Bull Market officially over!! Year heading negative.

[Breccia]

So um...DOW's not having a great time, is it?

Hopefully this is a mild correction, we've all been saying the DOW is suspciously high. The last thing we need is another bear market/recession/crash/whatever you call it when the stock market tanks.

[Felya]

So um...DOW's not having a great time, is it?

Hopefully this is a mild correction, we've all been saying the DOW is suspciously high. The last thing we need is another bear market/recession/crash/whatever you call it when the stock market tanks.

Tesla is trying to make Biden win! or... Tesla is showing they believe Biden will win!... Pick one... it’s Tesla’s fault today...

[Rasulis]

So um...DOW's not having a great time, is it?

Hopefully this is a mild correction, we've all been saying the DOW is suspciously high. The last thing we need is another bear market/recession/crash/whatever you call it when the stock market tanks.

The market drop really does not affect anybody important. Who gives a shit about a bunch of RobinHood traders. It is about time they learn the fundamentals of long term investment instead of all these get rich quick trades.

US crude dropping down to $36 could affect as many as 1,000,000 jobs by the end of the year. As it is, oil and gas sector unemployment rate is second only to Leisure and Hospitality.

[Milchshake]

Permanent layoffs are accelerating without any more government intervention on the horizon. The rate is worse than the previous two recessions.

'What am I going to do at 55?': More temporary layoffs could become permanent during COVID-19 recession

The Trump Administration has depicted the coronavirus recession as a severe but brief shock, noting that the economy and labor market bounced back more robustly than expected from May through July. But there are signs the initial burst of job gains may have played out and as much as half of temporary layoffs and furloughs could become permanent, according to some economists’ estimates.


That would make the current downturn look more like the Great Recession of 2007-09, with unemployment remaining elevated for years, than a pandemic-induced detour that resolves within months.

Americans Airlines said this week it would lay off 17,500 front-line workers amid a steep fall-off in travel

“Our expectation is that the initial employment rebound is basically over and that job gains will be minimal through the end of the year,” says economist Dante DeAntonio of Moody’s Analytics. “More temporary layoffs will become permanent as the impact of COVID-19 continues to weigh on the economy.”

[Elegiac]

Permanent layoffs are accelerating without any more government intervention on the horizon. The rate is worse than the previous two recessions.

'What am I going to do at 55?': More temporary layoffs could become permanent during COVID-19 recession

The Trump Administration has depicted the coronavirus recession as a severe but brief shock, noting that the economy and labor market bounced back more robustly than expected from May through July. But there are signs the initial burst of job gains may have played out and as much as half of temporary layoffs and furloughs could become permanent, according to some economists’ estimates.


That would make the current downturn look more like the Great Recession of 2007-09, with unemployment remaining elevated for years, than a pandemic-induced detour that resolves within months.

Americans Airlines said this week it would lay off 17,500 front-line workers amid a steep fall-off in travel

“Our expectation is that the initial employment rebound is basically over and that job gains will be minimal through the end of the year,” says economist Dante DeAntonio of Moody’s Analytics. “More temporary layoffs will become permanent as the impact of COVID-19 continues to weigh on the economy.”

For only six dollars a day, you too can sponsor an American.

[Zaydin]

So what is driving the drop in tech stocks, anyways?

Is Wall Street finally coming down off the high of smelling its own farts and realizing the real economy is still in pretty bad shape?

[Breccia]

Oil down more than a dollar. WTI is $38.55.

Okay bear with me, this might take a few tries to get right.

So in the US you're required to blend ethanol into gasoline, but can get a waiver from that if you can prove this requirement causes you serious financial hardship. Under Trump, that basically meant "everyone" and Trump handed out waivers four times faster than Obama -- basically in the ongoing effort to screw over the corn farmers despite promising to keep ethanol levels up in Jan 2016.

Hillary Clinton wants to shut down family farms just like she wants to shut down the mines and the steelworkers. She will do this not only through radical regulation, but also by raising taxes on family farms – and all businesses – to rates as high as nearly 50 percent.

-- Trump, Aug 27, 2016, in Iowa

Yeah. What a time 2016 was -- Trump was truly warning us of what was to come. Except, of course, he did it and that makes it okay. We'll discuss the mines and steelworkers another time, but the punchline is "they didn't even get $130,000"

So yes, Trump promised he'd defend corn farmers especially and then immediately sold them down the oil slick covered river.

Until this happened, because Trump has a court record like an Ohio sports team:

A U.S. appeals court has ruled that the Environmental Protection Agency must reconsider three of the biofuel waivers it recently granted to small oil refineries, arguing the agency’s justification for approving the exemptions was flawed.

According to the court’s decision, the EPA overstepped its authority to grant the Holly Frontier and CVR waivers because the refineries had not received exemptions in the previous year. The court said the RFS is worded in such a way that any exemption granted to a small refinery after 2010 must take the form of an “extension”.

“Because an ‘extension’ requires a small refinery exemption in prior years to prolong, enlarge or add to, the three refinery petitions in this case were improvidently granted,” according to the court’s 99-page decision. “We remand these matters to the EPA for further proceedings consistent with this opinion.”

Whoops! Turns out, most of those waivers before 2010 weren't continued all the way to 2020.

So what did oil companies do? They applied for retroactive waivers.

No, really. Not only did they want it to be okay that they didn't buy all that ethanol they were supposed to, they wanted Trump to sign off on it. In public. Which means that "extension" would suddenly magically be okay, like asking someone to give you a high credit rating because you started paying your child support after ten years of "I forgot".

That court case mentiones three. Trump got fifty-two retroactive waivers. I've said once or twice that the only way Trump's logic makes sense is time travel. I didn't think it'd be taken to heart.

So here we have enough oil companies to form a deck of cards, and they wanted to be dealt from the bottom of the deck.

And here's the funny part: Wheeler and Trump are the jokers. They're not going to do it.

With the price of oil reaching the price of a meal for four at Popeye's, oil companies who had been begging Trump for help, are suddenly less valuable to Trump than the farmers which, to be fair, do outnumber oil workers. In other words, Trump has now betrayed both farmers and oil workers, having made each group a promise that screwed the other, and then broken both of them, like a colossal fatasshole, as yet another group joins the "I never thought Trump would betray me!" support group.

"Well to be fair, that means oil companies will have to buy all that corn they didn't buy."

Um...no, I don't think that's the read here. I think these refineries didn't extend their waivers, and while they weren't extended, bought ethanol as legally required. Oh, except for those that got waivers that were illegal, as cited above. They're just facing hardship now, and therefore want those waivers brought up to date, so they can apply them again while saying "extension!" This doesn't actually help the farm industry, other than it stops Trump from heaping a loss to them on top of the losses from floods, COVID-19 transportation chain breaks, and of course China refusing to comply with Phase One because why the fuck would they?

So there you have it. If any of you, like me, were commenting on Trump trying to keep both oil and corn happy and being unable to do so, it's crunch time, and Trump had to decide whose votes mattered more. The strategy, of course, is flawed -- he's already damaged the farming industry substantially. Farmer optimism is at an all-time low. Over one-third of their income is socialist bailouts. Like the tax cut for the rich, too much of the farm bailouts went to large farm corporations, leaving smaller farmers to wither and die, which is why farm bankruptcies rose June 2019-June 2020 even more than the previuos year. 2019 was a suck year for farmers, and 2020 shows basically no improvement by any realistic metric.

But Trump is still trying to woo corn farmers, but at this point its battered wife syndrome. Trump not only sided with oil companies (well, until today basically) but also cut off their biggest trade partners for nearly four years, but this "I promise to stop selling you out to oil companies" feels a lot like "come on baby, I only hit you because I love you so much, now how about that martini" to me.

"Whoa! You can't make casual domestic violence jokes like that!"

Trump drove more farmers into bankruptcy and even suicide than anyone before him, despite vowing to protect them from Big Bad Clinton. You're damn right I'm comparing that to something vile and repulsive. Why aren't you? Who are you really angry with?

[Elegiac]

Trump drove more farmers into bankruptcy and even suicide than anyone before him, despite vowing to protect them from Big Bad Clinton. You're damn right I'm comparing that to something vile and repulsive. Why aren't you? Who are you really angry with?

The system, tbh.



Kinda amusing but sad that nothing has changed since the 1970s.

[Rasulis]

So what is driving the drop in tech stocks, anyways?

Is Wall Street finally coming down off the high of smelling its own farts and realizing the real economy is still in pretty bad shape?

My take is that it is a temporary setback. Where else are people going to put their money in?

Tech (including biotech, EV and Green Energy) is the only sector with companies doing double digit profits, expanding its workforce, actively doing M&A (mostly A), doubling and tripling revenue and market share, and increased VC investment (both private and federal).

All the other sectors suck. Bonds don’t even beat inflation which is already low. Our checking account pays higher interest rate than government bonds. Gold is okay I guess.

[Ashnazg]

So what is driving the drop in tech stocks, anyways?

Is Wall Street finally coming down off the high of smelling its own farts and realizing the real economy is still in pretty bad shape?

Allegedly, the pump and dump by Softbank, combined with too many green days in a row. This is a temporary correction and with vaccine excitement fading, we should see tech recover and surge again.

[Zan15]

Allegedly, the pump and dump by Softbank, combined with too many green days in a row. This is a temporary correction and with vaccine excitement fading, we should see tech recover and surge again.

meh softbank is a drop in the bucket vs the whole tech market.

what drove tech is the fact that investors got herded into thinking that tech was the only safe place to bet. The only place that was/is going to make money in the foreseeable future.
This and the timing around the 1200 dollar surge into the stock market by individual investors.

[Ashnazg]

meh softbank is a drop in the bucket vs the whole tech market.

what drove tech is the fact that investors got herded into thinking that tech was the only safe place to bet. The only place that was/is going to make money in the foreseeable future.
This and the timing around the 1200 dollar surge into the stock market by individual investors.

The idea is that Softbank's targeted and concentrated option purchasing on select few stocks (instead of more widely practiced diversified purchasing strategies that other whales employ) has led to option-sellers having to reduce their risks by buying stock to cover their positions. This, in turn, led to a positive feedback loop where call purchases led to stock price going up, which led to more call purchases, and so on.

I don't know if Softbank's size is big enough to make that much of an impact, but at least on paper, it makes some sense behind the irrational rise of Tesla.

[D3thray]

Okay bear with me, this might take a few tries to get right.

So in the US you're required to blend ethanol into gasoline, but can get a waiver from that if you can prove this requirement causes you serious financial hardship. Under Trump, that basically meant "everyone" and Trump handed out waivers four times faster than Obama -- basically in the ongoing effort to screw over the corn farmers despite promising to keep ethanol levels up in Jan 2016.


-- Trump, Aug 27, 2016, in Iowa

Yeah. What a time 2016 was -- Trump was truly warning us of what was to come. Except, of course, he did it and that makes it okay. We'll discuss the mines and steelworkers another time, but the punchline is "they didn't even get $130,000"

So yes, Trump promised he'd defend corn farmers especially and then immediately sold them down the oil slick covered river.

Until this happened, because Trump has a court record like an Ohio sports team:



Whoops! Turns out, most of those waivers before 2010 weren't continued all the way to 2020.

So what did oil companies do? They applied for retroactive waivers.

No, really. Not only did they want it to be okay that they didn't buy all that ethanol they were supposed to, they wanted Trump to sign off on it. In public. Which means that "extension" would suddenly magically be okay, like asking someone to give you a high credit rating because you started paying your child support after ten years of "I forgot".

That court case mentiones three. Trump got fifty-two retroactive waivers. I've said once or twice that the only way Trump's logic makes sense is time travel. I didn't think it'd be taken to heart.

So here we have enough oil companies to form a deck of cards, and they wanted to be dealt from the bottom of the deck.

And here's the funny part: Wheeler and Trump are the jokers. They're not going to do it.

With the price of oil reaching the price of a meal for four at Popeye's, oil companies who had been begging Trump for help, are suddenly less valuable to Trump than the farmers which, to be fair, do outnumber oil workers. In other words, Trump has now betrayed both farmers and oil workers, having made each group a promise that screwed the other, and then broken both of them, like a colossal fatasshole, as yet another group joins the "I never thought Trump would betray me!" support group.

"Well to be fair, that means oil companies will have to buy all that corn they didn't buy."

Um...no, I don't think that's the read here. I think these refineries didn't extend their waivers, and while they weren't extended, bought ethanol as legally required. Oh, except for those that got waivers that were illegal, as cited above. They're just facing hardship now, and therefore want those waivers brought up to date, so they can apply them again while saying "extension!" This doesn't actually help the farm industry, other than it stops Trump from heaping a loss to them on top of the losses from floods, COVID-19 transportation chain breaks, and of course China refusing to comply with Phase One because why the fuck would they?

So there you have it. If any of you, like me, were commenting on Trump trying to keep both oil and corn happy and being unable to do so, it's crunch time, and Trump had to decide whose votes mattered more. The strategy, of course, is flawed -- he's already damaged the farming industry substantially. Farmer optimism is at an all-time low. Over one-third of their income is socialist bailouts. Like the tax cut for the rich, too much of the farm bailouts went to large farm corporations, leaving smaller farmers to wither and die, which is why farm bankruptcies rose June 2019-June 2020 even more than the previuos year. 2019 was a suck year for farmers, and 2020 shows basically no improvement by any realistic metric.

But Trump is still trying to woo corn farmers, but at this point its battered wife syndrome. Trump not only sided with oil companies (well, until today basically) but also cut off their biggest trade partners for nearly four years, but this "I promise to stop selling you out to oil companies" feels a lot like "come on baby, I only hit you because I love you so much, now how about that martini" to me.

"Whoa! You can't make casual domestic violence jokes like that!"

Trump drove more farmers into bankruptcy and even suicide than anyone before him, despite vowing to protect them from Big Bad Clinton. You're damn right I'm comparing that to something vile and repulsive. Why aren't you? Who are you really angry with?

Ethanol is not a good additive to fuel and contributes more to greenhouse gases in its production than just straight gasoline. If he’s giving out more waivers I applaud it. Propping up corn farmers in this way was always a bad idea.

[Breccia]

Ethanol is not a good additive to fuel and contributes more to greenhouse gases in its production than just straight gasoline. If he’s giving out more waivers I applaud it. Propping up corn farmers in this way was always a bad idea.

I admit burning anything causes problems, I think the idea was renewable vs. finite.

But my main point was that Trump was trying to get the support of both opposing sides and ended up watching both of them fail, and also, betrayed both of them on the same issue.

[Rasulis]

Several posts ago I mentioned that despite the high unemployment, CA income tax withholding, sales tax and corporate tax went up by 9% compared to last year. Turned out, during the pandemic/recession, CA new business creation has also remained strong.



A note on the CDC eviction moratorium. It is not automatic. It requires tenants to fill in a form that they can download from the CDC stating that options besides being homeless or moving in with other people in close quarters. Many renters facing eviction don’t know about the ban or understand the rules or their rights.

For example, Houston is one of the ground zero cities for renter evictions.

Houston Public Media sent a reporter to four different courthouses last week to observe about 100 eviction cases, and found that only one renter was able to use the CDC order to block their eviction. So in 99% of those cases the order was having no effect at all.

Also, Harris County eviction dashboard.

[Zan15]

A note on the CDC eviction moratorium. It is not automatic. It requires tenants to fill in a form that they can download from the CDC stating that options besides being homeless or moving in with other people in close quarters. Many renters facing eviction don’t know about the ban or understand the rules or their rights.

For example, Houston is one of the ground zero cities for renter evictions.



Also, Harris County eviction dashboard.

Has anyone challenged the CDC order in court yet? I just don't see how it can stand up?

[Rasulis]

Has anyone challenged the CDC order in court yet? I just don't see how it can stand up?

Yeah. Landlord files lawsuit against CDC eviction moratorium

- - - Updated - - -

Twelve new IPOs this week. One of the busiest week since May 2019.

We have 8 California, 2 New York, 1 Massachusetts and 1 Brazil based companies.

IPO market gears up for busiest week since May of 2019 — Uber’s IPO week — with 12 deals on tap

Some M&A news that will affect the market.

Nvidia acquisition of Arm Holdings.

Gilead purchase Immunomedics.

Oracle (as part of a consortium) MAY be buying TikTok.

Note that all three are California companies.

[Deja Thoris]

Yeah. Landlord files lawsuit against CDC eviction moratorium

- - - Updated - - -

Twelve new IPOs this week. One of the busiest week since May 2019.

We have 8 California, 2 New York, 1 Massachusetts and 1 Brazil based companies.

IPO market gears up for busiest week since May of 2019 — Uber’s IPO week — with 12 deals on tap

Some M&A news that will affect the market.

Nvidia acquisition of Arm Holdings.

Gilead purchase Immunomedics.

Oracle (as part of a consortium) MAY be buying TikTok.

Note that all three are California companies.

That'll be a shame. Arm holdings are a world leading semi-conductor company, I hope they keep their Britishness (even though they are Japanese owned at the moment!)

[Rasulis]

That'll be a shame. Arm holdings are a world leading semi-conductor company, I hope they keep their Britishness (even though they are Japanese owned at the moment!)

Yeah. Softbank. My guess is that Nvidia is planning to compete with AMD and Intel. Maybe. Who knows anymore what these people have in mind.

[Omega10]

Meanwhile, the real battles in the US-China war are happening in China itself.

https://www.yahoo.com/finance/news/c...045103258.html

Title: China Lets Traders Push Yuan Toward Best Quarter on Record

Gist of article: China is allowing the Yuan to rise. With China recovering from the virus, and with the US mostly NOT recovering, China seems to be factoring in the reality that US consumers are not going to be buying as many imports. As I posted earller in the Brexit thread, EU is making moves to increase EU-Chinese trade in general, and EU will most likely expect China to buy more EU products in return as well as other concessions.

So, between needing to increase imports from EU to deal with them, and the reality that exports to the US are likely to be dropping due to both US economic weakness and continued China-US decoupling, China seems to be focusing on growing their internal markets, in which case a stronger Yuan means cheaper prices for imports for its citizens.

Excerpts:

China’s policy makers are in no rush to rein in a rapid advance in the yuan, as traders push the currency toward its largest quarterly rally on record.

The yuan has strengthened 4.5% since the end of June to 6.7566 per dollar, set for the biggest ever quarterly gain in Bloomberg data going back to 1981. The currency is the best performer in Asia in the third quarter, with the buying momentum close to the strongest since January.

The yuan is being supported by a slump in the dollar, while Chinese media has been attributing the gains to the nation’s economic recovery. The People’s Bank of China has also helped by not standing in its way, which for some in the market is an incentive for the currency to push higher. Beijing’s daily fixings have tracked the spot rate, and officials have not expressed any concern over the currency’s strength.

So at least for now, China is allowing this to happen. Note that besides making imports to China cheaper, it will make Chinese products in the US and other countries more expensive. On the one hand, this will directly take money out of the pockets of US consumers. On the other hand, it will speed up the China-US decoupling process.

Beijing’s apparent blessing of the rally is a far cry from a few years ago, when the PBOC sought to rein in gains for fears that it would hurt exporters. What’s different now is China has changed its strategy for boosting growth. It’s now more focused on cheapening imports and bolstering domestic consumption, and a stronger currency could help achieve that.

The yuan is also close to the weakest level in six years versus the euro, the currency of a major trade partner. That suggests there’s room for further gains.

I'd be willing to bet that Euro-Yuan exchange rates were discussed in recent EU-China negotiations. With the EU rising, the Yuan is almost forced to rise just to keep pace with the Euro.