House Passes 'Electoral Integrity' Bill To Restore Citizenship Question To Census

Authored by Katabella Roberts via The Epoch Times,

The House of Representatives voted on Wednesday to pass a measure that would add a citizenship question to the next U.S. census, as part of the latest efforts by conservatives to “protect America’s democracy and electoral integrity.”

The legislation, known as the “Equal Representation Act,” was led by Rep. Chuck Edwards, (R-N.C.), who spoke on the floor Wednesday regarding the need to ensure only American citizens are counted when apportioning congressional seats and Electoral College votes.

It passed in a vote of 206-202 along party lines.

The measure would direct the Census Bureau to add a question to the once-a-decade census asking whether or not the respondent is a citizen of the United States. It asks that only citizens be considered when determining how many lawmakers each state gets in the House of Representatives, as well as how many Electoral College votes each of the 50 states receives.

The measure creates new reporting requirements for data gathered from the citizenship question, noting that “the citizenship makeup of the population in the United States is a basic data point that should be available to U.S. policymakers, and the decennial census questionnaire is the best way to obtain such detailed information on citizenship status.”

The next decennial census is set to take place in 2030.

“Though commonsense dictates that only citizens should be counted for apportionment purposes, illegal aliens have nonetheless recently been counted toward the final tallies that determine how many House seats each state is allocated and the number of electoral votes it will wield in presidential elections,” Mr. Edwards said in remarks on the floor on Wednesday.

“And since the illegal alien population is not evenly distributed throughout the nation, American citizens in some states are losing representation in Congress to illegal aliens in other states, ” he added.

‘Alarming Undermining of American Democracy’

Mr. Edwards cited a 2019 study by the Center for Immigration Studies, which estimated that illegal immigrants and non-citizens, who have not naturalized and do not have the right to vote, impact the distribution of 26 seats in the House.

The lawmaker said his bill would “finally address this alarming undermining of American democracy” while helping to ensure electoral integrity.

“Enacting this legislation into law is vitally important to ensuring that the American people receive fair representation in Congress and that they, and only they, determine the outcomes of presidential elections,” Mr. Edwards said.

Conservatives welcomed the measure on Wednesday. House Speaker Mike Johnson (R-La.) said in a statement after the vote, “We should not reward states and cities that violate federal immigration laws and maintain sanctuary policies with increased Congressional representation.”

House Committee on Oversight and Accountability Chairman James Comer (R-Ky.) applauded Wednesday’s passage of the Equal Representation Act while criticizing the Biden administration’s “open border policies” which he said have “created the worst border crisis in American history, impacting every American.”

“In the midst of a crisis that is setting records for illegal border crossings, Congress is today taking steps to proactively protect a fair electoral process,” Mr. Comer said in a statement.

Mr. Comer said the new bill “adds a simple citizenship question to the decennial census questionnaire to ensure accurate information, and provides that only citizens are counted for apportionment of seats in the House of Representatives and Electoral College votes.”

“American citizens’ federal representation should be determined by American citizens only,” the Republican added.

President Joe Biden speaks to guests during an event at Gateway Technical College’s iMet Center in Sturtevant, Wis., on May 8, 2024. (Scott Olson/Getty Images)

White House ‘Strongly Opposes’ Bill

However, civil rights groups, Democrats, and the White House quickly criticized the bill–which is unlikely to pass the Democratic-controlled Senate–with many questioning its legality under U.S. law.

The Constitution states that representatives will “be apportioned among the several States according to their respective numbers, counting the whole number of persons in each state.”

In a statement of administration policy published on Monday, the Biden administration said it “strongly opposes H.R. 7109 [the Equal Representation Act]” which would “preclude the Department of Commerce’s Census Bureau from performing its constitutionally mandated responsibility to count the number of persons in the United States in the decennial census.”

The measure would also increase the cost of conducting the census and make it more difficult to obtain accurate data, the administration said.

“It would also violate the Fourteenth Amendment of the Constitution, which requires that the number of seats in the House of Representatives ‘be apportioned among the several States according to their respective numbers, counting the whole number of persons in each State,’” the administration added.

This is not the first time Republicans have attempted to add the citizenship question to the census. Commerce Secretary Wilbur Ross tried to do so during the 2020 Census under President Donald Trump.

That attempt was subsequently blocked by the Supreme Court.

Tyler Durden Thu, 05/09/2024 - 11:20

Biden Accused Of Helping Hamas As Israelis Fume Over Threat To Halt Weapons

Israeli leaders are furious after the evening prior CNN published an interview with President Biden wherein he laid out that the US will withhold all offensive weapons from Israel if it moves forward with a full-scale invasion of Rafah.

In a message to both Israel's "enemies and best friends" - clearly a reference to Washington - Defense Minister Yoav Gallant on Thursday vowed that Israel "will achieve [its] goals in the north and south."

"I say from here to Israel’s enemies and its best friends: The State of Israel cannot be subdued — not the IDF, not the Defense Ministry, not the defense establishment, not the State of Israel. We will stand, we will achieve our goals, we will hit Hamas, we will destroy Hezbollah, and we will bring security," Gallant said.

"Whatever the cost, we will ensure the existence of the State of Israel and remember well the directive we signed just a week ago during the Holocaust Remembrance Day ceremony, the words ‘Never Again.’ For me, it’s not just a directive, it’s a work plan. This is how the defense establishment will work and this is how the IDF will work," he added.

"We have no choice, we have no other country. We will do whatever is necessary, and I repeat – whatever is necessary, in order to defend the citizens of Israel, to remove the evil threats against us, and to stand up to those who attempt to destroy us."

Prime Minister Benjamin Netanyahu also responded, but just as with Gallant he has not named Biden or the United States directly...

In what looks like a response to Biden's remarks about halting military aid if Israel goes into Rafah Netanyahu shares this video of his speech from several days ago in which he says Israel will stand alone if it needs to https://t.co/ZwHj2bNi3M

— Barak Ravid (@BarakRavid) May 9, 2024

But others were more blunt and direct, claiming that Biden with this move is 'helping Hamas':

Finance Minister Bezalel Smotrich stated bluntly that the strong American opposition would only reinvigorate Israel’s drive to eliminate Hamas.

“We must continue this war until victory, despite, and to a certain extent precisely because of, the opposition of the administration Biden and the stopping of arms shipments,” he said in a statement. “We simply have no other choice that does not endanger our existence and security.”

National Security Minister Itamar Ben Gvir, a firebrand who leads the far-right Otzma Yehudit party, tweeted simply that “Hamas [loves] Biden.”

Here's what the hardline and hawkish national security minister tweeted out:

Hamas ❤️Biden

— איתמר בן גביר (@itamarbengvir) May 9, 2024

Former President Donald Trump agreed, writing in a statement that Biden withholding defense deliveries is tantamount to siding with the terrorists.

Part of his message also included the words "Biden is weak, corrupt, and leading the world straight into World War III. Remember - this war in Israel, just like the war in Ukraine, would have NEVER started if I was in the White House. But very soon, we will be back, and once again demanding PEACE THROUGH STRENGTH!"

The Rafah mission appears to still be on, and Israel's message of defiance in response to Biden let that be known. Meanwhile Israel's Walla News is reporting that the Hamas delegation has now left Cairo and that there has been no ceasefire breakthrough, with both sides once again blaming the other for rejecting a deal.

Israel has previously warned that Israel would give Hamas one week to accept the latest deal on the table (and that warning was issued last week), or else the military would go into Rafah. The refugee-packed southern city of the Gaza Strip has in the last hours been getting hammered by airstrikes, as tens of thousands of civilians scramble to get out.

Biden had said controversially in the CNN interview which angered the Israelis, "I’ve made it clear to Bibi (Prime Minister Benjamin Netanyahu) and the war cabinet: They’re not going to get our support if they go [into] these population centers."

"Civilians have been killed in Gaza as a consequence of those bombs and other ways in which they go after population centers," Biden said. "I made it clear that if they go into Rafah — they haven’t gone in Rafah yet — if they go into Rafah, I’m not supplying the weapons that have been used historically to deal with Rafah, to deal with the cities — that deal with that problem."

"We’re going to continue to make sure Israel is secure in terms of Iron Dome and their ability to respond to attacks that came out of the Middle East recently," Biden continued before spelling out: "But it’s, it’s just wrong. We’re not going to — we’re not going to supply the weapons and artillery shells."

Biden is now getting pushback at home too, with Congressional leaders demanding answers as to why Washington's close Mideast ally is being threatened with the withholding of vital US defense aid...

BREAKING: Speaker Johnson and Senate minority leader McConnell send a letter to President Biden expressing alarm about the decision to pause a weapons shipment to Israel and ask for clarification by the end of the week pic.twitter.com/OLd7agcEf1

— Barak Ravid (@BarakRavid) May 8, 2024

"This news flies in the face of assurances provided regarding the timely delivery of security assistance to Israel," House Speaker Mike Johnson (R-La.) and Senate Minority Leader Mitch McConnell (R-Ky.) wrote Biden in a letter issued Wednesday.

"The American public deserves to understand the nature, timing, and scope of these reviews," they wrote, and added that "daylight between the United States and Israel at this dangerous time risks emboldening Israel's enemies and undermining the trust that other allies and partners have in the United States."

Tyler Durden Thu, 05/09/2024 - 11:00

To Prevent A Banking Crisis, The Fed Must Cut; But...

Via SchiffGold.com,

In 2009, 140 banks failed, and a recent report from financial consulting firm Klaros Group says that hundreds of banks are at risk of going under this year. It’s being billed mostly as a danger for individuals and communities than for the broader economy, but for stressed lenders across America, a string of small bank failures could quite quickly spread into a larger bloodbath — especially in an economy with hot inflation and a feverish addiction to ultra-low interest rates.

Data Source: FDIC.gov

Most at-risk firms are smaller banks representing assets under $10 billion, with a handful of larger regional ones. Some might be able to avoid closing by halting expansion plans or offering fewer services. Others might save themselves by merging with larger banks. But with inflation too high for the Fed to cut now, “higher for longer” interest rate policy is looking increasingly likely, and banks with high exposure to troubled commercial real estate are at particular risk of starting a domino effect of small collapses that lead to bigger ones and bleed into becoming a real estate crisis.

The Klaros report looked at troubled community banks with a large proportion of troubled commercial real estate loans, uninsured deposits, and massive losses on other loans and bonds. These banks are held hostage by higher interest rate policy, and Jerome Powell has already acknowledged that not all of the Fed’s hostages will make it. Fear not, however — as he said at a recent hearing on monetary policy in the Senate Banking, Housing, and Urban Affairs Committee, a few failures won’t turn into an uncontrolled downward spiral:

“There will be bank failures…I think it’s manageable, is the word I would use.”

In other words, banks will fail, but it won’t be enough to trigger a large banking crisis or blow up the broader commercial real estate sector. Powell says the Fed is “working” with these troubled smaller banks that are sitting on loans for empty office and retail buildings, but it’s up to you whether you find his words reassuring:

“There are empty buildings in many major and minor cities…thousands and thousands of people who worked in those buildings are under pressure too…we’re just trying to stay ahead of it on a bank-by-bank basis.”

But interpreting Fed doublespeak is always a delicate endeavor. After all, if he did think 2024-2025 bank failures would be enough to start a domino effect, he wouldn’t say so, or it would cause markets to panic, and the collapse could quickly become a self-fulfilling prophecy.

But don’t worry — Powell promises that in any event, the Fed will use taxpayer money to protect the megabanks deemed “systemically important” if its economic meddling leads to a banking crisis. The first bank failure of 2024, First Republic Bank, doesn’t fall into this “too big to fail” category and was absorbed by the larger Fulton Financial. Almost 50% of First Republic’s loans were in commercial real estate.

In all its hubris, the Fed is stuck between preventing a banking crisis and preventing inflation from getting even more out of control. It needs higher rates to reduce inflation, but crucial sectors of the economy that are heavily dependent on lending can’t survive in a higher-rate environment, even if they don’t appear insolvent at first glance.

In a free market, interest rates would be much higher — and “too-big-to-fail” banks wouldn’t exist. Parts of the economy that couldn’t handle higher rates would be cleaned out of the system. Without the free market’s unforgiving but self-regulating mechanisms, where losers are allowed to lose no matter their size, Federal Reserve wizardry locks America into a seemingly endless cycle of death and reincarnation. Recession and bubble, boom and bust. But every cycle coils the spring more tightly as the Fed kicks the can down the road to prevent an all-out failure of the system, and the dollar itself, in the longer term.

Tyler Durden Thu, 05/09/2024 - 10:40

Denver Illegals Make Demands, Include 'Culturally Appropriate' Food, Lawyers, Unlimited Showers And Warnings Before Evictions

Illegal immigrants at a Denver, Colorado encampment that is set to be removed are refusing to leave until the city meets a list of 13 demands, which include access to "fresh, culturally appropriate ingredients" for food, unlimited showers, "the same housing support that has been offered to others," legal services, and fair warning before kicking them out.

The majority of the migrants at the Colorado encampment eventually accepted Denver's offer to stay at a shelter on Wednesday. 3
The majority of the migrants at the Colorado encampment eventually accepted Denver’s offer to stay at a shelter on Wednesday. FOX31 Denver

The group, which had been staying at an encampment under busy Central Park Boulevard in northeast Denver, before relocating under a bridge near the Denver Airport, sent their demands to Mayor Mike Johnson (D) on Wednesday, according to the nonprofit Housekeys Action Network Denver, which posted them to Facebook and said the demands were "incredibly reasonable and doable" and would ensure "long-term stability and opportunities for all."

The nonprofit also criticized the city for "poor conditions and lack of accountability that resulted in many of these same individuals finding themselves on the streets after having gone thru [sic] the system."

The full list of demands is as follows;

1. Migrants will cook their own food with fresh, culturally appropriate ingredients provided by the City instead of premade meals - rice, chicken, flour, oil, butter, tomatoes, onions, etc... Also people will not be punished for bringing in & eating outside food.
2. Shower access will be available without time limits & can be accessed whenever - we are not in the military, we’re civilians.
3. Medical professional visits will happen regularly & referrals/connections for specialty care will be made as needed.
4. All will receive the same housing support that has been offered to others. They cannot kick people out in 30 days without something stable established.
5. There needs to be a clear, just process before exiting someone for any reason - including verbal, written, & final warnings.
6. All shelter residents will receive connection to employment support, including work permit applications for those who qualify.
7. Consultations for each person/family with a free immigration lawyer must be arranged to discuss/progress their cases, & then the City will provide on-going legal support in the form of immigration document clinics, & including transportation to relevant court dates.
8. The City will provide privacy for families/individuals within the shelter.
9. No more verbal or physical or mental abuse will be permitted from the staff, including no sheriff sleeping inside & monitoring 24/7 - we are not criminals & won’t be treated as such.
10. Transportation for all children to & from their schools will be provided until they finish in 3 weeks.
11. No separating families, regardless of if family members have children or not. The camp will stay together.
12. The City must schedule a meeting with the Mayor & those directly involved in running the Newcomer program ASAP to discuss further improvements & ways to support migrants.
13. The City must provide all residents with a document signed by a City official in English & Spanish with all of these demands that includes a number to call to report mistreatment of if they aren’t

In response, Johnson's office offered the migrants the ability to stay in a city shelter for seven days instead of the initial three.

"We’ve been offering time and shelter, basically just trying to get families to leave that camp and come inside," Denver Human Services spokesperson Jon Ewing told 9News.

As the Epoch Times notes further, the migrant crisis is costing Denver bigly, as the group’s refusal to leave the encampment comes as Denver is battling with a $180 million budget gap as the illegal immigrant crisis continues to weigh heavily on the city.

In February, Mr. Johnston told reporters the city needs to slash roughly $18 million per month from public services throughout 2024 in order to fund the costs of providing services to illegal immigrants arriving in the city.

Denver Mayor Mike Johnston speaks during a news conference at the U.S. Capitol in Washington, Jan. 18, 2024. (Drew Angerer/Getty Images)

At the time, the Democrat called the cuts a “plan for shared sacrifice” that would help both “newcomers” illegally crossing the border and taxpayers who expected certain services in the city.

“This is what good people do in hard situations as you try to manage your way to serve all of your values. Our values are: we want to continue to be a city that does not have women and children out on the street in intense and 20-degree weather,” he said.

In its post on Facebook, Housekeys Action Network Denver said it was not up to Mr. Johnston to “accept and support the very migrants he says he appreciates and defends in his speeches.”

“Now is the time to support these individuals with sustainable, stable plans that also provide them with the autonomy and self-determination they want!!!” the organization said.

The Epoch Times reached out to Denver Human Services for further comment but did not receive a response by press time.

Tyler Durden Thu, 05/09/2024 - 10:20

Stocks And Bonds Rise Together As Inflation Fears Take Backseat

Authored by Simon White, Bloomberg macro strategist,

Stocks and bonds have been rising together again, with investors getting longer of both assets. Inflation fears are taking a backseat for now, allowing lower yields to boost stock prices.

Positioning data for equities shows that investors have been getting longer US stocks all year and are now net long as they have been since late 2021.

This was not long before the market peaked at the start of 2022, but the backdrop was worse then than it is now. CPI was 7% and still rising and excess liquidity was falling quite sharply.

Equities had a good week last week, retracing three-quarters of their recent down move. As discussed last week, they have seen a change of leadership, which has recently been consistent with a bottom in prices being near.

Stocks have rallied as yields have fallen from their recent high of ~4.70%. Bonds had become somewhat oversold, and we also saw some weaker than expected economic prints, e.g. payrolls, that pushed inflation concerns into the backseat and allowed USTs to bounce. Investors appear to have been dipping their toe back in, as positioning data shows an uptick in net long bond positioning.

Yet the longer-term outlook for bonds is still poor. Inflation will linger and leading indicators point to higher price growth to come. Stocks and bonds are rising together at the moment, but the flipside of that positive correlation is that they can fall together too, negating one of the main reasons multi-asset managers own them.

Banks have also been on net divesting themselves of Treasuries and agency securities over the last two years from 33% of assets to 30%. There was little to suggest that is about to start rising again from the latest Senior Loan Officer Survey, released on Monday for the three months to the end of April. The net percent of banks tightening standards for C&I loans remained steady, after rising in the quarters since SVB’s bankruptcy. That leads C&I loan growth by about six-to-nine months.

As the chart below shows, banks tend to reduce their holdings of less profitable Treasuries when they make more commercial loans.

That continues to make it more likely the household sector will be the buyer of last resort for Treasuries, and if inflation continues to be a problem, demand a higher yield premium to do so.

Tyler Durden Thu, 05/09/2024 - 10:00

Revenge Travel Peaked? Airbnb Pukes On Travel Spending Slowdown Forecast 

Shares of Airbnb stumbled in premarket trading in New York on Thursday after the home rental company beat earnings expectations for the first quarter but provided weaker-than-expected guidance. This comes after Bank of America analysts identified other travel companies missing earnings, leaving them with new fears that a consumer travel spending downturn nears. 

Here's how the company reported in the first quarter, compared with consensus expectations from Bloomberg: 

• Revenue $2.14 billion, +18% y/y, estimate $2.06 billion

• Gross booking value $22.9 billion, +12% y/y, estimate $22.32 billion

•  Adjusted Ebitda $424 million, +62% y/y, estimate $326.3 million

• Adjusted Ebitda margin 20% vs. 33% q/q, estimate 15.9%

• EPS 41c vs. 18c y/y, estimate 30c

• Nights and experiences booked 132.6 million, +9.5% y/y, estimate 131.81 million

• Gross booking value per nights and experiences booked $172.88, +2.6% y/y, estimate $169.38

• Free cash flow $1.91 billion, +21% y/y, estimate $1.07 billion

Despite the revenue beat in the quarter, nights and experiences booked, a key metric in the industry, posted 9.5%, falling short of expectations of a 12% increase. "It also represents the slowest rate of growth since 2020, suggesting that overall demand has normalized after an initial post-pandemic travel boom," Bloomberg said. 

Wall Street analysts were more focused on Airbnb's second-quarter guidance. The company now expects revenue for the quarter ending in June to be between $2.68 billion and $2.74 billion, down from $2.74 billion. 

• Sees revenue $2.68 billion to $2.74 billion, estimate $2.74 billion (Bloomberg Consensus)

In a statement, Airbnb noted that the Easter holiday and currency headwinds were some factors in the travel spending slowdown - ahead of the peak travel season in July. 

Wall Street analysts were focused on the "underwhelming" room nights metric and weak quarter-two guidance that overshadowed better-than-expected first-quarter earnings (list courtesy of Bloomberg):

Bloomberg Intelligence analyst Mandeep Singh

• "Airbnb's expectations of 8-10% top-line growth for 2Q suggests a further deceleration in room-night growth, with average daily rates likely to remain a slight tailwind"

RBC Capital Markets analyst Brad Erickson (sector perform, PT $150)

• "The Q2 revenue guide was slightly below consensus, and importantly, the shareholder letter called for Nights & Experiences y/y growth similar to Q1's 9% vs. consensus looking for 12%"

Morgan Stanley analyst Brian Nowak (underweight, PT $120)

• While Airbnb is a unique travel platform, room nights continue to underwhelm
• Expect "stable-to-slowing room night growth" and more use of marketing to drive growth "weighing on the multiple investors are willing to pay"

JPMorgan analyst Doug Anmuth (neutral, PT $145 from $140)

• Airbnb reported a solid 1Q, expect 2Q to be stable and acceleration in 3Q
• "ABNB's work on making hosting mainstream & perfecting the core service continued in 1Q"

Citi analyst Ronald Josey (buy, PT to $167 from $170)

• The results are better than expected, but the outlook is below the consensus

Evercore ISI analyst Mark Mahaney (in line, PT $140)

• Revenue and adjusted Ebitda are highlights of the report, but the revenue forecast "bracketed the Street"

Airbnb shares are puking in premarket trading, down 9.3% to $143 handle. 

The slowdown in travel spending has hit other companies in the industry. 

Last week, Booking Holdings posted worse-than-expected guidance, and Expedia Group reported disappointing results.

On Wednesday, this led Bank of America's trading desk to ask: "Theme Alert? Consumer Travel Spending easing?" 

They pointed out a list of disappointing earnings across the travel industry: 

• $EXPE miss/guide

• $TRIP miss

• $CMCSA parks commentary

• $DIS parks' moderation' or normalization

• $UBER slight bookings miss

Taking a deeper dive into markets, the Dow Jones US Travel & Leisure Index peaked in late March and fell 7.5%. The index is up against heavy resistance. 

Also, during earnings calls, McDonald's, Starbucks, and Tyson Foods have recently warned about mounting headwinds hitting low-income consumers amid the failure of Bidenomics, which has left the economy plagued with elevated inflation. 

To sum up, revenge travel originating from the end of the pandemic could fade here. 

Tyler Durden Thu, 05/09/2024 - 09:40

Biden's Partial Arms Embargo On Israel Is Aimed At Pressuring It Into A Regional Peace Deal

Authored by Andrew Korybko via Substack,

Many observers from the Mainstream Media and the Alt-Media Community alike were shocked when Defense Secretary Austin confirmed on Wednesday during a congressional testimony that the US had withheld “one shipment of high payload munitions” on the pretext that they could be used in Rafah. Biden then expanded on this newfound policy later in the day when declaring that “We’re not going to supply the weapons and artillery shells” if the IDF goes into Rafah’s population centers.

Nobody should have been surprised, however, since this piece here from mid-March about why Biden endorsed Schumer’s call for regime change in Israel explained the double game that his administration is playing. In brief, domestic electoral considerations influenced his team into ramping up last spring’s pressure campaign against Bibi, which was initially meant to punish him for ideological reasons but is now also aimed at pressuring Israel into the regional peace deal that it’s reportedly trying to broker.

Interested readers can learn more about it here, with the pertinence being that the US envisages Saudi Arabia recognizing Israel in exchange for Israel agreeing to Palestinian statehood. In furtherance of that grand strategic goal, which would reshape West Asian geopolitics, the US is dangling privileged nuclear energy and military partnerships in front of Saudi Arabia while gradually increasing its pressure on Israel. It also reportedly told Qatar to expel Hamas’ political wing if it doesn’t agree to a ceasefire.

There’ll be those activist-minded members of the Mainstream Media and the Alt-Media Community who’ll pick and choose which element of this policy to focus on in advance of their ideological agenda but the fact of the matter is that the entire whole represents a comprehensive diplomatic push. The US sees an opportunity to restore some of its lost regional influence through these means, which its policymakers believe will decelerate the recent expansion of Sino-Russo influence in West Asia.

Withholding a single arms shipment from Israel is a purely symbolic gesture that comes way too late to prevent the humanitarian catastrophe that unfolded in Gaza over the past eight months of total war, but it still signals that more forthcoming shipments might be withheld if Israel continues its Rafah operation. In that event, bilateral relations would worsen if Bibi doesn’t accept a compromise solution, which he’d be reluctant to do since that would discredit him after he promised to completely destroy Hamas.

Therein lies the problem, however, since that objective can only be achieved through military means that would perpetuate the Palestinians’ suffering and thus delay the deal that the US hopes to broker with the Saudis. The Kingdom won’t recognize Israel so long as the conflict continues, and a greater civilian death toll than the already presently high one could make it even more difficult to do so once the war finally ends. That deal is integral to Israel’s interests, but so too is Hamas’ destruction, ergo the dilemma.

Nevertheless, provided that Israel has adequate stockpiles to continue its campaign, then Bibi might gamble that he can destroy Hamas’ military wing at least and then play on the Saudis’ equal interest in the previously mentioned deal to eventually make it happen sometime after the war ends. That can’t be taken for granted though since the US wouldn’t have symbolically withheld is recent shipment nor would Biden have threatened to withhold all offensive arms if it thought this was truly the case.

It therefore remains to be seen what’ll happen, but the US expects that Bibi will indeed be pressured by this newfound policy into compromising on Gaza, which could discredit his leadership among the ultra-nationalist members of his coalition on whom his government depends. Basically, the US wants to kill three birds with one stone by bringing an end to this war for domestic electoral reasons, facilitating Bibi’s departure from office, and brokering an Israeli-Saudi peace deal for restoring its lost regional influence.

Tyler Durden Thu, 05/09/2024 - 09:20

Gold, Stocks, & Bonds Jump As 'Bad' Jobs News Reignites Rate-Cut Hopes

The sudden surge in initial jobless claims this morning was met with a significant across-the-market reaction (amid low levels of liquidity - Goldman noted yesterday was the quietest market day this year).

Rate-cut hopes jumped...

Which sent bond yields lower...

...and stocks higher...

The dollar dropped...

...sending gold higher...

This level of 'data dependence' in an illiquid market will not end well.

Tyler Durden Thu, 05/09/2024 - 09:07

 

Nestled in between lip-sync dancers and fashion influencers, financial fraud lurks on TikTok.

At least one person1 has noticed the risks to young consumers of social media: Since August 2020, @TikTokInvestors has been curating the most outrageous money-losing and dangerous videos culled from the “financial experts” at TikTok.

The advice ranges from wrong to risky to criminal:

-401ks? A scam!

-Want to earn more money? Day trade at home!

-Pay taxes? Not if you spend tax season on a boat!

-Want to turn $100 into a million? Follow my strategy earning 2% a day!

No, no, no and Hell, no!

It is a massive Dunning Kruger: exercise in inexperienced but overly confident “Finfluencers” reducing complex issues involving money to a slick but misleading sales pitch. No audited returns, mathematically improbable claims, and zero accountability But none of these “influencers” sell securities to clients, so they do not fall under the regulatory oversight of the Securities and Exchange Commission (SEC).2

Sure, you can claim mainstream media is bad, but social media is worse. No editors or gatekeepers, just a Wild West of grifters mixed in with everybody else. Bad financial advice reaches naïve, impressionable consumers of social media without any guardrails or controls. On Social Media, grifters can make outlandish claims without fear of reprisal. It is a bizarre set of circumstances that allows people to be defrauded on a regular basis. Only after people the con can prosecutors pursue the scammers.

I reached out to the person behind the @TikTokInvestors for some background; they shared some of the more egregious TikTok posts, along with some background on each:

Max Out your 401K? The dumbest idea ever!

@TikTokInvestors:

“Apart from his misleading arrogance and the inaccurate market statistics mentioned, a 401K is possibly the best investment vehicle for the average American. I doubt he’s run the real numbers of being invested in the stock market tax deferred with an additional company match. Always be wary of social media influencers who use engagement bait tactics to sell a course or event.” Then there is this brilliant and simple strategy: All you need to do is make 2% a day!

Turn $100 into 1 million dollars – I can show you how!

@TikTokInvestors:

“Turning $100 into $1mln by earning 2% daily in the market is nearly mathematically impossible. What’s dangerous here is that she’s well spoken, seems trustworthy, and comes across confident in her ability to do this for her clients. The reality is she can’t; the majority of professional investors in the world can’t even beat the S&P on an annual basis.”

Some of the more absurd claims date back to the pandemic. One of my faves is this handsome couple explaining “How do we maintain our lifestyle?”

A sneak peek of one of our top secret trading strategies

TTI noted

“This was at the peak of the bull market during the pandemic and it still makes me laugh. It goes without saying that investing is not this easy; whether you’re trading or investing long-term there’s a variety of factors and risks to consider before putting capital to work. Assuming every stock goes up and to the right is hilariously ignorant.”

There is lots more: A slew of bad tax advice likely to get-you-sent-to-jail-for-tax evasion: Live on a boat during tax season! (Nope); Spend $400k on a house, and the $189k depreciation offsets your taxable income (LOL). There were so many of these that the IRS had to post a list of 46 tax avoidance claims covering the most ridiculous statements, noting any that are “the same as or similar to the following are frivolous.”  Oops.

This is not a comprehensive list, but there are two others worth mentioning: It’s probably better if you do not teach your home-schooled 10-year olds to day trade. And, I find the phrase “Index Bro” amusing:  Don’t index, just buy the best stocks! (why didn’t I think of that?)

While the government debates whether or not to ban TikTok, investors should consider making some changes on various social media themselves. A good start would be eliminating all of the terrible FinTok advice on taxes, day trading and investing.

 

 

Previously:
Simple, But Hard (January 30, 2023)

One-Sided Markets (September 29, 2021)

The Price of Paying Attention (November 2012)

 

See also:
Welcome to FinTok, Where Day Trading, Options Investing, and Misinformation Reign (Institutional Investor, September 25, 2020)

TikTok Influencers Promise They’ll Make You Rich. The Math Doesn’t Add Up (Rolling Stone, January 24, 2024)

How TikTok Is Wiring Gen Z’s Money Brain (WSJ, May 4, 2024)

 

 

__________
1. Source: TikTok Investors on Twitter: Quotes from TTI are via DM’s on Twitter; he or she remains anonymous as they work in the finance industry and are not authorized to speak publicly on behalf of their employer.

2. But my firm does, and we spend a lot of time and money making sure every single thing we publish meets all SEC requirements.

 

The post TikTokInvestors appeared first on The Big Picture.

"Deep Freeze": Jack Smith Has Few Options In Trump Case, Say Former Prosecutors

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

A federal judge’s ruling this week that postponed former President Donald Trump’s classified documents case represents a significant legal win for the former president, legal analysts say.

A former federal prosecutor, Renato Mariotti, wrote that there is virtually “nothing” special counsel Jack Smith can do to speed the process up.

“Realistically there is nothing Jack Smith can do to move the Mar-a-Lago case forward to trial before the election. Judges have extremely broad discretion over their trial calendar, which is what gives Judge Cannon the ability to avoid setting a trial date at this time,” Mr. Mariotti wrote on social media.

Another former federal prosecutor, Brandon Van Grack, wrote that Mr. Smith’s team will have “a bumpy ride” ahead of them because of Judge Cannon’s “numerous other scheduled hearings on pretrial motions” from President Trump and two co-defendants, which he indicates that Judge Cannon believes “have merit.”

Harry P. Litman, a law professor and a former U.S. attorney, echoed those claims, saying that the case is now in a “deep freeze” after the latest order.

Meanwhile, multiple television legal analysts claimed that with her latest order, Judge Cannon is intentionally trying to delay the case. The Epoch Times contacted the court for comment.

“This is news but it’s hardly unexpected. Judge Cannon seems desperate to avoid trying this case. This isn’t justice. defendants aren’t the only ones with speedy trial act rights, we the people have them too,” wrote former federal prosecutor Joyce Vance, who currently works for MSNBC, on Tuesday afternoon.

But Tim Fitton, the head of the Judicial Watch legal group, wrote that complaints about Judge Cannon’s decisions are unwarranted, arguing that such a timeline “is normal and not surprising.”

“But the Left’s election riggers and civil rights abusers believe that Trump has no rights and will attack Judge Cannon for proceeding normally in this case and for not violating Trump’s constitutional rights,” he wrote on X, formerly known Twitter.

In that post, he pointed out that Mr. Smith’s team last week submitted court papers to Judge Cannon essentially saying that his team misled the court because the contents of a box of documents were re-arranged. Prosecutors did not disclose the exact reason why the materials may have been shifted.

“There are some boxes where the order of items within that box is not the same as in the associated scans,” Mr. Smith’s team wrote, adding that the update contrasts with what they told the judge several weeks ago during a hearing.

The boxes in question have “items smaller than standard paper such as index cards, books, and stationary, which shift easily when the boxes are carried, especially because many of the boxes are not full,” they added.

After the disclosure, President Trump wrote his Truth Social platform that he believes Mr. Smith should be arrested before calling for the case to be immediately dropped.

Other Activity

Judge Cannon has denied two bids by President Trump to dismiss the charges. She has signaled that President Trump’s arguments that the documents were personal records may be relevant to how she instructs the jury at a future trial, a decision that could lead to an appeal by prosecutors and more delays.

In the meantime, there has been speculation that the classified documents case will not go to trial before the 2024 election. If it does, it would likely be in the weeks immediately before Nov. 5, an outcome sure to draw accusations of election interference from President Trump’s legal team.

“Any judge would take pause with the idea of trying a presidential candidate a month before the presidential election,” said attorney Kel McClanahan, who specializes in national security issues and has represented members of the intelligence community.

A Trump win in November could mean that neither case ever reaches a jury. As president, President Trump could direct the Department of Justice to drop the federal charges or seek to pardon himself.

The charges in the Florida case include violations of the Espionage Act, which criminalizes the unauthorized possession of national defense information, as well as conspiracy to obstruct justice and making false statements to investigators.

Walt Nauta, valet to former President Donald Trump and a co-defendant in federal charges filed against Mr. Trump, is seen at the James Lawrence King Federal Justice Building in Miami on July 6, 2023. (Alon Skuy/Getty Images)(Photo by Alon Skuy/Getty Images)

President Trump has pleaded not guilty to 40 charges connected to allegations that he illegally retained classified documents at his home after leaving in January 2021 and obstructed officials’ attempts to retrieve them. Two of his aides, Walt Nauta and Carlos de Oliveira, have also been charged in the case.

He also faces charges in New York, where a trial is currently ongoing in which he is accused of falsifying business records during the 2016 election. Election interference charges were also filed in Fulton County, Georgia, and Washington.

He’s pleaded not guilty to those charges, too, arguing they’re part of an orchestrated plot to imperil his 2024 reelection chances.

Reuters contributed to this report.

Tyler Durden Thu, 05/09/2024 - 08:50

Reality Dawns? Initial Jobless Claims Suddenly Spike To Highest In 9 Months

With WARNs high, payrolls slowing, JOLTS data tumbling - led by construction jobs collapsing, and Challenger-Grey layoffs remarkably elevated, why would anyone question the government's official data on jobless claims - that continue to languish (in a good way) near record lows.

Well this week, the beginnings of reality started to shine through as 231,000 Americans file for jobless benefits for the first time last week, a large jump from last week's 209,000...

Source: Bloomberg

That is the largest weekly claims since August 2023, and the third biggest weekly jump since 2021.

Is the real world labor market starting to appear in the government's data?

1. Everybuddy: 100% of workforce
2. Wisense: 100% of workforce
3. CodeSee: 100% of workforce
4. Twig: 100% of workforce
5. Twitch: 35% of workforce
6. Roomba: 31% of workforce
7. Bumble: 30% of workforce
8. Farfetch: 25% of workforce
9. Away: 25% of workforce
10. Hasbro: 20% of workforce
11. LA Times: 20% of workforce
12. Wint Wealth: 20% of workforce
13. Finder: 17% of workforce
14. Spotify: 17% of workforce
15. Buzzfeed: 16% of workforce
16. Levi's: 15% of workforce
17. Xerox: 15% of workforce
18. Qualtrics: 14% of workforce
19. Wayfair: 13% of workforce
20. Duolingo: 10% of workforce
21. Rivian: 10% of workforce
22. Washington Post: 10% of workforce
23. Snap: 10% of workforce
24. eBay: 9% of workforce
25. Sony Interactive: 8% of workforce
26. Expedia: 8% of workforce
27. Business Insider: 8% of workforce
28. Instacart: 7% of workforce
29. Paypal: 7% of workforce
30. Okta: 7% of workforce
31. Charles Schwab: 6% of workforce
32. Docusign: 6% of workforce
33. Riskified: 6% of workforce
34. EA: 5% of workforce
35. Motional: 5% of workforce
36. Mozilla: 5% of workforce
37. Vacasa: 5% of workforce
38. CISCO: 5% of workforce
39. UPS: 2% of workforce
40. Nike: 2% of workforce
41. Blackrock: 3% of workforce
42. Paramount: 3% of workforce
43. Citigroup: 20,000 employees
44. ThyssenKrupp: 5,000 employees
45. Best Buy: 3,500 employees
46. Barry Callebaut: 2,500 employees
47. Outback Steakhouse: 1,000
48. Northrop Grumman: 1,000 employees
49. Pixar: 1,300 employees
50. Perrigo: 500 employees
51. Tesla: 10% of workforce

California and New York dominated the states with by far the largest increase in jobless claims last week - did the illegals all suddenly realize they could get paid for doing no work?

Continuing claims - according to the government - were also flat week on week at 1.785 million Americans, having gone practically nowhere for a year...

Still quiet a way to go to catch up to the non-govt-supplied data...

Source: Bloomberg

Ah, Bidenomics!!

If Trump wins in November, will all this data suddenly be fully released to reflect reality?

Tyler Durden Thu, 05/09/2024 - 08:38

The DOL reported:

In the week ending May 4, the advance figure for seasonally adjusted initial claims was 231,000, an increase of 22,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 208,000 to 209,000. The 4-week moving average was 215,000, an increase of 4,750 from the previous week's revised average. The previous week's average was revised up by 250 from 210,000 to 210,250.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 215,000.

The previous week was revised up.

Weekly claims were much higher than the consensus forecast.

Futures Drop As Treasury Yields Extend Gains

US equity futures are weaker as yields resume their rise and the USD strengthens after the BOE signaled it was ready to cut rates. As of 7:45am, S&P futures were down 0.2% and Nasdaq futures dipped 0.3% as all Mag7 names and most semis were red in the premarket. Most European markets are lower, tracking US futures and Asian stocks in what appears to be de-risking in a catalyst-light week. 10Y treasuries ticked lower for a second day, pushing the yield about 2bps higher to 4.51% after a $42 billion sale of 10-year notes received tepid demand. Commodities are stronger with Ags/Energy outperforming Metals. Jobless data is not expected to be market moving but keep an eye on the 30Y bond auction.  

In premarket trading, US-listed shares of Arm Holdings plunged 8.5% after the chip-design company gave a full-year forecast that is seen as mixed relative to consensus, especially given the market’s high expectations. Airbnb shares also tumbled 8.7% after the home-rental company’s Q2 revenue forecast trailed the average analyst estimate, ahead of the peak summer season. Here are some other notable premarket movers:

• AppLovin shares are up 15% after the software maker’s quarterly sales and earnings came in comfortably above forecasts.
• Bumble shares jump 12% after the online dating company affirmed its full-year forecast, which Citi said offset a weak second-quarter guide.
• Cardlytics shares drop 27% after the application software company reported revenue for the first quarter that missed the average analyst estimate.
• Cheesecake Factory shares rise 1.6% after the restaurant chain operator reported adjusted earnings per share for the first quarter that beat the average analyst estimate. Raymond James raised the recommendation on the stock to outperform from market perform.
• Compass stock climbs 13% after the real estate technology firm delivered a revenue forecast range for the second-quarter that beat the average analyst estimate at the midpoint.
• Duolingo shares fall 12% after the education software provider’s daily active user growth cooled. Analysts note that it was about time for the company’s growth to normalize after years of upside.
• Magnite shares rise 11% after the advertising technology firm posted 1Q profit and revenue that beat estimates.
• Robinhood shares gain 5.0% after the fintech’s results beat expectations thanks to strength in crypto trading.
• SolarEdge shares plunge 9.1% after the solar power company reported a wider-than-expected 1Q loss and provided guidance for 2Q that came in below even the most pessimistic forecasts, according to analysts.
• Trade Desk shares are up 1.1% after the advertising technology company reported first-quarter results that beat expectations and gave an outlook that is above the analyst consensus.
• Warner Bros. shares rise 3.3% after Chief Executive Officer David Zaslav ordered his lieutenants to find additional opportunities for cost-cutting in order to hit financial targets for the next couple years.
• Zai Lab ADRs soar 19% after the Chinese biopharmaceutical company reported estimate-beating sales.

The recent stock bounce is fading as the earnings season winds down, leaving investors to wait for new data - especially next week's CPI report - for clues to gauge how fast policymakers will be able to begin cutting rates. The pound fell against all of its Group of 10 peers after the Bank of England edged closer to cutting interest rates from a 16-year high, with two of the nine committee members voting for lower borrowing costs. US initial jobless claims data later Thursday will be another focal point for investors seeking more evidence that the labor market is finally softening, allowing the Federal Reserve to begin lowering rates by the end of the year. Prospects for a Fed rate cut improved after softer-than-expected US payrolls last week.

“We still see potential rate cuts to be some months out and with no probable actions occurring prior to September,” Louise Dudley, portfolio manager for global equities at Federated Hermes, said in a note to clients. “US economy figures have generally been hot.”

The CPI figures due next week will offer fresh insights about the US economy after recent employment data showed the labor market is cooling. Fed Bank of Boston President Susan Collins signaled Wednesday that interest rates will likely need to be held at a two-decade high for longer than previously thought to damp demand and reduce price pressures.

European stocks fell 0.2%, hovering near record highs after rising in the prior four sessions. The  energy sector outperformed, while autos were the worst laggards. Markets in Denmark, Finland, Norway, Sweden and Switzerland are closed for a holiday. Banco de Sabadell SA rose after Banco Bilbao Vizcaya Argentaria SA commenced a $12 billion hostile bid for the lender. Here are the most notable movers:

• BAE Systems shares rise as much as 0.9% in a fourth day of gains after the defense and aerospace systems manufacturer delivered results in line with expectations.
• Prysmian shares gain as much as 1.3%, pushing the stock to a record high, after narrowing its guidance to the upper end of the range and producing first-quarter results which analysts view as solid.
• Banco de Sabadell shares rise as much as 7.1% after BBVA made an €11.5 billion hostile bid for its smaller Spanish banking rival, days after having an initial approach rejected. BBVA drops.
• BE Semiconductor shares jump as much as 8% after the Dutch chip equipment maker said it receives an order for 26 hybrid bonding systems from a “leading semiconductor logic manufacturer.”
• Nexi shares rise as much as 7.7% after the payments firm reported estimate-beating results, helped by a stronger card issuing business and cost controls.
• IMI shares rise as much as 1.4%, on track to close at a fresh record high, after the engineering group delivered a solid trading update and reiterated its full-year guidance.
• ITV shares rise as much as 3% after the UK broadcaster issued stronger-than-expected advertising guidance for 2Q, leading brokers to raise their price targets on the stock.
• Harbour Energy shares rise as much as 6.2%, the most in four months, after the oil and gas company’s update showed it remains on track to meet expectations this year.
• Balfour Beatty shares rise as much as 1.7% after the group released a short trading update confirming trading has been in line with expectations since the start of 2024.
• 3i shares fall as much as 3.6% after total return for the full year missed the average analyst estimate, with RBC analysts noting misses in operating cash profit and net debt at year-end coming in a little above forecasts.
• Argenx shares fall as much as 10%, the steepest drop this year, after first-quarter results from the biotech firm failed to provide much in the way of fresh catalysts.
• BPER Banca shares decline as much as 6.1% in Milan as the bank’s key trends look weaker, according to Deutsche Bank analysts.
• Wood shares fall as much as 3.5%, paring Wednesday’s rally after the Scottish engineering firm rejected a preliminary 205p/share acquisition proposal from Sidara.

Asian stocks resumed gains on Thursday, lifted by optimism around key offshore Chinese tech companies as they report earnings next week. The MSCI Asia Pacific Index climbed as much as 0.4% after its four-day winning streak was halted in the previous session. Hong Kong-listed shares were among the best performers in the region, with Tencent giving the biggest boost to the index ahead of earnings next week. Meituan shares jumped nearly 5% after Citi raised its price target on expectation that earnings will show growth in the food delivery business. Japan’s Topix gained nearly 0.9% after BOJ Minutes revealed a desire from at least one member to sell all ETFs and an acknowledgement that a weaker JPY may lead to more inflation; the Australian benchmark fell after rising for five consecutive sessions. Stocks in Korea traded lower. Earnings of top Chinese technology companies will be key for the bounce-back in the nation’s stocks from their multi-year lows to continue. Tencent and Alibaba both publish results next Tuesday, followed by JD.com and Baidu two days later.

• Hang Seng & Shanghai Comp were underpinned amid resilience in the tech sector and after China's eastern city of Hangzhou lifted all home purchase restrictions, although there were headwinds from default concerns as Country Garden Holdings (2007 HK) failed to make coupon payments on a yuan-denominated bond due today but still has a grace period.
• Nikkei 225 recovered from an early dip with trade contained as participants digested BoJ rhetoric and soft wages.
• ASX 200 was dragged lower by underperformance in consumer stocks and financials with the latter pressured after Australia's largest lender CBA reported a decline in profits.

In FX, the Bloomberg Dollar Spot Index rose 0.1% as the greenback gained against all Group-of-10 peers; Treasury yields rose 1-3bps across the curve.

• USD/JPY rose as much as 0.3% as the Japanese yen led losses against the dollar, earlier in the Asian session the currency pair fell 0.2%; a BOJ April meeting summary indicated the weak yen is being closely watched and could result in a faster pace of rate hikes
• GBP/USD steadied around 1.2480 after falling as much as 0.4% to 1.2450 after the BOE kept rates unchanged but signaled that the time for cuts is approaching

Treasuries are lower on the day, but have pared declines as gilts jump on Bank of England’s 7-2 vote to keep rates on hold, with Ramsden joining Dhingra in supporting a cut. UK curve steepens with 2-year yields dropping around 3bp on the day. US long-end yields remain cheaper by about 3bp with front-end outperforming slightly. 10-year around 4.51%, also cheaper by 3bp on the day; gilt yields reached day’s lows and GBP/USD fell as much as 0.4% to 1.245% after BOE policy announcement. US session includes weekly jobless claims and $25b 30-year bond sale, last of week’s three auctions.

In commodities, oil prices advance, with WTI rising 0.6% to trade near $79.40. Spot gold is little changed.

Bitcoin softer on the session and holds just shy of USD 61k, whilst Ethereum unable to climb back above USD 3k.

To the day ahead now, and the main highlight will be the Bank of England’s latest policy decision and Governor Bailey’s press conference. Other speakers will include ECB Vice President de Guindos, the ECB’s Cipollone, Bank of Canada Governor Macklem, the Fed’s Daly, and BoE chief economist Pill. Otherwise in the US, we’ll get the weekly initial jobless claims, and there’s a 30yr Treasury auction taking place.

Market Snapshot

• S&P 500 futures down 0.2% to 5,201.50
• STOXX Europe 600 down 0.1% to 515.19
• MXAP down 0.2% to 176.15
• MXAPJ down 0.3% to 549.14
• Nikkei down 0.3% to 38,073.98
• Topix up 0.3% to 2,713.46
• Hang Seng Index up 1.2% to 18,537.81
• Shanghai Composite up 0.8% to 3,154.32
• Sensex down 1.1% to 72,646.43
• Australia S&P/ASX 200 down 1.1% to 7,721.64
• Kospi down 1.2% to 2,712.14
• Brent Futures up 0.6% to $84.11/bbl
• Gold spot up 0.1% to $2,311.61
• US Dollar Index up 0.16% to 105.71
• German 10Y yield little changed at 2.50%
• Euro down 0.2% to $1.0728
• Brent Futures up 0.6% to $84.12/bbl

Top Overnight News

• China’s efforts to revive homebuyer demand gathered steam on Thursday when two major cities scrapped all their remaining curbs on residential property purchases, a move that more local governments are expected to follow. Developer stocks surged after Hangzhou, the capital of eastern Zhejiang province, said it will remove eight-year-old restrictions on residential property purchases and no longer review the qualifications of homebuyers. Xi’an, the capital of Shaanxi province, announced similar steps hours later. BBG
• China’s central bank seems very likely to make a bond purchase in the secondary market for the first time in two decades. SCMP
• The BOJ’s board is becoming more concerned about the inflation outlook as a sharply weaker yen threatens to drive up import prices, a summary of its latest meeting showed. WSJ
• EU countries have agreed to use an estimated €3bn in profits arising from Russia’s frozen state assets to jointly buy weapons for Ukraine. The deal struck by the bloc’s 27 ambassadors on Wednesday only targets profits made by Belgium’s central securities depository Euroclear, where about €190bn of Russian central bank assets are held. Western nations immobilized Russia’s state assets abroad in 2022, in response to its full-scale invasion of Ukraine. FT
• President Biden trails former President Trump by roughly 1pp in national polling and by around 2pp in the swing state that would currently provide the winning electoral vote. Prediction markets imply around a 52% chance of a Democratic win. Biden’s lead over Trump in some prediction markets has retraced somewhat this month and Biden's approval rating has ticked down to 38%, not far off the 37% low and below Trump’s average approval in the six months before he lost the 2020 election. GIR
• Speaker Mike Johnson on Wednesday easily batted down an attempt by Representative Marjorie Taylor Greene of Georgia to oust him from his post, after Democrats linked arms with most Republicans to fend off a second attempt by G.O.P. hard-liners to strip the gavel from their party leader. NYT
•  Roughly one in 37 US homes is now considered seriously underwater, real estate data firm ATTOM said. That share is much higher — and growing at a faster pace — across a swath of southern states. But nationally, it’s still lower than before the pandemic. BBG
• Tim Cook will likely stay AAPL's CEO for at least another three years and his most likely successor at that time would be John Ternus, the current head of hardware engineering. BBG

A more detailed look at global markets courtesy of Newqsuawk

APAC stocks were mixed as the region took its cue from the indecisive performance stateside owing to mixed earnings and as markets await the next major catalysts, while the somewhat mixed but improved Chinese trade data had little impact.  ASX 200 was dragged lower by underperformance in consumer stocks and financials with the latter pressured after Australia's largest lender CBA reported a decline in profits. Nikkei 225 recovered from an early dip with trade contained as participants digested BoJ rhetoric and soft wages. Hang Seng & Shanghai Comp were underpinned amid resilience in the tech sector and after China's eastern city of Hangzhou lifted all home purchase restrictions, although there were headwinds from default concerns as Country Garden Holdings (2007 HK) failed to make coupon payments on a yuan-denominated bond due today but still has a grace period.

Top Asian News

• PBoC said it could either buy or sell treasury bonds in the secondary market depending on market conditions, as such trades can be used to manage liquidity, according to Reuters.
• China's eastern city of Hangzhou lifted all home purchase restrictions, according to its housing authority.
• Country Garden Holdings (2007 HK) said it cannot make payments on a yuan-denominated bond, while it aims to pay onshore coupons due today and additional interests by May 13th. Furthermore, it stated that if it fails to make payments within the grace period, China Bond Insurance Co. will undertake credit enhancement obligations and it is still raising funds due to sales recovery lagging expectations.
• US Commerce Secretary Raimondo said the US could ban Chinese-connected vehicles or impose guardrails, while it was separately reported that US Senator Brown is seeking a US ban on all Chinese internet-connected vehicles, according to Bloomberg.
• Hong Kong and Saudi Arabia are exploring an ETF to track Hong Kong stock indices, while Hong Kong is working with several financial institutions to develop the ETF and the government is considering establishing an economic and trade office in Riyadh.
• BoJ Summary of Opinions from the April meeting noted that a member stated if trend inflation accelerates, the BoJ will adjust the degree of monetary easing but an accommodative financial environment is likely to continue for the time being and a member said if forecasts under quarterly report are met, interest rates might rise to levels higher than markets currently price in. It was also stated that one option would be to hike rates moderately in accordance with economic, price and financial developments to avoid a shock from an abrupt policy shift. Furthermore, a member said they must hike rates at an appropriate time as the likelihood of achieving forecasts heightens and a member said the BoJ must deepen the debate on the timing and pace of a future rate hike.
• BoJ Governor Ueda said a low real rate supports the economy and inflation, while he added that they need to monitor FX and oil for real wages. Ueda also stated the BoJ could adjust the degree of monetary accommodation via rate hikes if trend inflation accelerates gradually, as well as noted that a sharp, one-sided yen fall is undesirable and bad for the economy. Furthermore, he reiterated if FX volatility affects or risks affecting trend inflation, the BoJ must respond with monetary policy and will scrutinise the recent weak yen in guiding monetary policy.
• Japanese Finance Minister Suzuki said it is important for currencies to move in a stable manner reflecting fundamentals and rapid FX moves are undesirable, while they are closely watching FX moves and will take thorough response in forex. Suzuki also stated they will take all necessary measures and continue to analyse the FX impact on the economy and livelihoods and take appropriate action.
• Japanese top currency diplomat Kanda said no comment on intervention and if necessary, they will take appropriate action and are ready for currency intervention at any time, while he added that comments about Japan's limitations are wrong when asked about FX intervention reserves.
• Nissan (7201 JT) FY23/24 (JPY): Net Profits 426.65bln (+92.3% Y/Y), Operating Profit 568.72bln (+50.8%), Recurring Profits 702.16bln (+36.2%); Sees FY24 global retail sales at 3.7mln and North America sales of 1.43mln.
• China is said to be considering a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via Stock Connect, Bloomberg sources say

European bourses, Stoxx600 (-0.2%) are mixed and unable to find direction, taking lead from an indecisive session in APAC trade with newsflow somewhat light thus far on account of Ascension Day. European sectors are mixed and with the breadth of the market fairly narrow, though with the exception of Autos, which has been weighed on by Mercedes-Benz (-5.5%). Energy is found at the top of the pile, propped up by broader strength in crude prices. US Equity Futures (ES -0.2%, NQ -0.3%, RTY -0.5%) are in the red, with slight underperformance in the RTY continuing the weakness seen in the prior session. In terms of stock specifics, Arm (-9%) is lower in the pre-market, despite beating on top/bottom line, though its guidance failed to impress investors & Tesla (-1.5%) on reports around China job reductions. Goldman Sachs raises 12-month FTSE 100 cash target to 8,800 from 8,200 (last close 8,354)

Top European News

 

FX

• USD is firmer vs. all peers in quiet newsflow with the DXY eclipsing yesterday's 105.64 best. Interim resistance ahead of the 106 mark comes via the 2nd May high at 105.89.
• EUR is once again on the backfoot vs. the USD in a third consecutive session of losses. Currently trading within a 1.0751-27 range.
• Pound is softer vs. the broadly stronger USD but flat vs. the EUR. BoE looming large for the pair with markets on the lookout for any hints of a move in June. If this materialises, yesterday's low sits at 1.2468 with the MTD low just below at 1.2466. To the upside, 1.25 would be the immediate target with the 200DMA at 1.2542.
• JPY unaffected by ongoing jawboning from Japanese officials and is the marginal laggard across the majors. 155.84 the session high thus far for USD/JPY.
• Antipodeans are both relatively contained vs. the USD with macro drivers on the light side. AUD/USD is consolidating around its 100DMA after two sessions of losses and respecting yesterday's 0.6557-99 range. NZD/USD a touch softer.
• PBoC set USD/CNY mid-point at 7.1028 vs exp. 7.2238 (prev. 7.1016).
• Brazil Central Bank cut the Selic rate by 25bps to 10.50%, as expected, whereby 5 members voted in favour of a 25bps cut and 4 members voted for a 50bps reduction. The committee unanimously judged that the uncertain global scenario and the domestic scenario, marked by resilient economic activity and de-anchored expectations, require greater caution. It also stated that monetary policy should continue being contractionary until the consolidation of both the disinflation process and the anchoring of expectations around the targets.

Fixed Income

• USTs are softer, in a continuation of the general bearish tone that was in place yesterday and one that appears to be driven by a pause-for-breath from the post-NFP move, lack of geopolitical escalation, relatively average 10yr before today's 30yr and an increase in corporate issuance activity.
• Gilts are pressured ahead of the BoE policy announcement. Gilts are toward the 97.50 trough and are underperforming EGBs somewhat, underperformance that appears to be a function of the UK catching up to the relatively average US 10yr auction late on Tuesday.
• Bunds are softer, with action and drivers perhaps a touch thinner thus far on account of Ascension Day. Bunds down to a 130.90 base which marks a new low for the week and has taken the 10yr yield back to the 2.50% mark

Commodities

• Firmer trade across energy contracts after futures settled with modest gains on Wednesday amid tailwinds from crude stocks drawing more than anticipated. Brent Jul'24 sits at the upper end of a USD 83.71-84.25/bbl range.
• Mixed trade across precious metals with spot silver the outperformer, spot palladium the laggard, and spot gold flat. XAU is contained to a current USD 2,307.59-2,319.85/oz intraday range, within yesterday's USD 2,303.75-2,321.53/oz range.
• Base metals have turned lower since European traders entered the fray amid the cautious risk tone coupled with a rising Dollar.
• Iraq sets the June 2024 Basrah medium crude OSP to Asia at USD +1.00/bbl vs Oman/Dubai, via SOMO; to North and South America at -0.65/bbl vs ASCO; to Europe at -3.35/bbl vs dated Brent

Geopolitics: Middle East

• Yemeni Houthis targeted two ships with rockets in the Gulf of Aden yesterday, according to the spokesperson.
• "Israel Broadcasting Corporation quoting a military source: Israel must reconsider its military plans in Rafah after Biden's statements", according to Sky News Arabia
• US President Biden said if Israel goes into Rafah, he won't supply them with weapons and artillery shells, while he added that Israel will not get their support if they go into those population centres and that bombs the US had supplied to Israel and now paused have been used to kill civilians. Biden also commented that Israel has not gone over the red line yet, while he is working with Arab states that are prepared to build Gaza and prepared to help transition to a two-state solution.
• Hamas senior official said the movement sticks to its approval of the truce proposal.
• Egyptian media said Israel deleted the phrase 'permanent ceasefire' and kept it 'sustainable', while Hamas, Islamic Jihad and Popular Front are participating in negotiations and are open to maturing and succeeding the Egyptian effort to reach a deal. Furthermore, work is underway to overcome the controversial points during the negotiations, which will be completed on Thursday, according to Asharq News.
• Israeli senior officials warned their US counterparts that the Biden administration's decision to pause a weapons shipment to Israel could jeopardise hostage negotiations, according to two sources briefed on the issue told Axios' Ravid.
• Syria shot down Israeli missiles fired from Golan Heights towards Damascus's surroundings.
• Adviser to Iran's Supreme Leader said Tehran will have to change its nuclear doctrine if its existence is threatened and has the capability to build a nuclear weapon, according to SNN.

Geopolitics: Other

• Ukraine drone attack sparked a fire and damaged oil tanks at a refinery in Russia's Krasnodar, according to regional officials.
• Russian President Putin says tactical nuclear weapon drills are planned, according to Interfax.
• Russia's Gazprom says its Salavat plant was attacked by a drone but the plant is working normally, according to Ria

US Event Calendar

• 08:30: April Continuing Claims, est. 1.78m, prior 1.77m
• 08:30: May Initial Jobless Claims, est. 212,000, prior 208,000

Central Bank Speakers

• 14:00: Fed’s Daly Participates in Fireside Chat

DB's Jim Reid concludes the overnight wrap

Morning from an early morning taxi to Heathrow en route to Madrid. After a remarkable Champions League semi-final last night I'm expecting a party in half the city at least today!

A little like Bayern last night, markets finally ran out of steam yesterday, with the S&P 500 (-0.00%) narrowly ending its run of four consecutive gains. If you're looking for the dullest stat ever then the -0.03 points move was the smallest in either direction since the -0.02 points decline in September 2018.

The pause for breath was partly due to some disappointing earnings releases, but it also comes on the back of its strongest 4-day rally since November, so it was always going to be hard to maintain that pace. It was much the same story for sovereign bonds too, as the 10yr Treasury yield (+3.7bps) moved higher after a run of five consecutive declines. However, it wasn’t all bad news, as Europe’s STOXX 600 (+0.34%), the UK’s FTSE 100 (+0.49%) and Germany’s DAX (+0.37%) all hit fresh record highs.

Amidst all this, there were fresh signs that rate cuts were moving back into fashion yesterday, as the Swedish Riksbank became the second central bank with a G10 currency to cut rates in this cycle. The move was expected, but it was the first rate cut they’d delivered since 2016, so it was a big milestone, which took the policy rate down by 25bps to 3.75%. In addition, their statement signalled that more cuts were likely ahead, saying that if the inflation outlook held up, then they expected two more cuts in the second half of this year. It’s also worth noting that they’re in a better position than some other central banks, as their preferred measure of inflation (CPIF) was at 2.2% in March, so just above their 2% target.

The Riksbank’s decision follows the Swiss National Bank’s cut back in March, and it comes with mounting anticipation that the larger central banks are soon about to follow. In particular, the focus is turning to the ECB, who are increasingly expected to cut rates in four weeks’ time, marking the first cut since before the pandemic. Likewise, investors are now pricing in a 68% chance the Bank of Canada will cut at their next meeting in June. So it’s plausible that within a couple of months, we could have several central banks easing policy, with the global monetary policy cycle in easing mode with the considerable exception of the US. Yesterday's CoTD (here) stretching back nearly 7 decades shows how rare it is for Europe to be easing before the US so we'll have to see the implications in the months ahead. The obvious one is for dollar strength to continue.

Central banks will remain in focus today, as we’ve got the Bank of England’s latest policy decision at 12:00 London time. In terms of what to expect, it’s widely anticipated they’ll leave rates unchanged at 5.25%, where they’ve been since August. So the focus will instead be on the vote split, their new forecasts, and what their forward guidance signals about potential cuts in the future. DB’s UK economist thinks the vote will be 7-2 to remain on hold, with 2 voting to cut, and he also expects a further dovish tilt in the forward guidance, which would set the stage for a June rate cut. See his full preview here

But even as central banks are pivoting towards rate cuts, yesterday saw sovereign bonds lose ground on both sides of the Atlantic, ending a run of gains since the Fed’s decision last week. For instance, the 10yr US Treasury yield was back up +3.7bps to 4.495% and is trading at 4.515% as I type in Asia hours. Marginally adding to the bond sell-off was the latest 10yr Treasury auction, that saw $42bn of bonds issued at 4.48%, 1bp above the pre-sale yield. And over in Europe, yields on 10yr bunds (+4.3bps), OATs (+4.1bps) and BTPs (+3.6bps) all moved higher, whilst Swedish 10yr yields (+3.5bps) saw a similar move despite the rate cut.

For equities, there was a more divergent performance on either side of the Atlantic, with those in Europe holding up and seeing the fresh records mentioned above and those in the US losing a touch of momentum. The S&P 500 was essentially flat on the day (-0.00%). Moderate losses from the Magnificent 7 (-0.29%) were counterbalanced by advances among sectors including utilities (+1.05%) and banks (+1.22%). But the overall tone was titled to the negative side with 7 of the 11 S&P 500 sector groups down on the day and the small cap Russell 2000 underperforming (-0.46%).

Elsewhere, it was a volatile day for oil prices, which reversed their earlier losses to leave Brent crude up +0.51% at $83.58/bbl ($83.95 overnight). At first they had seen a sharp decline, hitting an intraday low of $81.71/bbl, which is the lowest they’ve been in almost a couple of months. But then we had the latest weekly data from the EIA showing that US crude oil inventories were down by 1.36m barrels, leading to a recovery in prices.

Asian equity markets are notably higher this morning even if US futures are edging slightly lower. Chinese stocks are outperforming with the Hang Seng (+1.23%) leading gains followed by the CSI (+1.03%) and the Shanghai Composite (+0.91%) after Chinese property stocks surged after Hangzhou removed home buying restrictions, in a move that created speculation that other cities might follow. Elsewhere, the Nikkei (+0.33%) is reversing its previous session losses while the KOSPI (-1.05%) is retreating, bucking the regional trend. S&P 500 (-0.09%) and NASDAQ 100 (-0.16%) futures are trading slightly lower.

Coming back to China, export growth surpassed market expectations in April with exports rebounding +1.5% y/y (v/s +1.3% expected) after falling -7.5% in March, its first contraction since November. Imports increased +8.4% (v/s +4.7% expected), reversing the prior month’s -1.9% decline. April trade surplus stood at US$72.4 billion, compared with US$58.6 billion in March.

Moving to Japan, the latest salary data showed that real wages fell -2.5% y/y in March (v/s -1.4% expected), notching the sharpest drop in four months and extending the streak of declines to exactly 24 months. It followed the previous month’s -1.8% drop, as the rising cost of living outpaced nominal wages. Nominal wages rose +0.6% y/y in March, slowing from a downwardly revised +1.4% increase seen in February.

Elsewhere, government bonds are seeing losses in Asia with yields notably higher in Australia, New Zealand and Japan. As I type, 10yr government bond yields are over +7bps higher in Australia and New Zealand with 10yr JGB yields is +2.9bps higher at +0.90%, not far from the multi-year highs seen briefly in January.

There wasn’t much data yesterday, although German industrial production fell by -0.4% in March (vs. -0.7% expected), whilst Italian retail sales were unchanged (vs. +0.1% expected). Separately in the US, weekly data from the MBA showed that the contract rate on a 30yr mortgage was down -11bps to 7.18% over the week ending May 3, ending a run of four consecutive weekly increases.

To the day ahead now, and the main highlight will be the Bank of England’s latest policy decision and Governor Bailey’s press conference. Other speakers will include ECB Vice President de Guindos, the ECB’s Cipollone, Bank of Canada Governor Macklem, the Fed’s Daly, and BoE chief economist Pill. Otherwise in the US, we’ll get the weekly initial jobless claims, and there’s a 30yr Treasury auction taking place.

Tyler Durden Thu, 05/09/2024 - 08:19

"The Polling Data Has Been Wrong All Along": Watch Biden Deny Economic Reality In Train-Wreck CNN Interview

Authored by Steve Watson via Modernity.news,

During a brutal CNN interview aired Wednesday, Joe Biden looked shocked when host Erin Burnett reeled off a list of stats detailing how bad the economy is. Instead of suggesting how he is going to improve the situation, Biden denied any of it was real and claimed every poll showing Americans favouring Trump on the economy is wrong.

“Voters, by a wide margin, trust Trump more on the economy,” Burnett noted, before listing possible reasons for that including the cost of buying a home having doubled, real income accounting for inflation being down, economic growth being way short of expectations and consumer confidence being near a two year low.

“Are you worried that you’re running out of time to turn [the economy] around?” Burnett asked Biden.

“We’ve already turned it around,” Biden bizarrely claimed, before adding that “the polling data has been wrong all along.”

Biden looks shocked as CNN host Erin Burnett reels off a list of stats detailing how bad the economy is. Biden claims he's already "turned it around" and that every poll showing Americans favouring Trump on the economy is wrong. Full report here: https://t.co/smaN0DjOVD pic.twitter.com/K2wTAwdrse

— m o d e r n i t y (@ModernityNews) May 9, 2024

Jesus, look at his face at the 20-second mark onward. He's acting as if he's hearing this economic data for the first time.

— AdamInHTownTX (Not a Neurologist) (@AdamInHTownTX) May 8, 2024

That ain't gonna help instill confidence in voters. If this is his idea of a turnaround, what the hell would a recession look like?

— AdamInHTownTX (Not a Neurologist) (@AdamInHTownTX) May 8, 2024

He looks completely bewildered why those words are coming out of her mouth. His cue cards don't cover this.

— Mydaughterismyhero ❤️✝️ (@popparoni) May 8, 2024

When Burnett pointed out that Grocery prices are up almost a third, Biden shrugged it off and claimed Americans “have the money to spend.”

CNN: "Grocery prices are up 30%+ ... that's a real day-to-day pain that people feel..."

BIDEN: "They have the money to spend!"

Then he repeats the debunked lie about Snickers bars and "corporate greed." pic.twitter.com/3qJDyK1bvy

— RNC Research (@RNCResearch) May 8, 2024

They must not show him these polls. pic.twitter.com/xFe1OZILGk

— Kelkat (@Tweetytweeter63) May 8, 2024

He repeated the tired lie about creating millions of jobs that everyone knows is complete rubbish because he’s including jobs that were reinstated from the pandemic:

"Why should people here believe that you will succeed at creating jobs?"

BIDEN: "I've never failed! I've created over 15 million jobs!"

(UNMENTIONED: The vast majority of those jobs were simply recovered from the pandemic) pic.twitter.com/XQlNz6tdZk

— RNC Research (@RNCResearch) May 8, 2024

Biden also told an absolute whopper, claiming that inflation was 9 percent when he came into office, when in reality it was 1.4 percent.

Biden tells an absolute whopper of a LIE in a car crash CNN interview by claiming inflation was 9% when he took office. In reality it PEAKED at 9.1% a full 17 MONTHS after he became President. Full report here: https://t.co/smaN0DjOVD pic.twitter.com/OZrUNIdThZ

— m o d e r n i t y (@ModernityNews) May 9, 2024

After Biden took office, inflation surged to rates unseen since the early 1980s, peaking at an annual rate of 9.1 percent in June 2022, a full 17 months after he took office.

Yet, he is claiming it was ALREADY at 9 percent.

Since Biden took office, the average prices of goods and services have increased 19 percent, according to Bureau of Labor Statistics data.

By comparison, during Trump’s four years in office, prices increased by 8 percent, or roughly 2 percent per year, which is the normal annual rate of inflation.

Biden is a Proven liar.

— SMHonk (@SMHonk1983) May 9, 2024

*  *  *

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Thu, 05/09/2024 - 08:10

Can You Guess What It Costs To Live "The American Dream" After 3 Years Of Inflation Under Joe Biden?

Authored by Michael Snyder via The End of The American Dream blog,

If you are like most Americans, the cost of living has been going up much faster than your income has been.  Right now, millions of Americans that were once prospering are now deeply struggling.  When I was growing up, most of the population could afford to live “the American Dream”, but now that is no longer true.  At this point, the basics of a middle class lifestyle are out of reach for most Americans.  Poverty and homelessness are steadily rising, and the economy has become the number one issue during this election cycle.  Most of us just want things to go back to the way that they once were, but thanks to the very foolish decisions of our leaders that simply is not possible.

According to a brand new report that was just released, it now takes over $100,000 a year for the typical family to live “the American Dream” in all 50 states, and in 29 of those states it actually takes over $150,000 a year…

A household would have to spend more than $150,000 a year to live the dream in 29 of the 50 states, according to an analysis published in April by the personal finance site GOBankingRates.

According to the report, the optimal American lifestyle would cost $137,842 a year in Ohio, $147,535 in Texas, $159,932 in Florida, $194,067 in New York and $245,723 in California.

I had no idea that the cost of living “the American Dream” had gotten that high.

Illinois was ranked 26th on that list, and so it provides a pretty good snapshot of what the average U.S. household is facing right now…

• Median home price: $255,278

• Annual childcare costs: $24,174

• Annual mortgage costs: $21,401

• Car costs: $8,709

• Grocery costs: $8,143

• Healthcare costs: $7,021

• Utilities costs: $5,278

• Education costs: $2,475

• Pet costs: $1,170

• Total annual costs: $78,369

• Full cost of the American Dream: $156,739

Did your household bring in at least $150,000 last year?

If not, living “the American Dream” would not be possible for you in most states.

Needless to say, the vast majority of U.S. households are not bringing in that kind of income.

Last December, Investopedia issued a report that concluded that it now takes 3.4 million dollars to live “the American Dream” for an entire lifetime…

Another report, released in December by the financial media site Investopedia, estimates what the American Dream costs across an entire lifetime: $3.4 million.

That is a staggering sum, Investopedia observes, considering what the average American earns in a lifetime: about $2.3 million.

Housing costs are the number one reason why “the American Dream” is now out of reach for most of the U.S. population.

During the pandemic, home prices shot up at an absolutely frightening pace…

The median sale price for an existing home rose more than 40% between early 2020 and mid-2022, topping out at a seasonal peak just over $400,000, according to the National Association of Realtors.

Meanwhile, mortgage rates have risen to very painful levels.

The average rate on a 30 year fixed mortgage was sitting at just over 3 percent at the beginning of 2022.

Today, it is sitting at more than 7.2 percent…

Mortgage rates climbed again this week, exacerbating the home affordability crisis that is stifling the housing market.

Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage jumped to 7.22% this week from 7.17% last week. The average rate on a 30-year loan was 6.39% a year ago.

The monthly payment on a 30 year fixed mortgage at 7.2 percent for a $400,000 home would be $2,715 a month.

Who can afford that?

Some people can.

But most of the population cannot.

That helps to explain why the percentage of renters that believe that they will someday be able to afford to purchase a home has dropped to an all-time low…

The dream of home ownership has gotten even further away for renters, with higher housing costs and elevated interest rates standing in the way of the American housing dream, according to a New York Federal Reserve survey released Monday.

The share of renters as of February who possess hopes of “residential mobility,” or the belief from renters that they one day will be able to afford a home, fell to a record low 13.4% in the central bank’s annual housing survey for 2024.

That’s down from 15% in 2023 and well off the 20.8% series high back in 2014.

If they work hard and do the right things, most Americans just want to be able to provide a nice life for themselves and their families.

But during the Biden years that has become increasingly difficult to do.

As a result, the amount of confidence that the American people have in Joe Biden has plummeted…

In a Gallup poll published on Monday, only 38% of Americans said they still had confidence in Biden to lead the country and do the right thing for America’s economy. This figure is among the lowest Gallup has measured for any president since George W. Bush took office in 2001, Gallup reported.

“With Americans less optimistic about the state of the U.S. economy than they have been in recent months and concern about inflation persisting, their confidence in President Joe Biden to recommend or do the right thing for the economy is among the lowest Gallup has measured for any president since 2001,” Gallup reported.

The current low for Biden continues a substantial fall from when he first took office. As recently as 2022, the same poll found Biden’s confidence ratings were at 57%. It swiftly fell to 40% and has remained below that mark since.

I believe that this is going to be a very tumultuous election season.

And I am convinced that we will see even more chaos after the election than we will before it.

The American people desperately want change.

But instead, things just continue to get even worse month after month.

Decades of very foolish decisions have brought us to this point, and trying to turn this ship around is not going to be easy.

*  *  *

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

Tyler Durden Thu, 05/09/2024 - 07:45

BOE Keeps Rates Unchanged But Edges Closer To Cutting As Deputy Governor Calls For Easing

With both the Swiss SNB and Swedish Riksbank recently starting rate cuts, many were wondering if the BOE would be next to join the easing cycle. And while it did not, instead keeping rates unchanged at 5.25% for the sixth straight meeting, in line with what investors and economists had been expecting, the central bank did indicate it is on course to cut rates from a 16 year high over the coming months alongside its European peers as two of the nine members of its Monetary Policy Committee, including the deputy governor, voted to lower the key rate to 5%.

The Monetary Policy Committee voted by a majority of 7-2 to maintain #BankRate at 5.25%. Find out more in our #MonetaryPolicyReport: https://t.co/2lnXthHbMt pic.twitter.com/HXZdRjxPnl

— Bank of England (@bankofengland) May 9, 2024

Deputy Governor Dave Ramsden joined external member Swati Dhingra in calling for an immediate cut in the base rate from its current level of 5.25%. The other seven members of the Monetary Policy Committee preferred no change, saying they needed more evidence that inflation will be subdued.

It was the sixth meeting running that the UK central bank left its benchmark lending rate firmly in territory it describes as restrictive, aiming to bear down on wage and price pressures that reached a four-decade high in late 2022. Forecasts released with the decision suggested the BOE will have to reduce rates in the coming months, probably before a general election widely expected in the autumn.

The BOE will next meet in June, and then again in August. A cut at either meeting would likely see the BOE move before the Federal Reserve, which is now facing the prospect of keeping rates higher for longer. Cutting before the Fed would risk weakening the pound sterling against the U.S. dollar and pushing prices of imported goods and services higher. But waiting too long could delay an economic recovery and lead to job losses.

“We’ve had encouraging news on inflation, and we think it will fall close to our 2% target in the next couple of months,” Bailey said in a statement Thursday. “We need to see more evidence that inflation will stay low before we can cut interest rates. I’m optimistic that thing are moving in the right direction.”

Inflation in the U.K. has fallen steadily over recent months, and the BOE said it likely hit its 2% target in April, though official figures won’t be released until May 22. By contrast, inflation readings from the U.S. have been hotter than expected for a number of months, prompting the Fed to adopt a wait-and-see approach to future policy decisions.

The BOE expects inflation to pick up again toward the end of this year, and fall again in the second half of 2025. The bank''s policymakers forecast that inflation will be just below their 2% target in mid-2026 even if they cut interest rates at the pace expected by investors. That indicates that the central bank is comfortable with the trajectory for its key rate expected by investors, who see August as the most likely month for a first move, with two further cuts by mid-2025 and additional moves to 3.75% by the second quarter of 2027.

In the context of developed central banks, both Switzerland and Sweden have already lowered their key interest rates for the first time since the inflation surge began in 2021, while the European Central Bank has strongly indicated that it will cut in early June.

The likely divergence in policy settings reflects differing economic fortunes. While the U.S. economy has grown rapidly over the last 18 months, the U.K. and much of the rest of Europe stalled following the surge in energy and food prices triggered by Russia’s invasion of Ukraine.

Still, there are signs that the U.K. is starting to recover from that shock. Economic output fell in the final six months of last year, but the BOE estimates it rose again in the first three months of 2024 and will do so again in the current quarter. The central bank raised its forecast for growth this year to 0.5% from 0.25%, and its forecast for next year to 1% from 0.75%. It attributed the stronger outlook to higher-than-expected population growth.

Policymakers are increasingly confident that growth can pick up without pushing inflation above their target. They have worried that wages would continue to rise rapidly in a tight jobs market, preventing a cooling in the pace of price rises for labor-intensive services.

Gilts rose and the pound fell after the decision. Traders briefly priced a 50% possibility for the first 25 basis-point cut to come next month, and continued to fully priced in a cut by August. Markets now imply a total of 57 basis points of cuts through 2024, compared to 54 basis points before. Still, considering the thrust of the BoE's communication, UBS writes that it is "surprising" market pricing hasn't shifted further towards a June cut – especially since Governor Bailey has indicated it's up for consideration, commenting that the BoE is likely to cut rates in the quarters ahead, possibly by more than the markets are currently expecting. June prices around 14bp against 13bp heading into the MPC.

Tyler Durden Thu, 05/09/2024 - 07:28

Another Trump Trial Derailed: Fani-Donating Judge's Decision To Keep Her On RICO Trial Under Scrutiny By Appeals Court

One day after former President Donald Trump's classified documents trial was postponed indefinitely after we learned that the DOJ mishandled evidence in the case (with Judge Aileen M. Cannon citing a mountain of 'outstanding' pre-trial matters that would make a May 20 trial 'imprudent'), another Trump case appears to have no chance of going to trial before the 2024 election.

On Wednesday, a Georgia appeals court agreed to review a lower court ruling which allowed Fulton County District Attorney Fani Willis to remain on the Trump RICO prosecution despite being highly conflicted.

To review, Atlanta Judge Scott McAfee of Fulton Superior Court, who donated to Fani Willis when she was running for office, ruled in March that the Fani simply had to kick her lover, Nathan Wade, off the case after she paid him more than $600,000. The two notoriously took several lavish vacations together on Wade's dime (which Fani swears she repaid in cash).

According to McAfee, while he found the "appearance of impropriety," no "disqualification of a constitutional officer necessary when a less drastic and sufficiently remedial option is available," adding "that the prosecution of this case cannot proceed until the State selects one of two options."

And now, the Atlanta Court of Appeals has agreed to hear an appeal from the defendants over whether McAfee erred in his decision.

The Georgia Court of Appeals has agreed to hear an appeal from defendants over whether the judge erred when he ruled that Fani Willis could remain on the Trump RICO prosecution in Fulton County. This pushes that trial further off, likely beyond the election. pic.twitter.com/F1gXIfwI5E

— Joyce Alene (@JoyceWhiteVance) May 8, 2024

Willis indicted Trump and 18 other defendants last August, accusing them of a wide-ranging scheme to attempt to overturn the results of the 2020 presidential election in the state. All of the defendants were charged under Georgia’s Racketeer Influenced and Corrupt Organizations, or RICO, law. Trump and most of the other defendants have pleaded not guilty.

In their appeal application, Trump and other defendants argued that McAfee was wrong not to remove both WIllis and Wade, writing that "providing DA Willis with the option to simply remove Wade confounds logic and is contrary to Georgia law."

Most recently, Willis has defiantly refused to appear before a Georgia Senate Investigative Committee, telling reporters earlier this week (via RedState):

REPORTER: Would you appear before a Georgia Senate committee without a subpoena?

WILLIS: Well first of all I don't even think they have the authority to subpoena me, but they didn't learn the law. 

REPORTER: Will you appear, yes or no?

WILLIS: I will not appear to anything that is unlawful. I have not broken the law in any way. I've said it, you know, I'll say it amongst these leaders—I'm sorry folks get p***ed off that everybody gets treated even. 

FAITH LEADER STANDING NEXT TO HER: I think she answered that very well. 

The Georgia Court of Appeals has agreed to hear an appeal from defendants over whether the judge erred when he ruled that Fani Willis could remain on the Trump RICO prosecution in Fulton County. This pushes that trial further off, likely beyond the election. pic.twitter.com/F1gXIfwI5E

— Joyce Alene (@JoyceWhiteVance) May 8, 2024

Another one bites the dust?

Every Trump trial is melting down in front of the weaponized DOJ's eyes. https://t.co/FjikKJDrPF

— zerohedge (@zerohedge) May 7, 2024

Tyler Durden Thu, 05/09/2024 - 05:14

Why Germany Is Choosing Natural Gas Over Nuclear Power

By Haley Zermba of Oilprice.com

The world is experiencing a nuclear renaissance. Uranium prices are soaring as the world snaps up nuclear fuel, public favor for nuclear power is at a 10-year high in the United States, Russia is busily expanding its own nuclear energy empire in emerging economies in Africa, and even Japan is moving back to the carbon-free energy source 13 years after the Fukushima nuclear disaster. All told, approximately 60 new nuclear reactors are currently under construction around the globe, and another 110 are in planning stages.

But there’s one major detractor to the new nuclear revolution. A year ago, Germany took its last three nuclear power plants offline. And it seems pretty clear that they won’t ever be bringing them back on. Germany’s staunch anti-nuclear stance is a surprising one in many ways. The European nation is an outspoken proponent of the green energy transition, but has opted to take away one of its most reliable forms of carbon-free energy production as a matter of higher priority than transitioning away from coal – the dirtiest fossil fuel. 

16 April 2023, Baden-Württemberg, Neckarwestheim: The Neckarwestheim nuclear power plant. The era of commercial power generation with nuclear power plants in Germany came to an end on Saturday with the separation of the Isar 2, Neckarwestheim and Emsland nuclear power plants from the power grid.

Germany’s move to eliminate the last vestiges of its nuclear energy sector also comes at a time when the nation’s energy security is a cause for some concern. Critics had been warming for years that Europe – and Germany in particular – were dangerously reliant on Russian energy imports to keep the lights on. And those warnings proved to be correct when the continent was plunged into an energy crisis due to the energy sanctions brought against Russia in the wake of Moscow’s illegal invasion of Ukraine in February 2022. The German economy and energy sector was hit hard, as the country was reliant on Russia for a whopping 50% of its natural gas supplies at the time of the invasion.

But instead of extending the life of its nuclear sector in the interest of low-emissions energy security, Germany has chosen to spend billions on its own new natural gas plants, augmented by significant renewable energy expansion, and to fall back on coal when energy supplies are short. For many energy and climate experts, the move has been nothing short of baffling.

So what gives? According to a recent report from The Conversation, Germany’s stance on nuclear energy is the product of a long history rather than a grappling with current geopolitical realities. The decision to completely phase out nuclear energy production “can only be understood in the context of post-war socio-political developments in Germany, where anti-nuclearism predated the public climate discourse,” the report argues. Motivations for the vehement anti-nuclear discourse of the time included “a distrust of technocracy; ecological, environmental and safety fears; suspicions that nuclear energy could engender nuclear proliferation; and general opposition to concentrated power (especially after its extreme consolidation under the Nazi dictatorship).”

But the arguments at the time, which favored energy alternatives like solar and wind, were not actually based around concern for the climate. Instead they revolved around the decentralization and democratization of energy resources and their potential to contribute to greater self-sufficiency and citizen empowerment. It was an argument for a bottom-up rest of entrenched and autocratic power relations. Which means, to critics, that the anti-nuclear stance in Germany is rooted in a reality that no longer exists. The Cold War has given way to global warming, and new ideas and strategies are needed to meet these new existential threats. 

Now, a year after the total shutdown, more than half of Germans think that the timing of the nuclear pullout was a mistake, and industry experts say that Germans pay more for energy as a direct result of the pivot. However, even with an ideological shift and an update of political platforms, the German nuclear industry couldn’t come back online overnight. New nuclear plant development is a slow and costly endeavor, oftentimes stretching well over a decade. Starting from zero, when the threats posed by climate change as well as energy security are so urgent, makes no sense for Germany. While the rest of the world galvanizes around a nuclear energy resurgence, Germany will have to forge its own path. 

Tyler Durden Thu, 05/09/2024 - 05:00

The Chinese EV Wall In Europe Is Breaking

Despite EU investigations and jawboning from within the industry, it looks as though Europe has faced the inevitable: it needs to "face up" to the fact that Chinese EVs have arrived, and probably aren't going anywhere, anytime soon.

Chinese President Xi Jinping arrived in Paris on Sunday to ease trade tensions with a wary Europe. Accompanied by a business delegation focused on the electric vehicle industry, including Envision Group, SAIC Motor, and Xpeng Motors, the visit served as both a shopping trip and networking opportunity, Nikkei reported.

"We want to welcome more Chinese investors to France," President Emmanuel Macron said during the visit. 

As we have been writing about extensively for the last 6 months, the shift to electrification has changed the global auto industry's dynamics, which were once dominated by European brands. Now, China now leads in EV production, compelling European automakers to address the growing Chinese competition.

According to Nikkei, with the EU set to ban combustion engines by 2035, China plans to expand exports and production, maintaining a significant lead in affordable EVs.

As consumers shift to EVs, European manufacturers fear losing market share. Chinese brands, which made up only 7.9% of EU's electric vehicle sales in 2023, up from 0.4% in 2019, are projected to reach a 20% market share by 2027, according to Transport & Environment.

Felipe Munoz, senior analyst at JATO Dynamics told Nikkei: "When we're talking about these mass market segments, it's mainly about price ... and when you look at [Chinese brands'] price positioning compared to European rivals, there is always an advantage." 

Gregor Sebastian, a senior analyst at Rhodium Group, told Nikkei Asia: "I don't think in Europe there's the necessary capital at the moment to really do this without China, and on top of that ... in terms of the technology we're also behind China."

Europe remains divided over the potential influx of Chinese EVs. The European Commission has launched an investigation into Chinese EV subsidies, potentially leading to preliminary duties in May and permanent tariffs in November.

German Chancellor Olaf Scholz recently visited Beijing to ease trade relations, advocating for fair competition. While brands like Volkswagen and BMW welcome Chinese investment, others remain cautious. 

Despite concerns, Europe is the largest destination for Chinese EV-related FDI, attracting $7.6 billion in 2023 following $11.8 billion in 2022. Chinese automakers like SAIC and BYD are investing in local factories to build tailored cars for European consumers. Xi Jinping's trip includes a visit to Hungary, where BYD and Great Wall Motor are expanding, and Chery recently announced a joint venture plant in Spain.

"The student has overcome the teacher," Munoz added. He said Chinese cars are now "at the same level or even more in terms of quality, in terms of design, in terms of appeal, and in price."

Recall back in March we wrote about Mercedes CEO slamming the idea of import tariffs on Chinese EVs. 

“Don’t raise tariffs. I’m a contrarian, I think go the other way around: take the tariffs that we have and reduce them," Mercedes-Benz boss Ola Källenius said at the time.

Källenius said that the increased competition would "help Europe’s carmakers produce better cars in the long run" and that government protectionism is "going the wrong way", Financial Times reported this week. 

He called Chinese companies looking to export to Europe a “natural progression of competition and it needs to be met with better product, better technology, more agility.”

“That is the market economy. Let competition play out," he added. “We did not ask for this [probe]. We as companies are not asking for protection, and I believe the best Chinese companies are not asking for protection. They want to compete in the world like everybody else.”

“If we believe protectionism is the thing that gives us long-term success, I believe history tells us that is not the case," he added. “We live in a pragmatic world and realize there are some expectations to the general market economy rule . . . but if we seek our fortune in increased protectionism, we are going the wrong way.”

Recall back in September 2023 we wrote that the EU was opening an investigation into Chinese EV subsidies. 

At the time, we noted that European Commission President Ursula von der Leyen was taking exception with the fact that "the global market is flooded with cheap Chinese cars". 

Tyler Durden Thu, 05/09/2024 - 04:15

UK Moves Against Russian Diplomatic Personnel & Sites 'Used For Intel Purposes'

The British government announced Wednesday it has expelled an official of the Russian embassy for being "an undeclared military intelligence officer."

The action comes amid an apparent broader pressure and essentially a war on Russian diplomatic facilities and personnel in the UK, with interior minister James Cleverly briefing parliament that multiple Russian-owned properties will be downgraded from having diplomatic status and protections.

He alleged that Russian sites in Sussex as well as in London will see their diplomatic immunity removed. Cleverly told parliament that "we believe have been used for intelligence purposes."

Via Reuters

New restrictions will also be placed on the amount of time Russian diplomats can spend in the country, given recent "malign" Russian activity in the UK, according to the interior minister's words.

One reported example was an arson attack on a Ukrainian-linked business, which the UK alleged had ties all the way back to the Kremlin.

All of this also comes as both countries are trading very serious and rapidly escalating threats in the wake of Foreign Secretary David Cameran saying while on a trip to Kiev earlier this week that the UK is fine with Ukraine using British-supplied weapons to attack Russian territory.

He had stated provocatively, "Ukraine has that right. Just as Russia is striking inside Ukraine, you can quite understand why Ukraine feels the need to make sure it's defending itself."

Russia's foreign ministry in response promptly summoned UK Ambassador to Moscow Nigel Casey over the remarks. "Casey was warned that the response to Ukrainian strikes using British weapons on Russian territory could be any British military facilities and equipment on the territory of Ukraine and beyond," the ministry stated after the meeting.

Importantly, the Kremlin laid out that Cameron's words mean he "de facto recognized his country as a party to the conflict." This marked possibly the first time that the Russian government specifically threatened to attack British military installations and equipment within Ukraine and beyond.

But on Wednesday Cleverly told parliament that the British people will not be bullied by Kremlin propaganda: "This is not new and the British people and the British Government will not fall for it, and will not be taken for fools by (President Vladimir) Putin’s bots, trolls and lackeys," he said.

"Russia’s explanation was totally inadequate. Our response will be resolute and firm," he added of alleged Russian malfeasance on UK soil. "Our message to Russia is clear: stop this illegal war, withdraw your troops from Ukraine, cease this malign activity."

Tyler Durden Thu, 05/09/2024 - 02:45