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Market Quickly Retreats After News of Post-Memorial Day Pandemic Surge

What Coronavirus Peak?



This article was originally published by Barry Ritholtz.

Source: Morgan Stanley Markets are under pressure today: Between Fed Chairman Powell’s dour comments yesterday, and the spike in new infections we are seeing, hopes for a strong economic re-opening are now being called into question. The chart above is a fascinating April 15, 2020 discussion from Biotech analyst at Morgan Stanley Matthew Harrison. The dark blue line at the far left of the chart showed actual United States non-cumulative infections at the time of that April publication. The lighter lines to the right of that are essentially a complex forecast. To their credit, they MS noted “A recovery from this acute period in the outbreak is just the beginning and not the end. We believe the path to reopening the economy will likely take time. It will require turning on and off various forms of social distancing and will only come to an end when vaccines are available, in the spring of 2021 at the earliest.” Even with that caveat, the chart above was an optimistic guess at what might have happened, and unfortunately, it assumed a degree of competency of governments and self-discipline among the population that apparently, did not exist, Hence, it wildly underestimates the impact of behavioral factors like cabin fever and pent up social demand from the population at large, and the commitment from many state governors — especially POTUS — to make short-term economic sacrifices in order to achieve long term health and economic gains. As was pointed out yesterday, America has failed its Marshmallow test. For example, here is what the (non-cumulative) rate infection in the USA looks like, via Statistica: Number of new cases of coronavirus (COVID-19) in the United States from January 22 to June 10, by day Statistic: Number of new cases of coronavirus (COVID-19) in the United States from January 22 to June 10, 2020, by day* | Statista Source: Statista While the curve has been flattened, MS’s expected rates of daily new infection of under 10,000 in May and of under 5,000 in June infection was too optimistic by an order of magnitude. Predicting the future behavior of crowds of humans is much more challenging than we often realize. This is especially true if you build in expectations of rationality and sacrifice from individuals and institutions lacking any recent history of such. What about that second peak in December/January? Well, based on the most recent data, re-openings in various states, and the rise in infections and hospitalizations, we may be seeing a 2nd wave in June/July. That Winter wave might end up as the 3rd or 4th wave. It is yet another unforced error created by a lack of leadership and a mistrust in basic science. Will Fauci be able to save us next waves? I have my doubts. Perhaps one more chart can show where we are — not on a national basis, but on state by state basis: Are Coronavirus Cases Rising Or Falling In Your State?  Source: NPR While the timing and magnitude of the “second wave” forecast at top was wrong (so far), the direction is clearly correct:
“While this “second peak” is unlikely to be as severe as the first (roughly 10,000-15,000 new cases daily vs. 30,000-35,000 in the first peak), it means that the U.S. outbreak will have a very long tail. This much longer tail would put the total U.S. time to peak at about four times that of China and twice as long as in Italy, driven by the slow uptake of social-distancing measures and lack of robust testing.”
In other words, the US response was so incompetent at a national level that this is already bad, and it has a high possibility of getting worse. And that is before we see the newest waves of infections caused by protests. Finally, if your goal was to rapidly cause the spread a respiratory disease, then perhaps the very best way to accomplish that would be to Pepper Spray large groups of people who are in close proximity to each other. There will be many new infections and possibly an increase in deaths that result from that policing decision. Who will be held responsible for giving those orders?  Previously: On Predictions and Forecasts Sources: After the Coronavirus Peak, What’s Next Matthew Harrison (Equity Analyst, Large Cap Biotech) Mogan Stanley, April 15, 2020 Coronavirus Disease 2019 (COVID-19) CDC (updated regularly) Tracking The Pandemic: Are Coronavirus Cases Rising Or Falling In Your State? STEPHANIE ADELINE, CONNIE HANZHANG JIN, ALYSON HURT, RUTH TALBOT THOMAS WILBURN, DANIEL WOOD NPR, June 10, 2020 America Fails the Marshmallow Test: We lack the will to beat Covid-19. By Paul Krugman NYT, June 9, 2020
The post What Coronavirus Peak? appeared first on The Big Picture.

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Democrat Sen. Bob Menendez, Wife Indicted Over Gold Bar And Other Bribery Schemes

Democrat Sen. Bob Menendez, Wife Indicted Over Gold Bar And Other Bribery Schemes

Sen. Bob Menendez (D-NJ) and his wife Nadine have been indicted…



Democrat Sen. Bob Menendez, Wife Indicted Over Gold Bar And Other Bribery Schemes

Sen. Bob Menendez (D-NJ) and his wife Nadine have been indicted in New York for allegedly accepting bribes in relation to an allegedly corrupt relationship they had with three businessmen from their home state. The indictment also charges three businessmen, Wael Hana, Jose Uribe and Fred Daibes.

"Those bribes included cash, gold, payments toward a home mortgage, compensation for a low-or-no-show job, a luxury vehicle, and other things of value," reads the indictment.

Daibes, a developer and former bank chairman, allegedly gave Menendez gold bars valued at approximately $400,000, in exchange for assistance in a case in which he faced federal bank charges.

Instead of facing over 10 years in prison, Daibes, a felon, only ended up serving probation after striking an agreement with the US Attorney's Office in New Jersey.

"For purposes of the Federal Extortion Act, it makes no difference if the senator took an official act so long as he accepted the money and there was knowledge the money was in exchange for that official influence, even if he never carried out what he had promised he would do," according to NBC Legal Analyst Danny Cevallos.

Menendez disclosed that his family had accepted gold bars in 2020. Daibes encountered bank fraud charges that could have netted him up to a decade in prison for lying about a nearly $2 million loan from Mariner's Bank, where Daibes served as chairman.

Last year, however, New Jersey's U.S. Attorney's Office agreed to let Daibes plead guilty to one count and serve probation. They said Daibes had repaid the loan. -Fox News

According to the report, Menendez, 69, is 'close' with US Attorney Philip Sellinger - having supported him for the position, while Sellinger had previously raised funds for Menendez's campaign.

Bob Menendez and wife Nadine

Officials are also looking at whether Menendez, the former Chairman of the powerful Senate Foreign Relations Committee, or his wife, had improperly received gifts from a New Jersey food processor who obtained an exclusive contract with the Egyptian government to certify halal food experts around the world.

Egyptian officials and the New Jersey businessman who received the contract were hosted by Menendez in his office in 2018, according to the Wall Street Journal. A year later, the businessman became the "sole certifier of halal meat exported from the U.S. to Egypt," the outlet noted.

NBC News 4 said the gifts included the usage of a Mercedes and a luxury Washington, D.C., apartment. Investigators are attempting to resolve if Menendez, chair of the Senate Foreign Relations Committee, used his standing to help the man secure the contract. -Fox News

According to the indictment, Menendez provided 'sensitive US Government information to Egypt.'

Menendez and his wife are charged with three counts: conspiracy to commit bribery, conspiracy to commit honest services fraud, and conspiracy to commit extortion under color of official right.

In June of last year, federal agents searched Menendez's New Jersey home, where they found "fruits" of the pair's "corrupt bribery agreement" with the three businessman - including over $480,000 in cash, some of which was stuffed in envelopes, and $70,000 in Nadine Menendez's safe deposit box.

They also found gold bars worth over $100,000, "provided by either Hana or Daibes."

In the months before his office admitted he was under federal investigation, Menendez's wife sold up to $400,000 in gold bars between April 7, 2022 and June 16, 2022.

This is hardly the first time Menendez has been under federal criminal investigation.

Tyler Durden Fri, 09/22/2023 - 09:30

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Zelensky Departs Washington Mostly Empty-Handed Amid Mood Shift In West

Zelensky Departs Washington Mostly Empty-Handed Amid Mood Shift In West

By all accounts, Zelensky came away from his Washington visit with…



Zelensky Departs Washington Mostly Empty-Handed Amid Mood Shift In West

By all accounts, Zelensky came away from his Washington visit with nothing new. Biden did announce a fresh $325 million aid package for Ukraine from already committed funds, but the hoped-for long range missile approval never came (however, more cluster bombs are being sent). And as we detailed Thursday, House Republican leadership once again failed to move forward on a mere procedural vote for the Pentagon funding bill, due in large part to GOP members rejecting Biden's proposed $24 billion more in Ukraine aid.

Thursday's package announced by Biden, as Zelensky visited the White House and Capitol Hill, was run-of-the-mill and entirely to be expected. "Today I approved the next tranche of U.S. security assistance to Ukraine including more artillery, more ammunition, more anti-tank weapons and next week, the first U.S. Abrams tanks will be delivered to Ukraine," Biden said.

As for the earlier in the day (Thurs.) meeting with Congressional leaders, House Speaker Kevin McCarthy explained when asked why the Ukrainian leader's request to address Congress was denied, "Zelensky asked for a joint session, we just didn't have time. He's already given a joint session."


Instead in a closed-door meeting, Zelensky later acknowledged he discussed with lawmakers "the battlefield situation and priority defense needs."

But if there is any level of consolation for Kiev, it's seen in the Pentagon announcement which came late in the day Thursday. Facing potential US government shutdown on Oct.1st, given at this point Congress is not expected to pass the 12 appropriations bills needed to fund government operations before next fiscal year, the Pentagon has said it will exempt its operations supporting Ukraine from a shutdown. 

The military typically suspends any activities not deemed vital to national security during government shutdowns, thus the DoD is in effect saying Ukraine aid remains "vital to national security". 

"Operation Atlantic Resolve is an excepted activity under a government lapse in appropriations," Pentagon spokesman Chris Sherwood told Politico, in reference to the operational name still used for actions supporting Kiev.

But Politico points out a potential shutdown would still negatively impact US support to Ukraine:

Sherwood noted that while DOD’s activities related to Ukraine will continue, furloughs and other activities halted under the shutdown could still have a negative impact.

"Training would happen, but depending on whether or not there were certain personnel that were not able to report for duty, for example, that could have an impact," said Pentagon spokesperson Brig. Gen. Patrick Ryder on Thursday.

This Pentagon exemption to keep Ukraine-related support active during a government shutdown seems to be the only significant thing Zelensky came away with. 

It appears to have been the main object of discussion when Zelensky met with Secretary of Defense Lloyd Austin in Washington during the trip. The Pentagon said this was "to reaffirm the steadfast US support for Ukraine."

Meanwhile, Bloomberg takes note of Zelensky "showing the strain" amid increasing divisions among allies:

The Ukrainian president allowed a dispute with one of his biggest allies to spin out of control at the United Nations General Assembly this week, and that’s just a hint of the tensions building behind the scenes.

Zelenskiy has been leading his country through Russia’s brutal assault for 19 months, all the time fighting on another front to wring the weapons and finance he needs from his US and European supporters. Now he suspects that President Joe Biden’s commitment is wavering and other leaders may be taking their cue from the US, according to a person who met with him recently.

He grew very emotional at times during that discussion, the person said, and was scathing in his criticism of nations that he said weren’t delivering weapons quickly enough.

Washington's lackluster greeting of Zelensky this week (compared to how he was received in December 2022) came simultaneous to Poland declaring it will no longer arm Ukraine, amid a fierce diplomatic spat over blockage of Ukraine grain imports by Warsaw, to protect Polish farmers.

The Economist is also taking note of the significant mood shift among Western allies...

A "long war" indeed... given a G7 leader from a European country has told reporters this week that the West is prepared for a years-long war, something likely to last some six or seven years, according to the quote.

"A senior official from one European G-7 country said the war may last as much as six or seven more years and that allies need to plan financially to continue support for Kyiv for such a long conflict," Bloomberg wrote.

Tyler Durden Fri, 09/22/2023 - 10:15

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Michael Bloomberg puts up $500M to shut down this controversial industry

The businessman and former New York City mayor is investing big money for a high-powered campaign.



Years ago, a rich person or company would indicate wealth by donating libraries and orphanages or traverse the world in bespoke yachts or aircraft.

You may commission a boat to extract an enemy submarine off the depths of the ocean floor. Perhaps you'd get an ivy league school of public policy and government named in your honor. If you were really industrious, you might even gather a bunch of your high-powered banker friends in a locked room on a distant island off the coast of Georgia to establish what we now call the Federal Reserve. 

DON'T MISS: China is no longer the leading exporter to U.S. (here's who is)

Nowadays, however, it's quite in vogue to gather large stockpiles of your cash and put it to work not for your people or your country. Billionaires think much bigger than that. If you're really rich, you put your money to work for the good of planet Earth. 

Take, for example, Microsoft  (MSFT) - Get Free Report and Amazon  (AMZN) - Get Free Report, who both recently pledged hundreds of millions of dollars between the two to capture carbon out of the atmosphere and dispose of it where it may no longer be accessed. 

Businessman and former New York City Mayor Michael Bloomberg is the latest billionaire to take a stab at the seemingly unsolvable climate crisis – and he's putting a vast sum of his money up to the challenge. 

Aerial view of Jon Amos Power plant shows smoke stacks and cooling, Coal, Poca, West Virginia. (Photo by: Visions of America/Joseph Sohm/Universal Images Group via Getty Images)

Joe Sohm/Visions of America/Getty Images

Michael Bloomberg pledges millions to fight coal

Bloomberg's charitable organization, Bloomberg Philanthropies, announced on Wednesday that it would front $500 million to shut down all existing coal plants in the U.S. and prevent future natural gas plants from being constructed. 

The pledge may sound anti-industrialist, but Bloomberg's "Beyond Carbon" initiative claims it will "turbocharge," environmental progress. 

The initiative includes the following bullet points: 

  • Finish the job on coal. With 372 of 530 coal plants announced to retire or closed to date – more than 70 percent of the country’s coal fleet – this next phase will shut down every last U.S. coal plant.
  • Slash gas plant capacity in half, and block all new gas plants.
  • Increase U.S. clean energy four-fold. Accelerate the clean energy transition to reach the goal of 80 percent of total electricity generation.

"Bloomberg Philanthropies has helped retire more than 70 percent of all U.S. coal plants, which accounts for more than 80 percent of all emissions reductions in the United States since 2010," Bloomberg, who's a special envoy on climate ambition and solutions to the U.N. proudly announced on Wednesday. 

Beyond Carbon will also fund the following organizations as a part of its mission toward progress: 

  • Earthjustice
  • Hip Hop Caucus
  • Sierra Club
  • RMI
  • League of Conservation Voters
  • Advanced Energy United
  • Coalfield Development

No stranger to controversy, Bloomberg has supported a number of divisive policies during his tenure in the public eye, including calls for banning polystyrene foam that is commercially known as Styrofoam, smoking, trans fats, and restricting sugary drinks in some public businesses. 

Now, it seems the billionaire is more concerned about climate change as a threat to public health than fat or soda. 

"This work has helped achieve more than 80 percent of all U.S. emissions reductions since 2010 and plant closures from the campaigns are estimated to have saved 49,900 lives, prevented nearly 77,500 heart attacks, and saved billions in healthcare costs," Bloomberg Philanthropies writes.

"But the U.S. is now at a pivotal moment — without rapid progress on clean energy, we will fail to meet our U.S. climate targets, and public health risks will skyrocket. Beyond Carbon’s next phase will ensure the U.S. delivers on our global climate commitments by retiring the last remaining coal plants, stopping the expansion of natural gas, and quadrupling clean energy capacity while continuing to prioritize environmental justice and workforce transition."

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