January 2021 is a month for the history books. The month began with the Trump mob storming the US Capitol building, that alone was good enough for the history books.

But it ended with the Reddit mob storming the Wall Street hedge funds, completely trashing those daft enough to be short obscure, thinly traded stocks.

As an aside, how did the hedge funds come to be short 140 percent of GameStop’s float? Surely Wall Street wasn’t allowing “naked” shorting? They wouldn’t do that would they?

By the end of the week, the Reddit mob was pressing their luck in commodities, forcing the price of silver futures to jump by 99 cents on Friday. A nasty shock for the silver shorts. (Are the 1970s volatile commodity markets about to return? And if they do, what happens to inflation and the Fed’s promise of zero interest rates forever?)

Sideshow or main event? GameStop stock ride weighed as bubble warning

January 29, 2021 10:51 PM By Lewis Krauskopf

NEW YORK (Reuters) - Some investors are growing concerned that wild swings in GameStop and other stocks driven by small-time traders could be fresh signs of overexuberance that foreshadow volatility for the broader stock market.

GameStop shares closed up 400% for the week after the video game chain’s stock became a battleground between retail traders and Wall Street professionals, a tussle that captivated investors the world over.

Some market-watchers see those massive gains, as well as the moves in American Airlines and other heavily shorted stocks, as a sideshow in a rally underpinned by Federal Reserve support, anticipated coronavirus relief spending and expectations that vaccines against COVID-19 will help the U.S. economy rebound later this year.

Fed Chairman Jerome Powell earlier this week pushed back on suggestions that the central bank’s super-low interest rates and massive bond purchases were creating asset bubbles.

But those comments failed to quell some investors’ worries that the Fed’s monetary policy has encouraged excessive risk-taking across broader markets: The S&P 500 is up 66% since March and stocks stand near their highest valuations in two decades.

The action in GameStop and other stocks “definitely gives us some cause for concern,” said James Ragan, director of wealth management research at D.A. Davidson. “At the very least, you have to consider that there’s a chance of a market correction.”

The moves also drew some comparisons to the internet stock mania two decades earlier.

“Just the fact that you have a group of investors that are really chasing abnormal gains, that’s what is reminiscent of the dot-com bubble,” Ragan said.

Some barometers of general over-exuberance are already flashing: Citi said its “Panic/Euphoria” model is in “elevated euphoric territory.” And the latest fund manager survey from BofA Global Research noted that allocations to cash had dropped rapidly, indicating that investors are putting more funds into riskier assets.

The frenzied trading dominated the news on Wall Street this week, even as Apple Inc, Microsoft Corp and other corporate heavyweights reported quarterly results. The S&P 500 fell 3.3% for the week, with trading volume surging above 24 billion shares on Wednesday, well above the 14.4 billion-share average of the past 20 sessions. The CBOE volatility index closed above 30 points this week for the first time since early November.

One potential catalyst for further volatility could come if hedge funds are forced to sell out of positions in order to cover failed short selling bets, although it was unclear whether there would be enough of such selling to create a broad risk to equities.

Already, some short-selling hedge funds appeared to be changing their approach. Short seller Andrew Left, whose company Citron Research was one of the hedge funds to spark this week’s battle with small-time traders over GameStop Corp, said in a YouTube video on Friday that his company would no longer publish short selling research.

Others said the ramped-up activity of retail investors - who last year helped drive rallies in shares of Tesla Inc and other names - could in itself be the latest sign of market frothiness.

“When you think about market bubbles, the last players that jump on board are retail, and that is generally what is happening right now,” said Mike Mullaney, director of global markets research at Boston Partners.

https://www.reuters.com/article/us-usa-stocks-weekahead/sideshow-or-main-event-gamestop-stock-ride-weighed-as-bubble-warning-idUSKBN29Y322

Below, Bloomberg gives the best explanation of the past week’s casino fun and games.

“This week markets were fixated by an astronomical run-up in shares of GameStop Corp., which at one point were up 2,000% in less than a month. Much of the moonshot was driven by retail investors, who used online forums like Reddit's WallStreetBets to organize a concerted push at the expense of hedge funds like Melvin Capital Management LP.

Read on for a Bloomberg explainer.

Understanding the Trade

GameStop shares have surged from $19 at the start of the year to as much as $483 at one point this week. Stocks that experience moves this extreme and this fast usually have technical drivers behind them.

Some traders on online forums saw that GameStop was one of the most 'shorted' in America. What this means is that investors had borrowed shares from brokers and sold them in the market with the expectation that price would fall so they could buy the shares back, return them to the broker and then pocket the difference. The problem for investors that are short a company is that they will eventually have to buy the shares back no matter what the price is.

The very large short interest in GameStop meant that retail investors could, if enough of them moved together, push the share price of the company higher. This would cause the investors who were short to buy stock to limit their loses, with that buying pushing the price even higher. This can lead to very violent share price moves -- called a short squeeze.

Another tactic that's been used by retail traders to push shares of the company higher comes from the options market, which involve contracts that give investors the right to sell or buy a stock.

If a trader buys an option to buy a stock at a vastly inflated price to the current market value, they can pick it up fairly cheaply. For example, on Jan. 21 a GameStop option with a $60 strike price could be purchased for $0.07. The dealer who sold the option would usually buy some of the stock in order to hedge their position, which again would push the price higher. The more options bought, the more the dealer has to buy stock, and the higher the price rises. As it gets closer to the option strike price, the dealer has to buy even more stock to cover their exposure. This is known as a gamma squeeze.

The traders on online forums have been using these tactics for a while, deploying the options trade to lift the price of companies such as Virgin Galactic Holdings Inc. and Plug Power Inc. early last year.

If they can get a short squeeze and a gamma squeeze in place, both can become self-sustaining, leading to a big surge in the share price, lots of gains for the traders, and a proliferation of rocket emojis.

But Why Video Games?

GameStop ticked the “massive short position” box. But it also had a couple of other factors in its favor for a move like this. The free float (the number of shares that could be traded) was relatively small, meaning shares might not be readily available in the market for investors covering their shorts -- scarcity driving the price higher. The other thing it had in its favor was something we could call "chat momentum." Online forums had been discussing this stock for a long time. So when the move started there were plenty of retail investors ready to pile into a stock they were familiar with.

At its peak on Thursday, GameStop had a market value of $33.7 billion, bigger than half of the companies listed on the S&P 500 Index. For many of the retail traders involved, the chance of making huge amounts of money was an obvious motivating factor. For some others, getting one over on Wall Street seems to have been a strong added bonus.

But this isn't just a story about GameStop. There are short squeezes happening all over the world at the moment.

----Short squeezes do have a tendency to stop abruptly. The most famous squeeze of the millennium -- which also involved lots of option-based shenanigans -- was Volkswagen AG's brief move to become the world's most valuable company back in 2008. It didn't last very long.

But markets have also changed dramatically in the past few years. The emergence of no-commission trading through platforms like Robinhood Markets Inc. and the popularity of online forums and social networks mean that trading is more accessible than ever before. So a squeeze could go on for longer than a lot of people on Wall Street might expect. Options in particular have exploded in popularity.

Markets always change. New technology emerges. New products become available. New trends become hot. Old ones are discarded. Prices reach an equilibrium. Things that may be cheap or free now -- like buying lots of call options on stocks -- can get repriced. Regulators might choose to take action, though it's unlikely there would be much public support for any moves that could be seen as protecting big investors at the expense of small retail ones.

In the meantime, we're already starting to see Wall Street and markets adapt to the wild week that was. There are signs that hedge funds are bailing out of their short positions even before the retail army turns up, taking a small loss now for fear of a larger one later. Meanwhile, the chat forums are already looking for the next stock to send to da moon.”

End.

Finally, did Wall Street’s finest collude to bailout the trapped hedge fund shorts? The Texas AG has his suspicions.

Texas attorney general probes GameStop trade curbs from Robinhood, others

January 29, 2021 8:26 PM

WASHINGTON (Reuters) - Texas Attorney General Ken Paxton issued 13 civil investigative demands on Friday to Robinhood, Discord, Citadel and other trading apps that put curbs on stock trading, his office said in a statement the day after those curbs stalled a rally in shares of GameStop.

The CIDs, the civil equivalent of a subpoena, were sent following a week-long slugfest in which retail investors bid up shares of video game retailer GameStop and other out-of-favor companies, resulting in huge losses to big hedge funds that had shorted those stocks.

On Thursday, GameStop shares fell after Robinhood and other trading apps imposed the limits, a move that angered many elected officials and prompted calls for action from regulators.

“This apparent coordination between hedge funds, trading platforms, and web servers to shut down threats to their market dominance is shockingly unprecedented and wrong,” Paxton said in a statement.

The CIDs were sent to Discord, Robinhood Financial, Robinhood Markets, Robinhood Securities, Interactive Brokers, TD Ameritrade, TD Bank, E-Trade, WeBull Financial, Public Holdings, M1 Holdings, Citadel Financial, and Apex Clearing Corporation, Paxton’s office said in a statement.

https://www.reuters.com/article/retail-trading-robinhood-texas/corrected-update-1-texas-atty-general-probes-gamestop-trade-curbs-from-robinhood-others-idUSL1N2K42UY

Covid-19 Corner

This section will continue until it becomes unneeded.

Approx. 12 minutes.

NEW COVID 19 Variants (How Concerned Should We BE?)

https://www.youtube.com/watch?v=Rxg01L6Hh2E

Japan Discovers New Types of U.K. Coronavirus Strain

By River Davis

30 January 2021, 04:55 GMT

Three new types of U.K. strain detected in Tokyo hospital

· Research group says new variants are likely spreading in Japan

Three new types of the U.K. coronavirus strain, previously not detected in Japan, were discovered in patients at the Tokyo Medical and Dental University Hospital, according to a research group studying Covid-19 cases at the hospital.

None of the three patients infected with mutations of the U.K. strain had traveled abroad, meaning there is a high possibility that the variants are spreading in Japan, the group said in a statement on Friday. The patients were hospitalized during the period of November through late-December, with two of the three experiencing severe symptoms.

The new U.K. strains had previously not been detected in Japan outside of airport quarantine areas, according to the research group. Various strains have previously been found in Japan including one discovered in four passengers arriving from Brazil earlier this month. A variant found in South Africa was also detected in Japan in late December.

Japan has witnessed a spike in new coronavirus cases since the start of this year, with new infection numbers stuck above 1,000 a day in the capital in recent weeks. A state of emergency covering 11 prefectures is set to remain in place until Feb. 7.

Speaking at a briefing Friday, Hiroaki Takeuchi of the research group, urged that measures be taken to strengthen Japan’s borders to prevent the arrival of more new strains of the virus, national broadcaster NHK reported.

— With assistance by Muneeza Naqvi

https://www.bloomberg.com/news/articles/2021-01-30/japan-discovers-new-types-of-u-k-coronavirus-strain?srnd=premium-europe

What One Covid-19 Cluster on an Airplane Tells Experts About Risk Factors While Flying

When one person with Covid-19 took an 18-hour flight from Dubai to New Zealand, several people got sick

smithsonianmag.com January 28, 2021 7:45AM

After an 18-hour flight from Dubai to New Zealand, seven passengers tested positive for Covid-19 while under managed isolation and quarantine. Analysis of the virus’ genetic code—along with details about the passengers’ symptoms and behavior throughout their trip—indicates that one passenger infected at least four others while aboard the plane, according to a study published in Emerging Infectious Diseases.

Air travel has been difficult to study because different airlines and countries have different safety policies, and all policies rely on passengers’ willingness to follow the rules. The cluster of cases shows how precautionary measures, like obtaining a negative Covid-19 test result before a flight, aren’t enough to prevent transmission of the virus if other safety measures like mask-wearing aren’t strictly followed, Harvard Medical School physician Abraar Karan writes for Vox. It also shows how the managed isolation and quarantine, or MIQ, system successfully prevented the travelers from sparking new community spread of the disease, the researchers write.

---- The pair said that they wore masks and gloves while on the plane, but took their masks off when they were seated, sleeping or eating, Marc Daalder reports for the New Zealand-based Newsroom.

On such a long flight, people need to eat and drink, but each instance makes it more likely that the virus will spread.

“It is surprising and not surprising, on an 18-hour flight, that an outbreak would occur,” says Karan to the New York Times’ Benedict Carey. “It’s more than likely that more than just those two people took off their mask at some point.”

The flight also stopped to refuel in Kuala Lumpur, Malaysia, so the air filtration system was turned off for 30 minutes.

During the 14-day quarantine period in New Zealand, five other travelers from the same flight tested positive for Covid-19. All of them sat within two rows in front of or behind the two people who tested positive, with symptoms, on the third day. (Another person tested positive on the third day but didn’t show symptoms.)

https://www.smithsonianmag.com/smart-news/what-one-covid-19-cluster-airplane-tells-experts-about-risk-factors-while-flying-180976844/?utm_source=smithsoniandaily&utm_medium=email&utm_campaign=20210128-daily-responsive&spMailingID=44348007&spUserID=NjUwNDIzNTUzNDE0S0&spJobID=1922452384&spReportId=MTkyMjQ1MjM4NAS2

NY Nursing Home Deaths May Have Been 50% Higher Than Reported, AG's Office Says

Gov. Andrew Cuomo has been under fire for months over his nursing home policy and the true number of deaths in those facilities

By Marina Villeneuve, Bernard Condon and Matt Sedensky • Published January 28, 2021 •

New York may have undercounted COVID-19 deaths among nursing home residents by thousands, the state attorney general charged in a report Thursday that dealt a blow to Gov. Andrew Cuomo's oft-repeated claims that his state is doing better than others in protecting its most vulnerable.

The 76-page report found an undercount of more than 50%, backing up the findings of an Associated Press investigation last year that focused on the fact that New York is one of the only states in the nation that count residents who died on nursing home property and not those who later died in hospitals.

Such an undercount would mean the state's current official tally of 8,711 nursing home deaths to the virus is actually more than 13,000, boosting New York from No. 6 to highest in the nation.

---- The report from a fellow Democratic official undercut Cuomo's frequent argument that the criticism of his handling of the virus in nursing homes was part of a political “blame game," and it was a vindication for thousands of families who believed their loved ones were being omitted from counts to advance the governor's image as a pandemic hero.

“It’s important to me that my mom was counted,” said Vivian Zayas, whose 78-year-old mother died in April after contracting COVID-19 at a nursing home in West Islip, New York. “Families like mine knew these numbers were not correct.”

https://www.nbcnewyork.com/news/coronavirus/ny-nursing-home-deaths-may-have-been-50-higher-than-reported-ags-office-says/2853434/

60-Year-Old Father Dies After Receiving Second Dose Of Pfizer Vaccine

By CBSLA Staff January 28, 2021 at 4:15 am

SANTA ANA (CBSLA) – A 60-year-old Orange County man died after receiving a second dose of the coronavirus vaccine. Now investigators are trying to determine if the vaccination played any role in his death.

Hours after getting his second Pfizer dose on January 5, Tim Zook was in the emergency room of the hospital where he worked.

“He just couldn’t breathe on his own, he had stomach problems, he just wasn’t feeling good,” said Kyle Zook, his son.

He fell into a coma within two days and passed away four days after getting the shot.

“He was so bad he told them, ‘put me on the ventilator, I want to live,” said Kyle. “Those were his last words.”

Tim had high blood pressure but was otherwise healthy, Kyle said.

https://losangeles.cbslocal.com/2021/01/28/pfizer-vaccine-orange-county-moderna/

Next, some very useful vaccine links kindly sent along from a LIR reader in Canada. The links come from a most informative update from Stanford Hospital in California.

World Health Organization - Landscape of COVID-19 candidate vaccines. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines

NY Times Coronavirus Vaccine Tracker. https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html

Stanford Website. https://racetoacure.stanford.edu/clinical-trials/132

FDA information. https://www.fda.gov/media/139638/download

Regulatory Focus COVID-19 vaccine tracker. https://www.raps.org/news-and-articles/news-articles/2020/3/covid-19-vaccine-tracker

Some more useful Covid links.

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Rt Covid-19

https://rt.live/

Covid19info.live

https://wuflu.live/

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section. Updates as they get reported. Is converting sunlight to usable cheap AC or DC energy mankind’s future from the 21^st century onwards.

Analysis: Propane Outpaces Electric for Carbon Footprint in Trucks

January 27, 2021 by Emily Holbrook

A new comparative analysis published recently analyzes the carbon footprint of medium-duty and heavy-duty (MD-HD) engine vehicles powered by propane and electricity. The analysis, “Decarbonization of MD-HD Vehicle s with Propane,” found that propane-fueled MD-HD internal combustion engine vehicles provide a lower carbon footprint solution in 38 US states and Washington, DC, when compared to MD-HD electric vehicles (EVs) charged using the electrical grid.

Fifteen states and Washington, DC have proposed full electrification of medium- and heavy-duty trucks by 2050 with a target of 30% “zero-emission” vehicle sales by 2030. The rationale behind the proposals is based on the assumption that the electrical grid will be fully decarbonized by that time. Likewise, policy based on exhaust carbon dioxide (CO2eq) emissions alone as opposed to life-cycle analysis results misses the full picture, according to the Propane Education & Research Council (PERC). As a result, PERC says the policy proposals today conflate the promise of electrification with actual decarbonization.

The comparative analysis also reveals that MD-HD vehicles powered by renewable propane provide a lower carbon footprint solution in every US state except Vermont where electricity is generated by, and imported from, Canadian hydroelectric power plants. Renewable propane is derived from sources such as beef fats, vegetable oils, grease residue, and other biomass feedstocks.

Moreover, the analysis shows that decarbonization can be accelerated by adopting propane as the fuel of choice for MD-HD vehicles. The conclusion is supported by a life-cycle analysis of equivalent CO2eq emissions between electric and propane-fueled vehicles across the US using CARB carbon intensity values along with a powertrain efficiency analysis.

https://www.environmentalleader.com/2021/01/analysis-propane-outpaces-electric-for-carbon-footprint-in-trucks/

Major manufacturer drops hydrogen trucks in favor of battery-electrics

By Loz Blain January 28, 2021

Where will hydrogen fit in the clean transport mix? Not in trucking, says one of the world's largest heavy duty vehicle manufacturers, which is scaling back its fuel cell big-rig research and development operations in favor of battery-electric power.

Hydrogen is definitely happening. It's a convenient (if inefficient) way to store, transport and export clean energy, it offers huge energy density advantages for zero-emissions aviation and shipping, and many folk are expecting it to find a compelling use case in long-distance trucking, where its quick refilling ability can keep big rigs on the road longer than battery trucks that need to plug in and charge for long periods.

But Sweden's Scania, the world's tenth-largest trucking company, thinks otherwise. Having already launched both battery and fuel cell trucks, the company has announced it's committing to batteries, citing hydrogen's wastefully inefficient use of renewable energy, as well as additional system complexity, cost, safety and ongoing maintenance factors.

"Scania has invested in hydrogen technologies," reads a press release, "and is currently the only heavy-duty vehicle manufacturer with vehicles in operations with customers. The engineers have gained valuable insights from these early tests and efforts will continue. However, going forward the use of hydrogen for such applications will be limited since three times as much renewable electricity is needed to power a hydrogen truck compared to a battery electric truck. A great deal of energy is namely lost in the production, distribution, and conversion back to electricity."

https://newatlas.com/automotive/scania-ditches-hydrogen/

This weekend’s musical diversion. Vivaldi doubles down, 1726. I wonder what it sounds like swapping out the harpsichords for soft pianos? Approx. 8 minutes.

Concerto Con molti Istromenti Del Vivaldi / RV 555 in C major (Autograph score)

For three solo violins, two trumpets, oboe, two recorders, two ‘viole all’inglese’, two chalumeaux, two cellos, two harpsichords, strings and basso continuo.

https://www.youtube.com/watch?v=ltavr8Ptdxs

Next, this week’s chess masterclass. Approx. 19 minutes.

Battle For The Future: Heart and Soul || Carlsen vs Firouzja || Tata Steel (2021)

https://www.youtube.com/watch?v=TCfyFxQCSQM

Finally, ingenious India. Approx. 10 minutes.

India's Solar Canals. Lateral thinking at its finest!

https://www.youtube.com/watch?v=Ix9LNZIbTpc

“Whenever you are asked if you can do a job, tell ‘em, “Certainly I can!” Then get busy and find out how to do it.”

Theodore Roosevelt.

London Irvine Report

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Saturday, 30 January 2021

Special Update 30/01/2021 The Reddit Rout. Silver Next?

Sideshow or main event? GameStop stock ride weighed as bubble warning