Black Box Details Revealed on Ethiopian Airlines Flight 302
According to Reuters, the Boeing (NYSE:BA) 737 Max 8 that crashed soon after takeoff had an unusually high speed just after takeoff before the plane began reporting problems. It then asked permission to climb quickly. Pilots then urgently asked permission to return to the airport. Rueters’ source said that the man in the recording, one of the pilots, said that he had flight control problems and therefore requested permission to climb quickly in order to gain more maneuvering room. The pilot then reportedly signaled “break break” to air traffic control indicating that all non-emergency communication should cease. Requesting permission to return, he began to turn to the right, away from Addis Ababa, but the plane’s signal soon disappeared. The plane was traveling at around twice as fast as normal upon takeoff. The 737 MAX series remains grounded globally, though Boeing shares recovered somewhat, up 1.5% at market close Friday.
Labour Likely To Back Second Referendum on May Brexit Deal
British Labour leader Jeremy Corbyn indicated over the weekend that the party is likely to back a second referendum specifically on Prime Minister Theresa May’s Brexit deal with the European Union. He was speaking about supporting May’s deal in a third vote this coming week with an amendment that would make the approval conditional on a public referendum. If a third vote fails, Corbyn has also indicate that he would table another No Confidence motion in Theresa May’s government. In the meantime, a document leaked to the Observer showed that EU strategy is to wait for May’s government to fall in the hopes that her successor would reverse Brexit, which would be why they are refusing to compromise on the Irish backstop, which is the main sticking point preventing Brexiters from supporting the deal in the first place. British stocks (NYSEARCA:EWU) were up 3.3% last week despite the political chaos, which means the market may be starting to price in a soft Brexit, or a reversal of Brexit entirely.
Greenspan Says 25% Cut to Social Security Necessary to Save It
Alan Greenspan, former Federal Reserve Chairman (back when you were still allowed to say “Chairman”) from 1987 to 2006, has said the obvious, namely that massive cuts to social security benefits are necessary starting now and extending indefinitely into the future. “The actuaries of the Social Insurance system say that in order to be actuarially solvent through the life of the programs, we would have to cut benefits by 25 percent right now and extending into the future.” He continued by saying that resources are limited, quite the controversial statement these days with a resurgence of “Modern Monetary Theory” which doesn’t seem to agree that resources on Earth are limited. “I can basically argue that productivity growth has slowed down dramatically because, in effect, as I’ve said many times, that social benefits crowd out gross domestic saving and capital investment, which is at the root of what productivity growth is. So we’ve got to solve that problem,” he said. Good luck solving that problem. There have been no net government spending cuts since the end of World War II, as the national debt has climbed every year since.
Postpartum Depression Drug Nears Approval
Sage Therapeutics (NASDAQ:SAGE) may become the first company to successfully get a post partum depression drug past the Food and Drug Administration. The drug, brexanolone, is basically hormone replacement therapy consisting of a progesterone metabolite that takes the place of the same hormone that falls rapidly after pregnancy. It is given intravenously over 60 hours and is supposed to work within days, though patients will have to sit with a needle in their arm for 2 and a half days. The treatment is expected to be priced at between $20,000 and $35,000 a course. According to trial data, effects are long lasting. The treatment is likely to only be suitable for those with severe postpartum depression, since the new mother would have to stay in the hospital the whole time.
Short Squeeze on Oil Exploration Stocks?
Hedge funds are betting on a higher oil price (NYSEARCA:USO) after this past weekend’s OPEC meeting, which included non OPEC member Russia, in Azerbaijan. Saudi Arabia has been cutting crude output ever since oil’s fall from $75 a barrel in October. Thanks to those cuts, and US sanctions on Venezuela and Iran, oil has climbed back close to $60. “As long as we come out of the weekend with stasis, the hedge funds will consider that a positive sign and will continue to support the bull run,” said Ashley Petersen, an oil analyst at Stratas Advisors LLC in New York, quoted by Bloomberg. Still short interest in the S&P Oil and Gas Exploration ETF (NYSEARCA:XOP) is at 35% of total shares pretty high for a fund near all time lows. Could we see a short squeeze in the near future? Stay tuned.