There are ripples in the water:
"U.S. stocks dropped from record highs as investors weighed the potential fallout from forced block sales on the rest of Wall Street. The financials sector weighed on the benchmark S&P 500 for much of the day following revelations that banks including Goldman Sachs Group Inc. and Morgan Stanley liquidated holdings in Bill Hwang’s family office Archegos Capital Management on Friday after he failed to meet margin calls. Boeing Co. lifted the Dow Jones Industrial Average to another all-time high after the aircraft maker announced a large order. The Nasdaq Composite finished in the red. “Investors are whistling in the dark as they try to determine how wide the Archegos-related pain will spread,” said Adam Phillips, director of portfolio strategy at EP Wealth Advisors. “You’re seeing a tug-of-war play out between those who believe the situation is benign and those who worry about a systemic risk.” Small ripples of the forced unwind were felt in credit markets. Nomura had to take the rare step of canceling a bond deal that had already priced after its loss warning. The investment grade credit default swaps index, a gauge of U.S. credit fear, was relatively calm, even though traders are demanding a higher cost to hedge against losses on the debt of banks that have been caught up in the Archegos situation, including Nomura and Credit Suisse....."
"Archegos-linked stocks sink on block-trade fallout fears" by Divya Balji and Elena Popina Bloomberg, March 29, 2021
The group of stocks at the center of a $20 billion block-trade selling spree last week were under pressure on Monday as investors worried there could be more fallout from forced offerings.
Quite a difference from two months ago, no?
ViacomCBS fell 6.7 percent after a $2.1 billion block trade that launched on Sunday was said to price at the top of its range, while Discovery slipped 1.6 percent. The American depositary receipts of Chinese companies Baidu and GSX Techedu extended their declines following the forced liquidation of positions linked to Bill Hwang’s Archegos Capital Management, while Tencent Music Entertainment Group eked out a 1.2 percent gain.
The wave of block trades continued Monday as a large stake of about 20 million shares of Rocket Cos Inc. was said to have been sold Monday via Morgan Stanley. Shares of the home-loan provider closed 0.5 percent lower. Wells Fargo was said to have executed on four block trades valued at a combined $2 billion on Monday on ViacomCBS, Baidu, Farfetch Ltd., and Vipshop Holdings Ltd.
The block trades initiated by Goldman Sachs and Morgan Stanley were triggered after Archegos failed to meet margin calls, leaving Nomura Holdings Inc. and Credit Suisse facing potentially “significant” losses and sending shares of both plunging. The possibility of additional trades still looms over the market, while the traditional end-of-quarter volatility may contribute to sharper swings on previously high-flying stocks.
Feels like a Lehman $ituation.
The margin call will force every prime brokerage to review their books, said Edward Moya, senior market analyst at Oanda Corp. “When you look at the stocks that were incorrectly bet on, Wall Street must ponder if the V-shaped stock market recovery got out of hand.”
It's a K-shaped recovery, but anyway....
In the United States, bank stocks fell as the KBW Bank Index lost 2.3 percent, the most in a month. Goldman slipped 0.5 percent, even after the investment bank was said to have told shareholders and clients that the margin call will likely have an immaterial impact on its financial results. Morgan Stanley sank 2.6 percent.
Small ripples of the forced unwind were felt in credit markets. Nomura had to take the rare step of canceling a bond deal that had already priced after its loss warning. The investment grade credit default swaps index, a gauge of US credit fear, was relatively calm, even though traders are demanding a higher cost to hedge against losses on the debt of banks that have been caught up in the Archegos situation, including Nomura and Credit Suisse.
A block of about 45 million shares in ViacomCBS priced at $47 a share, a person familiar with the matter said on Monday. The trade was launched on Sunday via Morgan Stanley and was struck at a 2.6 percent discount to Friday’s close of $48.23. The US media giant was also the subject of at least one large block trade on Friday through Goldman Sachs.
Other stocks involved in Friday’s spree of block trades included Farfetch and Iqiyi Inc., according to an e-mail to Goldman clients seen by Bloomberg News. Both slumped after whipsawing in early trading Monday.
The US Securities and Exchange Commission has been monitoring the forced liquidation in holdings linked to Archegos, a spokesperson said.
Signs of support for some of the stocks are already starting to emerge.....
That is the hallmark of an impending CRASH, folks!
Have the bankers overplayed their hand, readers?
Is that why a crash is being set up?
"Southwest Airlines ordered 100 Boeing 737 Max 7 jets and said it would purchase as many as 155 more, cementing a half-century relationship and ending a public flirtation with Airbus. The 100-plane order, valued at about $10 billion before customary discounts, gives a boost to the slow-selling, 150-seat Max 7, the smallest plane available in the line. Southwest also switched 70 orders for the Max 8 to the 7, the airline said in a statement Monday."
That is why they lo$t altitude:
"One of Europe’s busiest airports hit the bond market on Monday to shore up its finances in the face of a second tourist season lost to the coronavirus pandemic. London’s Gatwick Airport is marketing 400 million pounds ($553 million) of junk-rated debt with a five-year maturity, but with British holiday makers still forbidden from traveling, it’s offering a hefty premium to lure skeptical investors — a yield between 4.75 percent and 5 percent, which is more than double the average for European bonds with a similar credit rating."
One guy is $creaming at the top of his lungs:
"How Larry Summers went from Obama’s top economic adviser to one of Biden’s loudest critics" by David J. Lynch Washington Post, March 29, 2021
Just about everywhere you look in the Biden White House, you can see former treasury secretary Larry Summers’s influence. Everywhere, that is, except for the policies.
Summers, 66, who drafted economic blueprints for the past two Democratic presidents and was a top candidate to lead the Federal Reserve Board under President Barack Obama, has emerged in recent weeks as the loudest critic of President Biden’s approach to reviving the pandemic-era US economy. The Harvard University professor — who advised Biden for a time last summer — warns that the president’s stimulus plan may trigger the highest inflation in more than half a century and could cost Democrats the chance to make lasting investments in the economy.
Summers’s Cassandra-like critique has ignited a firestorm among liberals, his traditional adversaries, who blame him for financial industry deregulation in the 1990s that contributed to the financial crisis and for the anemic recovery that followed, but his arguments also have been swatted aside by his erstwhile allies in the White House, the Treasury Department, and the Federal Reserve, who argue that the economy is in desperate need of help.
Another Cassandra for the time capsule!
’'This might not have struck as much a nerve if it didn’t reflect concerns that were widely felt,’' Summers said in a 45-minute telephone interview last week.
The extraordinary clash between a globally recognized Democratic economist and a Democratic president hoping to enact the most transformative liberal agenda since the Great Society involves both the central issues of the day and the lessons of history.
If he at times has veered into hyperbole, Summers nonetheless has given voice to an unpopular opinion that many in the Democratic camp say deserves consideration. Few other Democratic economists seem willing to air such concerns, perhaps for fear of imperiling Biden’s ability to translate his fragile congressional majority into decisive action.
Summers’s complaint about an oversized stimulus ’'was what a lot of people were saying privately, what was being whispered by people without his voice or without his platform who were nervous about going public,’' said Jason Furman, who was Obama’s Council of Economic Advisers chair and disagrees with Summers’s inflation assessment.
At issue are the risks and opportunities involved in restarting a $20 trillion economy and the unresolved debate over the mistakes made in responding to the 2008 financial crisis.
Summers says the Biden administration’s spending plan was drafted to satisfy political realities rather than economic requirements, and it is courting disaster. The Biden brain trust and other economists, including Paul Krugman, a winner of the Nobel Prize in economics, say he’s misreading the moment and overstating the downside risks.
’'The discussion he’s trying to push is one we should have,’' said Claudia Sahm, a longtime Summers critic and a former Federal Reserve staff economist who is now at the Jain Family Institute, ’'but it’s so out of proportion, and since [the bill] passed, he’s gotten more and more vicious.’'
Summers began warning of economic overheating late last year, criticizing the proposed $2,000 stimulus checks for individual Americans as ’'bad economics.’' When he made that argument, in a piece for Bloomberg Opinion, the idea had already been endorsed by House Speaker Nancy Pelosi, Democrat of California, and soon-to-be Senate majority leader Charles Schumer, Democrat of New York. Biden joined them days later.
Summers is all for bailing out the banks and Wall Street to the tune of trillions, though.
Last month, as Congress was considering Biden’s $1.9 trillion American Rescue Plan, Summers criticized it in a Washington Post opinion piece as excessive and poorly designed. Too much would be spent sending checks to people who didn’t need the money, while almost nothing would be used to increase the economy’s long-run potential, he said.
Summers acknowledged that the Obama administration hadn’t spent enough to bolster the economy after the 2008 financial crisis, but Biden’s rescue plan would learn that lesson too well, adding too much fuel to an economic fire that would already be raging by the time the money arrived.
The pandemic had punched a roughly $20 billion hole in Americans’ monthly wage income, he said. Biden proposed filling it with more than $100 billion. Coupled with the Federal Reserve’s ultralow interest rates, Washington’s spendthrift ways could send prices soaring.
’'I know the bathtub has been too empty,’' Summers said, ’'but one has to think about what the capacity of the bathtub is and how much water we’re trying to flow into it.’'
Now that they have flooded the economy with printed out of air money, the cash will soon be worthless -- thus the rise in prices!
Summers worries that a reopened economy could rev out of control. Either a surge of demand overwhelms producers and sends prices soaring or the Fed will try to prevent that inflationary spike by abruptly hiking interest rates, plunging the economy into a new recession.
There’s only a 1-in-3 chance that the administration enjoys a boom that settles into years of sustainable growth, he said.
That can't be right because the Globe told me we are going back to the roaring '80s.
’'We’re taking substantial risks,’' Summers said.
The United States could suffer the sort of price spiral that hasn’t been seen since the late 1960s, when President Lyndon B. Johnson refused to raise taxes to cover the combined costs of his domestic agenda and the Vietnam War, he says. From 1.6 percent in 1965, inflation ticked up to nearly 6 percent five years later.
The architects of Biden’s plan say any inflationary risks pale alongside the damage that could be done to millions of Americans if the administration doesn’t restore a vibrant economy. Spending on roads, bridges, and rural broadband networks, which could lift economic growth in the long run, was always envisioned as the second part of a two-step maneuver.
We are so f**ked then!
Is he out of the loop because of the friends he kept?
© 2004 Rick Friedman
He's been made, folks.
Time to vote on the union:
"Contentious union vote at Amazon heads to a count" by Karen Weise and Michael Corkery New York Times, March 29, 2021
SEATTLE — Thousands of yellow envelopes mailed to a squat brick building in Birmingham, Ala., will hold the fate of one of the most closely watched union elections in recent history, one that could alter the shape of the labor movement and one of America’s largest employers.
The envelopes contain the ballots of workers at an Amazon warehouse near Birmingham. Almost 6,000 workers at the building, one of Amazon’s largest, are eligible to decide whether they form the first union at an Amazon operation in the United States, after years of fierce resistance by the company. Voting ended Monday.
The organizers have made the case in a monthslong campaign that Amazon’s intense monitoring of workers infringes on their dignity and that its pay is not commensurate with the constant pressure workers feel to produce. The union estimates that roughly 85 percent of the workforce at the warehouse is Black and has linked the organizing to the struggle for racial justice.
Amazon has countered that its $15 minimum wage is twice the state minimum and that it offers health insurance and other benefits that can be hard to find in low-wage jobs.
“Even the fact that the vote is taking place is a referendum on the so-called future of work,” said Beth Gutelius, a researcher who studies the warehousing industry.
Whatever the outcome of the vote — which may not be known for days — the union drive has already succeeded in roiling the world’s biggest e-commerce company and spotlighting complaints about its labor practices. The vote comes at a delicate time for the company, which faces increasing scrutiny in Washington and around the world for its market power and influence, which have grown during the pandemic as consumers flocked online to avoid stores. President Biden has signaled his support for the workers, as have many progressive leaders.
If the Retail, Wholesale, and Department Store Union succeeds, it would be a huge victory for the labor movement, whose membership has declined for decades. A victory would also give it a foothold inside the country’s second-largest private employer. The company now has 950,000 workers in the United States, after adding more than 400,000 in the last year alone.
If the union loses, particularly by a large margin, Amazon will have turned the tide on a unionization drive that seemed to have many winds at its back. A loss could force labor organizers to rethink their overall strategy and give Amazon confidence that its approach is working.
The union drive has captured national attention partly because of the nation’s focus on essential workers during the pandemic and on racial inequalities highlighted by the Black Lives Matter movement.
“Obviously, we want to win,” Senator Bernie Sanders, a Vermont independent, said Friday when he visited Alabama, “but I think a major point has already been proven, and that is that workers, even in the Deep South, are prepared to stand up and organize and fight for justice.”
In Bessemer, Ala., a pro-union radio spot paid for by Black Lives Matter aired on a local R&B station, while every intersection around the warehouse has been crowded with signs. “Bama has your back! Vote union!” one read. The large building was draped in sky blue banners blaring “VOTE.” On Friday, an Amazon employee drove a golf cart around the parking lot to ward off news media.
The unionization effort came together quickly, especially for one aimed at such a large target. Workers at the building in Bessemer approached the local branch of the retail workers union last summer. In October, organizers began showing up at the warehouse daily, trying to talk with workers between shift changes.
By late December, more than 2,000 workers had signed cards indicating that they wanted an election. The labor board determined that figure showed enough interest to hold a vote.
Amazon wanted the voting to happen in person, as is typical, but the National Labor Relations Board found that the pandemic made that too risky and ordered a mail-in election.
Amazon claims that mail-in voting is susceptible to fraud, but were all for it last November.
The ballots were mailed out to workers in early February and had to be signed and received by the labor board at its Birmingham office by the end of Monday.
On Tuesday, the vote counting begins — a process that could take many days.
First, a staff member at the labor board will read the names of the workers, without opening an inner envelope with the actual ballot. Representatives from the union and Amazon will be on a private video conference. As each name is read, they will check the workers’ names against a staff list, and if either side contests whether that worker was eligible to vote, that ballot will be set aside. A representative from each side is also expected to be there in person to observe the process.
Republican monitors were given the boot last November.
After the two sides have had the opportunity to make their objections about eligibility, the NLRB will begin counting the uncontested ballots. After every 100 votes, the labor board will count those ballots again until all the votes are counted. This portion will be open to reporters on a video conference line.
If there are more contested ballots than uncontested, that is likely to set off legal arguments by the union and Amazon over the eligibility of each contested ballot. Each side has about a week to make its case before NLRB certifies the vote.
Either side can contest whether the vote was conducted fairly. The union, for instance, could argue that the company took steps to improperly sway the vote, by potentially making workers fearful of reprisal if they supported organizing.
But not the presidency, and if you do you are pushing false theories, etc.
If the union prevails, workers fear that the company may shut down the warehouse. Amazon has backed away from locations that bring it headaches before. In 2000, it closed a customer service office that was trying to unionize, saying the closing was the result of a reorganization. It stopped construction on an office tower when Seattle wanted to tax the company and backed out of plans to build a second headquarters in New York City after facing progressive opposition, but the company has committed more than $360 million in leases and equipment for the Bessemer warehouse, and shutting down the vote of a large Black workforce could publicly backfire, said Marc Wulfraat, a logistics consultant who closely tracks the company.....
I'll bet Bezos can't wait until AI takes your place!
Let's hope they don't evict you:
"CDC extends eviction moratorium through June; The protection was set to expire at the end of this month" by Tim Logan Globe Staff, March 29, 2021
Struggling renters just got more time to sort out their finances.
The Biden administration on Monday extended a ban on many evictions for another three months, just days before it was set to expire. Citing the ongoing pandemic, the Centers for Disease Control said it will continue the moratorium until the end of June.
On the road to property seizures and communism, for the landowner is still responsible for payments to the bank.
“The COVID-19 pandemic has presented a historic threat to the nation’s public health,” the agency said in a statement. “Keeping people in their homes and out of crowded or congregate settings — like homeless shelters — by preventing evictions is a key step in helping to stop the spread of COVID-19.”
The federal ban has probably kept millions of Americans from facing eviction since it was put in place by the Trump administration in September, particularly as even stricter state moratoriums, such as the one in Massachusetts, have expired. It prohibits courts from ordering the eviction of most households if they have lost income in the pandemic and would face homelessness.
As a practical matter, the ban has also discouraged many landlords from launching eviction cases, which in Massachusetts can take months to work through court. At the same time, rent-relief funds are starting to flow from Washington, D.C., to help tenants who are still out of work keep current and pay off debt they accumulated last year. The stimulus packages passed in December and March will, combined, send roughly $900 million in rental funds to Massachusetts. The Baker administration plans to pump much of it into a rental aid program that provides up to $10,000 to tenants and their landlords. Extending the federal eviction ban, advocates say, will give more time for that money to reach people.
Still, the ban is controversial. Many landlord groups oppose the measure, saying it forces them to provide housing without compensation, and federal judges in Texas and Ohio recently ruled against it in lawsuits, saying the CDC overstepped its authority, though neither judge has yet moved to strike down the ban nationwide.
Still, even many supporters acknowledge the federal ban can not continue indefinitely.....
WHY can it not continue indefinitely?
Form a union!
"To stay in their homes, tenants are unionizing" by Zoe Greenberg Globe Staff, March 29, 2021
Rumors circulated that the landlord wanted everyone out, but Giuliana Perez could not contemplate leaving her two-bedroom apartment, where light pours into the living room, in the middle of a pandemic. What would she do with her elderly mother? How would she pay first and last month’s rent at a new place when her hours as a caregiver had been slashed?
So in June of last year, she decided to act. She went door to door in her Hyde Park building, knocking at each of the eight other units. The neighbors talked about the raging virus, the cluttered basement. Perez learned about a leaking ceiling in one apartment and a broken dishwasher in another. The residents wrote a letter to the landlord, asking to meet as a group to “figure out how we can stay in our homes.”
That was how the 15 Dana Ave. tenant association was born. The group joined a host of newly created tenants unions across the city, a local response to massive unemployment caused by COVID and widespread fear of eviction.
“I hadn’t done anything like that in my life,” Perez, 43, said. “I was never in a position to fight back.”
For months, tenants and housing advocates have feared a “tsunami” of evictions coming to Boston. To prevent that, lawmakers enacted sweeping solutions, including a state moratorium on evictions, which expired in October, and a weaker federal moratorium, which still stands.
Governor Charlie Baker earmarked money for housing attorneys and mediators to help keep renters in their homes, and now $857 million in new federal funds will dramatically expand rental assistance in the state, but as residents waited for those large-scale solutions, some tenants, like Perez, turned to a more homegrown approach: They formed tenants unions to negotiate collectively with their landlords.....
They all went for a drink if the ad below was any indication.
Look, I don't think people should be thrown out into the street but moratoriums and bans aren't the answer either.
The answer is calling out the CVD fraud and going back to normal.
"Acting Mayor Kim Janey announced that the city was setting aside $50 million — most of it from the federal government — to help struggling renters and landlords make ends meet amid the pandemic. Janey said the money will help families pay for utilities, including Internet access, a crucial tool during the pandemic. At a time when many tenants are under financial stress and unable to pay rent, the city is encouraging landlords and tenants to communicate and work together to reach agreement, she said. Janey said the Rental Relief Fund has provided critical support to nearly 1,900 households that were at risk of eviction due to COVID-19. “These new funds,” she said, “will do even more.”
At least you have a place to eat a meal:
"Major Food Group, best known for hosting power brokers at its Carbone Italian restaurants in New York and Miami, is bringing its pasta sauces to the masses. This is the company’s first entry in the world of consumer packaged goods. Starting Monday, Carbone Fine Foods will offer three of its notable sauces —Marinara, Arrabbiata, and Tomato Basil — on its website and on Amazon. The sauces will also roll out at Stop & Shop supermarkets in New York, New Jersey, Connecticut, Massachusetts, and Rhode Island. The preservative-free sauce uses the same ingredients as at the restaurants, including ripe southern Italian tomatoes, fresh basil, and oregano, and it is crafted in small batches. Carbone products retail for $9 for a 24 oz. jar. That puts it in the premium sauce market, which has shown growth during the pandemic."
Want to order a pizza?
This guy left you the bill:
"One of world’s greatest hidden fortunes is wiped out in days" by Katherine Burton and Tom Maloney Bloomberg, March 30, 2021
From his perch high above Midtown Manhattan, just across from Carnegie Hall, Bill Hwang was quietly building one of the world’s greatest fortunes.
Even on Wall Street, few ever noticed him — until suddenly, everyone did.
Hwang and his private investment firm, Archegos Capital Management, are now at the center of one of the biggest margin calls of all time — a multibillion-dollar fiasco involving secretive market bets that were dangerously leveraged and unwound in a blink.
Hwang’s most recent ascent can be pieced together from stocks dumped by banks in recent days — ViacomCBS, Discovery, GSX Techedu, Baidu — all of which had soared this year, sometimes confounding traders who couldn’t fathom why.
One part of Hwang’s portfolio, which has been traded in blocks since Friday by Goldman Sachs, Morgan Stanley, and Wells Fargo, was worth almost $40 billion last week. Bankers reckon that Archegos’s net capital — essentially Hwang’s wealth — had reached north of $10 billion, and as disposals keep emerging, estimates of his firm’s total positions keep climbing: tens of billions, $50 billion, even more than $100 billion.
It evaporated in mere days.
’'I’ve never seen anything like this — how quiet it was, how concentrated, and how fast it disappeared,’' said Mike Novogratz, a career macro investor and former partner at Goldman Sachs who’s been trading since 1994. ’'This has to be one of the single greatest losses of personal wealth in history.’'
Ea$y come, ea$y go!
The cascade of trading losses has reverberated from New York to Zurich to Tokyo and beyond, and leaves myriad unanswered questions, including the big one: How could someone take such big risks, facilitated by so many banks, under the noses of regulators the world over?
One part of the answer is that Hwang set up as a family office with limited oversight and then employed financial derivatives to amass big stakes in companies without ever having to disclose them. Another part is that global banks embraced him as a lucrative customer.....
The A$ian Madoff?
The whole thing is spooking investors.