Authored by Charles Hugh Smith via OfTwoMinds blog,

When the wreck is recovered, witnesses will wonder why they took such heedless, foolish risks.

You're in the back seat wedged between tipsy revelers, the driver is drunk and heading into Deadman's Curve at 90 miles per hour. Nobody's worried because the driver has never crashed. Before they slid into euphoric incoherence, the other passengers answered your doubts with statistics and pretty charts showing that the driver had never had an accident, so there was nothing to worry about.

They also said that the driver's Uncle Fed had rigged the vehicle with an anti-accident device, so a crash was impossible. One passenger blurted out that a fellow named Goldy Sacks said the driver could easily "melt up" and take Deadman's Curve at 120 miles per hour without any trouble.

You see the problem here: the risk of crashing and expiring is soaring but the giddy occupants are completely confident there's no risk, and this confidence is the source of the danger. If you're sure Uncle Fed's device can protect the vehicle from any crash, then why not take Deadman's Curve at 90 miles per hour?

And if Goldy Sacks says you could actually take it at 120 miles per hour, then taking it at 90 MPH is actually quite prudent and cautious.

This confidence inspires tremendous risk-taking that eventually ends very badly for all the revelers. The irony is rich: the greater the confidence, the greater the risk, the greater the risk, the greater the odds of a crash. The greater the risks being taken, the greater the odds that the crash will be fatal to all occupants.

The confidence in Uncle Fed's safety device is delusional because it's never been tested. The fact that the driver hasn't crashed doesn't mean the risk is low or Uncle Fed's device works perfectly, it simply means luck has been on the driver's side.

It also doesn't mean the driver can take Deadman's Curve at 90 MPH without any risk. It simply means the driver hasn't taken on more risk than he can handle until now.

When the wreck is recovered, witnesses will wonder why they took such heedless, foolish risks. What they

Saule Omarova

It appears that not even oil supermajor Exxon, who has recently been struggling with its image as a fossil fuel company during the age of ESG, is immune to labor shortages.

The company is in the midst of considering salary hikes for its workers as a means to combat attrition across its business divisions, a new Bloomberg report revealed this week. 

CEO Darren Woods told employees they should be "encouraged" by the salary review process. 

“The policies we’re putting in place will get back to where people can begin to see a different path going forward than the path we came out of in 2020,” Woods told his team at a October 20 town hall meeting, according to the report.

He didn't indicate the size of any potential pay hikes, nor did he note which employees would be eligible. A company spokesman said that the program could alter salaries, promotions and retirement benefits. 

"We anticipate 2022 will follow our typical annual salary and promotion process, with industry benchmarking informing decisions about our 2022 salary program in advance of a January 1 effective date. We are recruiting, hiring and backfilling roles,” company spokesman Casey Norton said. 

Due to the pandemic, and the ensuing crash in oil, Exxon went from being one of the country's highest paying employers to imposing large job cuts and suspending matches to employee retirement programs. 

Former Exxon executives and staffers have found their way to hire-hungry tech names like Amazon and Microsoft as a result of the cuts. 

Woods was asked at the Oct. 20 town hall what he could have done better to mitigate attrition at the company. One employee asked him: “Everyone in the room today and calling in knows that we’re having some major attrition issues. While this can be kind of glazed over with the decision to have layoffs last year and the economy as a whole, really every business line is having attrition issues.” 

Woods responded by acknowledging the company has more attrition today, but that it's not something that is unique only to Exxon. 

“I’m not suggesting that your concerns around what are people thinking and what’s driving them to leave the company isn’t important. I would just make sure we put it

in

Authored by Bill Blain via MorningPorridge.com,

“Democracy is absolutely the worst form of government, except for anything else…”

Tesla’s rise into the $1 trillion club is extraordinary – proving that listening to what the momentum crowd is buying, while suspending disbelief and fundamental analysis is one road to success. Hertz is a lesson in seizing the moment – its stock gains and free publicity from its new EV fleet will likely exceed the cost of the cars!

As I write this morning’s Porridge I am going to try and not sound like a bitter and twisted old man….

I suppose today’s lesson today might be: “Don’t over think it.” Every morning I wake up and try to make sense of the market noise to discern the big forces acting on markets, the underlying rationales, what the numbers really mean, the potential arbitrages, and the direction of trade flow. But I wonder if I’m doing it wrong.

It’s not what I think that matters. The only thing that’s important is what the market thinks.

The market is simply a voting machine where suffrage is simply the price of a stock. If the market believes Donald Trump’s sight-unseen social media empire is worth billions, so be it. If the market believes Meme Stocks are worth trillions, so be it. Whatever the market believes.. so be it.

As so many clever economists and traders have spotted before me.. it’s the madness of crowds that matters. Over the last few years understanding Behaviours has proved far more useful than forensic accounting skills when it comes to stock picking.

I make the mistake of calling out the inconsistencies of the “drivers” like Adam Neumann, Cathie Wood, Elon Musk and the Eminence Noirs driving SPACs and funds – rather than understanding what makes them look so attractive, clever, clearsighted and intuitive to so many market participants. Promise most people you are going to make them unfeasibly rich – and they will listen.

I make the schoolboy error of asking.. how?

Life is full of regrets. If we let them define us – we truly would be miserable.

Do I regret dumping Tesla in the wake of the

The wall of worry that preoccupied traders just weeks ago has melted away, and has been replaced with a global market melt up (just as Goldman predicted again this weekend), which pushed US index futures to a new all time high this morning when spoos hit 4,580.75, while propelling European and Asian stocks higher as corporate earnings helped boost sentiment amid lingering concerns about inflation and growth. As of 715am ET, US equity futures were up 0.42% or 19.25 points, Dow Jones futures were up 126 points or 0.35% and Nasdaq futures jumped 0.61%, extending cash market gains boosted by Tesla’s rally to a $1 trillion market value on a big order and Facebook’s results announcement revealing strong user growth and a $50 billion stock buyback. 10-year Treasury yields dropped by 1 basis point while the dollar slid to session lows. Bitcoin traded around $63,000.

The barrage of earnings reports continued on Tuesday morning, with United Parcel Service, General Electric and 3M all gaining in pre-market trading after strong results. Eli Lilly advanced after raising full-year forecasts. Bakkt shares jumped 36% in the U.S. premarket session after more than tripling Monday when Mastercard said it has inked a deal with the firm to help banks offer cryptocurrency rewards on their debit and credit cards.  Facebook also rose after pledging to buy back as much as $50 billion more in stock, with tech heavyweights Twitter, Alphabet and Microsoft reporting after the market close on Tuesday. Here are all the notable premarket movers:

• Facebook (FB US) rises as much as 2.5% in premarket as analysts stay bullish despite a third-quarter revenue miss and an outlook that was below consensus. Advertising growth is seen improving in 2022.
• Tesla (TSLA US) gains 1% after stock closed at a record high, boosted by several factors on Monday including a large car order from rental firm Hertz and Morgan Stanley lifting its price target.
• Creatd (CRTD US) was up 27% adding to a 50% gain over the past two trading sessions amid a rally in a growing number of retail-trader favorite stocks linked to former U.S. President Donald Trump.
• Redbox (RDBX US) rises as much as 130% after the firm completed a business

Submitted by Quoth the Raven at QTR's Fringe Finance,

There’s no doubt our country has all of a sudden slipped into the most precarious state we’ve been able to readily confirm with our own two eyes in decades.

We are suffering from runaway inflation, we have a monstrous labor shortage, and products we normally would have abundant access to are missing from store shelves. The country doesn’t produce anything anymore, we have doubled our Central Bank’s balance sheet in under two years and the money supply has gone parabolic. 

And engineering solutions for these issues requires correctly identifying where the problem is coming from to begin with. It appears we can either go one of two directions when we try to deduce the cause of these issues.

The first direction we can go in is to point to monetary and fiscal policy and look at their direct effects on the state of the country and our economy. This, I believe, is the pragmatic approach to solving the issues our nation faces.

The second direction, according to a new Washington Post op-ed, is apparently to blame and shame ourselves for being greedy and assuming that we ever deserved such a quality of life to begin with.

The Post recently published a piece called "Opinion: Don’t rant about short-staffed stores and supply chain woes”, which put this argument on the table, basically telling people to shut up and be thankful for the little they have.

While normally I embrace the idea of being humble and thankful no matter how much or how little you have access to, the Post’s opinion piece brings an interesting concept into the foreground that I want to examine: what I am calling “the quality of life con”.

Let’s have a look at what the op-ed, written by award winner Micheline Maynard, argues. Maynard’s website notes that prior to working at the Washington Post, she worked for The New York Times and NPR.

In the op-ed, a photo of empty store shelves – very similar to the ones I used to effectively make my argument that the U.S. is turning

With Wall Street reaping another windfall in the first half of the year – reporting a 13% boost in pre-tax earnings from a year ago even as job losses accelerated in New York City’s securities industry – as the securities industry benefited from the pandemic-induced boom in markets, New York City is projecting a tax windfall courtesy of a surge across Wall Street bonuses.

The financial industry’s pretax profits surged about 13% from a year earlier to $31 billion, helped by record low interest rates, strong trading volume, record earnings in subsectors like global equities — which had the strongest six-month period since 1980 — and record revenues from underwriting and account supervision fees and investment advisory fees, state Comptroller Thomas DiNapoli said Thursday in a report. While it was the industry’s second-most profitable first half on record, DiNapoli cautioned that profits will subside as interest rates rise and monetary stimulus fades.

“Wall Street’s success during the pandemic has benefited New York’s economy and finances during a difficult time,” he said in a statement. However, cautioning that this bonanza will “subside at some point”, and adding that “as we prepare for an eventual slowdown in Wall Street’s record activity, we need to ensure New York’s Main Street, and its other vital sectors, are also recovering.”

DiNapoli’s optimism comes as Morgan Stanley posted record revenue and equities trading surged across the industry, while Goldman Sachs already generated enough revenue to give the firm its best year ever.

The NYC comptroller said that the average bonuses paid out to NYC securities industry workers in 2020 grew by 10% to $184,000 and made up 41% of wages. Average salaries including bonuses reached $438,450 last year, the highest of all industries in the city.

Based on the industry’s increased set asides for compensation this year, the city forecast a 6.5% rise in the average bonus for 2021, as banks have been increasing pay to attract new talent and retain existing staff, which would raise bonuses above the post-recession record paid out in 2017. DiNapoli’s office will release its estimate for 2021 bonuses in Spring 2022.

The comptroller credited the industry’s strong performance with helping to shore up tax revenues, and said a higher share of its employees had returned to their desks amid the pandemic compared with Manhattan’s overall office workforce.

As our chart shows, one of the countries lagging behind now might soon overtake Melbourne in light of recent events.

You will find more infographics at Statista

The country in question is, of course, the UK, where steadily rising case numbers and the discovery of a possible new Delta mutation have caused doctors to call for reintroducing the restrictions abolished on Freedom Day in July. As of now, Northern Ireland had to endure 223 total days of lockdowns, with England and Wales following closely behind with 213 and 212 days, respectively. The independent Republic of Ireland ranks third with 227 days after the Greater Buenos Aires area with 245 cumulative days.

While restrictions like mask mandates and shutting down non-essential businesses has been shown to have varied (if not negative) results in curbing the spread of the virus (no matter how strictly enforced), the best protection against hospitalization and death still appears to be getting vaccinated (or strengthening your immune system), even though the protection against the infection itself is losing efficacy over time.

As of October 18, almost 6.7 billion vaccine doses had been administered globally, with China, India and the European Union giving out the most shots in total.

When looking at the numbers, the disparity between more and less developed nations quickly becomes apparent: According to data from Bloomberg, African countries like Chad, South Sudan, Burkina Faso, Madagascar and the Democratic Republic of Congo haven't even administered enough doses to cover one percent of their population, while the administration of third doses or so-called booster shots is already underway or in the process of being rolled out in countries like Israel, the United States or the UK.

Finally, as we detailed previously, bear in mind that "viruses gonna virus!"

“T’was the best of times, t’was the worst of times …”

The risks of Plan B and a further Covid Lockdown are multiplying. It will clearly impact markets, but the real economic effects of Covid combined with energy costs, supply chains and bleak company earnings forecasts may be pushing us towards stagflation anyway.

"How to address the biggest economic shock in 300 years?” asked UK Chancellor Rishi Sunak while doing his pre-budget politicking last week. Whatever you believe or don’t believe about Covid, Sunak is quite right to consider it at the centre of the on-going economic crisis. Markets should factor that reality accordingly – which boils down to a very simple question: how much will Covid force Central Banks and Governments to act to stabilise the global economy?

This week pay attention to the UK Budget on Wednesday on how Chancellor Sunak addresses the ongoing critical-care needs of the UK by stepping away from his previous “policy-mistake” sounding mention of austerity spending cuts and tax-rises to make noises about increased “levelling out” spending. Hanging over everything will be the question – how much more economic pain could Covid inflict?

It’s a tough question.  A new lockdown would be economic suicide. The UK government plans to ride it out – but the history of the last 19 months says they won’t hesitate to make a U-Turn and institute Plan B if they think their credibility is on the line if the numbers of infections surge and the health service looks swamped. That’s a potential trade: should you sell UK stocks now on the likelihood the government will panic? (And buy-them back almost immediately as the Bank of England stops the noise about a rate cut and QE taper.)

But… another question is how much will rising infection numbers cause the economy to contract anyway? How much has confidence already been dented?

Here in Blighty, It’s a tale of two headlines:

Daily Mirror: Fears of new lockdown Christmas as scientists warn tougher Covid measures needed NOW.

Daily Telegraph: Coronavirus cases to slump this winter, say scientists.

The papers looks like it

Ideas for a European Army have long been debated within the EU, which has as its purpose a civilian alliance – thus many have long argued it doesn't need a military force – which would also be controversial as a parallel force to NATO. 

But Germany along with four other European Union countries are now seeking to establish a new EU "rapid reaction force" in order to respond quickly to any future military crisis. The group including Finland, the Netherlands, Portugal and Slovenia is pursuing the initiative, citing the lessons learned from Afghanistan and the disastrous pullout which saw many European nationals get stranded in the Taliban-controlled country, with not enough flights or personnel available to evacuate them.

German media outlet dpa days ago confirmed the plan after it obtained new internal documents, describing that the five countries are aiming "to expand the existing EU battle groups, which are multinational military units of 1,500 personnel each on standby to respond to crises."

"The new force is expected to include space and cyber capabilities, along with special forces and air transport," the report indicated.

Currently, German Defense Minister Annegret Kramp-Karrenbauer is in favor of the initiative, saying in a recent interview that EU forces within NATO are only able to conduct defensive operations within the context of United States support. Thus there's a desire for a more independent force that can deploy rapidly without seeking broader US and NATO approval first, or going through NATO hurdles.

When rumors of the plan were circulating earlier this year, one EU official was quoted as explaining that "What we have in mind is… to be able to deploy quickly this response force if for instance you have a legitimate government in a specific country which is afraid of a possible takeover by a terrorist group."

However, there's this interesting pushback by Germany's Left Party cited in Deutsche Welle:

Meanwhile, Germany's far-left Left party immediately denounced the plan, saying that leaders were drawing the wrong conclusions from Afghanistan.

"The EU does not need a new intervention force. The EU should be a civilian alliance," deputy party head Tobias Pflueger told dpa. The problem in Afghanistan was that nations had attempted