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Yes, 2021 Could Be Worse

Yes, 2021 Could Be Worse

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Yes, 2021 Could Be Worse Tyler Durden Thu, 09/17/2020 - 10:07

Authored by Robert Wright via The American Institute for Economic Research,

I notice lots of folks on social media pining for 2021. Don’t kill the messenger, but 2021 could be much worse than 2020.

Coronavirus restrictions could get worse.

But how? Covid-19 came close to causing a legitimate crisis only in the New York City area and there only with “help” from Governor Cuomo’s kill people in nursing homes policy. Not that they needed much help as the virus has killed mostly the frail and elderly and according to one study people who normally would have died of the flu a year or two ago had not the last two flu seasons been relatively light. Moreover, death counts have been confusing, with documented instances of people dying in motorcycle accidents and from terminal cancer being counted as Covid-19 fatalities.

Death rates in the United States are running at 109% of expectations but parsing everything out is difficult because the lockdowns caused additional deaths from suicide and abuse while decreasing deaths from motor-vehicle and other accidents. Definitive stats on the number killed by lockdowns, as opposed to the virus, as opposed to old age and other comorbidities, may never be available.

Even discerning the number of Covid-19 “cases” is problematic because many people who had the virus, especially early on, were not officially tested for it. On the other hand, tests, report the formerly venerable New York Times, now may be returning mostly false positives because they are super sensitive and return only a binary “yes” or “no” response even though being infected with a virus is a far cry different than being pregnant. Magnitudes matter when it comes to spreading the little sucker. 

Another problem, as I pointed out previously, is that viral spread is usually not salient, so “the” scientists we are supposed to be following have never really tried to track an evolving polyglot mass this closely before, and they are clearly still pretty clueless about it all. But that is not a reason to panic about the virus; it is a reason to panic about the sanity or intentions of our leaders, who need to pay for destroying our civil liberties on a wing and a prayer.

In short, although the virus is less deadly than at first, and treatments have improved (for example by not putting people on those ventilators we so desperately thought we needed back in March with such alacrity), and the disease appears to have run its course in much of the country, politicians and the media continue to stir up uncertainty, which they use to stoke fear in the public, and continued compliance with government dictates, school closings, and such. You, gentle reader, may be convinced it is largely hokum at this point, but that isn’t going to help you if most of your neighbors still insist on masks and social distancing, talismans and role-playing though they are.

If more coronavirus restrictions seem unlikely, look at what has been going on in Australia, which is creating a techno-police state in a reputed effort to save people from something that won’t, indeed can’t, hurt most of them. 

The recent Federal District court decision smacking down Pennsylvania’s lockdown is heartening, but what took so long? I called for attacking the constitutionality of lockdowns on due process (5th and 14th Amendment) grounds back in mid-April but only the Wisconsin Supreme Court responded appropriately and quickly, in May. The power hungry alpha Wolf of Pennsylvania wants the court’s ruling not to hold until he can appeal it! The audacity of that move should trouble anyone who thinks things cannot get worse.

And it is not clear that masks and other social distancing mandates will meet the same fate as shelter-in-place orders and other core lockdown measures, at least before 2021 rolls in. As John Tamny recently noted on these pages, “corona-reverence is far more political than the believers have previously felt comfortable admitting.”

Mostly peaceful protests could get less mostly peaceful. 

America has a long history of riots that make even looted retail stores, torched buildings, and occupied police precincts appear like a walk in the park by comparison. With so much at stake in the Presidential election due to our inability and unwillingness to curb the federal government’s power, both sides have incentives to rile up their bases when one or the other side loses this November. Where it ends, nobody knows, but the historical precedents are frightening. 

Many early American riots were deadly affairs, replete with real bombs and cannon showering lead grapeshot hither and thither. And the targets of wrath were often critical infrastructure, not symbolic statues. In 1837, for example, Radical Democrats called Loco Focos stirred up the crowd for partisan gain but after New York City’s mayor was assailed by sticks, brickbats, and pieces of ice (you thought Antifa invented that?), violence escalated and turned increasingly irrational. 

Enraged rioters breached the defenses of flour wholesaler Eli Hart and destroyed much of his stock because they believed bread prices were too high. They equally irrationally pledged to accept only hard money (gold and silver coins) instead of bank money (notes and deposits) when the former was needed to acquire more flour from places not ravaged by the Hessian Fly, cholera, and a giant fire, one caused not by global warming but by allowing too much dry wood to accumulate in one place (Manhattan). What is that old saying about repeating history again?

Now imagine 2020’s murder hornets, Covid-19 lockdowns, urban riotish uprisings, and such but with enemy aircraft overhead and missiles inbound because we are also at war with Iran. Or China. Or Russia. Or North Korea. Or all of them. 

Normally, countries do not want to throw down against the United States, which has proven its willingness and ability to invade, occupy, and generally ruin countries no matter how many trillions of dollars it takes. But it isn’t clear that Uncle Sam has trillions to spare anymore, especially if it is going Fight Club on itself. And it is clearly vulnerable in an age when the World War II Japanese tactic of trying to light its western forests on fire has become appallingly easy. 

Moreover, America’s rulers might be interested in fomenting a war about now to distract from domestic difficulties. They are likely under the silly misapprehension that war is “good for the economy.” That sounds crazy, and it is, but we are talking about the same brainiacs who gave up the growth-inducing free trade consensus for tariffs, industrial policy, and anti-price gouging laws!

The war scenario struck me recently while rereading Robert Nisbet’s Twilight of Authority (New York: Oxford University Press, 1975 but also available at the Liberty Fund). An historical sociologist who taught at several major universities and was a researcher at the American Enterprise Institute, Nisbet (1913-1996) argued that Western Civilization could soon collapse into a new dark age. His work was easy to dismiss when America’s socioeconomic fortunes improved in the 1980s and 1990s thanks to deregulation, more rational trade policies, and productivity increases tied to the telecom revolution. But looked at from the perspective of September 2020, his book appears prophetic. Consider its chilling opening passage:

“Periodically in Western history twilight ages make their appearance. Processes of decline and erosion of institutions are more evident than those of genesis and development. Something like a vacuum obtains in the moral order for large numbers of people. Human loyalties, uprooted from accustomed soil, can be seen tumbling across the landscape with no scheme or larger purpose to fix them. Individualism reveals itself less as achievement and enterprise than as egoism and mere performance. Retreat from the major to the minor, from the noble to the trivial, the communal to the personal, and from the objective to the subjective is commonplace. There is a widely expressed sense of degradation of values and of corruption of culture. The sense of estrangement from community is strong.”

The major “stigmata,” as Nisbet terms the signs of twilight, leads to a dark age of militarism because war appeals to increasing numbers of people as a way out of “economic crises, political division, and intolerable social disintegration.” The horrors of war go unheeded in the twilight era because “a spreading wave of unreason” engulfs both “popular and philosophical writing.”

And one final gem. 

While a year is defined by the amount of time it takes the earth to revolve once around the sun, when a new year begins is arbitrary and varies over culture (e.g., the Chinese or Jewish new years) and over time. The new year in the Christian Western world, in fact, used to begin in March, which is why the names of our months do not correspondent with their current number: sept = 7, but it is the ninth month of the year currently; oct = 8, but it is the tenth month, nov = 9; and dec of course = 10. 

So buck up, buckaroos, because 2021 is just a cultural construct anyway. The world will improve not on an arbitrary day but when you all decide to make it a better place.

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Stock Market Today: Stocks turn lower as Treasury yield rise mutes earnings gains

A mixed set of big tech earnings, alongside modestly higher Treasury yields, has stocks moving lower into the start of the Wednesday session.

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Updated at 10:07 am EDT U.S. turned lower Wednesday, while Treasury yields crept higher and the dollar building gains against its global peers as investors reacted to the first wave of mega-cap tech earnings while continuing to track movements in the bond market. Microsoft  (MSFT) - Get Free Report and Google parent Alphabet  (GOOGL) - Get Free Report kicked-off this week's run of earnings from the so-called 'magnificent seven' late Tuesday with a mixed set of September quarter results, reflecting both the power for AI technologies to boost near-term profits and the impact of surging interest rates on corporate spending. Microsoft's revenue growth in cloud computing, driven in part by its early investments in AI, lifted shares in the tech giant firmly higher in pre-market trading as it looks to add around 85 points to the Dow Jones Industrial Average at the opening bell. Google, meanwhile, slumped 6.6% following a mixed set of third quarter earnings that showed slowing cloud computing growth overshadowing record ad revenues of $59.65 billion. Facebook and Instagram owner Meta Platforms  (META) - Get Free Report posts its third quarter earnings after the bell later today, with magnificent seven stalwart Amazon  (AMZN) - Get Free Report following on Thursday. In the bond market, a muted auction of $51 billion in 2-year notes yesterday, which drew softer demand from both foreign and domestic investors, drew a line under the recent Treasury market rally, which was also tested by a faster-than-expected reading for business activity by S&P Global over the month of October. Benchmark 10-year notes yields were last marked 5 basis points higher in the early New York trading at 4.901% while 2-year notes were pegged at 5.091%, 3 basis points higher than yesterday's auction levels, ahead of a $52 billion sale of 5-year notes later in the session. The U.S. dollar index, meanwhile, was marked 0.14% higher against a basket of six global currency peers and trading at 106.41 heading into the morning session. In other markets, global oil prices drifted modestly higher in early New York trading ahead of Energy Department data on domestic stockpiles and international exports later this morning. Brent crude contracts for December delivery were marked 23 cents higher at $88.31 per barrel while WTI contracts for the same month edged 13 cents higher to $83.87 per barrel. On Wall Street, the S&P 500 was marked 42 points lower, or 0.99%, in the opening hour of trading while the Dow was down 133 points despite the impact of Microsoft's advance. The tech-focused Nasdaq, meanwhile, was down 186 points, or 1.43%, as the slump in Google shares offset a smaller gain for Microsoft. In overseas markets, Europe's Stoxx 600 was marked 0.28% higher in late-day Frankfurt trading amid another busy earnings session while Britain's FTSE 100 edged 0.02% lower in London. Overnight in Asia, reports of a new trillion-yuan bond sale from the Chinese government, worth around $137 billion in U.S. dollar terms and aimed at adding further stimulus to the moribund economy, boosted sentiment and helped regional stocks eek out a modest 0.09% gain heading into the close of trading.
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People in Europe ate seaweed for thousands of years before it largely disappeared from their diets – we wonder why?

The decline of seaweed as part of the staple diet in Europe remains a mystery.

  Yarlander / Shutterstock
Seaweed isn’t something that generally features today in European recipe books, even though it is widely eaten in Asia. But our team has discovered molecular evidence that shows this wasn’t always the case. People in Europe ate seaweed and freshwater aquatic plants from the Stone Age right up until the Middle Ages before it disappeared from our plates. Our evidence came from skeletal remains, namely the calculus (hardened dental plaque) that built up around the teeth of these people when they were alive. Many centuries later, this calculus still contains molecules that record the food that people ingested. We analysed the calculus from 74 skeletal remains from 28 archaeological sites across Europe. The sites span a period of several thousand years starting in the Mesolithic, when people hunted and gathered their food, through to the earliest farming societies (a stage called the Neolithic) all the way up to the Middle Ages. Our results suggest that seaweed was a habitual part of the diet for the time periods we studied, and became a marginal food only relatively recently. Unsurprisingly, most of the sites where we detected the consumption of seaweed are coastal. But we also found evidence from inland sites that people were ingesting freshwater aquatic plants, including lilies and pondweed. We also found an example of people consuming sea kale.

How are we sure people ate seaweed?

We identified several types of molecules in the dental calculus that collectively are characteristic of seaweed. We refer to these as “biomarkers”. They include a set of chemical compounds called alkylpyrroles. When we detect these compounds together in calculus, we can be fairly sure where they came from. The same goes for other compounds characteristic of seaweed and freshwater plants. To have become embedded in dental calculus, the seaweed and freshwater plants had to have been in the mouth and most probably chewed. Biomarkers do not survive in all our samples, but where they do, they’re found consistently across many individuals we analysed from different places. This suggests seaweed was probably a routine part of the diet.

Perceptions of seaweed

Today, seaweed is often seen as the scourge of beaches. It accumulates at the high-water mark where it can create a slippery and sometimes smelly barrier to the sea. But it is a wondrous world of its own. There are over 10,000 species of seaweed worldwide living in the intertidal zone (where the ocean meets the land between high and low tides) and the subtidal zone (a region below the intertidal zone that is continuously covered by water). Around 145 of these species are eaten today and in parts of Asia it is commonplace. Seaweed is edible, nutritious, sometimes medicinal, abundant and local. Although overconsumption can cause iodine toxicity, there are no poisonous intertidal species in Europe. It is also available all year round, which would have been particularly useful in the past, when food supplies were less reliable.

Reconstructing ancient diets

Reconstructing ancient diets is challenging and is generally more difficult as you go back in time. This helps explain why we’ve only just realised how much seaweed was being eaten by ancient Europeans. In archaeology, evidence for ancient diets often comes from physical remains: animal bones, fish bones and the hard parts of shellfish. Evidence for plants as part of the diet before farming, however, is rare. Techniques to study molecules from archaeological remains have been around for some time. A key method is known as carbon/nitrogen (C and N) stable isotope analysis. This is widely used to reconstruct ancient human and animal diets based on the relative proportions of these elements in bone collagen. But the presence of plants has been difficult to identify, due to their low nitrogen content. Their presence is masked by an overwhelming signal for animals and fish.

Hiding in plain sight

The evidence for seaweed had been present all along, but unrecognised. Our discovery provides a perfect example of how perceptions of what we regard as food influence interpretations of ancient practices. Seaweed was detected in chunks that had been chewed (and presumably spat out) at the 12,000-year-old site of Monte Verde, Chile. But when it is found at archaeological sites, it is more commonly interpreted as having been used for things other than food, such as fuel and food wrappings. In European archaeology, there is a longstanding perception that Mesolithic hunter-gatherers ate lots of seafood, but that when people started farming, they focused on food sourced from land, such as their livestock. Our findings hammer another nail into the coffin of this theory. Today, only a few traditional recipes remain, such as laverbread made from the seaweed species Porphyra umbilicalis in Wales. It’s still not clear why seaweed declined as a staple source of food in Europe after the Middle Ages.

What are the implications?

Our unexpected discovery changes the way we understand past people. It also alters our perceptions of how they understood the landscape and how they exploited local resources. It suggests, not for the first time, that we vastly underestimate ancient people. They had a knowledge, particularly about the natural world, that is difficult for us to imagine today. The finding also reminds us that archaeological remains are minute windows into the past, reinforcing the care required when developing theories based on limited evidence. The consumption of plants, upon which our world depends, has been habitually left out of dietary theories from our pre-agrarian past. Rigid theories have sometimes forgotten that humans were behind these archaeological cultures – and that they were probably similar to us in their curiosity and needs. Today seaweed sits, largely unused as food, on our doorstep. Making the edible species a bigger component of our diets could even contribute to making our food supplies more sustainable. The Conversation

The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

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EUR/AUD bearish breakdown supported by additional China fiscal stimulus and AU inflation

Weak PMI readings from the Eurozone, an increase in China’s budget deficit ratio, and renewed inflationary pressures in Australia may trigger a persistent…

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  • Weak PMI readings from the Eurozone, an increase in China’s budget deficit ratio, and renewed inflationary pressures in Australia may trigger a persistent bearish sentiment loop in EUR/AUD.
  • Watch the key short-term resistance at 1.6700 for EUR/AUD.
  • A break below 1.6250 key medium-term support on the EUR/AUD may trigger a multi-week bearish impulsive down move.

The Euro (EUR) tumbled overnight throughout the US session as it erased its prior gains against the US dollar recorded on Monday, 23 October; the EUR/USD shed -104 pips from yesterday’s intraday high of 1.0695 to close the US session at 1.0591, its weakest performance in the past seven sessions.

Yesterday’s resurgence of the USD dollar strength has been attributed to a robust set of October flash manufacturing and services PMI data from the US in contrast with weak readings seen in the UK and Eurozone that represented stagflation risks.

Interestingly, the Aussie dollar (AUD) has outperformed the US dollar where the AUD/USD managed to squeeze out a minor daily gain of 21 pips by the close of yesterday’s US session. The resilient movement of the AUD/USD has been impacted by positive news flow out from China, Australia’s key trading partner.

China’s national legislature has just approved a budgetary plan to raise the fiscal deficit ratio for 2023 to around 3.8% of its GDP which was above the initial 3% set in March and set to issue additional sovereign debt worth 1 trillion yuan in Q4. This latest round of additional fiscal stimulus suggests that China’s top policymakers are expanding their initial targeted measures to address the ongoing severe liquidity crunch in the domestic property market as well as to reverse the persistent weak sentiment inherent in the stock market.

In addition, the latest set of Australia’s inflation data surpassed expectations has also reinforced another layer of positive feedback loop in the Aussie dollar which in turn may put Australia’s central bank, RBA on a “hawkish guard” against cutting its policy cash rate too soon.

The less lagging monthly CPI Indicator has risen to an annualized rate of 5.6% in September, above consensus estimates of 5.4%, and surpassed August’s reading of 5.2% which has translated into a second consecutive month of uptick in inflationary growth.

In the lens of technical analysis, a potential bearish configuration setup has emerged in the EUR/AUD cross pair from a short to medium-term perspective.

Major uptrend phase of EUR/AUD is weakening

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Fig 1: EUR/AUD medium-term trend as of 25 Oct 2023 (Source: TradingView, click to enlarge chart)

Even though the price actions of the EUR/AUD have been oscillating within a major ascending channel since its 25 August 2023 low of 1.4285 and traded above the key 200-day moving average so far, the momentum of this up movement is showing signs of bullish exhaustion.

Yesterday (24 October) price action ended with a daily bearish reversal “Marubozu” candlestick coupled with the daily RSI momentum indicator that retreated right at a significant parallel resistance in place since March 2023 at the 65 level which suggests a revival of medium-term bearish momentum.

EUR/AUD bears are now attacking the minor ascending support

Fig 2: EUR/AUD minor short-term trend as of 25 Oct 2023 (Source: TradingView, click to enlarge chart)

The EUR/AUD has now staged a bearish price action follow-through via the breakdown of its minor ascending support from its 29 September 2023 low after a momentum bearish breakdown that was flashed earlier yesterday (24 October) during the European session as seen from the 4-hour RSI momentum indicator.

Watch the 1.6700 key short-term pivotal resistance (also the 50-day moving average) for a further potential slide toward the intermediate supports of 1.6460 and 1.6320 in the first step.

On the other hand, a clearance above 1.6700 invalidates the bearish tone to see the next intermediate resistance coming in at 1.6890.

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