but higher in other places like asparagus and blackberries."

McMillon said that in other areas prices were still up but have been falling.

"Dry grocery and consumables categories like paper goods and cleaning supplies are up mid-single digits versus last year and high teens versus two years ago. Private-brand penetration is up in many of the countries where we operate, including the United States," he said.

Costco sees almost no inflation impact

McMillon avoided the word inflation in his comments. Costco  (COST)  Chief Financial Officer Richard Galanti, who steps down on March 15, has been very transparent on the topic.

The CFO commented on inflation during his company's fiscal-first-quarter-earnings call.

"Most recently, in the last fourth-quarter discussion, we had estimated that year-over-year inflation was in the 1% to 2% range. Our estimate for the quarter just ended, that inflation was in the 0% to 1% range," he said.

Galanti made clear that inflation (and even deflation) varied by category.

"A bigger deflation in some big and bulky items like furniture sets due to lower freight costs year over year, as well as on things like domestics, bulky lower-priced items, again, where the freight cost is significant. Some deflationary items were as much as 20% to 30% and, again, mostly freight-related," he added.

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