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Futures Slide, Euro Rises Ahead Of ECB

Futures Slide, Euro Rises Ahead Of ECB



Futures Slide, Euro Rises Ahead Of ECB Tyler Durden Thu, 09/10/2020 - 07:43

Wednesday's tech-led rally in stock markets stalled in Europe on Thursday as traders pulled back to hear what the European Central Bank would say about the euro’s run-up in recent months and this morning. Meanwhile, S&P futures dropped 17 points suggesting the rally in underlying stocks will stall once again amid concerns over record valuations.

The drop came after the gains in technology shares drove the largest Nasdaq advance since April on Wednesday as the S&P 500 rose the most since June following the fastest Nasdaq correction from an all-time high in history. The increased volatility in recent days suggests that U.S. stocks may be due for a pullback, with investors weighing catalysts to decide on the trajectory.

Mizuho Bank’s head of economics and strategy in Singapore, Vishnu Varathan, said investors were grappling with whether this month’s steep U.S. tech selloff was really done, and beyond that an increasingly uncertain U.S. political outlook and persistent Sino-U.S. tensions.

Meanwhile, the ECB’s upcoming meeting, along with emergency Brexit talks in London after negotiations turned chaotic again, and wilting commodity markets kept the bulls firmly on the leash. An early push from the pan-European STOXX 600 faltered as tech struggled, the euro and government bonds gained pre-ECB, and drooping oil and metals prices hit the region’s drillers and miners.

Analysts also waited to see whether reports that the ECB will fractionally revise up its COVID-battered economic and inflation forecasts later would ultimately effect the chances of a further ramping up of stimulus, which would rein in the euro (see our full ECB preview here).

“What happens at the ECB today is quite important for global markets,” said TD Securities’ European head of currency strategy Ned Rumpeltin. "There is still one trade, which is reflate or die,” he said referring to stimulus aid lifting asset prices. “So the degree to which the ECB either takes that one step forward or one step back today will be important."

While the ECB is widely expected to keep policy steady, investors will be closely watching comments from President Christine Lagarde for any hints on whether the stronger euro is becoming a problem for the region. Analysts have speculated that Lagarde and her colleagues could start laying the groundwork for an intervention that would prevent the euro’s strength from slowing an economic recovery.

"The persistent dollar weakness since March has started making some governments and central banks uncomfortable," said Athanasios Vamvakidis, head of Bank of America’s Group-of-10 currency strategy. “We expect the ECB to push against euro strength today. It is still early to talk about risks of a currency war, but I would expect more push against further dollar weakness."

Earlier in the session, MSCI's broadest index of Asia-Pacific shares outside Japan snapped its longest losing streak since February with a 0.7% gain. Japan's Nikkei rose 0.9% and Chinese blue chips rose 0.8%. Markets in Sydney and Hong Kong were just better than flat though and, in a reminder of the risks, Jakarta nosedived 5% on plans to re-introduce COVID-19 social restrictions in the Indonesian capital. Like Europe though, Wall Street futures traded down between 0.5%-0.7% ahead of trading there.

In FX, the euro advanced a second day against the dollar as traders awaited Thursday’s European Central Bank’s policy decision. The pound rose as investors awaited the outcome of emergency Brexit talks between the U.K. and the European Union. Risk- sensitive Scandinavian and antipodean currencies edged lower as European stock markets and U.S. equity futures failed build on Wednesday’s gains; the Swiss franc led G-10 peers.

In rates, bond buyers also returned after a tepid response to a $35 billion U.S. 10-year auction overnight, pushing the yield on U.S. 10-year debt down by a whisker to 0.7001% near high end of a less-than-2bp daily range; bunds lag by 2bp ahead of ECB, gilts by 1bp. Treasuries were slightly richer vs Wednesday’s close after paring small gains, with U.S. session focused on August PPI and 30-year bond reopening. Treasury auction cycle concludes with $23b 30-year reopening at 1pm ET (+$4b vs previous 30-year reopening), on the heels of soft demand at both the 3- and 10-year offerings this week.

In commodities, concerns about demand for fuel also had oil prices back under pressure, in an indication of wavering confidence in global growth. Brent crude futures fell back to $40.45 a barrel after bouncing back from a three-month low overnight. U.S. crude futures slipped 0.8% to $37.68 a barrel.

Expected data include jobless claims and wholesale inventories. Chewy, Oracle and Peloton are reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.3% to 3,378.75
  • STOXX Europe 600 down 0.4% to 368.13
  • MXAP up 0.6% to 170.42
  • MXAPJ up 0.2% to 559.27
  • Nikkei up 0.9% to 23,235.47
  • Topix up 1.2% to 1,624.86
  • Hang Seng Index down 0.6% to 24,313.54
  • Shanghai Composite down 0.6% to 3,234.82
  • Sensex up 1.2% to 38,650.61
  • Australia S&P/ASX 200 up 0.5% to 5,908.52
  • Kospi up 0.9% to 2,396.48
  • Brent futures down 0.8% to $40.45/bbl
  • Gold spot little changed at $1,946.17
  • U.S. Dollar Index down 0.2% to 93.08
  • German 10Y yield fell 1.1 bps to -0.473%
  • Euro up 0.3% to $1.1834
  • Italian 10Y yield fell 0.7 bps to 0.895%
  • Spanish 10Y yield fell 2.4 bps to 0.315%

Top Overnight news from Bloomberg

  • ECB President Christine Lagarde will have to walk a fine line as she portrays a euro-area economy that’s recovering as hoped from the coronavirus pandemic yet still in need of massive support; see decision day guide
  • China’s next five-year plan beginning in 2021 will call for increases to its mammoth state reserves of crude, strategic metals and farm goods
  • Trump administration appointees suppressed intelligence on Russian election interference and the threat from white supremacists, according to a whistle-blower complaint filed by the Department of Homeland Security’s former intelligence chief
  • One in five U.K. companies is a “zombie,” with profits only just covering debt interest payments, according to a report by an influential Conservative think tank

A quick look around global markets courtesy of NewsSquawk

Asia-Pac bourses were initially mostly positive, but ultimately finished mixed, after taking advantage of the constructive handover from the US where tech rebounded from the recent sell-off to lift the Nasdaq out of a correction, while vaccine concerns also abated amid reports AstraZeneca may resume trials next week. ASX 200 (+0.5%) and Nikkei 225 (+0.9%) gained from the open with tech and mining names leading the advances in Australia but with upside later reversed amid weakness in financials and ongoing tensions with its largest trading partner China after reports that 6 Chinese citizens either left or were denied entry into Australia for alleged espionage or foreign interference. The Japanese benchmark was kept afloat by recent favourable currency moves and better than expected Machinery Orders data, while Tokyo also lowered its virus alert level by one notch. Hang Seng (-0.6%) and Shanghai Comp. (-0.6%) were somewhat cautious after mixed US-China related headlines with the US said to have revoked more than 1000 visas of Chinese nationals as of September 8th due to ties with the Chinese military, although there were also reports that TikTok’s parent, ByteDance, was in discussions with the US government on possible arrangements that would allow the app to avoid a full sale of its US operations. Focus was also on Yum China shares which declined 4% on an underwhelming Hong Kong debut, although Beigene shares were boosted on its inclusion in the HK-mainland stock connect program, while hefty losses were seen in the IDX Composite (-5.0%) which triggered a circuit breaker intraday after the Jakarta Governor announced to reimpose large-scale social restrictions. Finally, 10yr JGBs were lacklustre following the recent mild weakness in T-notes and rebound in equity markets, with price action in 10yr JGBs also hampered by resistance at the 152.00 level and as all metrics suggested a weaker than previous 20yr JGB auction.

Top Asian News

  • Dollar’s Dominance Gives U.S. Upper Hand in China Fight
  • Yum China Has Hong Kong’s Weakest Debut in More Than a Year
  • Tokyo Lowers Virus Alert Level, Eases Restrictions on Bars
  • Turkey Is Said to Be Discussing Oil and Gas Exploration in Libya

European stocks trade mixed (Euro Stoxx 50 -0.1%) having experienced directionless trade throughout much of the morning, following on from a mixed/choppy APAC session. Fresh fundamental news flow has been relatively light as participants gear up for the ECB policy decision (full preview available in the research suite). Sectors are mostly lower with no clear risk profile to be derived – Basic Resources, Banks and Oil & Gas stand are the laggards, with the latter on account of softer oil prices, whilst Autos, Travel & Leisure reside on the other side of the spectrum. In terms of individual movers, Akzo Nobel (+3.5%) remains buoyed as the group continues to see improving trends in Q3, with total revenue expected to be close to prior year’s levels – thus providing support to the European Chemical sector. Nexi (+5.2%) remains a top gainer in the region after sources stated that the Co. and SIA are close to clearing a hurdle to a potential merger. Finally, Morrison (-5.1%) trades at the bottom of the Stoxx 600 following their trading update which noted that COVID-19 continues to have a significant and widespread impact on business.

Top European News

  • Euronext Is Said to Ready Over $4 Billion Bid for Borsa Italiana
  • Nexi, SIA Close to Clearing Hurdle to Blockbuster Merger
  • Deadly Hog Fever Arrives in Germany, Europe’s Top Pork Producer
  • Navalny Security Tightened as Putin Foe Revives, Spiegel Says

In FX, there was not much movement in G10 currencies compared to the frantic price action that panned out on Wednesday, but the ECB policy meeting and press conference from President Lagarde hold potential to spark another bout of volatility along with the extraordinary joint committee convene between the EU and UK arranged after yesterday’s controversial IMB. In the interim, Usd/major pairs are mixed and relatively rangebound as inferred by the DXY holding within a tight range just above 93.000 (93.281-036) ahead of US claims, ppi and wholesale inventories. Meanwhile, the Euro is meandering between 1.1839-01 and well flanked by decent option expiry interest (down to 1.1775 and up to 1.1900 – full details on the headline feed at 6.56BT), with Cable pivoting 1.3000 and Eur/Gbp hovering nearer the upper end of 0.9105-0.9075 parameters.

  • NOK/SEK - Little independent impetus or direction via Scandinavian inflation data (headline as forecast and core firmer in Norway vs mostly softer than expected Swedish CPI and CPIF), but wavering risk sentiment following the midweek session recovery and a downturn in crude prices have pushed the Crowns back down within 10.6720-10.6210 and 10.3516-10.3206 respective parameters.
  • CHF/JPY/CAD/NZD/AUD - The Franc is outperforming above 0.9100 vs the Greenback and just shy of 1.0750 against the Euro for no apparent or obvious reason other than consolidation off recent lows, while the Yen is retracing towards 106.00 where heavy expiries reside (2 bn) ahead of almost as much from 105.85 to 105.80 (1.9 bn), and with latest BoJ source reports about a looming economic assessment upgrade largely shrugged aside. Elsewhere, the Loonie retains some post-BoC momentum in advance of Governor Macklem’s speech, with Usd/Cad straddling 1.3150 and the Antipodean Dollars are essentially idling vs their US counterpart as Nzd/Usd and Aud/Usd rotate around 0.6680 and 0.7275. Next up for the Kiwi, NZ manufacturing PMI and food price index reads for August, while the Aussie will continue to monitor Chinese diplomatic developments and daily PBoC fixes for the Cny. Talking Yuan, market observers report that Usd 3 bn options for Cnh to hit 8 in one year went through during Asian trade and for reference the pair is now circa 6.8400, so devaluation and/or a major Buck rally envisaged by the aggressor.
  • EM - The Rand is lagging in wake of a much wider than anticipated SA Q2 current account deficit, but for once the Lira is showing a degree of resilience in the face of Greek calls for tough EU sanctions against Turkey and data revealing a rise in unemployment. Indeed, Usd/Try has defended attempts on 7.5000, thus far at least.

In commodities, WTI and Brent front month futures have been drifting lower in early European trade after relatively sideways overnight price action, with the benchmarks straddling figures just below USD 38/bbl and USD 40.50/bbl respectively. A few updates for the complex – the EIA STEO revised its US oil supply forecasts lower by 210k BPD for 2020. However, after September, “EIA expects U.S. crude oil production to decline slightly, averaging just under 11.0mln BPD during the first half of 2021 because EIA expects that new drilling activity will not generate enough production to offset declines from existing wells.” Meanwhile, the delayed Private Energy Inventory report adds further to the bearish narrative after printing a surprise build of 3mln bls vs. Exp. -1.3mln bbls during the last week – traders will be eyeing confirmation via today’s EIA DoE’s released at 1600BST/1100ET. Elsewhere, participants are keeping an eye on the storage situation given the touted demand decline amid a resurgence in COVID-19 cases, with sources via EnergyIntel noting that traders and international oil companies are actively booking VLCC supertankers for the next 6-12 months – suggesting participants are looking for storage of oil as opposed to sales – reflected in the curve contango. Also note, ahead of the JMMC meeting on the 17th, sources stated that the recent price decline was causing concern in Riyadh, but not yet panic - adding that there was not a need for a "bigger cut" at this point. Elsewhere, spot gold and silver remain relatively contained within tight ranges just sub-USD 1950/oz and around USD 27/oz respectively ahead of the ECB policy decision later today. In terms of base metals LME copper prices have been declining alongside stocks, with participants keeping an eye on the easing COVID-19 measures in Chile.

US Event Calendar

  • 8:30am: PPI Final Demand MoM, est. 0.2%, prior 0.6%; PPI Ex Food and Energy MoM, est. 0.2%, prior 0.5%
  • 8:30am: PPI Final Demand YoY, est. -0.3%, prior -0.4%; PPI Ex Food and Energy YoY, est. 0.3%, prior 0.3%
  • 8:30am: Initial Jobless Claims, est. 850,000, prior 881,000; Continuing Claims, est. 12.9m, prior 13.3m
  • 9:45am: Bloomberg Consumer Comfort, prior 45.1
  • 10am: Wholesale Inventories MoM, est. -0.1%, prior -0.1%; Wholesale Trade Sales MoM, prior 8.8%

DB's Jim Reid concludes the overnight wrap

Disorder certainly continues to rule at home. Last week I beamed at how easy the first couple of days at nursery were for the twins. Well this week has been a different story. I think they believed that after two days followed by a weekend of no school that was their education was over with and were thus quite relaxed. This week as soon as my wife has pulled out their uniform to dress them, they have screamed and kicked the house down. My wife rung me in my cozy isolated home office at 915am yesterday to let me know that the only way she could get them to school was in their pyjamas and then to get the teacher to help change them at school once she’d dropped my daughter off. She was still shaking and needed to pause before she drove home. I felt a bit guilty being on an earlier work conference call during the turmoil downstairs. Having said that please please book me for a call any day between 8-9am so I can avoid a nervous breakdown.

Markets went from breaking down to recovery yesterday and recouped much of their losses from the previous day’s selloff. US tech outperformed, with the NASDAQ advancing +2.71%. That included strong performances from Tesla (+10.92%), Microsoft (+4.26%) and Apple (+3.86%), though the broader S&P 500 was also up +2.01% as 23 of 24 industries rose on the day (Autos at -0.37% the sole exception). The rebound was the best day for the S&P in over three months, while the NASDAQ’s daily advance was the most since 29 April. Similarly equities bounced back in Europe, where the STOXX 600 rose +1.62%, while the DAX climbed +2.07% to leave the index down just -0.09% on a YTD basis.

Speaking of Europe, the ECB will be taking centre stage for markets today as they announce their latest monetary policy decision and also release their updated macroeconomic forecasts. This meeting has come increasingly into focus in recent weeks, with the euro having risen above $1.20 at one point for the first time in over 2 years, and this appreciation has triggered a verbal reaction from ECB speakers. Meanwhile there’s the risk that the rising exchange rate reinforces low inflation, with the latest flash CPI estimate for August showing a negative reading (at -0.2%) for the first time in over 4 years. That said, we did get a Bloomberg headline yesterday saying that the forecasts were said to show more confidence in the outlook, with the euro moving higher after the news broke.

In terms of what we’re expecting today, our European economists think that the policy stance will be left unchanged, but that the ECB will reinforce their communications with a resolutely dovish message, before easing further in December with an expansion of their asset purchase programme. That December easing would coincide with the release of the ECB’s staff 2023 inflation forecasts, which could form the basis for a policy shift.

Ahead of this, markets in Asia are following Wall Street’s lead with the Nikkei (+0.64%), Hang Seng (+0.04%), Shanghai Comp (+0.29%) and Kospi (+0.82%) all up. Meanwhile Yields on 10y USTs are down -1.7bps this morning reversing much of yesterday’s rise and futures on the S&P 500 and Nasdaq are down -0.30% and -0.27% respectively.

On the coronavirus, here in the UK yesterday the government officially announced the overnight news that gatherings in England would now be limited to a maximum of 6, either indoors or outdoors. That came as a further 2,682 cases were reported yesterday, which pushed the 7-day average (2,363) to its highest since May 27. Prime Minister Johnson said that mass testing could be the route back to normal life, and that the first pilot of this would go ahead in the English city of Salford next month. In other news, following the pause in the AstraZeneca trial after a person developed neurological disorder that causes inflammation of the spinal cord, the FT reported that the trials could resume next week. Having been more than -3% lower following the open, the company’s share price pared back its losses by the end of the session to close up +0.15%. Bloomberg has reported that “an unrelated neurological illness” led to a pause in trials in July as well which was confirmed by an AstraZeneca spokeswoman who said that “There was a brief trial pause in July while a safety review took place after one volunteer was confirmed to have an undiagnosed case of multiple sclerosis,” and added that the independent panel monitoring the trial concluded the diagnosis was unrelated to the vaccine after which the trials resumed. Elsewhere, Asahi has reported that the Tokyo Metropolitan Government has decided to lower its coronavirus alert by one notch from the highest of four levels. The same report also added that Tokyo is planning to end its request of shorter hours at bars and restaurants next week.

The virus news in the US steadily gets better, while the service industry in New York City got a huge boost yesterday when Governor Cuomo announced that indoor dining may resume on September 30. Elsewhere in the US, California had its lowest cases since May and Miami has eased its city-wide curfew and has reopened outdoor public spaces such as the zoo and theme parks.

Concerns over Brexit remained yesterday as the UK government published their Internal Market Bill, which would allow the government to override elements of the Withdrawal Agreement reached between the UK and the EU last year. A number of senior EU figures weighed in negatively in response to the bill’s release, with Commission President von der Leyen tweeting that she was “Very concerned about announcements from the British government on its intentions to breach the Withdrawal Agreement. This would break international law and undermines trust.” Others to respond negatively included the Irish PM, the European Council President, as well as the former UK Conservative Prime Minister John Major, though EU sources told Reuters that they would not seek to suspend the talks between the two sides on their future relationship. Speaking of those discussions, the 8th negotiating round wraps up today, so we should hopefully get some headlines on whether there’s been any progress or not from the key players. Meanwhile, Bloomberg has reported overnight that the EU believes it may have a case to seek legal remedies even before the UK internal-market bill is passed by the UK Parliament and that it would have a clear justification once the bill becomes law, according to the EU’s preliminary analysis of the UK legislation. Criticism on the internal-market bill has also come from across the Atlantic with the US House Speaker Nancy Pelosi saying that the UK must ensure the free flow of goods across the border, as agreed in Britain’s deal with the EU last year. She added that “If the UK violates that international treaty and Brexit undermines the Good Friday accord, there will be absolutely no chance of a US-UK trade agreement passing the Congress.”

Over in fixed income, sovereign bonds sold off yesterday, with yields on 10yr Treasuries (2.1bps), bunds (+3.3bps) and gilts (+4.9bps) all moving higher. Other safe have assets also struggled, with the Japanese Yen being the worst-performing G10 currency, while the dollar index (-0.25%) fell back as well. Oil rebounded however, with WTI (+3.51%) and Brent (+2.54%) recovering at least some of the previous day’s losses. It was the largest one-day move higher for WTI since mid-June as the risk-on sentiment mixed with expectation that American stockpiles have dropped for a seventh week running. With the greenback falling, gold rose the most in 2 weeks (+0.77%) even with higher yields on the day.

Finally there wasn’t much data of note yesterday, though the number of job openings in the US in July rose to a higher-than-expected 6.618m (vs. 6m expected), which is their highest level since February before the impact of the pandemic was felt. That said, unlike in February when unemployment was below 6m, the total number of unemployed workers in July stood at 16.3m, so the number of unemployed far exceeded the number of openings.

Looking to the day ahead, the aforementioned ECB decision and President Lagarde’s subsequent press conference will be a key highlight. Lagarde will also be speaking at a Bundesbank event later in the day, and separately the ECB’s Villeroy and Bank of Canada Governor Macklem will be speaking. Data releases include French and Italian industrial production for July, while from the US there’s the weekly initial jobless claims and August’s PPI reading. Finally, the 8th negotiating round between the UK and the EU on their future relationship concludes today.

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…



The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Another beloved brewery files Chapter 11 bankruptcy

The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.



Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.

It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business. 

And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.

During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.

Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.

Overall beer sales have fallen.

Image source: Shutterstock

Covid is not the only reason for brewery bankruptcies

While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,

Beer sales have fallen to their lowest levels since 1999 and some industry analysts

"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.

Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.

Another brewery files Chapter 11 bankruptcy

Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11. 

"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," explained. 

Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors. 

The popular brewery operates three taprooms and sells its beer to go at those locations.

"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.

The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).

Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.


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Spread & Containment

Revving up tourism: Formula One and other big events look set to drive growth in the hospitality industry

With big events drawing a growing share of of tourism dollars, F1 offers a potential glimpse of the travel industry’s future.




Sergio Perez of Oracle Red Bull Racing, right, and Charles Leclerc of the Scuderia Ferrari team compete in the Las Vegas Grand Prix on Nov. 19, 2023. Tayfun Coskun/Anadolu via Getty Images

In late 2023, I embarked on my first Formula One race experience, attending the first-ever Las Vegas Grand Prix. I had never been to an F1 race; my interest was sparked during the pandemic, largely through the Netflix series “Formula 1: Drive to Survive.”

But I wasn’t just attending as a fan. As the inaugural chair of the University of Florida’s department of tourism, hospitality and event management, I saw this as an opportunity. Big events and festivals represent a growing share of the tourism market – as an educator, I want to prepare future leaders to manage them.

And what better place to learn how to do that than in the stands of the Las Vegas Grand Prix?

A smiling professor is illuminated by bright lights in a nighttime photo taken at a Formula 1 event in Nevada.
The author at the Las Vegas Grand Prix. Katherine Fu

The future of tourism is in events and experiences

Tourism is fun, but it’s also big business: In the U.S. alone, it’s a US$2.6 trillion industry employing 15 million people. And with travelers increasingly planning their trips around events rather than places, both industry leaders and academics are paying attention.

Event tourism is also key to many cities’ economic development strategies – think Chicago and its annual Lollapalooza music festival, which has been hosted in Grant Park since 2005. In 2023, Lollapalooza generated an estimated $422 million for the local economy and drew record-breaking crowds to the city’s hotels.

That’s why when Formula One announced it would be making a 10-year commitment to host races in Las Vegas, the region’s tourism agency was eager to spread the news. The 2023 grand prix eventually generated $100 million in tax revenue, the head of that agency later announced.

Why Formula One?

Formula One offers a prime example of the economic importance of event tourism. In 2022, Formula One generated about $2.6 billion in total revenues, according to the latest full-year data from its parent company. That’s up 20% from 2021 and 27% from 2019, the last pre-COVID year. A record 5.7 million fans attended Formula One races in 2022, up 36% from 2019.

This surge in interest can be attributed to expanded broadcasting rights, sponsorship deals and a growing global fan base. And, of course, the in-person events make a lot of money – the cheapest tickets to the Las Vegas Grand Prix were $500.

Two brightly colored race cars are seen speeding down a track in a blur.
Turn 1 at the first Las Vegas Grand Prix. Rachel Fu, CC BY

That’s why I think of Formula One as more than just a pastime: It’s emblematic of a major shift in the tourism industry that offers substantial job opportunities. And it takes more than drivers and pit crews to make Formula One run – it takes a diverse range of professionals in fields such as event management, marketing, engineering and beyond.

This rapid industry growth indicates an opportune moment for universities to adapt their hospitality and business curricula and prepare students for careers in this profitable field.

How hospitality and business programs should prepare students

To align with the evolving landscape of mega-events like Formula One races, hospitality schools should, I believe, integrate specialized training in event management, luxury hospitality and international business. Courses focusing on large-scale event planning, VIP client management and cross-cultural communication are essential.

Another area for curriculum enhancement is sustainability and innovation in hospitality. Formula One, like many other companies, has increased its emphasis on environmental responsibility in recent years. While some critics have been skeptical of this push, I think it makes sense. After all, the event tourism industry both contributes to climate change and is threatened by it. So, programs may consider incorporating courses in sustainable event management, eco-friendly hospitality practices and innovations in sustainable event and tourism.

Additionally, business programs may consider emphasizing strategic marketing, brand management and digital media strategies for F1 and for the larger event-tourism space. As both continue to evolve, understanding how to leverage digital platforms, engage global audiences and create compelling brand narratives becomes increasingly important.

Beyond hospitality and business, other disciplines such as material sciences, engineering and data analytics can also integrate F1 into their curricula. Given the younger generation’s growing interest in motor sports, embedding F1 case studies and projects in these programs can enhance student engagement and provide practical applications of theoretical concepts.

Racing into the future: Formula One today and tomorrow

F1 has boosted its outreach to younger audiences in recent years and has also acted to strengthen its presence in the U.S., a market with major potential for the sport. The 2023 Las Vegas race was a strategic move in this direction. These decisions, along with the continued growth of the sport’s fan base and sponsorship deals, underscore F1’s economic significance and future potential.

Looking ahead in 2024, Formula One seems ripe for further expansion. New races, continued advancements in broadcasting technology and evolving sponsorship models are expected to drive revenue growth. And Season 6 of “Drive to Survive” will be released on Feb. 23, 2024. We already know that was effective marketing – after all, it inspired me to check out the Las Vegas Grand Prix.

I’m more sure than ever that big events like this will play a major role in the future of tourism – a message I’ll be imparting to my students. And in my free time, I’m planning to enhance my quality of life in 2024 by synchronizing my vacations with the F1 calendar. After all, nothing says “relaxing getaway” quite like the roar of engines and excitement of the racetrack.

Rachel J.C. Fu does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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