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Global Stocks Rise, S&P Futures Above 3,200 As Melt-Up Continues

Global Stocks Rise, S&P Futures Above 3,200 As Melt-Up Continues



Global Stocks Rise, S&P Futures Above 3,200 As Melt-Up Continues Tyler Durden Mon, 06/08/2020 - 07:59

One day after a record surge in Nasdaq trading volumes on Friday, which was coupled with a record spike in call option activity as both retail and hedge fund investors rush into stocks, global stocks inched higher again on Monday, adding to a 42% surge from their March lows, as the unexpectedly strong US jobs report data fuelled hopes of a quicker global economic recovery from the coronavirus pandemic. Emini futures jumped in early trading overnight then drifted in a range between 3,185 and 3,210.

In stock-specific news, Bloomberg over the weekend reported that AstraZeneca approached Gilead regarding a potential merger which would mark the largest healthcare deal on record. However, sources via The Times downplayed the prospect of any AstraZeneca interest, stating that it has abandoned a tentative interest, while Wall Street analysts puked on the prospects of the deal. Gilead was 3.3% higher in pre-market.

The MSCI all-country world stocks index was 0.1% higher and just 7% away from a fresh record high, while the benchmark S&P 500 is within striking distance of turning positive for the year.

In Europe, a surge in travel and leisure stocks helped cap losses on the pan-regional index, which traded 0.2% lower after poor German and Chinese economic data. The Eurostoxx 50 was weighed down by tech and healthcare names while the FTSE MIB and IBEX bucked the trend, rising over 0.5% supported by banks and autos.

Europe's fundamentals remain dismal with German industrial output slumping a record 17.9% in April and firms now expect a bumpy road ahead despite a massive stimulus package.

"European stocks are probably under pressure following weak China data overnight. However, we do not think this marks the end of the rally," said Marija Vertimane, senior strategist at State Street Global Markets. “We are beginning to see evidence of economic data improving gradually and thankfully no major secondary spikes in infections. We expect that to encourage investors to come back to the market."

Asia shares rose in a catch-up rally following Friday’s U.S. jobs data but were again capped by the Chinese data, published on Sunday, which showed exports contracted in May although an even bigger drop in imports resulted in a record trade surplus. All markets in the region were up, with Jakarta Composite gaining 2.5% and Singapore's Straits Times Index rising 1.4%. Trading volume for MSCI Asia Pacific Index members was 25% above the monthly average for this time of the day. The Topix gained 1.1%, with Asahi Broadcasting Group and Gumi rising the most. The Shanghai Composite Index rose 0.2%, with Fujian Start Group and Changshu Fengfan Power Equipment posting the biggest advances.

In rates, the payrolls report pushed the 10-year Treasury yield as high as 0.959% on Friday, a level not seen since mid-March. It last stood just below 0.91%. The rise in U.S. yields has put more focus on the Fed which will hold a two-day policy meeting ending on Wednesday.

“Steepening of the U.S. Treasury curve reflects to a significant extent high (bond) supply versus QE (quantitative easing),” Nikolaos Panigirtzoglou, strategist at JPMorgan, said. "The Fed at $4-5 billion QE a day is not doing enough to offset supply. It would become more challenging for the Fed if the 10-year...yield approaches 1%."

Pointing to the spread between U.S. two- and 10-year Treasury yields widening above 70 basis points to its highest since February 2018, Panigirtzoglou believes there is scope for Fed to introduce yield curve control measures.

In Europe, Bunds and peripheral spreads were quiet ahead of ECB President Lagarde’s appearance at a European Parliament hearing later Monday.

In FX, the dollar fell against a basket of its peers and headed for the longest losing streak since 2011. The broad improvement in sentiment weighed on the safe-haven Japanese yen, which stood at 109.5 to the dollar, near Friday’s 10-week low of 109.85. The pound continued its long rally against the dollar on hopes that the U.K.’s coronavirus lockdown restrictions will be lifted more quickly. Australian dollar climbed as iron ore futures surged above $100 a ton after Brazil’s Vale SA was ordered to suspend operations that account for about a 10th of its output after workers contracted Covid-19, boosting concerns surging cases will disrupt its output

In commodities, Brent crude initially climbed above $43 per barrel, but faded some gains after Saudi Arabia said an extra month of production cuts is voluntary and will be self-policed. Over the weekend, OPEC+ unanimously agreed to extend current cuts for one month through July and will review if a longer extension is needed this month, while Saudi and Russia emphasised they want stronger compliance from other nations and both Iraq and Nigeria agreed to slightly deeper cuts.  Saudi Arabia set July Arab light crude oil OSP to Asia at Oman/Dubai +USD 0.20 and to north-west Europe at ICE Brent + USD 0.30, while reports noted that the July pricing for all grades to Asia was higher by between USD 5.60-7.30 and the largest hike in prices in 2 decades.

Iron ore jumped after a Brazil mine hit with Covid-19 infections suspended operations.

There is nothing on the US economic calendar for Monday; Thor Industries and Coupa Software are among companies reporting earnings.

Market Snapshot

  • S&P 500 futures up 0.5% to 3,202.75
  • STOXX Europe 600 down 0.4% to 373.69
  • MXAP up 0.7% to 159.96
  • MXAPJ up 0.4% to 515.34
  • Nikkei up 1.4% to 23,178.10
  • Topix up 1.1% to 1,630.72
  • Seng Index up 0.03% to 24,776.77
  • Shanghai Composite up 0.2% to 2,937.77
  • Sensex up 0.5% to 34,463.87
  • Australia S&P/ASX 200 up 0.1% to 5,998.72
  • Kospi up 0.1% to 2,184.29
  • German 10Y yield fell 0.2 bps to -0.279%
  • Euro up 0.1% to $1.1305
  • Italian 10Y yield fell 0.9 bps to 1.241%
  • Spanish 10Y yield rose 1.1 bps to 0.569%
  • Brent futures up 1% to $42.72/bbl
  • Gold spot up 0.6% to $1,695.49
  • U.S. Dollar Index down 0.1% to 96.84

Top Overnight News from Bloomberg

  • China’s trade surplus surged to a record in May as exports fell less than expected, helped by an increase in medical-related sales, and imports slumped along with commodity prices, data over the weekend showed
  • Car sales in China rose for the first time in almost a year last month, evidence that the world’s largest auto market is rebounding from the coronavirus crisis and the trade war with the U.S
  • Saudi Arabia increased prices for some crude exports by the most in at least two decades, doubling down on a strategy to bolster the oil market after OPEC+ producers extended historic output cuts over the weekend
  • New Zealand will remove social distancing requirements after reporting zero active cases of Covid-19, indicating it has achieved its aim of eliminating the virus
  • Qatar’s peg against the dollar has been the only one in the region that hasn’t come under pressure even as local economies succumb to what may be their worst recession ever. The nation’s bonds have also outperformed those of the other five members of the Gulf Cooperation Council this year

Asian equity markets began the week relatively upbeat as the region took its first opportunity to react to the strong US jobs data which firmly lifted all major indices on Wall St last Friday and the Nasdaq to a fresh all-time high, with mostly encouraging Chinese trade data and early strength in oil prices following the OPEC+ extension agreement, adding to the constructive risk tone. As such, Nikkei 225 (+1.4%) gapped above the 23k level but with some of the gains later reversed after Final Q1 GDP missed expectations despite showing a significant improvement from the preliminary release, and the KOSPI (+0.1%) outperformed shortly after the open before it briefly wiped out all its gains amid a cooling of inter-Korean relations, as well as weakness in index heavyweight Samsung Electronics as de facto chief and Samsung Group heir Jay Y. Lee attended a court hearing on the arrest warrant related to accounting fraud. Elsewhere, Hang Seng (U/C) and Shanghai Comp. (+0.2%) were kept afloat after the PBoC injected CNY 120bln of liquidity and announced to conduct an MLF operation in around a week’s time, while the latest trade figures from China over the weekend mostly topped estimates which included a record trade surplus in USD terms and a surprise expansion in CNY-denominated Exports. Finally, ASX 200 remained closed for the Queen’s Birthday Holiday and 10yr JGBs were higher despite the gains in stocks as prices reversed Friday’s selling pressure, in which the rebound in JGBs also followed the weaker than expected Japanese GDP data.

Top Asian News

  • New Zealand to End Social Distancing After Eliminating Covid-19
  • JD’s $4.1 Billion Hong Kong Listing Is Said to Be Oversubscribed
  • China’s Monthly Car Sales Rise for First Time in Almost a Year
  • Hong Kong’s Most Vocal Activist Investor Says He Has Cancer

European equities attempted to nurse earlier losses [Euro Stoxx 50 -0.5%] following on from firm APAC trade as the region had the first chance to react to the blockbuster US jobs data. Europe kicked the session off with broad losses of over 1%, but thereafter recouped amid a lack of fresh catalysts and with investors focusing on reopening economies alongside Central Bank support. Major bourses now see a more mixed performance, as is the case for broader sectors which started trade mostly in the red; stateside, futures remain modestly in positive territory. Energy remains the top gainer, but overall sectors do not reflect a clear risk tone. The sectoral breakdown sees banks and oil & gas topping the charts whilst financial services and IT. In terms of individual movers – the story in focus: AstraZeneca (-2.2%) reportedly approached Gilead (+3% pre-mkt) regarding a potential merger, which would mark the largest healthcare deal on record. However, sources via The Times downplayed the prospect of any AstraZeneca interest, stating that it has abandoned a tentative interest. Meanwhile, Intesa Sanpaolo (+3.4%) and UBI Banca (+4.1%) are higher after the ECB authorised the former’s takeover of the latter. Wirecard (-1.6%) opened lower by over 7% amid reports late-doors Friday that Munich prosecutors said Co’s premises have been searched as part of a market manipulation probe initiated by Bafin; prosecutors have opened a probe against the Co, including the whole management board. Co. said it is cooperating with authorities and reaffirmed guidance. Elsewhere, IAG (+7.8%) extend on gains after British Airways has threatened to dismiss all its 4.3k pilots and rehire them on individual contracts unless it can reach a new employment agreement with the Balpa union. Finally, Danske Bank (+8.9%) has extended on initial gains after the group agreed to sell its troublesome Estonian business in a EUR 312mln deal.

Top European News

  • German Industrial Slump Hits Bottom With Record Output Drop
  • Johnson Seeks Path to U.K. Revival as Poll Ratings Slip Away
  • Private Equity Comes Back With Bridgepoint Reviving Agro Deal
  • Airbus’s Global Footprint Becomes a Burden as Sector Shrinks

In FX, although risk sentiment has stalled somewhat after Friday’s unexpected rise in US employment, the Greenback remains shy of best levels amidst doubts about the validity and accuracy of the data due to misrepresentation or reporting irregularities. Hence, the DXY has not been able to maintain momentum or revisit post-NFP peaks just above the 97.000 level with the index meandering between 96.985-741 as attention turns to the FOMC and the prospect that the Fed may edge a bit closer to enhancing forward guidance via a more targeted approach yield control.

  • AUD/NZD/NOK - In contrast to the Buck, bullish impetus is keeping the Aussie, Kiwi and Norwegian Krona elevated as the former hovers a fraction below 0.7000 in holiday-thinned trade, but underpinned alongside the YUAN (Usd/Cnh and Usd/Cny either side of 7.0700) in wake of significantly wider than forecast Chinese trade surpluses forged on above consensus exports even though relations between the 2 countries continue to deteriorate. Note, Aud/Usd has essentially carved out a double top, while the Kiwi is building a firm base on the 0.6500 handle and Aud/Nzd is straddling 1.0700 ahead of NZ fully reopening from COVID-19 lockdown due to no further cases and an impending shift to Alert Level 1. Elsewhere, Eur/Nok has now breached 10.5000 and eyeing the 200 DMA beyond technical support at 10.4387 (March 2 high) against the backdrop of firmer oil prices on the back of OPEC+ reaching agreement to extend the reduced output pact by a further month to the end of July.
  • GBP/EUR/CAD - Sterling has also retained its upward trajectory and sights on the 1.2700 marker in terms of Cable following a retest of Friday’s circa 1.2730 peak as UK PM Johnson comes under pressure to press ahead with the next stages of lifting coronavirus restrictions, with Eur/Gbp pivoting 0.8900 even though the Euro is keeping tabs on 1.1300 against the US Dollar after last week’s impressive gains and despite more weaker than anticipated Eurozone macro releases in the form of German ip and Sentix sentiment. Meanwhile, the Loonie is gleaning more crude traction around 1.3400 in advance of Canadian housing starts and the aforementioned Fed policy meeting.
  • JPY/CHF - Both narrowly mixed vs the Greenback and relatively rangebound between 109.69-39 and 0.9639-13 parameters with the Yen noting downward tweaks to final Japanese Q1 GDP and Franc paring some declines against the Euro from sub-1.0900 irrespective of mixed weekly Swiss bank sight deposit balances.
  • EM - Regional currencies have largely picked up where they left off las week, with the oil and commodity focused Rub, Zar and Mxn all on the front foot as oil remains buoyant, but the Try underperforming as an importer.

In commodities, WTI and Brent futures hold onto modest gains amid the fallout from the OPEC+ meeting – which saw an extension of 9.6mln BPD cuts (barring Mexico’s 100k BPD) by an extra month to the end of July as anticipated. Focus meanwhile has now turned to compliance and how the heads of the group plan to enforce full/over-compliance – namely among the known laggards Iraq and Nigeria – who reaffirmed commitment to the pact over the weekend. On that front, Iraq has already hinted at possible problems regarding making up for its shortfall. In terms of over-compliance, Gulf OPEC producers (Saudi, UAE, Kuwait) are not planning to continue with their voluntary deeper oil cut of 1.18mln BPD beyond June, according to sources. Eyes will now be on the June 18th JMMC meeting where the committee will review secondary source data alongside current market fundamentals before proposing policy recommendations. Note: sources last week said that OPEC+ is to move cautiously to rebalance the market amid easing lockdowns, while possible Shale resumptions could also weigh on eastern producers’ minds. Thereafter, Saudi Aramco also released its July Official Selling Prices (OSPs) which showed steep increases for all crude grades to all regions. Furthermore, Libya’s El Sharara oilfield (300k BPD) has restarted output at 30k BPD and is expected to reach capacity within 90 days after 142 days of inactivity. Reports also note that the El Feel field (70k bpd) has restarted operations. Meanwhile, Cristobel made landfall over the weekend but has since weakened to a Tropical Storm as it moves further inland. Heavy Rainfall and storm surges continue along the gulf coast from Southeastern Louisiana eastward to the Florida Panhandle. It was reported that energy firms evacuated 195 Gulf of Mexico production platforms and 3 rigs ahead of Storm Cristobal on Sunday and that producers had cut 34% of offshore oil and 32% of nat gas output as of mid-Sunday. WTI July trades on either side of USD 40/bbl (vs high. 40.44/bbl) and Brent August dipped back below USD 43/bbl (vs. high 43.41/bbl). Spot gold trades on the firmer side of a USD 1678-97/oz range with little specific for the metal, whilst copper prices extend gains above USD 2.50/lb amid falls in stocks at exchange warehouses – falling to 139k tons which is the lowest since Jan 17th. Meanwhile, around 90% of the large Peruvian mines have received the green light at resuming operations following a pandemic-related disruption. Libya’s El Sharara oilfield (300k bpd) has restarted output and is expected to reach capacity within 90 days. Reports also note that the El Feel field (70k bpd) has restarted operations.

US Event Calendar

  • Nothing major scheduled

DB's Jim Reid concludes the overnight wrap

As far as I can see the two most ruinous financial decisions you can make are either to short US equities or buy an old house. Fortunately I’ve never done the former but I’ve done the latter twice over the last decade and would have been better off setting aside a big pile of cash and burning it. A year after finishing renovations on our dream home the latest saga arrived at 2:30am on Saturday night when I get a poke in the ribs from my wife. “Wake up. Wake up! Something terrible has happened downstairs and we need to go and investigate”. I take this pretty badly having woken out of a deep sleep and dismiss her claims that there was a very loud bang as nothing more than her having a bad dream. I begrudgingly get my dressing gown on and trudge downstairs. Half way down the stairs, dust starts rising everywhere and as the fog got more intense we reached the downstairs hallway to find rubble and debris everywhere and half our ceiling collapsed onto the floor. My wife and I were both in shock, especially once we realised how heavy the fallen plaster was and how dangerous it could have been. When we renovated we had to unwillingly replace virtually all of the ceilings as they progressively fell down during the heavy works but not this one. I’ll find out early this week what this latest problem is going to cost us!!! However at least no one got hurt.

The week after payrolls is normally light on activity and to be honest it might take me a week to get over the shock of a collapsed ceiling and a week for all economists to work out how the data missed their payrolls forecasts on Friday by probably the biggest amount ever for an economic data release (more later). Having said that it’s likely to be quiet the market highlight is undoubtedly the Federal Reserve’s monetary policy decision on Wednesday. Elsewhere ECB President Lagarde appears today at a European Parliament Committee but don’t expect too much given the close timing to the ECB meeting last week. We also have another Eurogroup meeting on Thursday where the recovery fund will be the main interest, as well as the release of US CPI data for May on Wednesday.

For the Fed on Wednesday, our economists expect the meeting to mark a first step away from a complete focus on crisis prevention towards more traditional goals of providing accommodation to support the recovery. In particular, they expect the Fed to announce an open-ended QE program consistent with monthly Treasury purchases of between $65bn and $85bn. In addition, the meeting statement should slightly enhance the commitment to keep rates lower for longer. An updated SEP should reflect a cautious outlook where elevated unemployment and below-target inflation should result in the median dots signalling that officials expect to keep rates unchanged at least through end-2022. See here for their preview.

The meeting comes after a remarkable payrolls report on Friday. To recap, headline nonfarm payrolls rose by 2.509 million with private payrolls increasing by 3.094 million versus consensus of -7.5m and -6.75m respectively. In addition, the main U-3 unemployment rate fell by 1.4ppts to 13.3% versus 19% expected. While the BLS noted that the U-3 rate was likely boosted by ongoing classification issues, and should likely have been three percentage points higher, the U-6 unemployment rate also fell to 21.2%, down 1.6% from its April all-time high. Just as three sectors of the labour market (food service & accommodation, health care & social assistance and retail) accounted for 55% of the February to April decline in private payrolls, the same sectors comprised 64% of the May gain, recovering between 15.5% and 17.5% of their declines over the previous two months. Hiring though was broad-based, with the payroll diffusion index surging to 64.0%, its highest since December 2018 (64.9%). In our economists view, the unexpected bounce in employment may reflect rehiring ahead of planned re-openings within states that was not quite captured in the initial jobless claims data. In short, the May payroll figure was what they would have expected for June. Overall there’s little doubt that this was a very positive print but it will take time to work out whether this was more of a bringing forward of re-hirings or something more structural.

As we’ll see in the weekly recap at the end, the payrolls report helped drive another bumper day in equities (S&P +2.62%). Looking deeper at US equities, DB’s Binky Chadha, in a report late on Friday, suggested positioning is still as low as the 8th percentile for the US helped in part by new retail money coming into the market. He also argues that there is a cash mountain in money markets after $1.2 trillion went in since March with almost none moving out so far. This now amounts to $5 trillion (25% of GDP) and is still at financial crisis highs and any re-allocation away should be beneficial across risk assets. However positioning in the mega cap growth stocks (MCGs) we discussed at length last week now look stretched so there is still room for a catch-up for the rest where positioning is very light. See Binky’s full report here.

On a similar vein Craig in my team has looked more at the bifurcation in US HY credit. If we look at a bucket of what we perceive to be the most defensive BB sectors, making up 28% of the BB and single-B market (ex-financials), this group now has a cash price higher than what it was pre-covid. Spreads have also repriced to the point where they rank in the 61st percentile (100% equals tightest). The other segment of the market is simply the rest of the BB and single-B market. This bucket has a current cash price which is 5pts lower than it was pre-covid. The repricing in spreads is also less significant, with spreads now ranking in the 20th percentile. However, like the equity market, these less favoured names have started to 'catch up' to the BB defensive bucket in recent days. As investors continue to search for dislocations, assuming this move towards less favoured sectors continues, opportunities within this segment of the market are likely to be far greater. See Craig’s note here for more on this.

In terms of weekend news OPEC+ agreed to a one-month extension in its recent output cuts and suggested a stricter compliance approach to those who breech this. Oil is up around +1% so far this morning after six weeks of gains and another good week last week as we’ll see in the weekly recap below. Elsewhere, China’s trade surplus came in at record $62.9bn (vs. $41.4bn expected and $45.3bn in April) in May with exports sliding to -3.3% yoy in USD terms (vs. -6.5% yoy expected and +3.5% yoy last month) while imports tumbled to -16.7% yoy (vs. -7.9% yoy expected and -14.2% in April).

Nevertheless, markets in Asia have kicked off the week on the front foot with the Nikkei (+1.23%), Hang Seng (+0.17%), Shanghai Comp (+0.28%) and Kospi (+0.16%) all up. Futures on the S&P 500 are also up +0.24% as we type. Overnight, Japan’s final Q1 GDP came in at -0.6% qoq (vs. -0.5% qoq expected).

Looking back to last week now. Global equities continued to rally to new post-shutdown highs as economic data improved throughout the week, accentuated by the US payroll data on Friday, and further promised stimulus in Europe. Equities that lagged the most throughout the pandemic, such as retailers, cruises and airlines were some of the best performers on the week with hopes for a faster than expected economic recovery taking hold. The S&P 500 rose +4.91%, with the largest one-day gain coming on Friday after the jobs report (+2.62%). The index is now +42.75% off the March lows and is down just -5.68% from all-time highs and ‘only’ -1.14% YTD. Equity markets both in the US and Europe continued to see a rotation into value-oriented stocks with US banks up +17.11% (+4.86% Friday) on the week, while European Banks rose +20.18% (+7.55% Friday). The tech-focused NASDAQ underperformed the S&P for a second week in a row, up “just” +3.42% (+2.06% Friday). However, the index has outperformed throughout the crisis and on Friday closed just -0.03% below February’s all-time high having briefly traded above it in the session.

European equities rallied even further on the week as the ECB announced an increase to the size of their PEPP by a further €600bn, the German government agreed additional fiscal stimulus, and virus case counts remained contained even as economies are slowly reopened. The Stoxx 600 rallied +7.12% (+2.48% Friday) over the five days with the core continental ones up around +9-11% on the week. Asian indices rose alongside their European and American counterparts. The Nikkei was up +4.51% over the week (+0.74% Friday) while the CSI 300 was up +3.47% (+0.48% Friday), and the Kospi rose +7.50% (+1.43% Friday).

Oil rallied further on the week as demand expectations rose with economic data improving. Prices were also helped by hopes that OPEC+ would extend production cuts as has been confirmed over the weekend. WTI futures rose +11.44% (+5.72% Friday) to $39.55/barrel and Brent crude rose +19.73% on the week (+5.78% Friday) to over $40/barrel for the first time since the first week of March.

Credit spreads on both sides of the Atlantic tightened on the week with risk sentiment continuing to drastically improve. European HY cash spreads were -83bps tighter on the week (-30bps Friday), while European IG spreads tightened -35bps (-13bps Friday). US HY cash spreads were -121bps tighter (-33bps Friday), while IG tightened -25bps on the week (-10bps Friday).

Peripheral debt tightened as well, with Spanish 10yr yields -17.5bps tighter to German bunds over the 5 days, while Italian BTPs were -23.5bps tighter, Greek 10yr yields tightened -33.8bps, and Portuguese bonds tightened -13.6bps. With risk assets rallying, core sovereign bonds sold off as US 10yr Treasury yields rose +24.3bps (+7.2bps Friday) to finish at 0.895%, while 10yr Bund yields rose +17.0bps over the course of the week (+4.3bps Friday) to -0.28%.

Also on Friday, the EU’s chief Brexit negotiator, Michel Barnier, said that “the truth is that there was no substantial progress” following the latest round of talks with the UK on their future relationship after Brexit. He also said that a full legal text would need to be ready by the end of October given the time needed for ratification. Nevertheless, the pound strengthened further against other major currencies, reaching its highest level against the US dollar in nearly three months (+0.56% Friday and +2.63% on the week).

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Fauci And The CIA: A New Explanation Emerges

Fauci And The CIA: A New Explanation Emerges

Authored by Jeffrey A. Tucker via Brownstone Institute,

Jeremy Farrar’s book from August 2021…



Fauci And The CIA: A New Explanation Emerges

Authored by Jeffrey A. Tucker via Brownstone Institute,

Jeremy Farrar’s book from August 2021 is relatively more candid than most accounts of the initial decision to lock down in the US and UK. “It’s hard to come off nocturnal calls about the possibility of a lab leak and go back to bed,” he wrote of the clandestine phone calls he was getting from January 27-31, 2020. They had already alerted the FBI and MI5. 

“I’d never had trouble sleeping before, something that comes from spending a career working as a doctor in critical care and medicine. But the situation with this new virus and the dark question marks over its origins felt emotionally overwhelming. None of us knew what was going to happen but things had already escalated into an international emergency. On top of that, just a few of us – Eddie [Holmes], Kristian [Anderson], Tony [Fauci] and I – were now privy to sensitive information that, if proved to be true, might set off a whole series of events that would be far bigger than any of us. It felt as if a storm was gathering, of forces beyond anything I had experienced and over which none of us had any control.”

At that point in the trajectory of events, intelligence services on both sides of the Atlantic had been put on notice. Anthony Fauci also received confirmation that money from the National Institutes of Health had been channeled to the offending lab in Wuhan, which meant that his career was on the line. Working at a furious pace, the famed “Proximal Origin” paper was produced in record time. It concluded that there was no lab leak. 

In a remarkable series of revelations this week, we’ve learned that the CIA was involved in trying to make payments to those authors (thank you whistleblower), plus it appears that Fauci made visits to the CIA’s headquarters, most likely around the same time. 

Suddenly we get some possible clarity in what has otherwise been a very blurry picture. The anomaly that has heretofore cried out for explanation is how it is that Fauci changed his mind so dramatically and precisely on the merit of lockdowns for the virus. One day he was counseling calm because this was flu-like, and the next day he was drumming up awareness of the coming lockdown. That day was February 27, 2020, the same day that the New York Times joined with alarmist propaganda from its lead virus reporter Donald G. McNeil

On February 26, Fauci was writing: “Do not let the fear of the unknown… distort your evaluation of the risk of the pandemic to you relative to the risks that you face every day… do not yield to unreasonable fear.”

The next day, February 27, Fauci wrote actress Morgan Fairchild – likely the most high-profile influencer he knew from the firmament – that “be prepared to mitigate an outbreak in this country by measures that include social distancing, teleworking, temporary closure of schools, etc.”

To be sure, twenty-plus days had passed between the time Fauci alerted intelligence and when he decided to become the voice for lockdowns. We don’t know the exact date of the meetings with the CIA. But generally until now, most of February 2020 has been a blur in terms of the timeline. Something was going on but we hadn’t known just what. 

Let’s distinguish between a proximate and distal cause of the lockdowns.

The proximate cause is the fear of a lab leak and an aping of the Wuhan strategy of keeping everyone in their homes to stop the spread. They might have believed this would work, based on the legend of how SARS-1 was controlled. The CIA had dealings with Wuhan and so did Fauci. They both had an interest in denying the lab leak and stopping the spread. The WHO gave them cover. 

The distal reasons are more complicated. What stands out here is the possibility of a quid pro quo. The CIA pays scientists to say there was no lab leak and otherwise instructs its kept media sources (New York Times) to call the lab leak a conspiracy theory of the far right. Every measure would be deployed to keep Fauci off the hot seat for his funding of the Wuhan lab. But this cooperation would need to come at a price. Fauci would need to participate in a real-life version of the germ games (Event 201 and Crimson Contagion). 

It would be the biggest role of Fauci’s long career. He would need to throw out his principles and medical knowledge of, for example, natural immunity and standard epidemiology concerning the spread of viruses and mitigation strategies. The old pandemic playbook would need to be shredded in favor of lockdown theory as invented in 2005 and then tried in Wuhan. The WHO could be relied upon to say that this strategy worked. 

Fauci would need to be on TV daily to somehow persuade Americans to give up their precious rights and liberties. This would need to go on for a long time, maybe all the way to the election, however implausible this sounds. He would need to push the vaccine for which he had already made a deal with Moderna in late January. 

Above all else, he would need to convince Trump to go along. That was the hardest part. They considered Trump’s weaknesses. He was a germaphobe so that’s good. He hated Chinese imports so it was merely a matter of describing the virus this way. But he also has a well-known weakness for deferring to highly competent and articulate professional women. That’s where the highly reliable Deborah Birx comes in: Fauci would be her wingman to convince Trump to green-light the lockdowns. 

What does the CIA get out of this? The vast intelligence community would have to be put in charge of the pandemic response as the rule maker, the lead agency. Its outposts such as CISA would handle labor-related issues and use its contacts in social media to curate the public mind. This would allow the intelligence community finally to crack down on information flows that had begun 20 years earlier that they had heretofore failed to manage. 

The CIA would hobble and hamstring the US president, whom they hated. And importantly, there was his China problem. He had wrecked relations through his tariff wars. So far as they were concerned, this was treason because he did it all on his own. This man was completely out of control. He needed to be put in his place. To convince the president to destroy the US economy with his own hand would be the ultimate coup de grace for the CIA. 

A lockdown would restart trade with China. It did in fact achieve that. 

How would Fauci and the CIA convince Trump to lock down and restart trade with China? By exploiting these weaknesses and others too: his vulnerability to flattery, his desire for presidential aggrandizement, and his longing for Xi-like powers over all to turn off and then turn on a whole country. Then they would push Trump to buy the much-needed personal protective equipment from China. 

They finally got their way: somewhere between March 10 or possibly as late as March 14, Trump gave the go ahead. The press conference of March 16, especially those magical 70 seconds in which Fauci read the words mandating lockdowns because Birx turned out to be too squeamish, was the great turning point. A few days later, Trump was on the phone with Xi asking for equipment. 

In addition, such a lockdown would greatly please the digital tech industry, which would experience a huge boost in demand, plus large corporations like Amazon and WalMart, which would stay open as their competitors were closed. Finally, it would be a massive subsidy to pharma and especially the mRNA platform technology itself, which would enjoy the credit for ending the pandemic. 

If this whole scenario is true, it means that all along Fauci was merely playing a role, a front man for much deeper interests and priorities in the CIA-led intelligence community. This broad outline makes sense of why Fauci changed his mind on lockdowns, including the timing of the change. There are still many more details to know, but these new fragments of new information take our understanding in a new and more coherent direction. 

Jeffrey A. Tucker is Founder and President of the Brownstone Institute. He is also Senior Economics Columnist for Epoch Times, author of 10 books, including Liberty or Lockdown, and thousands of articles in the scholarly and popular press. He speaks widely on topics of economics, technology, social philosophy, and culture.

Tyler Durden Thu, 09/28/2023 - 17:40

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North Korea Enshrines “Permanent” Nuclear Power Status In Constitution

North Korea Enshrines "Permanent" Nuclear Power Status In Constitution

On Thursday North Korean state media quoted leader Kim Jong Un as saying…



North Korea Enshrines "Permanent" Nuclear Power Status In Constitution

On Thursday North Korean state media quoted leader Kim Jong Un as saying more advanced atomic weapons are needed to counter the threat from the United States.

This signals the death knell for Washington's long stated policy goal of denuclearization of the Korean peninsula, given that the remarks came as Kim enshrined the DPRK's status as a permanent nuclear power in its constitution.

North Korea's "nuclear force-building policy has been made permanent as the basic law of the state, which no one is allowed to flout," Kim told the State People's Assembly, according to state-run KCNA.


Starting last year he declared the north as an "irreversible" nuclear weapons state, and has in the last couple months ramped up ballistic missile tests in response to intermittent, ongoing joint US military drills with the south. This has already been a record year in terms of the number of Pyongyang's missile tests.

The north's rubber-stamp parliament, which met Tuesday and Wednesday, has approved the nuclear update to the constitution. Kim described that this was necessary as the United States has "maximized its nuclear war threats to our Republic by resuming the large-scale nuclear war joint drills with clear aggressive nature and putting the deployment of its strategic nuclear assets near the Korean peninsula on a permanent basis."

In July, the nuclear-armed USS Kentucky Navy ballistic missile submarine made a port call in South Korea, which marked a first in decades. It has stayed there since, enraging Pyongyang.

Kim in his Thursday address also blasted growing defense cooperation between Washington, Seoul and Tokyo as the "worst actual threat," saying that as a result "it is very important for the DPRK to accelerate the modernization of nuclear weapons in order to hold the definite edge of strategic deterrence."

A similar message was delivered in New York on Tuesday by Kim Song, North Korea's representative at the UN, who said in an address to the UN General Assembly that the region is close to the "brink of a nuclear war"

"Owing to the reckless and continued hysteria of nuclear showdown on the part of the US and its following forces, the year 2023 has been recorded as an extremely dangerous year that the military security situation in and around the Korean peninsula was driven closer to the brink of a nuclear war," he said.

"Due to [Seoul’s] sycophantic and humiliating policy of depending on outside forces, the Korean peninsula is in a hair-trigger situation with imminent danger of nuclear war," the ambassador continued. He further blasted the US for attempting to erect an "Asian NATO" that will bring a "new Cold War structure to northeast Asia."

Tyler Durden Thu, 09/28/2023 - 17:20

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Tesla rival Polestar reveals production plans for electric SUV

The Sweden-based electric vehicle maker completes key testing before launching production of its new SUV.



Tesla's Model Y crossover, the best-selling vehicle globally, is the standard that electric vehicle makers strive to compete with. The Austin, Texas, automaker sold about 267,200 Model Y vehicles in the first three months of the year and continued leading the pack well into the second quarter.

It's no wonder that the Model Y is leading all vehicles in sales as it retails for about $39,390 after tax credits and estimated gas savings. Ford  (F) - Get Free Report hopes to compete with the Model Y about a year from now when it rolls out the new Ford Explorer SUV that is expected to start at $49,150.

Related: Honda unveils surprising electric vehicles to compete with Tesla

Plenty of competition in electric SUV space

Mercedes-Benz (MBG) however, has a Tesla rival model with its EQB all-electric compact sports utility vehicle with an estimated 245 mile range on a charge with 70.5 kWh battery capacity, 0-60 mph acceleration in 8 seconds and the lowest price of its EVs at a $52,750 manufacturers suggested retail price.

Tesla's Model X SUV has a starting price of about $88,490, while the Model X full-size SUV starts at $98,490 with a range of 348 miles. BMW's  (BMWYY) - Get Free Report xDrive50 SUV has a starting price of about $87,000, a range up to 311 miles and accelerates 0-60 miles per hour in 4.4 seconds.

Polestar  (PSNY) - Get Free Report plans to have a lineup of five EVs by 2026. The latest model that will begin production in the first quarter of 2024 is the Polestar 3 electric SUV, which is completing its development. The vehicle just finished two weeks of testing in extreme hot weather of up to 122 degrees in the desert of the United Arab Emirates to fine tune its climate system. The testing was completed in urban cities and the deserts around Dubai and Abu Dhabi.

“The Polestar 3 development and testing program is progressing well, and I expect production to start in Q1 2024. Polestar 3 is at the start of its journey and customers can now visit our retail locations around the world to see its great proportions and sit in its exclusive and innovative interior,” Polestar CEO Thomas Ingenlath said in a statement.

Polestar 3 prototype is set for production in the first quarter of 2024.


Polestar plans 4 new electric vehicles

Polestar 3, which will compete with Tesla's Model X, Model Y, BMW's iX xDrive50 and Mercedes-Benz, has a starting manufacturer's suggested retail price of $83,000, a range up to 300 miles and a charging time of 30 minutes. The company has further plans for the Polestar 4, an SUV coupé that will launch in phases in late 2023 and 2024, as well as a Polestar 5 electric four-door GT and a Polestar 6 electric roadster that the company says "are coming soon." 

The Swedish automaker's lone all-electric model on the market today is the Polestar 2 fastback, which has a manufacturer's suggested retail price of $49,900, a range up to 320 miles and a charging time of 28 minutes. The vehicle accelerates from 0-60 miles per hour in 4.1 seconds. Polestar 2 was unveiled in 2019 and delivered in Europe in July 2020 and the U.S. in December 2020.

Polestar 1, the company's first vehicle, was a plug-in hybrid that went into production in 2019 and was discontinued in late 2021, according to the Polestar website.

The Gothenburg, Sweden, company was established in 1996 and was sold to Geely affiliate Volvo in 2015.

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