Bull Market officially over!! Year heading negative.

[Breccia]

Apparently some states taking steps back from re-opening took the wind of out investors

That can't be right, we've been seeing that for weeks now.

(checks news)

Oh shit, it was California this time. Nevermind.

In other news: I want everyone to guess how many people, assuming no major changes in the future like a new bill passing, how many people will be evicted by October.

No really, guess.

It's twenty million families, one in five households

That result is covered in this CBS News article. In that article we see 20% of renters, 13 million people missed their May rent payment. Multiple states around the country had short-term eviction blocking laws, but some of those have ended (Virgina, North Carolina, Wisconsin, Animal Crossing) leading to eviction spikes.

The unemployment and PPP funds are due to end, like, soon. Not only do we know unemployment will still be up, and that enough businesses will have just collapsed under their own debt to hire back, this study now adds "plus you lose your home right before the election".

Just so we're all clear: even the homeless can vote. The party who caused this mess had better think of an option fast.

"But Breccia! I don't see you coming up with any ideas!"

First of all, I didn't break the system. Second of all, not my fucking job.

But that doesn't mean I can't throw some ideas at the wall and hope one sticks. How about going to all those banks holding all those mortgages and saying "hey, remember around 2008 when we bailed all of you out? Guess what, you owe us a favor. What you're going to do is, if a mortgage holder can prove they were fired between 'It's just one person coming over from China, everything is under control' and 'I take no responsibility' then you just push their mortgage payment back three months. No payments, no interest, no forgiveness, and no late fees. Just hit the pause button for three months. In fact, you can even tell them it was your idea. Make it sound like you value your customers as people, they really like that. I mean, you don't really want to be holding a bunch of houses when nobody can afford them, do you? If things get worse and we need more than three months, then we'll actually offer you something in return, like tax rebates or something." Now, is that idea perfect? Almost certainly not, I just made that shit up. But do you know what definitely won't work? Watching millions upon millions of Americans kicked out of their own homes because Trump thought a trade deal with China was worth the risk to the US economy and its people, and doing nothing.

"Okay fine, you're not an expert and you're not in a position to do anything. But why hasn't Pelosi come up with anything, huh? Huh?"

She did. Back in mid-May, actually. Literally two months ago, to the day.

"Well, surely McConnell has said something similar."

Has he? I'll be honest, I don't remember that. Maybe you can find it? During his last photo op a week ago he laid out his plan, yes it mentioned direct payments and, of course, liability protection (retroactive to December, which is admission that this is not CHINA VIRUS CHINA VIRUS CHINA VIRUS as some members of the rabid fanbase like to shrill), but nothing about rent or mortgage. Hey, if you find it, please link it. I'd be relieved to see both the House and the Senate agree on protecting America's needy and take steps to prevent so many people onto the street due to circumstances they couldn't possibly control.

Well, I guess they could have voted for Clinton.

[Rasulis]

More worried about the banks first.


so goes the banks so goes the economy


He's hardly ever right but

https://www.cnbc.com/2020/07/13/cram...-get-ugly.html

It may be true that the banks' revenue reports represent the economy. However, as we have seen, the stock market is not the economy.

Strictly my personal opinion with no supporting data whatsoever. My take is that the banks' reports, if they turn out to be bad, will probably depress the stock market for a short period of time. However, in the long run, as long as the big 6 and the work at home stocks (Zoom, Docusign, etc.) revenues ended up beating the forecasts, we will see the stock market surge again on the back of the tech sector.

Citigroup, JP Morgan and Wells Fargo tomorrow.

[Zan15]

It may be true that the banks' revenue reports represent the economy. However, as we have seen, the stock market is not the economy.

Strictly my personal opinion with no supporting data whatsoever. My take is that the banks' reports, if they turn out to be bad, will probably depress the stock market for a short period of time. However, in the long run, as long as the big 6 and the work at home stocks (Zoom, Docusign, etc.) revenues ended up beating the forecasts, we will see the stock market surge again on the back of the tech sector.

Citigroup, JP Morgan and Wells Fargo tomorrow.

Outside of WF the first bunch did ok. They apparently really were helped by the fees and impact of the govt programs like PPP.

Tech today seems to be taking a breather, more and more mumblings about this being the time that money starts rotating into other parts of the market and tech takes a pause. who knows if that will happen.


Other notes on the insane: Shares of Tesla Inc. TSLA, 2.27% climbed 0.8% after Piper Sandler analyst Alexander Potter raised his price target on the stock to $2322 from $939, writing of “faster-than-expected share gains” and big opportunities in software.

So they rose their price target just because the shares went up so fast....and they needed to keep up....vs actual fundamentals LOL. God its like 2000 all over again.

[Rasulis]

Outside of WF the first bunch did ok. They apparently really were helped by the fees and impact of the govt programs like PPP.

Tech today seems to be taking a breather, more and more mumblings about this being the time that money starts rotating into other parts of the market and tech takes a pause. who knows if that will happen.


Other notes on the insane: Shares of Tesla Inc. TSLA, 2.27% climbed 0.8% after Piper Sandler analyst Alexander Potter raised his price target on the stock to $2322 from $939, writing of “faster-than-expected share gains” and big opportunities in software.

So they rose their price target just because the shares went up so fast....and they needed to keep up....vs actual fundamentals LOL. God its like 2000 all over again.

They can mumble all they want. Lets see who is willing to be the first to dump billions of dollars in the big six stocks.

I am really curious who is buying Tesla stocks. I know I am not. I can't find a single ETFs with more than 1% Tesla exposure.

That leaves hedge fund brokers and Robinhood. According to Robintracker 500,000ish of Robinhood members hold Tesla stocks. I don't know the actual number of shares held by Robinhood investors. Tesla float volume is just under 150M. Institutional share is 57% so around 85M. Which leaves 65M for retail investors. Average daily trading volume is 22M. Is it possible that 500k-ish Robinhood traders can move Tesla stock value that much? If the answer is yes, that's actually a pretty scary thought.

[Breccia]

Banks are bracing for impact.

Basically, the moves by Wells Fargo and others that demonstrate the issue are putting money aside for the upcoming default wave. Citi and JPMorgan are also suffering losses/getting far lower profits. They're expecting a bunch of upcoming losses -- heavy ones. $28 billion of them.

[Zan15]

That can't be right, we've been seeing that for weeks now.

(checks news)

Oh shit, it was California this time. Nevermind.

In other news: I want everyone to guess how many people, assuming no major changes in the future like a new bill passing, how many people will be evicted by October.

No really, guess.

It's twenty million families, one in five households

That result is covered in this CBS News article. In that article we see 20% of renters, 13 million people missed their May rent payment. Multiple states around the country had short-term eviction blocking laws, but some of those have ended (Virgina, North Carolina, Wisconsin, Animal Crossing) leading to eviction spikes.


.

lol those bastards in animal crossing, i never did trust them!

[Rasulis]

A couple of interesting articles on global economy. If you need a break from the US market. Which is actually kinda boring now.

Bankers Shocked by 45% China Tax Rate Mull Leaving Hong Kong

Fears of a Hong Kong brain drain are increasing after China moved to tax its citizens’ global income, undermining the financial hub’s appeal to thousands of bankers and other white-collar workers from the mainland.

Faced with a tax rate as high as 45% -- up from about 15% previously -- Chinese professionals across Hong Kong are considering moving back home to avoid getting squeezed by both the new levy and sky-high living costs in the former British colony, according to interviews with workers and recruiters.

The prospect of an exodus has upended expectations that mainland talent would help offset any outflow of locals and foreign expatriates from Hong Kong, many of whom are looking to escape the city’s controversial new national security legislation.

While it’s too early to gauge how many people will ultimately move out, professionals of all stripes now have reasons to leave a city that not long ago was viewed as one of the world’s most attractive places to build a career. That risks weighing on Hong Kong’s battered economy and further undermining its status as a premier financial center.

China Starts Taxing Its Citizens for Global Income

China has started tracking down some of its citizens living abroad to collect taxes, surprising expatriates who never had to pay levies back home on overseas income, according to people familiar with the matter.

State-owned enterprises operating in Hong Kong, which has one of the lowest tax rates in the world, told mainland Chinese expats recently to declare their 2019 income so they can pay taxes at home, according to the people, who asked not be named because they aren’t authorized to speak publicly on the matter. Chinese SOEs are also informing employees working in other places such as Singapore, two of the people said.

China, which charges taxes of as high as 45%, revised its income tax rules January last year to help authorities start collecting money from its citizens worldwide — similar to what the U.S. does with Americans living abroad. But Beijing only disclosed detailed instructions this year on how to file such taxes, catching many expatriates flat-footed.

The move signals the beginning of what could be a major shake-up for one of the largest expat communities in the world as some could see their tax bills soar. Though specific statistics on expats weren’t immediately available, Chinese state media have reported there are about 60 million ethnic Chinese living overseas.

There are 80,000 to 150,000 mainland Chinese working in Hong Kong, according to the South China Morning Post, which earlier reported on the issue. Chinese citizens working in Macau have also been told to start paying income taxes back home, according to the Nikkei Asian Review.

China’s State Taxation Administration didn’t immediately respond to a fax seeking comment.

The move could be a big blow for Chinese expats working in places such as Hong Kong, who’ve only had to pay a maximum of 15% of their salaries in taxes. That’s one third of mainland China’s highest tax bracket.

It’s not just paychecks. The rules also subject income from dividends and property sales to taxation back home, said Jia Zeliang, chief executive officer at wealth-planning adviser Ishtar Consulting Inc. That’s likely to force many companies to shoulder much of the extra tax burden or risk an exodus of Chinese expats, Jia said.

Though Chinese nationals have theoretically been obliged to pay taxes on their global income for many years, it hadn’t been enforced, said Jacky Chu, who heads PwC China’s global mobility services. The change could be a boon for accounting firms.

“We have seen a surge of companies asking for our advice,” Chu said. “China didn’t have such a large number of expats working overseas when the old tax legislation was drafted decades ago. That could be why many people were not entirely aware of the requirement.”

[Zan15]

Banks were also propped up last Q by....wait for it....

https://theintercept.com/2020/07/14/...cares-act-ppp/

BANKS WILL MAKE out with $18 billion in fees for processing small business Paycheck Protection Program relief loans during the pandemic, according to calculations by Amanda Fischer, policy director at the Washington Center for Equitable Growth, a progressive economic think tank.


For some banks, this money represents a hefty windfall. New Jersey-based Cross River Bank’s estimated $163 million haul would be more than double its net revenue last year. JPMorgan Chase could make $864 million.

[Omega10]

Outside of WF the first bunch did ok. They apparently really were helped by the fees and impact of the govt programs like PPP.

Tech today seems to be taking a breather, more and more mumblings about this being the time that money starts rotating into other parts of the market and tech takes a pause. who knows if that will happen.


Other notes on the insane: Shares of Tesla Inc. TSLA, 2.27% climbed 0.8% after Piper Sandler analyst Alexander Potter raised his price target on the stock to $2322 from $939, writing of “faster-than-expected share gains” and big opportunities in software.

So they rose their price target just because the shares went up so fast....and they needed to keep up....vs actual fundamentals LOL. God its like 2000 all over again.

Or maybe 2008. It's interesting how people's attitudes are changing.

https://www.marketwatch.com/story/st...of2&yptr=yahoo

Title: Dow ends up 550 points, stocks jolt higher after Fed’s Brainard calls for ‘sustained’ large-scale asset purchases

The article is pretty standard cheer leading and support for the recent strong stock market results.

But the comments afterwards.

Except for a few anti-600 a week unemployment benefit comments (which were quite strongly refuted), the rest of the comments are all about the pumped up stock market based on the Fed spending enough money to prop up the stock market.

Socialism and lots of cash for the investment class, capitalism for everyone else.

There were quite a few comments talking about the upcoming evictions and mortgage bankruptcies. Marketwatch always had a strong very pro-business contingent in its comment section to support its pro-business commentary. Now it just has its pro-business commentary that is harshly rejected in the comments section.

I am expecting a LOT of substantial changes coming up. I don't think most of the changes will be good news.

Edit: A lot of people are ... sceptical about the Moderna news. Very little if any push back against this scepticism.

[Rasulis]

I was talking to a friend that work for Haynes and Boone. A law firm that specialize in oil & gas M&A and bankruptcy. She mentioned that normally, the rush to bankruptcies during oil crash would be accompanied by heightened M&A activities. This time, there is no M&A activities at all. Zero. Zilch. Nada. They ended up having to transfer all the personnel in the M&A division to the bankruptcy division.

[Breccia]

I was talking to a friend that work for Haynes and Boone. A law firm that specialize in oil & gas M&A and bankruptcy.

Because people buy up the cheap companies? And the lack of means nobody wants even cheat oil/gas assets?

[Rasulis]

Because people buy up the cheap companies? And the lack of means nobody wants even cheat oil/gas assets?

That and nobody in the oil & gas industry has cash to spare for M&A.

Warren Buffett did just buy natural gas transmission and storage assets of Dominion Energy. I guess that counts as an acquisition.

Netflix quarterly report tomorrow.

[Omega10]

Because people buy up the cheap companies? And the lack of means nobody wants even cheat oil/gas assets?

Rasulis was 100% correct in the crude oil prices.

It goes UP as high as 41... then CRASHES all the way to 39... THEN IT SURGES... to about a little less than 41... then it dramatically CRASHES to a bit above 39.

Cheap Oil / Gas assets are only worth it if the government pumps in 15-20 bucks a barrel. I guess you can borrow that much from a bank at not much interest, pay high bonuses to the owner and top investors, and then declare bankruptcy?

Peak Oil came to America. It did not come to Russia or to Saudi Arabia. They still have cheap oil. We do not.

[Rasulis]

Rasulis was 100% correct in the crude oil prices.

It goes UP as high as 41... then CRASHES all the way to 39... THEN IT SURGES... to about a little less than 41... then it dramatically CRASHES to a bit above 39.

Cheap Oil / Gas assets are only worth it if the government pumps in 15-20 bucks a barrel. I guess you can borrow that much from a bank at not much interest, pay high bonuses to the owner and top investors, and then declare bankruptcy?

Peak Oil came to America. It did not come to Russia or to Saudi Arabia. They still have cheap oil. We do not.

I agree that the US has reached peak oil. Both in term of drilling/lifting/refining cost constraint and falling demand.

My wife helped 3 clients sell their house, another 3 clients buy their house, and managed our rental properties and several commercial properties for remote clients without ever leaving the house since CA was shut down in March, 2020.

I have not had to attend a single face-to-face meetings since March. I have two project interviews next month that will be conducted remotely. That will be a first for me.

All of my engineers and geologists are working from home. They stopped by the office usually about 2 days a week for half a day.

Same case with all the other consulting, banking & investment, and tech firms, and municipalities in San Diego County.

UCSD and SDSU are going online with their classes. I anticipate all the other local universities will likely do the same thing. At least for Fall 2020.

Just from those few local observations, I draw the conclusion that demand for oil in the US will not go back for a long time. If ever.

[Zan15]

Netflix quarterly report tomorrow.

Eek, swing and a miss

Delayed quote
$476.30
-51.09 -9.69%


https://www.marketwatch.com/story/ne...?mod=home-page


they are dragging a lot of tech down in after hours

the big 6 are all down .5-1.5%

amz 2,963.44
-36.46 -1.22%

Goog
1,502.39
-15.61 -1.03%

face
$238.53
-2.40 -1.00%

Msft
203.00
-0.9202 -0.45%

[Rasulis]

Eek, swing and a miss

Delayed quote
$476.30
-51.09 -9.69%


https://www.marketwatch.com/story/ne...?mod=home-page


they are dragging a lot of tech down in after hours

the big 6 are all down .5-1.5%

amz 2,963.44
-36.46 -1.22%

Goog
1,502.39
-15.61 -1.03%

face
$238.53
-2.40 -1.00%

Msft
203.00
-0.9202 -0.45%

I am perfectly fine with those numbers. I would be more concerned if their stock values just kept going up. Some market ambivalence is normal.

[Zan15]

I am perfectly fine with those numbers. I would be more concerned if their stock values just kept going up. Some market ambivalence is normal.

with long term unemployed looking to settle in the 20 million range i have no idea how those companies will continue to rise especially without 2400 dollars a month of income on top of the average national unemployment of almost 400 a month.

we goosed the economy since most people got more to spend then they have ever. the bad part is even after the goosing it was still a blood bath.

Now 20-30 million people are going to be jumping into said blood bath next month

[Rasulis]

Tech M&A as a share of all of US deals YTD through July 9 of each year. There are currently 120b of proposed tech M&A deals that are undergoing DoJ Anti-Trust review that are not included in the graph.



- - - Updated - - -

Tennessee based Mall Owner CBL Prepares to File for Bankruptcy Protection

- - - Updated - - -

Greatest Increase Ever in U.S. Wages Is Actually Horrible News

The median weekly earnings of full-time workers in America jumped more than 10% in second quarter from a year earlier, the U.S. Bureau of Labor Statistics reported today.

The data marks the largest increase in the four decades that the agency has tracked it but is skewed by a more sobering reality: massive job losses among lower-wage workers.

“The unusually large increase in median weekly earnings in the second quarter reflects the fact that employment declined more for lower-paid workers than for higher-paid workers,” the report noted.

The trend first started to become clear in labor-market data in April, after businesses across the U.S. shuttered to stem the spread of the virus, putting millions out of work. It’s become more pronounced since.

Median weekly earnings of the nation’s 104.5 million full-time salaried workers surpassed $1,000 for the first time as of June 30, according to the report.

In essence, workers at the lower end of the wage scale --including retail and restaurant staff -- lost a disproportionate number of jobs during the Covid-induced business closures. That pushed up average hourly pay for those left working.

By race, Asians working at full-time jobs earned the most at $1,336, followed by Whites, who made $200 a week more than Blacks. Median weekly earnings of Hispanics were lowest at $786.

[Breccia]

Jobless claims raise stakes in battle over COVID-19 aid

The U.S. is facing significant long-term economic damage from the coronavirus as lawmakers spar over boosted unemployment benefits amid stubbornly high weekly jobless claims.

More than 1 million Americans have filed new claims for unemployment benefits each week for the past four months. Those figures provide a grim backdrop to the fight unfolding in Washington over whether to extend enhanced unemployment insurance for millions of job-seekers.

Economists say the persistently high jobless claims coupled with the growing number of permanent job losses are troubling signs for both workers and the economy.

“The main thing that we're seeing right now is the scarring of the economy happening in real time. We are seeing more people becoming permanently unemployed. We are seeing people continue to get laid off,” said Martha Gimbel, senior manager of economic research at philanthropic investment firm Schmidt Futures.

Gimbel — along with more than 150 other economists — is warning that the scarring could get deeper and more damaging if the White House and Congress allow a $600 weekly boost to unemployment benefits to expire on July 31. The added insurance was implemented in late March with the signing of the CARES Act.

Quick aside here: Mitch "No to Everything" McConnell is reportedly pushing for a lower amount, $400 or even $200. While that's better than $0, we already know the $600 was to keep the average laid-off American's income stable enough to pay bills...and even that wasn't always enough. I'm not convinced a lower amount is the solution to "there are no jobs".

Oh, and Trump is still pushing for a payroll tax cut. Which does not help anyone fired at all.

“We are worried about people getting evicted. We are worried about people being unable to feed their kids. This isn't about stimulus. This is about support, and I think it's really important to distinguish between those two things,” she said.

The labor force has regained roughly 8 million of the more than 20 million jobs lost since March, largely due to workers coming back from temporary layoffs.

But roughly 30 million Americans — 11.9 percent of the workforce — were receiving some form of unemployment insurance as of the first week of July. And while millions of furloughed workers returned to their jobs in May and June, another 2.9 million workers were permanently laid off during that period.

The unprecedented ways the pandemic has devastated the economy has also made it harder to gauge the full toll of the coronavirus recession.

The emergence of the pandemic forced thousands of businesses to shutter and layoff more than 20 million workers over two months. When states eased those restrictions in May and June, many businesses were able to reopen — if at reduced capacity — and bring back workers they had furloughed earlier.

“We're seeing business closures and more short-term layoffs because of public health orders, which was not the case in the Great Recession or in prior recessions,” said Elizabeth Pancotti, policy adviser at Employ America, a progressive advocacy group.

“A lot of what we're seeing is people moving in and out of the unemployment system,” she added.

The unemployment rate in June dropped to 11.1 percent

I'm just going to quote that part again.

The unemployment rate in June dropped to 11.1 percentfrom 13.3 percent the previous month and a post-Depression record high of 14.7 percent in April. Weekly jobless claims have steadily declined from a peak of 6.8 million in late March to 1.3 million in the second week of July.

But that 1.3 million figure is still almost twice the pre-pandemic high of 695,000 set in October 1982, and doesn’t include the more than 920,000 claims filed through the Pandemic Unemployment Assistance program for gig workers and others who do not qualify for the traditional system.

A renewed surge of coronavirus cases has prompted another wave of restrictions and a decline in consumer activity, particularly in hard-hit states. The steady rise of COVID-19 cases has weakened the economic forecast for the remainder of 2020 and beyond, prompting businesses to shed thousands of workers as they brace for a long and uncertain road to recovery.

So have we seen any Q2 results yet?

New York is saying -14.3%

Fortune had a lot to say about earnings in Q2 more than GDP. But they did say we won't see pre-COVID GDP levels (that's the less-than-three Trump has gotten for three years now) until mid-2021.

Various articles predict -20% to -35% with ever-increasing odds of recession.

And Atlanta is saying negative thirty-four percent.

That's with the rapid re-opening.

[cubby]

Quick aside here: Mitch "No to Everything" McConnell is reportedly pushing for a lower amount, $400 or even $200. While that's better than $0, we already know the $600 was to keep the average laid-off American's income stable enough to pay bills...and even that wasn't always enough. I'm not convinced a lower amount is the solution to "there are no jobs".

Oh, and Trump is still pushing for a payroll tax cut. Which does not help anyone fired at all.

Even worse, Trump is pushing to phase out funding for testing and contact tracing, as well as "zero-out" the CDC and NIH budgets.