Authored by Michael Washburn via The Epoch Times,

After weeks of tumultuous and bitter testimony and cross-examination in New York Attorney General Letitia James’s civil lawsuit against members of the Trump family, the star witness is expected to take the stand when the trial resumes at 10 a.m. on Nov. 6.

Assistant Attorney General Andrew Amer’s highly aggressive questioning of Donald Trump Jr. and Eric Trump on the witness stand last week was a prelude to what looks sure to be the most intensive, closely watched phase of the trial. Former President Donald Trump will appear in the civil court building at 111 Centre Street in Manhattan to testify about the truthfulness of valuations of Trump family assets in financial statements provided to Deutsche Bank and other lenders.

The former president’s sons gave lengthy testimony on the mornings of Nov. 1, Nov. 2, and Nov. 3 on often overlapping subjects. The prosecutor went over financial documents and records in painstaking detail, seeking answers from the brothers as to whether they recognized certain letters, emails, and financial statements and whether they had knowingly approved the presentation of such items to the banks for the purpose of obtaining loans on terms highly favorable to the Trump family and The Trump Organization.

Mr. Amer repeatedly grew frustrated with the brothers’ tendency to qualify their answers and demanded that they reply to his questions with a “yes” or “no.” Justice Arthur Engoron largely supported Mr. Amer in his efforts to obtain simple answers, and the judge’s perceived favoritism toward the prosecution led to a prolonged argument with Trump lawyer Christopher Kise on the afternoon of Nov. 2 and the morning of Nov. 3.

Former President Donald Trump (R) appears in the courtroom with attorney Christopher M. Kise for the third day of his civil fraud trial at the New York State Supreme Court in New York City on Oct. 4, 2023. (Mary Altafeer/Pool/Getty Images)

At many points throughout the proceedings, the brothers minimized their role in the preparation of the statements of financial condition and other documents and records and said they trusted the professional accountants and financial experts who prepared such items. Although the documents bear their signatures, they were merely acting in accordance with legal advice from people inside and outside the Trump business empire whose job was to run numbers and come up with valuations.

In essence, the brothers acknowledged their authority within The Trump Organization while portraying their role as the rubber-stamping of documents containing figures and valuations that others had compiled.

Typical of the cross-examination was a moment on Nov. 2, when Eric Trump told Mr. Amer that “people ask me questions all the time, but I never had anything to do with a statement of financial condition.”

Then, a bit later in his testimony, he said: “We had an accounting department that would sometimes work with outside entities. I did not work on a statement of financial condition; I’ve been very clear about that.”

Questions for the Former President

Mr. Amer often pursued an indirect route to getting the information he wanted, asking one of the Trump brothers a question that a third-party financial professional assigned to a given project or the former president himself might be in a better position to answer.

At one point, he asked Eric Trump whether the witness had seen one of his father’s financial statements from August 2013. At such times, Eric Trump often alluded to the sheer amount of time that had passed and said he didn’t recall the details of the document or figures he was pressed about.

He denied his involvement in appraisal work on properties and said repeatedly that Sheri Dillon, who’s now an attorney with the law firm Morgan Lewis & Bockius, handled the minutiae of such matters.

The brothers didn’t dispute their agency as executives of The Trump Organization with a significant amount of latitude when it came to signing documents whose preparation they had entrusted to others. But they fell short of claiming oversight of properties and assets that fall under their father’s ownership.

Hence, the questioning of Donald Trump Jr. and Eric Trump may have been a long warm-up for the most critical phase of the trial, when questions about who was ultimately answerable for representations made to powerful financial institutions, and for any real or alleged inflations of the value of Trump family assets, will be front and center throughout the testimony.

President Trump is expected to take the stand as soon as the new phase of the trial begins on Nov. 6.

US equity futures extended gains after last week’s blockbuster rally, the biggest of the year, despite some weakness in bonds, as traders remained optimistic that US and European central banks may start cutting interest rates as soon as next year. As of 7:40am, S&P emini futures were higher by 0.2%, near top of Friday’s range, while Europe’s Estoxx 600 dropped 0.2% with materials leading declines. South Korea’s Kospi soared more than 5% after regulators banned short selling. The dollar fell for a fourth day. Crude futures rose more than 1.5% after Saudi Arabia and Russia reaffirmed they will stick with their supply curbs through year-end. Bitcoin continued its ascent, last seen above $35K, with Ethereum rising above $1900. 

Among individual stock market movers, Ryanair jumped almost 7% after announcing its first regular dividend. Tesla rose in pre-market trading after Reuters reported the company would produce a new, more affordable electric car model in Germany. Albemarle fell 1% as UBS cut its recommendation on the lithium producer’s stock to neutral from buy. Meanwhile, Morgan Stanley slashed its price target to Street-low of $90 from $155. Here are the other notable premarket movers:

• Apple Inc. is upgraded to accumulate from neutral at Phillip Securities, a move that comes in the wake of the iPhone maker’s recent results. Shares are down 0.3%.
• BioNTech ADRs gain 4.7% after the vaccine maker reported a profit for the third quarter, exceeding analysts’ expectations of a loss. The firm also gave quarterly sales results that topped estimates.
• Birkenstock has received buy-equivalent recommendations from a majority of brokers initiating coverage after the so-called quiet period for analysts at firms that participated in the initial public offering. Shares are down 0.2%.
• Bumble slumps 7.1% after the Wall Street Journal reported that CEO Whitney Wolfe Herd is stepping down.
• Dish Network Corp. is down as much as 13% after a satellite television company reported revenue for the third quarter that missed the average analyst estimate and said its CEO Erik Carlson will resign effective November 12.
• Fortinet Inc. is downgraded to hold from buy at HSBC, a move that comes in the wake of the cybersecurity company’s recent results. Shares down 1.2% in premarket trading.
• Freshpet shares are up 12% in premarket trading, after the retailer of pet products reported third-quarter results that beat expectations and raised its full-year forecast.
• Hilton Grand Vacations falls 6% in premarket trading after the manager of timeshare resorts agreed to buy Bluegreen Vacations Holding for $75.00 per share in an all-cash transaction, representing a total enterprise value of approximately $1.5 billion, inclusive of net debt.
• Paramount Global slides 3.5% in premarket trading after BofA double-downgrades its rating to underperform from buy, on basis of no significant asset sales on the horizon for the media company.
• Tecnoglass Inc. shares fall 11% in premarket trading Monday after narrowing its full-year revenue outlook to a range of $835 million to $848 million, after previously forecasting between $830 million and $855 million.
• SolarEdge Technologies falls 0.3% as Wells Fargo adds to the slew of downgrades since the solar equipment supplier’s weak revenue forecast last week, cutting to equal-weight with uncertainties seen outweighing a discounted valuation.

Global equity markets are finding firmer footing after recent US data pointed to a cooling economy, leading traders to price lower rates by June. Ten-year Treasury yields, the benchmark rate for the global cost of capital, edged higher Monday, having slid in recent weeks from the 16-year highs touched last month.

“A better-than-expected US earnings season and the peak in interest rates are all pointing towards a year-end rally,” said Julius Baer strategist, Leonardo Pellandini, echoing a view that has rapidly become consensus when as recently as two weeks ago the Wall Street outlook was that a drop below 4,000 was in the cards. Which is not to say that the permabears are giving up: according to Morgan Stanley’s Michael Wilson who has been wrong most of the year, last week’s market bounce was more of a bear market rally than the start of a sustained upswing, particularly in light of a gloomy earnings outlook and weaker macro data.

More information about how policymakers see the trajectory of inflation may come later in week, with speeches due from Federal Reserve Chair Jerome Powell and Bank of England governor Andrew Bailey.

“There’s a bit more reason for investors to be more optimistic that the Fed is probably done with rate hikes, but one should not let one’s guard down,” Vasu Menon, managing director for investment strategy for OCBC Bank Singapore, said on Bloomberg Television. “If the economy proves to be more resilient, if inflation proves to be more stubborn, bond yields could go up once again.”

Here are the latest market observations from Goldman trader Rich Privorotsky:

Massive stop in of macro risk last week. Very visible in the PB stats with a huge jump in nets and some outsized flows to buy macro products (“Global book saw largest net buying since Dec ’21”) . It was really a beta chase and that is quite evident from the record amounts IWM calls, the ballooning of SPX calls and a corresponding jump in funding spreads.

L/S scrambling to lock in gains on short alpha bets drove portfolio destruction and the unwind of momentum across the market (later parts of last week saw some of the worst systematic alpha we’ve seen all year). Non-profitable tech 2 day return = 13.5%, 99th % of the last 5 years. Amazing to see that the market’s correlation to longer dated rates only go higher on the week (rolling 60-day basically back to the highs).

If you look at cross asset price action the market traded as if it had been delivered QE with bonds up/eq up, credit tighter/bonds up, Cyc/def up/bonds up and vol down/bonds up. To some extent that’s true, the QRA did curtail some of the bond supply overhang. As the dust has settled I’m not so sure just how big of an impact this really has, net duration might be platueing very temporarily but the change is really marginal. Market took NFP as Goldilocks print with economy slowing just enough to take pressure off the rate market and yet not enough to project recession. Last week had a lot of weak data with ISM manf, ISM services both coming in light of expectations. The market is repricing forward earnings expectations lower sharply in European and slightly so in the US. GIR actually decomposed the yield moves last a with the lion share driven by a  downgrade to growth and to a lesser extent policy (see side-note).

The technicals are supportive: From here CTA are still going likely to be buying more, L/S nets have already jumped considerably after last week (more could come but think a lot of the squaring now rear view), asset mangers have length to add as the CFTC positioning  data suggests they have trimmed exposure in SPX/NDX to early summer levels (but that’s a far cry from deeply underweight levels to start the year) and vol control probably will at some point start buying again but at at a gradual pace. Vol is back to a 14 handle so any exogenous risk premia for the multiple geopolitical conflicts has slipped to zero. Ironically SPX implied vs realized still shows pretty big downside to spot vol levels. 

European stocks struggled to gain traction as bond yields pared some of Friday’s post-payrolls drop. The Stoxx 600 was modestly red after rising for five straight days. Travel and mining are the best performing sectors. Ryanair shares rise as much as 6.8%, the most since January, after the budget airline announced its first ever dividend and reported second-quarter results that analysts called solid. Here are other notable European movers:

• Melrose Industries shares rise as much as 4.8%, the most since September, after its subsidiary GKN Aerospace signed a new agreement with GE Aerospace, widening a long-term partnership on the GEnx program
• JD Sports rises as much as 2.4% in London as Citi initiates with a buy rating, citing that it sees Asia-Pacific representing the largest growth opportunity for sporting-goods stocks
• Stadler Rail rises as much as 1.5% after Oddo raised its recommendation for the Swiss train maker to neutral from underperform, citing increasingly “rational” multiples after the stock’s plunge over the past two years
• Evotec drops as much as 7.8%, as RBC downgrades the German pharma company to sector perform on major near-term uncertainty from factors including life science sector headwinds
• K+S shares slide as much as 7.8% to a June low after the potash producer was cut to sell from neutral at UBS, citing a lack of earnings momentum and a challenging environment for the crop nutrient
• Telecom Italia shares slip after erasing gains of as much as 5.4% at the open. The Italian carrier’s board approved a sale of its land-line network to KKR for as much as €22 billion
• Heidelberg Materials falls as much as 3% as UBS downgrades the cement maker to neutral from buy, citing potential for larger and higher-multiple M&A activity, which could weigh on shares
• PostNL falls as much as 13%, the steepest drop since May 2022, after third-quarter results missed estimates. A recovery in parcel volumes failed to match expectations in the third quarter
• Oerlikon drops as much as 7.4%, after RBC cuts the polymer processing group to sector perform in note saying that third-quarter results were “sobering” and a cautious outlook won’t help investor confidence

Earlier in the session, the MSCI Asia Pacific Index advances as much as 1.9%, rallying the most since July 13, after US Treasury yields fell on Friday following data releases that showed the US service sector expanded at the weakest pace in five months, job growth moderated and the unemployment rate climbed to 3.9%.

• Hang Seng and Shanghai Comp conformed to the gains in the region with sentiment supported by weekend comments from the Chinese Premier who stated China will soon release a plan to promote high-standard institutional opening up in the Shanghai Free Trade Zone, whilst the Finance Minister said China will accelerate the issuance and use of government bonds. Traders are also cognizant of the Chinese Trade Balance data due for release tomorrow.
• Korea’s Kospi index surges as much as 4.1%, the most since January 2021, following the nation’s move to reimpose a full ban on short-selling for about eight months; Kosdaq +6.2%.
• Japan’s Nikkei 225 remained comfortably above the 32,500 level and hit levels last seen at the end of September with the Industrial sectors leading the gains, whilst Final Services and Composite PMIs were revised higher from the Prelim.
• Australia’s ASX 200 posted modest gains as the index is hindered by losses in heavyweight Energy and Mining sectors, although gold names outperformed as the yellow metal held onto recent gains, while Financials were boosted by Westpac post earnings. Participants also look ahead to tomorrow’s RBA decision in which 35/39 analysts polled by Reuters expect a 25bps rate hike.
• Indian stocks climbed for the third straight day, reflecting the widespread gains across Asia. The S&P BSE Sensex rose 0.9% to 64,958.69 as of 03:45 p.m. in Mumbai, while the NSE Nifty 50 Index gained by a similar measure to 19,411.75. Today’s gain in the Nifty was the third-best Monday performance so far this year. The NSE metal index was the top-performing sector, with 12 of its 15 member stocks advancing on the day. All sectors except the gauge for state-run banks ended in the green.    

In FX, the Bloomberg Dollar Spot Index was flat after the index on Friday posted its worst performance since mid-July. The Japanese yen is one of the weakest G-10 currencies, falling 0.2% versus the greenback; the USDJPY was boosted by short covering by leveraged funds; the yen pared losses after Bank of Japan Governor Kazuo Ueda cautiously hinted that gradual progress is being made toward achieving the bank’s inflation target “Another soft outcome on Japanese labor cash earnings will reinforce our view that BoJ policy tightening is a distant prospect,” Kristina Clifton, Commonwealth Bank of Australia strategist, wrote in a note, referring to data due to come out on Tuesday

In rates, treasuries are slightly cheaper across the curve amid deeper losses in core European rates, partially unwinding Friday’s sharp bull-steepening rally spurred by softer-than-expected October jobs report. US yields cheaper by up to 3bp across front-end of the curve which leads losses on the day, re-flattening 2s10s spread by around 1bp into early US session; 10-year yields around 4.59% with bunds and gilts lagging by 4bp and 3bp in the sector.  Scant economic data is scheduled for this week, while auctions resume Tuesday with $48b 3-year note sale, followed by 10- and 30-year offerings Wednesday and Thursday. Powell is slated to speak Wednesday and Thursday, among more than a dozen planned appearances by Fed officials this week. Dollar IG issuance slate already includes a handful of deals; forecasts for the week suggest around $40b of issuance on deck, higher than average, during economic data drought.

In commodities, oil prices advance, with WTI rising 1.8% to trade near $81.90. Spot gold falls 0.3%.

No US economic data scheduled for the session; ahead this week are trade balance, wholesale inventories and University of Michigan sentiment

Market Snapshot

• S&P 500 futures up 0.1% to 4,382.00
• STOXX Europe 600 little changed at 444.09
• MXAP up 2.0% to 159.84
• MXAPJ up 2.2% to 499.71
• Nikkei up 2.4% to 32,708.48
• Topix up 1.6% to 2,360.46
• Hang Seng Index up 1.7% to 17,966.59
• Shanghai Composite up 0.9% to 3,058.41
• Sensex up 0.9% to 64,930.04
• Australia S&P/ASX 200 up 0.3% to 6,997.38
• Kospi up 5.7% to 2,502.37
• German 10Y yield little changed at 2.69%
• Euro up 0.1% to $1.0745
• Brent Futures up 1.4% to $86.04/bbl
• Brent Futures up 1.3% to $86.01/bbl
• Gold spot down 0.3% to $1,986.56
• U.S. Dollar Index little changed at 104.93

Top Overnight News

• China will further expand market access and increase imports, its premier told a trade fair in Shanghai on Sunday, amid criticism from European firms who said they wanted to see more tangible improvement in the country’s business environment. RTRS
• China will accelerate the issuance and use of government bonds, state-run news agency Xinhua reported on Sunday citing an interview with new finance minister Lan Foan. The finance ministry will steadily promote the resolution of local government debt risk and increase efforts to better leverage the role of special bonds to boost the economy, Xinhua cited Foan as saying. RTRS
• Foreign firms yanked more than $160 billion in total earnings from China during six successive quarters through the end of September, according to an analysis of Chinese data, an unusually sustained run of profit outflows that shows how much the country’s appeal is waning for foreign capital. WSJ
• Chinese brokerages surged after authorities proposed to relax capital requirements for firms and signaled support for more acquisitions. BBG
• Shares in South Korea surged on Monday morning after the country’s financial regulator issued a blanket ban on short selling to appease retail investors ahead of parliamentary elections next year. FT
• Saudi Arabia and Russia reaffirmed that they will stick with oil supply curbs of more than 1 million barrels a day until the end of the year, even as turmoil in the Middle East roils global markets. The leaders of the OPEC+ coalition announced the plans in separate official statements on Sunday. Riyadh has slashed daily crude production by 1 million barrels and Moscow is curbing exports by 300,000 barrels, on top of earlier cuts made with fellow OPEC+ nations. BBG
• Trump leads Biden in nearly all the important battleground states according to a new poll (Biden leads among voters under 30 by just a single point and his advantage with Hispanic voters is down to the single digits). NYT
• Israeli troops encircled Gaza City, effectively cutting off the northern part of the strip from the south, an army spokesman said. Antony Blinken is in Turkey after making unannounced stops in the West Bank and Iraq. White House officials are frustrated at the scale of civilian casualties in Gaza. WaPo
• Hedge funds extended short positions on Treasuries to a record, CFTC data showed — just before smaller-than-expected US bond sales and weaker jobs data spurred a rally. Also on a collision course: Money markets have raised policy-easing wagers, betting the first Fed rate cut will be in June, with 100 bps of reductions by end-2024. BBG
• Consumer Discretionary was the most net bought sector on the US Prime book last week and saw the largest net buying since Dec ’21, driven almost entirely by long buys. Last week’s long buying in US Cons Disc ranks in the 93rd percentile vs. the past five years.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded higher across the board following the post-NFP tailwinds from Wall Street on Friday, with sentiment in the region also boosted by South Korea announcing a ban on stock short-shelling which catapulted the KOSPI index to gain over 4%. ASX 200 posted modest gains as the index is hindered by losses in heavyweight Energy and Mining sectors, although  gold names outperformed as the yellow metal held onto recent gains, while Financials were boosted by Westpac post earnings. Participants also look ahead to tomorrow’s RBA decision in which 35/39 analysts  polled by Reuters expect a 25bps rate hike. Nikkei 225 remained comfortably above the 32,500 level and hit levels last seen at the end of September with the Industrial sectors leading the gains, whilst Final Services and Composite PMIs were revised higher from the Prelim. Hang Seng and Shanghai Comp conformed to the gains in the region with sentiment supported by weekend comments from the Chinese Premier who stated China will soon release a plan to promote high-standard institutional opening up in the Shanghai Free Trade Zone, whilst the Finance Minister said China will accelerate the issuance and use of government bonds. Traders are also cognizant of the Chinese Trade Balance data due for release tomorrow.

Top Asian News

• China Premier said China will continue to promote opening up and market opportunities, and China will actively expand imports, and promote coordination of trading goods and services. He added China will further expand market access and remove barriers to foreign investment in manufacturing. China Premier said in the next five years, China’s imports of goods and services are expected to reach USD 17tln on cumulative terms, and China will soon release a plan to promote high-standard institutional opening up in the Shanghai Free Trade Zone, according to Reuters.
• China’s Finance Minister said China will accelerate the issuance and use of government bonds, and China will steadily promote the resolution of local government debt risks, according to Reuters citing state media.
• Alibaba’s (9988 HK/BABA) Ant Group has received Chinese government approval to release products powered by its ‘Bailing’ AI model to the public, according to Reuters.
• PBoC injected CNY 18bln via 7-day reverse repos with the rate at 1.80% for a CNY 658bln net daily drain, according to Reuters.
• China’s Shenzhen state asset regulator says if Vanke (2202 HK) faces extreme conditions it has sufficient liquidity to assist, via Reuters citing sources.
• South Korea to ban all stock short-selling through the first half of 2024 to help create a “level playing field” for both retail investors and institutional and foreign investors, according to financial regulators cited by Reuters.
• The Japanese government reportedly plans to submit an extra budget to Parliament on November 20th, according to Asahi.
• BoJ Governor Ueda reiterated that Japan’s economy is recovering moderately and is likely to continue recovering and repeated that the BoJ will patiently maintain monetary easing to support economic activity, according to Reuters. He said long-term interest rates may rise somewhat, but what’s important is to look at the real interest rate that takes into account inflation expectations. He added the BoJ will continue massive bond-buying even under the new operation decided last week and will conduct nimble market operations when interest rates rise, depending on the level and speed of moves of long-term rates. He said even if long-term rates come under upward pressure, he doesn’t expect the 10-year JGB yield to sharply exceed 1%, and BoJ needs to carefully weigh the effect of the policy in stimulating the economy and the potential side-effects under YCC. Ueda said the BoJ will keep Yield Curve Control and negative short-term rates intact until the sustained achievement of 2% inflation is foreseen. Ueda said the BoJ needs to have more conviction that wages will keep rising.
• BoJ Minutes from the September 21-22 meeting (two meetings ago) said members expressed the need to continue patiently with monetary easing to achieve the sustainable inflation target, alongside wage growth, according to Reuters.
• Japanese government is to hold a meeting with management and labor unions this month, via Nikkei.
• RBA Shadow Board calls for a rate hike to curb inflation, according to Canberra Times.

European bourses are in the red with trade thus far relatively cagey and contained after last week’s action and as the region awaits fresh catalysts, Euro Stoxx 50 -0.3%. Sectors are mixed with outperformance in Travel & Leisure post-Ryanair while the likes of Real Estate, Construction and Chemicals lag. Stateside, futures are modestly firmer in a continuation of Friday’s action going into a week that features numerous Fed speakers incl. Chair Powell and data prints such as Manheim & UoM; ES & NQ +0.2%. Berkshire Hathaway (BRK): Reported a +40.6% increase in Q3 operating earnings to USD 10.76bln (exp. 8.95bln), or around USD 4.96/shr per Class B share (exp. 4.42), and around USD 7,442 for each Class A share (exp. 6,625). Q3 revenue USD 93.2bln (exp. 88.1bln); Q3 insurance underwriting operating income USD 2.422bln (vs USD 1.247bln Q/Q), Q3 insurance investment income USD 2.47bln (vs 2.369bln Q/Q). Ended the quarter with USD 157.2bln of cash. Executed USD 1.1bln of share repurchases in Q3 (vs USD 1.4bln in Q2). Its outlook acknowledges challenges like the pandemic’s impact, geopolitical risks, and inflation pressures. +0.6% in pre-market trade.

Top European News

• ECB President Lagarde said the ECB is determined to bring inflation down to 2%. “According to our projections, we will get there in 2025”, according to an interview with Greek press conducted on 30th October and released on 4th November.
• UK PM Sunak will reportedly unveil a North Sea annual oil and gas licensing bill which will allow companies to bid yearly for new licences to drill for fossil fuels, according to the FT. “There is currently no fixed period between licensing rounds – but this would change under a bill to be announced in Tuesday’s King’s Speech… Ministers said projects would have to meet net-zero targets and claimed the policy would guarantee energy security.”, according to the BBC.
• UK Chancellor Hunt is facing calls from Tory MPs to lower taxes after figures revealed a multi-billion GBP improvement in public finances since March’s budget, according to The Times.

FX

• Buck continues to buckle after ‘dovish’ Fed, NFP and ISM misses as DXY slips into a softer 105.15-104.84 range, Pound, Euro and Franc all extend gains vs Dollar to form 1.2400+ triple top, probe 1.0750 and approach 0.8950 respectively.
• EUR/USD faces decent option expiry interest below 1.0800.
• USD/JPY capped by 21 DMA and expiries at 150.00 strike after BoJ Governor Ueda maintains that patient monetary easing is still needed.
• Aussie prepares for likely RBA hike, with AUD/USD holding above 0.6500 and AUD/NZD cross eyeing return to 1.0900.
• Loonie underpinned by a bounce in crude and hawkish line from BoC’s Rogers ahead of Canadian Ivey PMIs and Market Participants Survey.
• PBoC sets USD/CNY mid-point at 7.1780 vs exp. 7.2868 (prev. 7.1796)

FX

• Bonds hand back more of Friday’s post-payrolls and services ISM gains.
• Bunds towards the lower end of 129.90-130.38 band alongside EGB peers after stronger than expected German factory orders and not as weak as feared EZ Sentix index.
• Gilts and T-note near base of 94.78-95.15 and 108-02/07+ respective ranges.

Commodities

• Crude benchmarks are firmer and have continued to climb despite a lack of fundamental updates occurring in European hours, with the move primarily a recovery from Friday’s pressure and aided by geopolitics alongside a softer USD.
• As it stands, WTI Dec’23 and Brent Jan’24 contracts are at the top end of circa. USD 1.50/bbl parameters but remain well within Friday’s and by extensions last week’s parameters.
• Spot gold is little changed with the overall tone a tentative one as we await fresh catalysts and continue to analyse last week’s data and potential associated Fed implications. Finally, base metals are generally firmer owing to the constructive APAC tone.
• Saudi Arabia December OSPs: Arab Light prices maintained for Asia and the US, but large cut to NW Europe, according to Reuters: Asia +4.00/bbl (prev. +4.00/bbl) vs Oman/Dubai average, NW Europe +4.90/bbl (prev. +7.20/bbl) to Ice Brent settlement, US +7.45/bbl (prev. +7.45/bbl) vs ASCI.
• Saudi Ministry of Energy reaffirmed that Saudi Arabia will continue the voluntary cut of 1mln BPD through December, according to the state news agency SPA.
• Russia’s Deputy PM Novak reaffirmed Russia to continue the additional voluntary supply cut of oil and petroleum products exports by 300k BPD until the end of December this year. He said the voluntary cut decision will be reviewed next month to consider deepening the cut or increasing oil production, according to Reuters.

Geopolitics: Israel-Hamas

• Israeli PM Netanyahu said there will be no ceasefire until hostages are returned, according to Reuters. Israel’s army says it has cut the Gaza Strip in two, according to AFP.
• Four civilians, three of them children, were killed by an Israeli airstrike in south Lebanon on Sunday evening, according to Sky News.
• Hezbollah said it fired multiple Grad rockets at the northern Israeli town of Kiryat Shmona in retaliation for an Israeli airstrike in South Lebanon, according to Reuters.
• Hezbollah lawmaker Fadallah said the Israeli strike which killed children is a “dangerous development”, and will have repercussions, according to Reuters.
• Lebanon said it will submit a complaint to the United Nations over the killing of civilians including children in an Israeli strike in South Lebanon, according to the Lebanese Foreign Minister cited by Reuters.
• Israeli military spokesperson said their attacks in Lebanon are made based on intelligence information, according to Reuters.
• Evacuations from Gaza to Egypt through Rafah crossing were reportedly suspended since Saturday after Israeli strikes on ambulances, according to Egyptian official sources cited by Reuters.
• Qatar’s Foreign Ministry spokesperson said the Hamas political office in Doha will remain open so long as it can be used towards peace, and there’s no reason to close it now, and added that Qatar is working with Egypt to ensure Rafah crossing remains open, according to Reuters.
• Egyptian Foreign Minister Shoukry says he cannot justify Israel’s actions against Palestinians as self-defence, according to Reuters.
• Diplomatic adviser to the UAE President said Israel’s response to the October 7 attack is disproportionate, and added the Palestinian issue is an Arab issue, according to Reuters.
• Saudi Arabia strongly condemned the statement issued by an Israeli minister regarding dropping a nuclear bomb on the Gaza Strip, according to Reuters.
• US Central Command announced that the Ohio-class nuclear submarine has arrived in the Middle East.
• US President Biden said “yes” when asked if there has been any progress on a humanitarian pause in Gaza, according to Reuters.
• US Secretary of State Blinken said the US is intensely focused on bringing home hostages from Gaza. He said a humanitarian pause could advance the prospect of getting hostages back, while adding the current flow of aid to Gaza is grossly insufficient, according to Reuters.
• US Secretary of State Blinken told Palestinian leader Abbas that the Palestinian Authority should play a central role in what comes next in Gaza, according to a Senior State Department Official cited by Reuters. Blinken made clear that Palestinians must not be forcibly displaced and reiterated US commitment to advancing dignity, and security for Palestinians and Israelis alike, according to Reuters.
• Iran’s Defense Minister warned the US it “will be hit hard” if it does not implement a ceasefire in Gaza, according to Tasnim cited by Reuters. Iran’s Vice President said the tragedy in Gaza cannot be ignored, according to Reuters.
• The Turkish Foreign Minister reportedly discussed the situation in Gaza with the Egyptian and Jordanian counterparts. They exchanged views on stopping attacks on civilians in Gaza and achieving an urgent ceasefire, according to a Turkish diplomatic source cited by Reuters.
• French Foreign Minister said the humanitarian conference on November 9th will cover the respect of international law, and will call for a concrete mobilization for the civilian population in Gaza, according to Reuters.
• TotalEnergies (TTE FP) has raised security vigilance for its operations in the Middle East, according to Reuters.

Geopolitics: Others

• Armed factions claim to target Ain al-Assad base in Iraq with 4 missiles, according to Sky News Arabia citing their correspondent.
• US Secretary of State Blinken in Iraq, said he had a very good and candid conversation with the Iraqi leader and said attacks on US personnel are a matter of Iraqi sovereignty and against its own interests, according to Reuters.
• The Turkish military conducted air strikes against Kurdish militants in northern Iraq, hitting 15 targets, according to the Defense Ministry cited by Reuters.
• Russian Defense Ministry said a new atomic submarine conducted a test launch of a Bulava intercontinental missile in the White Sea, according to Reuters.
• Belarus Foreign Ministry summons Polish Charge D’Affaire over violation of its airspace on Nov 2nd, according to a statement.
• Russia is moving to expand its military presence in eastern Libya, according to Bloomberg.
• Japanese PM Kishida said Japan will continue to contribute to enhancements of Philippine security capabilities and stated that in the South China Sea, a trilateral cooperation to protect the freedom of the sea is underway, according to Reuters.
• China’s Defense Ministry, in response to Canada accusing Chinese fighter jets of ‘unsafe interception,’ states that China’s response was professional while adding Canada’s move violates China’s laws and jeopardizes China’s security, according to Reuters.
• Iraqi PM arrived in the Iranian capital as part of an official visit, according to Asharq News.
• Russian President Putin has decided to run for President again in 2024, via Reuters citing sources; Russian President Putin has not announced he would run for another presidential term and no campaign yet, via Peskov.

US Event Calendar

• Nothing major scheduled

DB’s Jim Reid concludes the overnight wrap

The week after payrolls is usually very light on US data and this rings true this week. The highlight for us will probably be today’s US Senior Loan Officers Opinion Survey (SLOOS) even if it’s unlikely to be an immediate market mover. Bank lending standards are in deep recessionary territory and the longer they stay there the more risk that refinancings won’t happen (or come at a much higher cost) which will slow the economy and potentially cause accidents. For now a combination of excess savings, private markets, and the lack of need for refis could have weakened the usual impact on the economy, even with the typical lag. So the trillion dollar question is can the economy get by long enough for bank lending standards to gradually improve to normal levels? I’m sceptical of this but we will see if any trends emerge today at 7pm London time.

The big story of last week was the epic rally in bonds and equities. It seems our seasonal chart we published on October 27th (link here), that basically said the bottom in US equity markets in H2 occurs on that day (using nearly 100 years of data), has picked the local lows perfectly. The S&P 500 (+5.85%) had its best week in a year and 10 and 30yr US yields rallied -26.4bps and -24.8bps respectively and had their best week since March and January. For Treasuries there was much talk about the QRA (quarterly refunding announcement) driving the rally. There’s no doubt that this was the initial catalyst but the rally had 4 stages. First the QRA, then the weak ISM, then the dovish Fed (all on the same day), and then finally a weak payrolls report on Friday which we’ll discuss at the end when we briefly recap the past week. The one thing we’ll say here is that the Sahm Rule got a little closer to being triggered with US unemployment (3.9%) now 0.5pp above its lows in April. The trigger is the 3m moving average being 0.5pp above the 3m moving average lows of the last 12 months and when this happens the US economy has always been in, or about to be in, recession (using post WWII data). It is currently 0.33% above the lows. So one to watch. The fascinating thing about markets is that the path to a hard landing is often via the appearance of a soft landing first. So we’re in this window where the data is softening but if it only ends up softens a bit, and then stabilising, then its great news. However if it’s the start of something bigger it’s not. The former scenario won out last week as you’ll see in more detail at the end in our review.

Moving onto this week, outside of the SLOOS, the week is full of Fed speak stored up from the Fed blackout period and with the FOMC being firmly behind us. See DB’s Brett Ryan week ahead here for more details on the Fed speakers but the main one is Powell at the IMF conference on Thursday. Last Wednesday he talked about tighter financial conditions doing some of the Fed’s work for them. After the huge 60/40 rally since, will he still feel the same way by Thursday? Elsewhere in the US, tomorrow’s trade numbers are of minor interest and then Friday’s University of Michigan’s consumer confidence is the other main highlight with focus on the 1yr and longer-term inflation expectations. The former spiking from 3.2% to 4.2% last month and more importantly, the latter picking back up a couple of tenths.

Moving back across the pond, markets will focus on German factory orders (today) and industrial production tomorrow. Other notable indicators due include Italian retail sales (Wednesday) and industrial production (Friday), the trade balance for France (Wednesday), the ECB Consumer Expectations Survey (Wednesday), and UK monthly GDP (Friday).

In China, all eyes will be on the inflation data (Thursday) following last week’s misses on the PMIs. Current median estimates on Bloomberg suggest the CPI is expected to fall back into negative territory (-0.1% YoY vs 0.0% in September) and the PPI is also seen falling (-2.7% vs -2.5%). Prior to the inflation prints, there will also be trade balance data tomorrow.

As well as Powell speaking this week, ECB President Lagarde (Thursday) and BoE Governor Bailey (Wednesday) will all make appearances. Staying with central banks, the RBA have their latest meeting tomorrow with our economists (more here) expecting a +25bps hike.

In corporate earnings, with more than 400 of the S&P 500 members having already reported, things will slow down a bit until Nvidia report on November 21st. The key names this week are in the day-by-day week ahead at the end. See our equity strategists’ global review of earnings season so far here.

Asian equity markets are rallying this morning following Western markets on Friday. The KOSPI (+4.20%) is leading the way and is trading sharply higher after South Korea reimposed a ban on short selling until the end of June 2024. Elsewhere, the Nikkei (+2.41%) is also climbing after returning from a long weekend while the Hang Seng (+1.69%), the CSI (+1.34%) and the Shanghai Composite (+0.88%) are also trading higher. US stock futures are broadly flat with US Treasuries 0-2bps higher across the curve.

Early morning data showed that Japan’s services activity expanded at the softest pace this year as the final estimate of the au Jibun Bank services PMI fell to 51.6 in October from 53.8 in September. Meanwhile, the final composite PMI was at 50.5 in October, down from 52.1 in September.

Staying in Japan, BOJ Governor Kazuo Ueda has said this morning that the central bank is gradually making progress towards its inflation target as Japanese companies are becoming more proactive in setting prices and wages. However, he added that it was still insufficient to justify a pivot away from the central bank’s ultra-loose policy.

In commodities, oil prices are gaining ground in Asia with Brent futures up +0.47%, trading at $85.29/bbl after Saudi Arabia & Russia, two top oil exporters, reaffirmed that they will continue with their oil supply cuts of more than 1 million barrels a day until the end of the year.

Looking back on last week now, Friday saw the release of US nonfarm payrolls for October. T he headline result came in below expectations at 150k (vs 180k expected), a significant drop from the revised 297k (previously 336k) in September. The unemployment rate drifted upwards to 3.9% (vs 3.8% expected), and average hourly earnings was at 0.2% (vs 0.3% expected). In sum, the data was weaker across the board, and was taken as further evidence of a cooling of the US economy and labour market.

Off the back of this, markets moved to price in meaningful and earlier cuts to the Fed rate. The rate priced in for the December 2024 meeting fell -19.8bps on Friday, and -22.3bps week-on-week, bringing the expected rate to 4.345%. In other words, c. 100bps of cuts are now priced until 2024 year-end. This Fed repricing saw the 2yr Treasury yield fall by -15.0bps on Friday, and -16.2bps over the week, reaching their lowest level since early August at 4.84%. Friday’s rally was less pronounced on the long-end, with the 10yr yield down -8.7bps and 30yr down -3.4bps. B ut longer-dated bonds outperformed over the week, with the 10yr down -26.4bps to 4.57%, and the 30yr down -24.8bps, their strongest weekly rallies since March and January respectively. Over in Europe, bonds saw slightly smaller gains, with 10yr German bunds down -18.7bps week-on-week (and -7.2bps on Friday).

The jobs data underpinned Friday’s rally in equity markets, with the S&P 500 up +0.94%. Friday marked the fifth consecutive day of gains for the index, with an overall weekly increase of +5.85%, its best week since this time last year. Tech also enjoyed a strong week, after the NASDAQ recorded a weekly gain of +6.61% (and +1.38% on Friday). But it was the small-cap Russel 2000 index that saw the largest outperformance, with a +7.56% weekly gain its largest since early 2021 (+2.71% on Friday). Friday’s rally did not falter in the face of a speech from Lebanese group Hezbollah, which emphasised that further conflict by the group would ‘depend on escalation’. On the whole, the speech was interpreted as limiting the risks an immediate broadening of the conflict. After the strong week, the VIX equity volatility measure fell -6.4pts week-on-week (and -0.8pts on Friday) to 14.9, its largest weekly decline since March 2022. Over in Europe, the STOXX 600 posted a more modest gain of +3.41% (and +0.17% on Friday).

Turning to commodities, oil prices declined for the second week in a row amid limited signs of escalation in the Middle East and softer economic data. Brent crude dropped -2.26% on Friday, and -6.18% on the week to $84.89/bbl. WTI crude fell -5.88% week-on-week (and -2.36% on Friday) to $80.51/bbl. Gold fell -0.68% on the week, but jumped +0.38% on Friday.

Finally in FX, lower rates and easing perceptions of geopolitical risk weighed on the dollar, with the broad dollar index seeing its largest daily and weekly declines since mid-July (-1.04% on Friday and -1.44% week-on-week).

Shares of Tesla in New York are higher in premarket trading after several reports said the company plans to reveal an affordable electric vehicle to be produced at its Giga Berlin-Brandenburg plant in Germany. 

Reuters spoke with a source familiar with plans to build a 25,000-euro ($26,838) car at its Berlin-Brandenburg plant. There was no further information about the production start date or any specs on the new vehicle, which is planned to be the cheapest offering for the mass EU market. Currently, Tesla’s least expensive car in Germany is the Model 3, starting at €42,990.

According to autos research firm JATO Dynamics, the average price of an EV in Europe in the first half of 2023 was around €65,000. The steep rise in auto borrowing rates plus high vehicle prices has crushed demand for EVs. 

Last Thursday, X account Gigafactory Berlin News first revealed the upcoming €25,000 EV – days before Reuters. 

#GigaBerlinBrandenburg@elonmusk announced today during his visit to GigaBerlin that a 25k € Tesla will be built here.🔥🚗 pic.twitter.com/EmdYXQAUOS

— Gigafactory Berlin News (@Gf4Tesla) November 3, 2023

EV blog InsideEVs said Tesla CEO Elon Musk visited Giga Berlin last Friday and told staff about the new affordable car. However, the blog said, “We tried to find additional confirmation of this report, but apparently, the speech was limited only to employees and there is no video.” 

Musk had long planned to make a more affordable EV. He said in 2018 that a low-cost version of a car would take three years to develop, admitting it was “really tough” to produce because of the auto industry’s economics and competition. In 2020, Musk pushed the affordable EV timeline three more years. 

Tesla shares are up 2% in premarket trading. 

The news of the affordable EV could be a move by Musk to crush competition in an ongoing price war that Tesla appears to be winning. Some EV-makers might go bankrupt in the process while they attempt to compete with Tesla. 

By Eric Peters CIO of One River Asset Management

“President Biden Issues Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence,” announced the White House homepage in large, bold font [here].

It’s a rather weak name for such an important order, probably the product of a committee, or some first-year McKinsey consultant. So, I asked GPT-4 for a new name, perhaps biblical, playing on the theme of Eve and the forbidden fruit from the tree of knowledge, or maybe something Orwellian, like the deficit-fueled extravaganza they called the Inflation Reduction Act. And GPT-4 suggested the “AGI Safety Act.” 

“Imagine a technological breakthrough that will give its inventor power over humanity and can be used for both extreme evil and good,” I asked GPT-4.

The Bletchley Declaration – a pledge of international cooperation in the quest to regulate frontier Artificial Intelligence – had just been signed by 28 nations, including the US, China, Japan, the EU, UK, India, Brazil, Canada, Australia, UAE, and Saudi Arabia [here].

“Assume many players are investing massively to be first to make the breakthrough,” I continued typing in GPT-4’s neural interface.

“Will it be possible to coordinate their behaviors so that the breakthrough is used for good and spread across humanity in a way that is fair to all?” I asked.

“And how can this be possible, when the risks of losing this competition are potentially existential, while the rewards are so great?”

I was just curious.

OpenAI’s Sam Altman was at the UK’s Bletchley conference, as was Elon Musk, Salesforce’s Benioff, Google’s Manyika and Hassabis, and Arm’s Haas.

Each major government had senior representatives. Naturally, Putin couldn’t make it. Nor any Ayatollahs. And the North Korean kid can’t stomach long train trips.

“Achieving coordination among competing players for the common good, especially when the stakes are incredibly high, is indeed a challenging endeavor. However, with the right combination of diplomacy, strategic planning, and incentives, it might be possible. Here’s a strategy to navigate such a situation,” answered GPT-4.

It gave me a sensible ten-point plan that humanity has used to address nuclear proliferation.

I asked if there are other examples.

GPT-4 highlighted the human genome project, ozone layer depletion, climate change via the Paris Agreement, and global health emergencies via the WHO which I think must have been a joke.

And this suggests that in all human history, there is just one example, which was our unsuccessful effort to prevent a nuclear arms race.

Which is surely the direction the AGI sprint is headed. And GPT-4 reluctantly agreed. 

Via SchiffGold.com,

The boom in AI could mean a boom in industrial demand for precious metals in 2024.

Metals Focus, an independent precious metals research consultancy, released a note recently that said it expects the increased demand for chips powering AI technology to drive “widespread support for a range of precious metals bearing components.”

Industrial and tech demand for precious metals has been muted this year due to sluggish global economic activity. For instance, the demand for gold in the tech and industrial sector was down 3% year-on-year in the third quarter with offtake in the electronics sector dropping by 4%.

Metals Focus said increased demand due to the evolution of AI could reverse this trend in the coming year, not just for gold, but also for silver, platinum, and palladium.

Expected upside from several applications that are gradually maturing should help support the recovery in industrial offtake next year.”

Metals Focus projects that shipping growth for AI servers and switches will rise by double digits over the next few years to keep up with the evolution of AI algorithms. This will stimulate precious metals demand.

Demand is expected to rise for “platinum alloys used in chip manufacturing, silver-palladium Ag-Pd multi-layer ceramic capacitors (MLCCs) in high power components, gold bonding wire in chip and memory packages, gold plating in printed circuit boards and palladium plating on lead frame.”

AI-driven demand will likely have the most significant impact on the silver market. Silver possesses the lowest electrical resistance among all metals at standard temperatures and is a vital component in many electronic applications. Tech and industrial applications account for more than half of global silver demand.

The silver market already faces the potential for significant supply constraints due to growing demand in the green energy sector. Silver demand was at record levels in 2022 and will likely run hot over the next several decades.

According to a research paper by scientists at the University of New South Wales, solar manufacturers will likely require over 20% of the current annual silver supply by 2027. And by 2050, solar panel production will use approximately 85–98% of current global silver reserves.

Industry/tech only represents about 7%  of global gold demand, but this still amounted to just over 75 tons of gold in the third quarter.

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Anheuser-Busch InBev’s studio chief departed the company and cited the Bud Light backlash as one reason why, she confirmed this week.

In April, Bud Light faced significant backlash and a boycott when it released personalized beer cans that feature a transgender social media influencer and activist. In the meantime, sales of the beer have dropped for consecutive weeks and appear to show no signs of abating.

Lauren Denowitz, the now-former studio head, wrote on social media that she has left the firm’s division and made note of the company’s branding “crisis.”

“With the Bud Light situation earlier this year, the company experienced its largest brand crisis in its several-hundred-year history. The impacts are being felt far and wide,” she wrote on LinkedIn, adding that the firm is “prioritizing resourcing shorter-term impact initiatives versus longer-lead-time strategic bets like brand entertainment.”

“While I am disappointed that a promising initiative with such momentum was cut short, I am incredibly grateful for the opportunity I was given,” Ms. Denowitz said.

“They want that beer without a debate. We are taking the feedback and working hard toward our consumers’ business every day across the world,” Mr. Doukeris added, echoing comments he made weeks after the controversy erupted earlier this year.

Recent Bud Light advertising campaigns, he added, “are all about bringing people together over a beer for the moments that matter” and claimed that a “recent survey found that over 40 percent of lapsed Bud Light drinkers said that they are now more open to come back to drinking Bud Light.”

Anheuser-Busch said that its U.S. revenues declined by 13.5 percent for the earnings quarter, while volumes dropped by 16.6 percent. That drop was driven “primarily due to volume decline of Bud Light.”

“Approximately two-thirds of this decrease attributable to market share performance and the remainder from productivity loss, increased sales and marketing investments, and support measures for our wholesaler partners,” the company said in a release this week.

The decline marks the second quarter in which the Bud Light backlash has affected its U.S. sales. In August, Anheuser-Busch said its American division had recorded a drop in profit amid the backlash, which caused the dethroning of Bud Light from its position as the top-selling beer in the United States for more than 20 years.

U.S. dollar sales of Bud Light were down 29 percent in the four weeks that ended on Oct. 21 compared to sales a year before that, according to Nielsen data compiled by Bump Williams Consulting, as reported by The Associated Press. Year-to-date sales are down about 19 percent.

It all started when Bud Light sent a commemorative can to transgender influencer Dylan Mulvaney in early April. Conservative celebrities and commentators reacted swiftly, with some calling for a consumer boycott of the brand as images of the Mulvaney can were displayed across social media.

“I’m proud to announce we are back in business together,” UFC chief executive Dana White said in a statement. “There are many reasons why I chose to go with Anheuser-Busch and Bud Light, most importantly because I feel we are very aligned when it comes to our core values and what the UFC brand stands for.”

The financial terms haven’t been disclosed, but a person familiar with the partnership told CNBC in October that the deal is above $100 million.

Mr. White, meanwhile, recently told Fox News host Sean Hannity last week that the deal isn’t about revenue. “There are many other things that are important to me other than just the money,” he said. “And the people that were all involved in this negotiation, on every side, absolutely, positively know that my choice was not determined by money.”

The US Navy revealed it had recently conducted a live weapons firing exercise in the surrounding waters of the Arabian Peninsula using an unmanned vessel equipped to deploy loitering munitions – drones designed to self-destruct upon striking a target – which successfully eliminated a mock enemy target. 

The exercise was called “Digital Talon” – and performed by the US Naval Forces Central Command (NAVCENT) on Oct. 22. It involved unmanned surface vehicles (USVs) and loitering munitions. The service said the exercise “constituted the first use of lethal munitions from USVs in the Middle East region.” 

A video released by the Navy shows NAVCENT’s Task Force 59, the Navy’s first Unmanned and Artificial Intelligence Task Force, firing loitering munitions, or “kamikaze drones,” from the USV. The drones with a built-in munition (warhead) struck a simulated hostile forces target in the waters of the Arabian Peninsula.

U.S. Naval Forces Central Command (NAVCENT) is advancing lethality and the combat capabilities of unmanned surface vehicles during Exercise Digital Talon in international waters @US5thFleet, Oct. 23. During the exercise, NAVCENT’s Task Force 59, the Navy’s first Unmanned and… pic.twitter.com/N9jkv4vpeM

— U.S. Central Command (@CENTCOM) November 2, 2023

“We are focused on the operational application of new, cutting-edge unmanned systems and artificial intelligence technologies,” Vice Adm. Brad Cooper, NAVCENT commander, wrote in a statement.

Cooper continued, “Last month, we integrated 12 different unmanned platforms with manned ships for ‘manned-unmanned teaming’ operations to conduct enhanced maritime security operations in the waters surrounding the Arabian Peninsula.” 

The exercise comes as the Navy enhances surveillance and security around the Strait of Hormuz, where at least 20% of the world’s oil (nearly 17 million barrels a day) plus 18% of liquified natural gas transits daily. 

Iran has shown hostility in the region against commercial and military vessels transiting the strait – also, tensions between Israel and Hamas risk sparking a broader conflict throughout the Middle East. 

Authored by Will Jones via The Brownstone Institute,

In one of the more bizarre moments at the Covid Inquiry so far, Professor Neil Ferguson, the architect of Britain’s lockdown, today denied ever calling for the first national stay-at-home order – in the latest instance of lockdown backpedalling. 

The Mail  has more.

Professor Neil Ferguson’s terrifying March 2020 models warned that 500,000 Brits would die unless tougher action was taken to curb the virus’s spread.

It spooked Boris Johnson into adopting draconian restrictions that saw the country told they “must stay at home.” Vaccines — considered the only safe route out of the pandemic — were still months away from being deployed.

But Professor Ferguson, who quit his role as a SAGE adviser two months after being caught breaking social distancing rules to meet his married lover, today insisted he didn’t tell officials to plunge the country into a lockdown.

He told the UK COVID-19 Inquiry that the situation was “a lot more complex.”

The inquiry is in its second module, which is examining core UK decision-making and political governance.

Hugo Keith KC asked: “Do you feel that you did confine yourself to the provision of scientific advice, or did you become, despite your best endeavours, irrevocably involved in determination of policy?”

Imperial College London’s Professor Ferguson, nicknamed ‘Professor Lockdown’ for his infamous modelling, said it was a “difficult question to answer.”

He said: “I know I’m associated very much with a particular policy.

“But as you’ll be aware from the evidence I’ve given in my statement and statements of evidence, the reality was a lot more complex. 

“I don’t think I stepped over that line to say ‘we need to do this now.’

“What I tried to do was at times, which was stepping outside the scientific advisory role, to try and focus people’s minds on what was going to happen and the consequences of current trends.”

The epidemiologist drew heavy flak for his team’s modelling on the Covid pandemic. 

Their work suggested 500,000 Brits would die if nothing was done to stop the spread of the virus and there would be 250,000 deaths if two-thirds caught Covid.

Worth reading in full.

Ross Clark in the Spectator says that perhaps the most remarkable revelation from Professor Ferguson’s inquiry evidence is that “he spoke to and emailed Ben Warner at No. 10 on March 13th, three days before the Imperial paper [Report 9] was published.”

Warner was a data scientist brought into Downing Street by Dominic Cummings and whom Cummings later credited for inducing pandemic alarm in No. 10, so Ferguson contacting him directly beforehand is significant. 

However, Clark notes that in his email to Warner,

“Ferguson then stopped short of damning the Government’s policy of mitigation rather than suppression. In fact, if the Government decided to continue with mitigation, he wrote, ‘there is a rational basis to that decision which I would say the science supports.’ However, he added, the Government should make it clear how many people were likely to die.

“Intriguingly, Ferguson then went on to write: ‘This event is in the natural disaster category and the cure (e.g. massive social distancing, shutdowns) could be worse than the disease.’ In other words, he had at least considered the possibility that lockdowns could cause more damage than they were worth – but neither he nor anyone else seems to have tried to model this.”

Republished from DailySceptic

Authored by Doug French via The Mises Institute,

Bloomberg reports that price inflation in Turkey was more than 60 percent in September. The 61.5 percent reading was released by the Turkish government’s statistical office.

Being on the ground in Turkey for Hans-Hermann and Gülçin Hoppe’s Property and Freedom Society meeting, I can say the vibe was not hyperinflationary. The shelves are not empty and the port city of Bodrum is booming.

Professor Hoppe told the crowd Bodrum has grown from a population of fifty thousand to a million for the whole peninsula.

No matter the destruction to the Turkish lira, money keeps pouring into peninsula real estate, watercraft, and businesses.

“According to statistics by the Turkish Statistical Institute, the average property price in Bodrum in 2021 was around $490 per square foot,” wrote Spencer Elliott for Forbes this past summer.

“Over the last decade, property values have increased dramatically, with the total valuation of the real estate transactions in Bodrum rising from $892 million in 2010 to over $2.1 billion in 2020.”

I wrote in 2011, “In 1966, one US dollar bought 9 lire. By 2001, a dollar bought 1.65 million lire. Four years later, six zeros were lopped off the lira and a dollar equaled 1.29 new Turkish lire. Today, a dollar can be traded for around 1.60 lire.”

This year (2023) a single US dollar fetches twenty-five lire at the currency shops in Bodrum.

Government jiggery-pokery with the currency is a way of life in Turkey. Numerous episodes are mentioned by the eminent scholar the late Norman Stone, who was a frequent speaker at the Property and Freedom Society, in his book Turkey: A Short History. But it was not paper and zeros that were manipulated. Writing about Constantinople in 1651, Stone explained that the one hundred thousand local civil servants “were paid in copper money and were expected to pay their taxes in silver . . . [which] brought about a revolt of the guilds.”

But today’s Turkey, which now wants to be known as “Türkiye,” is not Venezuela or Zimbabwe. A trip over the hill from Bodrum to Merkez Mah, Çökertme Cd, Yalıkavak Marina revealed Dior, Gucci, and other high-end shops a sidewalk away from one multimillion dollar yacht crammed next to another. Dinner at Salt Bae’s Nusr-Et Bodrum was had amongst beautiful people, with amazing cuisine, tableside flair bartending, and an unforgettable sunset into the shimmering waters of the Aegean Sea.

Hyperinflation seemed pretty good.

Turkish restaurant cuisine has changed subtly over the seventeen years of the Property and Freedom Society. Döner kebab was once offered everywhere. It is a type of kebab using a vertical, constantly rotating spit to slow-roast the meat. The meat is sliced off of it in chunks as it rotates.

Now there are fewer Döner kebabs, and restaurants in the Bodrum harbor area are advertising hamburgers. American burger darling Shake Shack even has a location in the Istanbul airport amongst the duty-free shops that appear every few steps. And at the new, immense Istanbul airport, a passenger must take plenty of steps.

As always, I indulged myself in the Turkish haircut experience, going to the same neighborhood barber I’d patronized on previous trips. Of course, the price reflected the inflation, three hundred Turkish lire. In 2012, the same haircut, nose and ear waxing, and shoulder massage went for twenty Turkish lire, which was twelve dollars at the time. Today’s three hundred lire equals that same twelve dollars.

Other conference goers found a barbershop down near the docks and were charged fifty dollars for the above-mentioned services plus a straight-edge shave. One wonders if it was a bit of selective pricing. I’ve never noticed barber service pricing being posted in a Turkish barber shop so a deal should be made up front.

According to Bloomberg, “Turkey’s inflation print for September sets the stage for a front-loaded move from the central bank to tame price gains. Underlying price pressures signal a higher trajectory for inflation, which we now see peaking at 73 percent in 2Q24, up from our earlier call of 70 percent.”

One knowledgeable Bodrum local confidently said the actual inflation rate was more like 160 percent.

The national minimum wage was raised 34 percent in July to $483 (11,402 lire) monthly, Reuters recently reported.

Labor minister Vedat Isikhan said, “The minimum wage assessment commission completed its work with an agreement between the workers and employers.”

The minimum wage was raised 100 percent last year.

The Turkish central bank bumped its benchmark one-week repo rate by 5 percentage points to 30 percent late last month to slow down the inflation rate.

The rate rise came just weeks after President Recep Tayyip Erdoğan, who once called high interest rates the “mother and father of all evil,” publicly embraced “tight monetary policy,” reported the Financial Times.

Inflation always hits low-income earners the hardest, as they must spend most of their income on food, gas, and rent. Remember the monthly minimum wage from above – it is enough to buy eighty-two gallons of gasoline, which currently goes for 138.849 lire per gallon, and nothing else.