
A store owner called police to report a loitering homeless man and the cops showed up and bought him shoes to help get him on his way.
https://thefreethoughtproject.com/watch-instead-of-arresting-homeless-man-police-bought-him-shoes-and-food/
NO STRINGS ATTACHED NEWS THAT MAINSTREAM JUST WON'T COVER.
A store owner called police to report a loitering homeless man and the cops showed up and bought him shoes to help get him on his way.
https://thefreethoughtproject.com/watch-instead-of-arresting-homeless-man-police-bought-him-shoes-and-food/
It's D-Day For The Repo Market: On Monday $100 Billion In Liquidity Will Be Drained - What Happens Next?
Last week's apocalyptic report by repo market guru Zoltan Pozsar, which for those who missed it predicted that an imminent market crash and loss of control of overnight rates by the Fed would spark nothing short of QE4, sparked an unprecedented panic at the Federal Reserve, which just two days later unveiled a historic liquidity injection, in which the Fed promised to inject no less than $500 billion in the next 4 weeks to avert a catastrophic freeze in the repo market as we approach the year end "turn", which would consist not only of a continuation of the Fed's T-Bill POMO, but also a massive injection of nearly $500 billion in overnight and term repos in the coming days.
In other words, instead of a reactive QE4 - as predicted by Pozsar - the Fed will flood the repo market with a proactive firehose of liquidity.
There's more: add in the incremental liquidity from the expanded overnight repo of about $50 billion and another $60 billion in T-Bill purchases, and the Fed will inject a total of just shy of $500 billion in the next 30 days. This also means that by Jan 14, the Fed's balance sheet would have grown by a cumulative $365BN in "temporary" repos, and together with the expanded overnight repos, and the $60BN in monthly TBill purchases, and by mid-January, the Fed's balance sheet, currently at $4.066 trillion, will surpass its all time high of $4.5 trillion!
The question then is whether this will be sufficient to refute the repo Doomsday predicted by Pozsar, one which was supposed to launch QE4, or will the Fed's gargantuan liquidity injection still not be enough and lead to a collapse in the repo market.
Well, since the next key catalyst in the potential repo market turmoil is imminent, we may know as soon as tomorrow, when there is another large December corporate tax payment date (with as much as $78BN being remitted to the TSY) and another $54 billion in US Treasury settlements.
Recall, that as we explained last week, the mid-December funding dynamics looks very similar to mid-Sep except for the outsized role of the Fed. On Monday, Dec 16, Bank of America anticipates that $54Bn of UST coupon settlements coupled with what has historically been $30-50BN of corporate tax payments to UST. This could result in a UST cash balance inflow - or a liquidity drain - of up to $80-$100bn in just one day.
Also recall, every dollar of UST cash balance increase represents a similar USD reserve drain from the banking system, and a similar liquidity drain in mid-September culminated with the now historic explosion in overnight repo rates.
So should traders panic? Well, if the Fed's gargantuan liquidity injection is anything to go by, the answer is no, and as BofA's Mark Cabana writes, "despite the similarities we do not anticipate a material spike in funding due to the Fed's ongoing reserve management operations."
The main reason we do not anticipate considerable funding stress is due to the outsized presence of the Fed now vs mid-Sep. In mid-Sep the Fed was still under the impression it could drain reserves from the banking system without a material impact on funding levels. Since mid-Sept the Fed has learned the banking system has reached reserve scarcity and the Fed it is now adding reserves via repo operations and outright bill purchases to stabilize funding markets. The Fed will ensure it adds enough reserves to offset any Treasury cash balance drain in Dec.
Consider that as of last week, the Fed has provided $340bn in funding through their existing repo and bill purchase operations:
Furthermore, as revealed on Friday, in anticipation of the Monday liquidity drain, the Fed announced that it would expand the Monday term repo up to $50 billion, and extend the maturity date to January 17, allowing dealers to lock in excess liquidity well beyond the "turn". However, contrary to Cabana's expectation that "the Fed will increase O/N repo operation limits to around $200bn in the days surrounding Dec 16" there is some risk the Fed has misjudged how much net liquidity will be soaked up as a result of Monday's drain.
As a result, Cabana notes that even with this operational change, funding could still be volatile as bank portfolios and money fund deposits get pared back amidst corporate outflows, while dealer intermediation of Fed repos may also be challenged with year-end regulatory reporting dynamics limiting how smoothly this funding gets passed along, something Pozsar discussed extensively last week.
In any case, the adjustment to Fed repo operations is the latest of measures undertaken to ensure repo remains relatively stable at year end, and although overnight repo markets will likely be volatile around year-end BofA's concern around the turn has moderated in recent weeks and certainly after Friday's announcement of a gargantuan liquidity backstop.
As a result, Cabana now "thinks the Fed has provided enough liquidity and dealers have adjusted their businesses around GSIB to ensure funding markets remain relatively stable leading into year end." Ironically, the BofA strategist now sees risks that "funding trades too soft early in 2020 vs the Fed's policy target range. This will likely result in one or two 5bps technical IOER increases to ensure fed funds does not fall below the Fed's target range in 1H '20" as the overall funding situation shifts from too little reserves, to too many, potentially forcing dealers to shift from the repo facility to the reverse repo facility!
Incidentally that observation was echoed by another repo market experts, Curvature's Scott Skyrm, who on Friday penned the following year-end repo market prediction:
Soft December Funding
With the Fed committed to dumping $500 billion in liquidity into the market over year-end, there WILL be an abundance of cash overall. More cash will be added than will actually leave the market. However, the Fed is adding much of this cash via term RP operations over the next two weeks, whereas most of the cash is only needed for the Turn itself. I predict, by the last week in December, overnight GC rates will trade very soft. Perhaps opening at 1.50% each day - though GC will have a hard time dropping below the 1.45% RRP rate.
Soft Year-End Funding
I believe the Turn rate will close soft on year-end. Probably below 1.00%. What will be even more interesting is that Money Market Funds will be "crowded out" by the Fed cash entering the market. When Primary Dealer banks take billions of dollars of cash from the Fed, they will give all of their collateral to the Fed. That will leave little collateral for banks to give to Money Market Funds on the day of quarter-end - forcing the MMFs to go to the Fed's RRP window. The Fed will effectively both loan cash into the market and borrow cash from the market.
Bottom line: after Pozsar's apocalyptic forecast prompted the Fed to unleash a liquidity tsunami, fears about an imminent seizure in the repo market have faded, with BofA's Cabana now writing that "overall, the Fed's guiding hand should make market participants comfortable not to fear material repo stress around the mid-Dec corporate tax date and to believe any year-end funding pressures should be relatively short lived."
Still, as Skyrm cautions, "there is still one major phantom year-end risk looming around the market. If the Fed's term RP operations fully fund the Primary Dealer bank balance sheets and the banks cannot increase their balance sheets further, the last few Fed operations of the month might not have any takers. There is a chance there will be little Primary Dealer bank balance sheet left by year-end."
In any case, when looking at tomorrow's massive $100 billion liquidity drain, the repo market should be able to digest it without a spike in the G/C repo rate now that the Fed has effectively backstopped any and all year-end liquidity needs. If, however, the first repo prints come in elevated: at 2% or higher, it will mean that not even the Fed's half a trillion dollar liquidity injection was enough, and that Pozsar's fire and brimstone forecast is starting to come true.
Tyler Durden Sun, 12/15/2019 - 16:50 Tags Business FinanceRecently Retired USAF General Makes Eyebrow-Raising Claims About Advanced Space Technology
Authored by Brett Tingley via TheDrive.com,
Recently retired U.S. Air Force Lieutenant General Steven L. Kwast gave a lecture last month that seems to further signal that the next major battlefield will be outer space. While military leadership rattling the space sabers is nothing new, Kwast’s lecture included comments that heavily hint at the possibility that the United States military and its industry partners may have already developed next-generation technologies that have the potential to drastically change the aerospace field, and human civilization, forever. Is this mere posturing or could we actually be on the verge of making science fiction a reality?
Who Is Steven Kwast?According to his official USAF biography, Lt. Gen. Kwast graduated from the United States Air Force Academy with a degree in astronautical engineering, and also holds a master’s degree in public policy from Harvard’s Kennedy School of Government. Kwast previously served as Commander of the 47th Operations Group at Laughlin Air Force Base and the 4th Fighter Wing at Seymour Johnson AFB. Kwast boasts more than 3,300 flight hours in the F-15E, T-6, T-37, and T-38 and over 650 combat hours.
Lt. Gen. Kwast most recently served as Commander of the Air Education and Training Command (AETC) at Joint Base San Antonio (JBSA), but retired in August. According to some reports, Kwast was prematurely relieved of his duties at JBSA and blacklisted for promotion after speaking out on space-related issues despite a service-wide gag order. Kwast declined to comment on the reports and retired on September 1, 2019.
[youtube https://www.youtube.com/watch?v=ItL2-UikIwU]
Despite the controversy surrounding his removal from his post at AETC, some defense analysts and Lt. Gen. Kwast’s own supporters within the Armed Forces were suggesting prior to his retirement that he should be appointed as Commander of the Pentagon's budding Space Force. Kwast has published several op-eds in recent years pushing for the U.S. military to take on a greater role in space in order to ensure American economic dominance and what he sees as the continued proliferation of American values.
Gaining The High Ground In SpaceKwast delivered a lecture at Hillsdale College in Washington, D.C. on November 20, 2019, titled “The Urgent Need for a U.S. Space Force.” Kwast’s wide-ranging speech described the power of new technologies to revolutionize humankind, referencing the competitive advantage the discovery of fire offered to early humans and the strategic value that nuclear weapons offered 20th-century superpowers. When it comes to current revolutionary technologies, Kwast says the “the power of space will change world power forever” and that it’s up to the United States military to leverage that power:
"As a historian, reflecting on the fact that throughout the history of mankind… technology has always changed world power. But the story of rejecting the new and holding and clinging to the paradigms of the past is why no civilization has ever lasted forever, and values are trumped by other values when another civilization figures out a way of finding a competitive advantage. The nature of power, you either have it and your values rule or you do not have it and you must submit. We see that play out again and again in history and it’s playing out now."
[youtube https://www.youtube.com/watch?v=KsPLmb6gAdw]
As has been common as of late, Lt. Gen Kwast cites rapidly growing Chinese military and technological advances as the reason why the United States must invest heavily in new space-based technologies. “We can say today we are dominant in space but the trend lines are what you have to look at and they will pass us in the next few years if we do not do something. They will win this race and then they will put roadblocks up to space,” Kwast argues, “because once you get the high ground, that strategic high ground, it’s curtains for anybody trying to get to that high ground behind them.”
Kwast claims China is already building a “Navy in space” complete with the space-based equivalents of "battleships and destroyers" which are “able to maneuver and kill and communicate with dominance, and we [the United States] are not.” Kwast’s speech centers on the thesis that the United States needs a Space Force in order to counter Chinese advances and win the competition over the economy of the future and, as an extension, who sets the values of the future:
"Space is the Navy for the 21st century economy, a networked economy that will dominate any linear terrestrial economy in the four engines of growth and dominance that change world power: transportation, information, energy, and manufacturing. [...] Whoever gets to the new market sets the values for that market. And we could either have the market with the values of our Constitution [...] or we could have the values we see manifest in China."
As we’ve reported previously, there have been hints of radical new technologies under development by the military and, just as in Kwast’s speech, Chinese advances have been cited as the reason why these technologies are needed. China has been rapidly expanding its presence in space in recent years, placing a lander on the far side of the moon in late 2018 in what some say was a push to scout natural resources with which to develop a permanent lunar manufacturing center. China has also been developing “mothership” aircraft from which to rapidly and unpredictably launch spaceplanes and other payloads into space. The country has also launched several eyebrow-raising satellites in recent years which some analysts claim could be used in anti-satellite warfare. Beyond all this, they have been investing heavily in a traditional space program that includes many facets of manned and unmanned space technologies that rivals, and in some ways, exceeds our own.
Setting the Stage for 21st Century WarfareKwast argues that the scientists, engineers, historians, and strategists of today have been pushing the U.S. Congress to more heavily and more rapidly fund the Space Force and associated technologies, but there is still some pushback and confusion as to why these are presently needed. Kwast ultimately makes the case that the United States must be able to bring kinetic power, non-kinetic power, and informational power to the battlefield cheaper and faster than its adversaries in order to ensure strategic advantage in space.
Around the 12:00 mark in the speech, Kwast makes the somewhat bizarre claim that the U.S. currently possesses revolutionary technologies that could render current aerospace capabilities obsolete:
"The technology is on the engineering benches today. But most Americans and most members of Congress have not had time to really look deeply at what is going on here. But I’ve had the benefit of 33 years of studying and becoming friends with these scientists. This technology can be built today with technology that is not developmental to deliver any human being from any place on planet Earth to any other place in less than an hour."
Kwast’s comment is only one of several curious comments made by military leadership lately and they do seem to claim that we could be on the precipice of a great leap in transportation technology. We also don't know exactly where he is coming from on all this as it is not necessarily the direct wheelhouse of someone who was running the Air Force's training portfolio, although it does have overlaps. Whether or not the revolutionary aerospace technologies Kwast mentions have actually been developed is one thing, but Kwast’s lecture, his recent op-eds, and his supporters make it clear that there are many within the U.S. military and analyst community who have felt that there is a great need to boost investment in American space technologies and the U.S. military’s presence in space. That vision is certainly taking root across the Defense Department.
Is all this setting the stage for a new space race that will benefit mankind by furthering scientific and technological development, or is it ushering in the conditions for the first great space war? Only time will tell, but according to Kwast, the technologies needed to win that war may be more science fact than fiction.
Tyler Durden Sun, 12/15/2019 - 16:25Schiff, Nadler Insist Impeachment "Not A Failure" Despite Plunge In Public Support, Interest
No matter what the Democrats do to try and juice up some public hysteria about the impeachment process - from delaying votes to 'prime-time' to conjuring images of Trump holding Zelensky's daughter hostage in the basement of The White House - it appears both public interest, and more importantly public support, for the impeachment of President Trump is slumping.
In the latest sign that Democrats are losing the public's interest, Axios reports that The level of readers' engagement on stories about impeachment has steeply declined since September, according to data from NewsWhip.
A trend that so vividly exposes the fact that while plenty of attention is being paid to the impeachment saga, it doesn't draw the same level of emotion and enthusiasm that we saw in September.
Specifically, Axios notes that public interest hit its apex when the case against Trump was building and news cycles were driven by new revelations about Trump, Ukraine and the characters involved; but, after two weeks of public testimony in mid-November, the national conversation shifted from the accumulation of evidence to debate over whether that evidence was sufficient for impeachment and conviction.
And so as "interest" fades, so does "support" which, regardless of political affiliation, peaked in October.
For a brief glistening moment on The Hill, public support (based on the polls), topped 50% (on October 14th), but since then it has slid lower...
As one would imagine, the support is split dramatically between Democrats (84.6%) and Republicans (10.0%) in favor of impeachment, but as the chart below shows, those whose mind remains "independent" - should those unicorns actually exist in the real life - have seen a dramatic slide in support.
Finally, we note that, in addition to public interest (news report engagement) and public support (polls), the betting markets are also going "the wrong way" as PredictIt shows the odds of Trump serving out his first term are soaring back to pre-impeachment-process highs...
Source: PredictIt/Bloomberg
Simply put, no one trusts the news to get to the facts and when it is as boring, partisan, and predictable as this has been, who can blame them.
And don't forget, Democrats have been planning this 'coup' since before the midterms, but according to the New York Times, Pelosi says she's not going to push moderate Democrats to support the impeachment, saying she has "no message to them" and that "we're not whipping this legislation."
None of this appears to bother Rep. Eric Swalwell, who farted on live TV last week,
"I’m not focused on the polls, I know my colleagues aren’t either... this president used his great vast power to ask a foreign government to help him cheat an election."
Sadly, Mr. Swalwell, with members of your own party mutinying, perhaps it is time to listen to "we, the people" after all.
And despite all the evidence above, House Intelligence Committee Chairman Adam Schiff insisted “it isn’t a failure” during an ABC News interview on Sunday.
“No, it isn’t a failure, at least it’s not a failure in the sense of our constitutional duty in the House,” he said.
Nine months ago, Schiff said that the “only thing worse than putting the country through the trauma of an impeachment is putting the country through the trauma of a failed impeachment.”
Rep. Jerrold Nadler, the House Judiciary Committee chairman whose panel drafted two articles of impeachment, also believes the impeachment push wouldn’t be a failure if not passed in the Senate.
During an interview on Sunday, Nadler was reminded that he previously stated that “before you impeach somebody, you have to persuade the American public that it ought to happen,” including “Trump voters.”
We suspect Pelosi and the core of the Democratic Party base would disagree on whether this whole process has been a "failure" or not.
Tyler Durden Sun, 12/15/2019 - 16:00 Tags PoliticsHedge Fund CIO: "Are We At That Point In The Cycle Where The Next Move Is Massive Capital Destruction"
Submitted by Eric Peters, CIO of One River Asset Management
Obviously Not Obvious
“A lot of people have started talking about how we are moving away from monetary dominance to fiscal, and thus inflation will start rising,” said the CIO. “Even Germany is seen to be cracking,” he said.
We were talking about asset allocation, which was an easier exercise back when the 10yr treasury yield was double today’s 1.82% and the Shiller PE ratio was half today’s 30.38.
“But it’s not a guarantee. Japan had an extraordinary fiscal deficit for decades. They ended up with no inflation, no GDP growth and no asset price appreciation.” “So is this just a prescription for no growth in asset prices?” asked the same CIO. “Are we now consigned to zero growth in all asset classes? Or is there an asset allocation that makes sense?” he added. “Some people are arguing for a reflation model. Adding commodities to their portfolios.” Dusting off those playbooks that investors haven’t used since the 1970s.
“But what if you have to pull out the interwar playbook from the 1930s? What if we are at that point in the cycle where the next material move is massive capital destruction?” “Would you simply put your money in cash and take it out of stocks and bonds?” asked the CIO. “No one alive knows how to navigate that kind of market - one where the politics tear the economic fabric and conflict roils markets so dramatically that the only thing to do is focus on preservation.”
What if it’s not as simple as a monetary handoff that leads to massive fiscal expansion and reflation?
“Predictions that seem obvious are obviously not obvious. How do you build a probability tree for what comes next? What’s the output?”
Tyler Durden Sun, 12/15/2019 - 15:35 Tags Business Finance
"It's Sickening": Elon Musk's P.I. Dug Through Vern Unsworth's Trash To Find Dirt
The more we read, the more baffled we are that Elon Musk was able to win his defamation trial against British cave diving hero Vern Unsworth, who Musk publicly labeled both "pedo guy" and a "child rapist".
The latest chapter in the saga comes from The Daily Mail, who reported yesterday that Unsworth had been subject to four investigations by Thai police due to Musk's allegations. Elon Musk's aides reportedly encouraged a private investigator that they hired - who later turned out to be convicted felon - to leak any dirt they found to the media.
E-mails and text messages show that when the PI was unable to dig up dirt, the investigator "resorted to peddling lies and unfounded innuendo."
The messages also show how private investigators posed as charity workers and journalists to try and elicit information on Unsworth. They also admitted to carrying out a "bin spin", which is slang for going through a person's trash in order to try and find dirt on them.
Using a pseudonym "Jim Brickhouse", Musk's family office manager urged a PI to find evidence that Unsworth was "linked to an extreme level of darkness". The operation was code named "Operation Rowena" and cost Musk 40,000 pounds.
Their goal of trying to find information to use against Unsworth failed miserably. As time went by without information, Musk's family office manager become more desperate for information. "Clearly we'd like information now. There is some urgency to this situation," he said on August 27.
He also suggested trying to interview Unsworth's wife by posing as a journalist. "If employing additional asset is possible… we'll support this, even if it means an additional expense," he wrote.
Unsworth commented: "That they would talk of doing that shows you the depths to which they sank to try to ruin me. It's sickening."
Unsworth continued, talking about the trial: "Musk said 'pedo guy' was just an insult, yet here was the head of his private office hoping to prove what he says he didn't mean – that I am a paedophile – and then planning to smear me publicly. When I saw these documents, I was dumbfounded."
"I'm incredibly proud of what we did to save the boys' lives and I'm proud I was a part of it. Yet my legal battle with Musk has cast a very dark cloud and come close to wrecking my life," Unsworth continued.
He concluded: "If Musk had come out and done a full apology, got on the phone to me and said he was sorry in the media, that would have put an end to it. I just wanted him to put the record straight – but he didn't."
Recall, we recently reported on L. Lin Wood, Unsworth's attorney, who, after the case, appeared to bizarrely capitulate to Elon Musk. No matter what may have been going on behind the scenes, it appears as though the one person who got the short end of the stick in this drama-show was Mr. Unsworth.
Tyler Durden Sun, 12/15/2019 - 15:10Ben Stokes has been crowned Sports Personality of the Year an hour after viewers said host Gary Lineker spoiled the show by calling the cricketer the 'main award winner'.
A cruise ship has docked in Sydney a week after some of its Australian passengers were among those who were killed in the White Island volcano.
Botswana's government has revoked the licences of hunters hunters Michael Lee Potter and Kevin Sharp who shot dead a research elephant and then tried to hide its collar.
Named locally as Matthew Charles Gibbard, 50, and Stefan Joshua Zone, 28, the pair were ambushed by motorbike-riding thugs outside the Faena Art Hotel in Buenos Aires on Saturday morning.
New Zealand Prime Minister Jacinda Ardern has written an emotional post in the wake of the deadly White Island volcano tragedy.
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