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The Steady Slide Towards Tyranny: How Freedom Dies From A To Z

The Steady Slide Towards Tyranny: How Freedom Dies From A To Z

Authored by John & Nisha Whitehead via The Rutherford Institute,

“As I look at America today, I am not afraid to say that I am afraid.”

- Former presidential advisor Bertram Gross

The American governmental scheme is sliding ever closer towards a pervasive authoritarianism.

The American people, the permanent underclass in America, have allowed themselves to be so distracted and divided that they have failed to notice the building blocks of tyranny being laid down right under their noses by the architects of the Deep State.

This steady slide towards tyranny, meted out by militarized local and federal police and legalistic bureaucrats, has been carried forward by each successive president over the past fifty years regardless of their political affiliation.

Biden, Trump, Obama, Bush, Clinton: they have all been complicit in carrying out the Deep State’s agenda.

Frankly, it really doesn’t matter who occupies the White House, because it is a profit-driven, unelected bureaucracy—call it whatever you will: the Deep State, the Controllers, the masterminds, the shadow government, the corporate elite, the police state, the surveillance state, the military industrial complex—that is actually calling the shots.

In the interest of liberty and truth, here’s an A-to-Z primer that spells out the grim realities of life in the American Police State that no one seems to be talking about anymore.

A is for the AMERICAN POLICE STATE. A police state “is characterized by bureaucracy, secrecy, perpetual wars, a nation of suspects, militarization, surveillance, widespread police presence, and a citizenry with little recourse against police actions.”

B is for our battered BILL OF RIGHTS. In the militarized police culture that is America today, where you can be kicked, punched, tasered, shot, intimidated, harassed, stripped, searched, brutalized, terrorized, wrongfully arrested, and even killed by a police officer, and that officer is rarely held accountable for violating your rights, the Bill of Rights doesn’t amount to much.

C is for CIVIL ASSET FORFEITURE. This governmental scheme to deprive Americans of their liberties—namely, the right to property—is being carried out under the guise of civil asset forfeiture, a government practice wherein government agents (usually the police and now TSA agents) seize private property they “suspect” may be connected to criminal activity. Then, whether or not any crime is actually proven to have taken place, the government keeps the citizen’s property and it’s virtually impossible to get it back.

D is for DRONES. Nearly 1500 police departments across the U.S. include drones as part of their technological arsenal, and that number is growing. Although drones may be used for benevolent purposes, they have increasingly become extensions of the surveillance state, carrying out warrantless and constant mass aerial surveillance in violation of the Fourth Amendment. New autonomous police drones can “read a license plate from 800 feet away and follow a vehicle from a distance of 3 miles.”

E is for EMERGENCY STATE. From 9/11 to COVID-19 and beyond, we have been the subjected to an “emergency state” that justifies all manner of government tyranny and power grabs in the so-called name of national security. The government’s ongoing attempts to declare so-called national emergencies in order to circumvent the Constitution’s system of checks and balances constitutes yet another expansion of presidential power that exposes the nation to further constitutional peril.

F is for FASCISM. A study conducted by Princeton and Northwestern University concluded that the U.S. government does not represent the majority of American citizens. Instead, the study found that the government is ruled by the rich and powerful, or the so-called “economic elite.” Moreover, the researchers concluded that policies enacted by this governmental elite nearly always favor special interests and lobbying groups. In other words, we are being ruled by an oligarchy disguised as a democracy, and arguably on our way towards fascism—a form of government where private corporate interests rule, money calls the shots, and the people are seen as mere economic units or databits.

G is for GLOBAL POLICE. The federal government has distributed more than $18 billion worth of battlefield-appropriate military weapons, vehicles and equipment such as drones, tanks, and grenade launchers to domestic police departments across the country. As a result, most small-town police forces now have enough firepower to render any citizen resistance futile. By the time you take those small-town police forces, train them to look and act like the military, and then enlist them to be part of the United Nations’ Strong Cities Network program, you not only have a standing army that operates beyond the reach of the Constitution but one that is part of a global police force.

H is for HOLLOW-POINT BULLETS. The government’s efforts to militarize and weaponize its agencies and employees is reaching epic proportions, with federal agencies as varied as the Department of Homeland Security and the Social Security Administration stockpiling millions of lethal hollow-point bullets, which violate international law. Ironically, while the government continues to push for stricter gun laws for the general populace, the U.S. military’s arsenal of weapons makes the average American’s handgun look like a Tinker Toy.

I is for the INTERNET OF THINGS, in which internet-connected “things” monitor your home, your health and your habits in order to keep your pantry stocked, your utilities regulated and your life under control and relatively worry-free. The key word here, however, is control. This “connected” industry propels us closer to a future where police agencies apprehend virtually anyone if the government “thinks” they may commit a crime, driverless cars populate the highways, and a person’s biometrics are constantly scanned and used to track their movements, target them for advertising, and keep them under perpetual surveillance.

J is for JAILING FOR PROFIT. Having outsourced their inmate population to private prisons run by private corporations, this profit-driven form of mass punishment has given rise to a $70 billion private prison industry that relies on the complicity of state governments to keep their privately run prisons full by jailing large numbers of Americans for petty crimes.

K is for KENTUCKY V. KING. In an 8-1 ruling, the Supreme Court ruled that police officers can break into homes, without a warrant, even if it’s the wrong home as long as they think they may have a reason to do so. Despite the fact that the police in question ended up pursuing the wrong suspect, invaded the wrong apartment and violated just about every tenet that stands between the citizenry and a police state, the Court sanctioned the warrantless raid, leaving Americans with little real protection in the face of all manner of abuses by law enforcement officials.

L is for LICENSE PLATE READERS, which enable law enforcement and private agencies to track the whereabouts of vehicles, and their occupants, all across the country. This data collected on tens of thousands of innocent people is also being shared between police agencies, as well as with government fusion centers and private companies. This puts Big Brother in the driver’s seat.

M is for MAIN CORE. Since the 1980s, the U.S. government has acquired and maintained, without warrant or court order, a database of names and information on Americans considered to be threats to the nation. As Salon reports, this database, reportedly dubbed “Main Core,” is to be used by the Army and FEMA in times of national emergency or under martial law to locate and round up Americans seen as threats to national security. There are at least 8 million Americans in the Main Core database.

N is for NO-KNOCK RAIDS. Owing to the militarization of the nation’s police forces, SWAT teams are now increasingly being deployed for routine police matters. In fact, more than 80,000 of these paramilitary raids are carried out every year. That translates to more than 200 SWAT team raids every day in which police crash through doors, damage private property, terrorize adults and children alike, kill family pets, assault or shoot anyone that is perceived as threatening—and all in the pursuit of someone merely suspected of a crime, usually possession of some small amount of drugs.

O is for OVERCRIMINALIZATION and OVERREGULATION. Thanks to an overabundance of 4500-plus federal crimes and 400,000 plus rules and regulations, it’s estimated that the average American actually commits three felonies a day without knowing it. As a result of this overcriminalization, we’re seeing an uptick in Americans being arrested and jailed for such absurd “violations” as letting their kids play at a park unsupervised, collecting rainwater and snow runoff on their own property, growing vegetables in their yard, and holding Bible studies in their living room.

P is for PATHOCRACY and PRECRIME. When our own government treats us as things to be manipulated, maneuvered, mined for data, manhandled by police and other government agents, mistreated, and then jailed in profit-driven private prisons if we dare step out of line, we are no longer operating under a constitutional republic. Instead, what we are experiencing is a pathocracy: tyranny at the hands of a psychopathic government, which “operates against the interests of its own people except for favoring certain groups.” Couple that with the government’s burgeoning precrime programs, which will use fusion centers, data collection agencies, behavioral scientists, corporations, social media, and community organizers and by relying on cutting-edge technology for surveillance, facial recognition, predictive policing, biometrics, and behavioral epigenetics in order to identify and deter so-called potential “extremists,” dissidents or rabble-rousers. Bear in mind that anyone seen as opposing the government—whether they’re Left, Right or somewhere in between—is now viewed as an extremist.

Q is for QUALIFIED IMMUNITY. Qualified immunity allows police officers to walk away without paying a dime for their wrongdoing. Conveniently, those deciding whether a cop should be immune from having to personally pay for misbehavior on the job all belong to the same system, all cronies with a vested interest in protecting the police and their infamous code of silence: city and county attorneys, police commissioners, city councils and judges.

R is for ROADSIDE STRIP SEARCHES and BLOOD DRAWS. The courts have increasingly erred on the side of giving government officials—especially the police—vast discretion in carrying out strip searches, blood draws and even anal and vaginal probes for a broad range of violations, no matter how minor the offense. In the past, strip searches were resorted to only in exceptional circumstances where police were confident that a serious crime was in progress. In recent years, however, strip searches have become routine operating procedures in which everyone is rendered a suspect and, as such, is subjected to treatment once reserved for only the most serious of criminals.

S is for the SURVEILLANCE STATE. On any given day, the average American going about his daily business will be monitored, surveilled, spied on and tracked in more than 20 different ways, by both government and corporate eyes and ears. A byproduct of the electronic concentration camp in which we live, whether you’re walking through a store, driving your car, checking email, or talking to friends and family on the phone, you can be sure that some government agency, whether the NSA or some other entity, is listening in and tracking your behavior. This doesn’t even begin to touch on the corporate trackers that monitor your purchases, web browsing, Facebook posts and other activities taking place in the cyber sphere.

T is for TASERS. Nonlethal weapons such as tasers, stun guns, rubber pellets and the like have been used by police as weapons of compliance more often and with less restraint—even against women and children—and in some instances, even causing death. These “nonlethal” weapons also enable police to aggress with the push of a button, making the potential for overblown confrontations over minor incidents that much more likely. A Taser Shockwave, for instance, can electrocute a crowd of people at the touch of a button.

U is for UNARMED CITIZENS SHOT BY POLICE. No longer is it unusual to hear about incidents in which police shoot unarmed individuals first and ask questions later, often attributed to a fear for their safety. Yet the fatality rate of on-duty patrol officers is reportedly far lower than many other professions, including construction, logging, fishing, truck driving, and even trash collection.

V is for OPERATION VIGILANT EAGLE. One of several government initiatives dating back to 2009 that call for heightened scrutiny of those who challenge the government’s authority, this particular program calls for surveillance of military veterans, characterizing them as extremists and potential domestic terrorist threats because they may be “disgruntled, disillusioned or suffering from the psychological effects of war.” Coupled with a report that defines extremists as individuals and groups “that are mainly antigovernment, rejecting federal authority in favor of state or local authority, or rejecting government authority entirely,” these tactics bode ill for anyone seen as opposing the government.

W is for WHOLE-BODY SCANNERS. Using either x-ray radiation or radio waves, scanning devices and government mobile units are being used not only to “see” through your clothes but to spy on you within the privacy of your home. While these mobile scanners are being sold to the American public as necessary security and safety measures, we can ill afford to forget that such systems are rife with the potential for abuse, not only by government bureaucrats but by the technicians employed to operate them.

X is for X-KEYSCORE, one of the many spying programs carried out by the National Security Agency that targets every person in the United States who uses a computer or phone. This top-secret program “allows analysts to search with no prior authorization through vast databases containing emails, online chats and the browsing histories of millions of individuals.”

Y is for YOU-NESS. Using your face, mannerisms, social media and “you-ness” against you, you are now be tracked based on what you buy, where you go, what you do in public, and how you do what you do. Facial recognition software promises to create a society in which every individual who steps out into public is tracked and recorded as they go about their daily business. The goal is for government agents to be able to scan a crowd of people and instantaneously identify all of the individuals present. Facial recognition programs are being rolled out in states all across the country.

Z is for ZERO TOLERANCE. We have moved into a new paradigm in which young people are increasingly viewed as suspects and treated as criminals by school officials and law enforcement alike, often for engaging in little more than childish behavior or for saying the “wrong” word. In some jurisdictions, students have also been penalized under school zero tolerance policies for such inane "crimes" as carrying cough drops, wearing black lipstick, bringing nail clippers to school, using Listerine or Scope, and carrying fold-out combs that resemble switchblades. The lesson being taught to our youngest—and most impressionable—citizens is this: in the American police state, you’re either a prisoner (shackled, controlled, monitored, ordered about, limited in what you can do and say, your life not your own) or a prison bureaucrat (politician, police officer, judge, jailer, spy, profiteer, etc.).

None of these dangers have dissipated in any way, and yet suddenly, no one seems to be talking about any of the egregious governmental abuses that are still wreaking havoc on our freedoms: police shootings of unarmed individuals, invasive surveillance, roadside blood draws, roadside strip searches, SWAT team raids gone awry, the military industrial complex’s costly wars, pork barrel spending, pre-crime laws, civil asset forfeiture, fusion centers, militarization, armed drones, smart policing carried out by AI robots, courts that march in lockstep with the police state, schools that function as indoctrination centers, bureaucrats that keep the Deep State in power.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, this is how freedom dies.

If there is any means left to us for thwarting the government in its relentless march towards outright dictatorship, it may rest with the Tenth Amendment, which affirms that “we the people” (in the form of juries and local governments) have the power to invalidate governmental laws, tactics and policies that are illegitimate, egregious or blatantly unconstitutional.

Nullify everything.

Nullify the court cases. Nullify the laws. Nullify everything the government does that flies in the face of the Constitution.

It’s time to rein in our runaway government, reclaim our freedoms, and restore justice in America.

Tyler Durden Wed, 05/01/2024 - 16:30

Exxon To Win FTC Approval For $60 Billion Pioneer Deal, Creating Energy Supergiant

Exxon To Win FTC Approval For $60 Billion Pioneer Deal, Creating Energy Supergiant

Having adversely intervened in virtually every other M&A deal in the past 3 years, the Biden FTC will reportedly allow Exxon's $60 billion purchase of Pioneer to go through after the companies agreed to minor concessions, Bloomberg reported citing people familiar with the matter. The announcement of the deal will likely come any moment, and the resulting deal will make Exxon - a company which Biden once said makes money money than god - far and away the biggest oil and natural gas producer in the Permian Basin, North America’s largest US oil field, and also the biggest energy company in the US.

Pioneer shares that had been down more than 2% on the day reversed those losses and were trading up as much as 0.9% on the news. Hess Corp, the target of a takeover bid by Chevron, also climbed 0.9% although the probability of that deal passing is far lower especially in light of the ongoing arbitration with Exxon over Guyana.  Chevron, Occidental and Chesapeake are among companies with large pending takeovers that are undergoing in-depth reviews before the FTC.

The Pioneer deal will combine two fast-growing Permian operations, lifting Exxon’s production in the basin to the equivalent of about 2 million barrels a day by 2027, up from about 600,000 last year.

More than 50 lawmakers - obviously mostly communists, pardon, democrats - urged the FTC in March to increase scrutiny on concerns a $230 billion wave of consolidation in would increase energy prices for consumers, squeeze suppliers and suppress wages. In short: enforce more Soviet-style central planning and crush conventional capitalism. As a result, investors had feared the agency, which has become more a ruthless enforcer of authoritarian anti-capitalism under Democrat admin puppet Lina Khan, would stand in the way of several large deals, especially in an election year when the Biden administration is seeking to prove its climate credentials and contain gasoline prices at all cost.

In response to the ruling communists, oil executives have claimed the deals will benefit shareholders, consumers and the environment. Exxon CEO Darren Woods said the Pioneer deal would lower its cost of production, making US barrels more competitive in the global market, and provide a strong platform for growth, which would ultimately benefit consumers. Exxon also pledged to reduce climate-warming emissions from Pioneer operations to net zero by 2035, accelerating the prior target by 15 years.

The Biden administration has constantly been at odds with the oil industry, but easing through what many executives see as necessary consolidation is likely to improve relations. With domestic crude prices up roughly 14% this year and tensions rising the Middle East, the administration is vulnerable to Republican attacks on measures that hurt the oil industry and raise fuel prices.

 

Tyler Durden Wed, 05/01/2024 - 16:14

Taper 'Tantrum-ette' - Stocks Pump'n'Dump As Fed 'Eases' Balance-Sheet Pressure

Taper 'Tantrum-ette' - Stocks Pump'n'Dump As Fed 'Eases' Balance-Sheet Pressure

Powell to traders today...

h/t @ForexLive

The bigger than expected QT taper announcement juiced markets (stocks and bond prices up, dollar down) into Powell's press conference, then got spooked lower as he admitted "inflation has shown a lack of further progress... and gaining confidence to cut will take longer than thought."

But that dip didn't last long and yields puked, stocks soared, gold rallied and the dollar puked...

Source: Bloomberg

The market shrugged off Powell's comments about "whether rates are at their peak will depend on data" which opened up the path of possible rate-hikes, but he dd add that "he doubts next move will be a hike."

CNBC's Steve Liesman asked the big question that everyone should be asking: you are 'sort of easing' by reducing QT while holding rates flat because you're not confident that inflation is under control - wassup with dat?

Powell replied with some words that meant nothing, stating that they have long planned on tapering QT and claimed that 'reduction in balance sheet run-off is not policy-easing'.

"This is not the easing you're looking for..."

By the close, all of Powell's pig-kissing lipstick had been wiped off (see below for the coordinated crypto/nasdaq take-down) as stocks saw solid gains erased in the hour after Powell stopped speaking... Small Caps and The Dow managed to hold on to the gains but Nasdaq and S&P closed nearer the day's lows...

'Most Shorted' stocks saw a massive squeeze (+5%) on the FOMC headlines, before the late day selling pressure hit...

Source: Bloomberg

MAG7 stocks ended the day unchanged after giving back their post-Powell gains...

Source: Bloomberg

Treasury yields plunged 6-8bps across the curve on the day, with the short-end outperforming, dragging all yields lower on the week...

Source: Bloomberg

The 2Y Yield snapped back below 5.00% once again...

Source: Bloomberg

The yield curve (2s30s) jerked flatter initially, then steepened dramatically back to flat on the week...

Source: Bloomberg

The dollar tumbled on the non-easing 'easing' (but bounced back a bit after Powell finished speaking)...

Source: Bloomberg

Gold surged back above $2300 on the non-easing...

Source: Bloomberg

Bitcoin bounced back on the FOMC statement, recovering some of last night's bloodbathery, but somebody did not want it back to $60,000 and that smackdown dragged stocks down with it...

Source: Bloomberg

Oil prices ignored all the fuss around The Fed and fell for the third day in a row (its biggest daily drop since early Jan) with WTI back below $80 at six-week lows...

Source: Bloomberg

Finally, rate-cut expectations (hawkishly) rose on the day with one-or-two cuts in 2024 now 50-50 and two-or-three cuts more in 2025 around 50-50 also...

Source: Bloomberg

And, also Powell explained that he "doesn't see the stag or the 'flation" in markets... well this should help Jay...

Source: Bloomberg

We can't help but feel like Powell is awfully eager to 'loosen' policy... but he made it clear that the 2024 election "just isn't a part of the Fed's thinking."

So, that's that then!

Tyler Durden Wed, 05/01/2024 - 16:00

China Crossed Biden's Red Line On Ukraine, So What?

China Crossed Biden's Red Line On Ukraine, So What?

Authored by Mike Shedlock via MishTalk.com,

It’s ridiculous to have red lines if you are not going to do anything when they are crossed. So what should Biden do?

China Has Crossed Biden’s Red Line on Ukraine

A Wall Street Journal Op-Ed moans China Has Crossed Biden’s Red Line on Ukraine.

President Biden warned China two years ago not to provide “material support” for Russia’s war in Ukraine. On Friday, Secretary of State Antony Blinken conceded that Xi Jinping ignored that warning. China, Mr. Blinken said, was “overwhelmingly the No. 1 supplier” of Russia’s military industrial base, with the “material effect” of having fundamentally changed the course of the war. Whatever Mr. Biden chooses to do next will be momentous for global security and stability.

Mr. Biden can either enforce his red line through sanctions or other means, or he can signal a collapse of American resolve by applying merely symbolic penalties. Beijing and its strategic partners in Moscow, Tehran, Pyongyang and Caracas would surely interpret half-hearted enforcement as a green light to deepen their campaign of global chaos. Mr. Xi sees a historic opportunity here to undermine the West.

What sanctions? On Who? On What? For How Long?

Op-ed writer Matt Pottinger provided no details, he just wants action. He needs to explain what sanctions make any sense at all, and how they would work.

Numerous US sanctions on Russia, China, Iran, all failed. Hell some of them on Russia and China not only failed they backfired.

How China Gets Around US Sanctions on Semiconductors

On February 18, 2024, I explained How China Gets Around US Sanctions on Semiconductors

How Russia Makes a Mockery of US Sanctions in One Picture

Unprecedented US and EU sanctions against Russia have had no impact on Russia’s oil exports or revenue. Who’s the beneficiary?

On December 29, 2023 I noted How Russia Makes a Mockery of US Sanctions in One Picture

On September 19, 2023, I commented Lesson of the Day: Sanctions Don’t Work Because They Create New Markets

Why Sanctions Fail
  • Someone always has an incentive to break sanctions.

  • Sanctions create new markets.

This is how Russia sells oil and how China gets access to equipment and parts.

In the case of chips, the US has forced China into a path to self-sufficiency. Hooray?!

Matt Pottinger wants sanctions. He should name some. Nah, what he really wants is to promote his book “The Boiling Moat: Urgent Steps to Defend Taiwan.”

What Color Are Biden’s Red Lines?

On March 10, I asked Are Biden’s Red Lines to Netanyahu Really Yellow or Green?

Presumably you know the answer now, but if not, please consider this idle threat: Biden Threatens Sanctions on Israeli Soldiers Yet Wants More Money for Israel

If you are going to have red lines, I suggest they should be red.

Israel vs China Red Lines

In the case of Israel, there was an easy remedy. Biden could have withheld aid. Instead, when Israel repeatedly crossed lines, Biden stepped up the aid further emboldening Netanyahu.

In the case of China, there are no sanctions or policy actions that make any sense, so there should not be any red lines.

Attempting to set foreign policy for the world is a huge mistake. And setting red lines you cannot or will not do anything about makes one look silly.

Tyler Durden Wed, 05/01/2024 - 15:40

Starbucks On Brink Of Worst Crash Since Dot Com After "Stunning" Earnings Miss 

Starbucks On Brink Of Worst Crash Since Dot Com After "Stunning" Earnings Miss 

Starbucks shares plummeted by 16% during the early cash session, approaching the -16.2% level last seen during the Covid crash. If intraday losses surpass 16.2% and remain above this level at closing, it would mark the company's worst single-day loss since the Dot Com crash in early 2000.

"Starbucks reported what's perhaps the worst set of results of any large company so far" this quarter, analyst Adam Crisafulli of Vital Knowledge wrote in a note. William Blair downgraded the coffee chain, citing last quarter's "stunning across-the-board miss on all key metrics."

Starbucks reported a 4% drop in same-store sales in the second quarter compared with the same period last year, while analysts tracked by Bloomberg were expecting growth. In China, same-store sales plunged 11%. The company's top geographic segments are showing a pullback in consumer spending. 

On Tuesday evening, CEO Laxman Narasimhan started the earnings call with investors by clarifying his unhappiness with last quarter's results. 

"Let me be clear from the beginning. Our performance this quarter was disappointing and did not meet our expectations," Narasimhan said. 

He said major headwinds originate from a "cautious consumer," adding, "A deteriorating economic outlook has weighed on customer traffic and impact felt broadly across the industry." 

Here's a snapshot of the second quarter's earnings results (list courtesy of Bloomberg):

  • Comparable sales -4%, estimate +1.46% (Bloomberg Consensus)

  • North America comparable sales -3%, estimate +2.05%

  • US comparable sales -3%, estimate +2.31%

  • International comparable sales -6%, estimate +1.36%

  • China comparable sales -11%, estimate -1.62% 

  • Adjusted EPS 68c, estimate 80c 

  • Net revenue $8.56 billion, estimate $9.13 billion

  • Operating income $1.10 billion, -17% y/y, estimate $1.35 billion

  • Adjusted operating margin 12.8%, estimate 14.5%

  • Operating margin 12.8%, estimate 14.4%

  • North America operating margin +18%, estimate +19.5%

  • International operating margin 13.3%, estimate 15.2% 

  • Channel development operating margin 51.7%, estimate 43.6%

  • Average ticket +2%, estimate +2.41% 

  • North American average ticket price +4%, estimate +4.15%

  • International avg. ticket -3%, estimate +0.1%

  • North America net new stores 134, estimate 144.33

  • International net new store openings 230, estimate 429.23

  • Comparable transactions -6%, estimate -0.27% 

  • North America comparable transactions -7%, estimate -1.86%

  • International comparable transactions -3%, estimate +1.37%

Goldman analysts Eric Mihelc and Scott Feiler told clients, "Expectations were for a clear sales miss and a modest EPS miss, but both came worse than the lowered bar." 

They added, "The miss was across geography and was as bad, if not worse, than worst fears." 

Other Wall Street analysts shared the same gloom and doom about the coffee chain (list courtesy of Bloomberg): 

Deutsche Bank analyst Lauren Silberman cuts Starbucks to hold from buy 

  • Says the "challenging" results was a sign "headwinds are more pervasive and persistent than we expected, and we have limited visibility into the pace and magnitude of a recovery"

  • Had thought comparable sales deceleration in the US was more transitory and isolated to a specific cohort

  •  However, with the decline in 2Q traffic and what seems to be limited improvement from Lavender and Spicy Refreshers, Silberman sees it being difficult to "underwrite a meaningful reacceleration," which is key to the bull case

William Blair, Sharon Zackfia (cuts to market perform from outperform)

  • After healthy demand over the past three years, Zackfia says the "tide has turned quickly," with Starbucks posting the weakest traffic performance outside the pandemic or Great Recession

  • China now "looks more fragile," with comparable sales down 11%, and even Starbucks Rewards members "took a rare dip," she adds

Jefferies, Andy Barish (hold)

  • There was a "notable" miss on US and international comparable sales as well as EPS, and Barish says there is "no easy fix in sight to reaccelerate SSS near-term"

  • Notes that international comparable sales was "similarly weak," with traffic and comparable transactions both declining; China's comparable sales miss and Middle East volatility more than offset positive comps seen in Japan, APAC and Latin America

  • PT cut to $84 from $94

Citi, Jon Tower (neutral) 

  • Starbucks is "putting a lot of oars in the water to try and paddle" its way back to a stable comparable sales outlook that investors would be willing to underwrite

  • However, Tower expresses concern that there is not enough "coxswain keeping oarsmen working in unison/with accountability"; adds that it ignores the "true leak in the bottom of the boat," flagging broad consumer pushback to cumulative transaction growth and the value equation

  •  Notes China store margins are still in the double digits and the segment is profitable despite top-line declines

  •  PT cut to $85 from $95

Cowen, Andrew Charles (hold)

  •  "We believe 2024 guidance has been derisked as we model 0% NA comps & 3% EPS growth, the high end of the range"

  • Expects shares to be in a "holding pattern" as Starbucks restores credibility while competition and tough macroeconomic conditions present headwinds

  • PT cut to $85 from $100

Bloomberg Intelligence, Michael Halen and Jennifer Bartashus

  • "Starbucks slashed fiscal 2024 same-store sales, revenue and EPS guidance and lacks a cogent plan to boost demand"

  • "We believe several initiatives, including targeting overnight sales, dozens of new products and a four-week mobile- app upgrade cycle are overkill — a distraction unlikely to boost traffic"

On Tuesday, a similar story occurred at McDonald's when the burger chain reported lower-than-expected quarterly sales growth. 

Notably, working-poor consumers are pulling back spending in a period of stagflation (read here & here). 

Tyler Durden Wed, 05/01/2024 - 15:25

The Path Of Least Resistance: Northwestern Reaches Controversial Settlement With Pro-Palestinian Protesters

The Path Of Least Resistance: Northwestern Reaches Controversial Settlement With Pro-Palestinian Protesters

Authored by Jonathan Turley,

Northwestern University has agreed to a controversial settlement with pro-Palestinian protesters encamped on its campus this week, including a commitment for scholarships for Palestinians, Palestinian faculty appointments, and special housing for Muslim students.

The protesters will also be allowed to continue their protests while agreeing to stay in a particular area of campus.  It will also put the students and supporting faculty on bodies to review any university investments and purchases, a major demand from supporters of the Boycott, Divestment and Sanctions (BDS) movement.

Previously, protesters had reportedly prevented some students and faculty from entering buildings and engaged in property damage.

The Daily Northwestern reported the details of the deal and noted

“the University has committed to provide a conduit for students to engage with the Investment Committee of the Board of Trustees. It will also re-establish an Advisory Committee on Investment Responsibility this fall, which will include students, faculty and staff.

...

In addition, the University committed to some support for Palestinian students and faculty in the agreement. NU will ‘support visiting Palestinian faculty and students at risk,’ and will provide the cost of attendance for five Palestinian undergraduates to attend Northwestern.

...

The University also committed to providing an ‘immediate temporary space for MENA/Muslim students’ — a longtime demand from students on campus — and will provide and renovate a house for MENA/Muslims students as soon as possible. The final house is expected to come in 2026.”

It also includes a commitment of the university to intervene with employers to guarantee that students suffer no consequences for participating in protests in their jobs and internships.

Northwestern (my alma mater) has always chosen the path of least resistance when it comes to protesters, including at times surrendering core academic functions. I have been particularly critical of the loss of freedom of speech and academic integrity on campus.

Students previously succeeded in cancelling a speech by former U.S. Attorney General Jeff Sessions. Student Zachery Novicoff embodied the rising intolerance to free speech on campus. He is quoted as saying “There’s a limitation to free speech. That ends at overtly racist old white dudes.”

criticized former Northwestern University President Morton Schapiro for his lack of support for free speech on campus. Schapiro denounced what he called “absolute” free speech positions and endorsed speech sanctions, including treating speech as a form of assault.

During his tenure, the university often seemed a mere pedestrian to mob action taken against dissenting voices. For example, we previously discussed a Sociology 201 class by Professor Beth Redbird that examined “inequality in American society with an emphasis on race, class and gender.”  To that end, Redbird invited both an undocumented person and a spokesperson for the Immigration and Customs Enforcement.  It is the type of balance that is now considered verboten on campuses.

Members of MEChA de Northwestern, Black Lives Matter NU, the Immigrant Justice Project, the Asian Pacific American Coalition, NU Queer Trans Intersex People of Color and Rainbow Alliance organized to stop other students from hearing from the ICE representative.  However, they could not have succeeded without the help of Northwestern administrators (including  Dean of Students Todd Adams).  The protesters were screaming “F**k ICE” outside of the hall.  Adams and the other administrators then said that the protesters screaming profanities would be allowed into the class if they promised not to disrupt the class.  Really?  They were screaming profanities and seeking to stop the class but would just sit nicely as the speaker answered questions?

Of course, that did not happen. As soon as the protesters were allowed into the classroom, they prevented the ICE representative from speaking.  The ICE official eventually left and Redbird canceled the class to discuss the issue with the protesters that just prevented her students from hearing an opposing view.

The comments of the Northwestern students were predictable after being told by people like Schapiro that some offensive speech should be treated as a form of assault.  SESP sophomore April Navarro rejected that faculty should be allowed to invite such speakers to their classrooms for a “good, nice conversation with ICE.” She insisted such speakers needed to be silenced because they “terrorize communities” and profit from detainee labor. Here is the face of the new generation of censors being shaped by speech-intolerant academics like Schapiro:

We’re not interested in having those types of conversations that would be like, ‘Oh, let’s listen to their side of it’ because that’s making them passive rule-followers rather than active proponents of violence. We’re not engaging in those kinds of things; it legitimizes ICE’s violence, it makes Northwestern complicit in this. There’s an unequal power balance that happens when you deal with state apparatuses.”

Last year, the Northwestern student body banned press from meetings to protect students from the harm of media coverage. The students also have previously frozen funds of conservative groups.

The Northwestern journalism faculty is little better.  Steven Thrasher, the Daniel H. Renberg Chair of social justice in reporting at Northwestern, who trashed a reporter who waited for the facts before reporting on a police shooting.

Of course, it is not just conservative speakers that the students want to ban. In 2021, they called for the removal of the President of the Board of Trustees. Despite being a major donor and supporter of the school, J. Landis Martin was denounced as a Republican who donated money to former President Donald Trump.

The university issued a statement that “This path forward requires the immediate removal of tents on Deering Meadow, cessation of non-approved use of amplified sound and a commitment that all conduct on Deering and across campus will comply with all University rules and policies. Compliant demonstration can continue at Deering Meadow through June 1.”

The university has long lacked the fortitude to stand up to students engaging in disruptive protests.

The danger of such passivity is evident on our campuses. As Henry David Thoreau warned, “all rivers and most corrupt men follow the path of least resistance.”

Here is the Northwestern agreement.

Tyler Durden Wed, 05/01/2024 - 15:05

Wall Street Reacts To Powell Unleashing His Inner Dove

Wall Street Reacts To Powell Unleashing His Inner Dove

Ahead of today's FOMC statement and Powell presser, we said that the bogey for a dovish interpretation today will come not from the Fed's rate decision, which we knew would be unchanged, but the QT tapering decision...

... and sure enough, the fact that the Fed announced an accelerated QT tapering and it was bigger than expected ($35BN vs $30BN) is why the market is viewing the Fed announcement as dovish and futures are now soaring.

And while we wait for Powell's presser to conclude, here are some other hot takes from Wall Street strategists and thinkers:

David Russell, head of market strategy at TradeStation

“The Fed is still in wait-and-see mode before they get dovish. But the data hasn’t been cooperating. This statement keeps investors data dependent and focused on April numbers like CPI two weeks from now.”  

Audrey Childe-Freeman, chief G-10 FX strategist at Bloomberg Intelligence

“A first glance at the statement brings dollar bears some breathing space as the language adjustment is not as hawkish as may have been feared, though the reference about underwhelming inflation progress entertains a potential new layer of hawkishness at a later stage that could contain dollar downside ahead of the press conference. Muted dollar reaction so far captures this well.

“The language embraced thus far does not signal that the narrative has shifted back to new rate-hike debates, but rather to pushing back the timing on a rate cut. This is probably good enough for near-term euro-dollar relief given the feared hawkish pivot.”

Brian Coulton, chief economist at Fitch Ratings

“With unemployment still low and the labor market still tight, there is only a limited risk to the Fed’s employment mandate from waiting longer before embarking on rate cuts. On the other hand the risk of failing to get inflation down on a sustained basis seems to be rising as each week goes by. Patience is the watchword now for the Fed and the risk of fewer or no rate cuts this year is growing.”

Erica Adelberg, Bloomberg Intelligence’s mortgage-backed securities strategist:

“Making it explicit that any surplus MBS paydowns will be reinvested into Treasuries could adversely affect the MBS/Treasury basis, but at this point MBS paydowns are projected to be about half of the $35 monthly cap on average for the foreseeable future. The average loan rate backing the Fed’s MBS holdings is more than 300 bps below current mortgage rates, so it would take a significant interest rate rally to hit the MBS cap.”

Kathy Bostjancic, Chief Economist at Nationwide:

“We expect Chairman Powell will underscore this hawkish pivot in his press conference and emphasize that the timing of pace of rate cuts will depend highly on the future path of inflation. He likely will indicate the Fed is on an extended pause until inflation resumes its disinflationary trend.”

Ira Jersey, Bloomberg rates strategist:

“His lack of comment about the possibility of a hike is interesting, and I’d be surprised if he’s not asked about the potential for hikes in the press conference. But it seems that ‘on hold’ is his base case for now.”

Bloomberg Economics’ Anna Wong and Stuart Paul:

“For anyone wondering if this year’s hot inflation readings were just a blip, the May 1 FOMC meeting offered a clear answer: Hawkish tweaks to the statement show policymakers have lost confidence that inflation is moving in the right direction. At the same time, the Fed announced it would start tapering its balance-sheet run off in June – a month earlier than we expected — and will reduce the runoff cap by a bit more than we foresaw. That initially comes across as dovish, but the motivation here is key. If it turns out the Fed wants the run-off process to last longer — ultimately boosting the chance that its balance sheet will return to pre-pandemic size – that actually would be hawkish.”

Developing

Tyler Durden Wed, 05/01/2024 - 14:51

Watch Live: Fed Chair Powell Walk The 'Asymmetric' Tight-Rope At Today's Presser?

Watch Live: Fed Chair Powell Walk The 'Asymmetric' Tight-Rope At Today's Presser?

As expected, no change in rates from The Fed, and a hawkish bias to the language changes in the FOMC statement.

The bigger than expected QT taper news is noteworthy and Powell will have to explain why they are 'easing' this policy more than expected while inflation remains 'out of control'... and they are not ready to cut rates.

So now it's down to Powell to avoid a faux pas (as we detailed below) over shifts in The Fed's 'asymmetric' response function.

Watch Powell walk that tightrope live here (due to start at 1430ET):

*  *  *

As we detailed earlier, today's Fed meeting had the market feeling (and positioned for) “HAWKISHNESS,” especially after the ECI pile-on yesterday, which didn’t simply “upside surprise,” but re-accelerated to 1.2% after ending 2023 at 0.9%, and showing that persistent wage pressures further add to the risk of keeping inflation “too elevated” for the Fed.

However, according to Nomura MD Charlie McElligott, the largest risk with the Fed today is that there will be no summary of economic projections / no dot plots...

...meaning that outside of the usual statement, it will be Powell’s press conference alone that dictates market behavior... and the backtest on that is a bit dicey, with some historic faux pas in-sample.

He’s gotta find a way to “keep it in the pocket,” where his language simply must message “balance of risks”...

...which means (as we detailed earlier) that he dangerously must “toe the line” on widening out the Fed path away from currently asymmetric “when cut?”-messaging dating back to Dec ’23...

...and instead back to a two-way distribution with both ‘cut’ and honest-to-God ‘hike’ –optionality.

Nomura's rates guru Jonathan Cohn details just how narrow a path it is for Powell:

Powell’s FOMC presser and, in particular, his answer to the inevitable question around potential hikes represents a key risk.

Following meaningful policy path repricing since CPI and reorientation of Fedspeak, the bar for Powell to exceed market hawkishness is high.

Powell, pricing, positioning

What to expect

Statement:

Our economists expect two hawkish changes (see their preview here)

  1. Change “inflation has eased over the past year, but remains elevated” to “inflation remains elevated”

  2. Removal of “greater” in the Fed’s expectation that it would not ease rates “until it has greater confidence that inflation is moving sustainably toward 2%”

Presser:

  • Powell’s FOMC presser will again be highly scrutinized, particularly his answer on whether hikes are in play. Bostic and Bowman flagged hikes as a risk and Williams did not rule them out, inviting a reassessment of two-way risk. Though Powell will likely maintain that policy is restrictive, he will also likely want to retain optionality amid high uncertainty around neutral. The phrasing of that optionality sentiment will be critical.

Is the market ready / priced?

  • How much is priced: The market has repriced a lot, going from 63bp of cuts in 2024 pre-CPI to 28bp currently. Market-implied year-end rates for 2024 and 2025 are well above the median dots, granted the March dot plot had some ‘cuspy’ medians. The repricing owes primarily to sticky inflation arresting progress through H2 last year, though there has also clearly been a reduced ‘recession’ premium as well. In terms of hike appreciation, the market-implied probability of a hike by year-end is now around 15%, double what it was pre-CPI. Given the reorientation of Fedspeak amid this sticky inflation (i.e., less emphasis on cuts this year), there is a higher bar for Powell to exceed market hawkishness.

  • Repositioning: At the front-end, there have been a couple waves of washouts in ‘sell hike’ trades like 1x2 payer spreads in the sell-off. An examination of open interest changes coupled with insights from our futures desk suggests a good deal of positioning post-CPI was rolled into lower strikes, not simply taken off. And with the increase in put OI in 94.625 (no cut) strike largely a function of buyers, those combining with sales in lower strikes (short skew) seem prepared for something like no cut or one hike scenario. Of course, the risk is that if Powell rhetoric around potential hikes is seen as hawkish and followed by strong NFP and CPI, we move quickly toward the low strikes as the market prices in a higher probability of multiple hikes and we get another positioning flush. I do think that if the Fed feels the need to change its directional bias and hike (not just stay on hold), one has to price in a high probability of multiple hikes, not a one and done. However, I still think there’s a very high bar for the Fed to pay more than lip service to open-mindedness.

QT slowdown

  • The Fed is expected to announce a reduction in the pace of QT, likely to $30bn per month for UST. I wouldn’t expect much guidance on an end date. Slowing runoff should theoretically allow for a longer period of QT and lower ultimate level of reserves (thanks to more time for an efficient redistribution of liquidity) – a level around which uncertainty bands are very large.

Putting it together suggests a ‘middle of the road’ Powell can give way to a temporary relief rally, while a blundered characterization of hike optionality could lead to another position flush out and bear-flattening of the yield curve.

Hence, McElligott warns that with all this HAWKISH mentality / sentiment / positioning, the risk is that any surprisingly dovish Fed speak or Data (e.g. NFP Friday), you COULD see potential for an outsized SHORT SQUEEZE / RALLY RISK on stops.

Tyler Durden Wed, 05/01/2024 - 14:25

FOMC Leaves Rates Unch, Says (Bigger Than Expected) QT Taper To Start In June

FOMC Leaves Rates Unch, Says (Bigger Than Expected) QT Taper To Start In June

Tl;dr: The Fed just told the market that 'yields are too damn high'.

*  *  *

Since the last FOMC meeting, on March 20th, gold has been the biggest outperformer (interesting along with dollar strength), while stocks, bonds, and crude (and crypto) have all been sold (with bonds and oil equally ugly)...

Source: Bloomberg

And since March 20th, US macro data has serially disappointed...

Source: Bloomberg

More problematically, since the last FOMC meeting, inflation data has dramatically surprised to the upside and growth data to the downside - screaming stagflation in the face of the Fed...

Source: Bloomberg

Rate-cut expectations (for 2024 and 2025) have plunged significantly since the last FOMC (that is now just one 25bps rate-cut priced in for 2024)...

Source: Bloomberg

Expectations are fully priced for a nothing-burger today on rates...

Source: Bloomberg

... with a slight hawkish bias in the language-changes in the statement (and the possibility of QT-taper signaling). But it will be Powell's press conference that everyone will be focused on.

So what did The Fed say?

Rates unchanged...

  • *FED HOLDS BENCHMARK RATE IN 5.25%-5.5% TARGET RANGE

Key statement changes

Fed adds following sentence:

"In recent months, there has been a lack of further progress toward the Committee's 2 percent inflation objective."

Fed also replaces

"The Committee judges that the risks to achieving its employment and inflation goals are moving into better balance"

with

"The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.

And the QT Taper is here - and its bigger than expected (-$35BN/mth vs -$30BN expected):

Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.

The Committee will maintain the monthly redemption cap on agency debt and agency mortgage‑backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities

This means $105BN less gross issuance needed in Q3, with The Fed implicitly saying 'yields are too high'.

Just as we said...

Read the full redline below:

What happens next (on average)?

Tyler Durden Wed, 05/01/2024 - 14:00

Lu-Lu-Leveraged: Lululemon Founder Pledges Shares For Margin Loan

Lu-Lu-Leveraged: Lululemon Founder Pledges Shares For Margin Loan

Lululemon's founder is taking on some lu-lu-leverage - and it's coming at a time when Lululemon's stock is more than 20% off its recent highs. 

Chip Wilson, the founder of Lululemon, has reportedly used a significant portion of his stake in the company to secure financing from Goldman Sachs Group Inc., according to a new report from Yahoo/Bloomberg

According to a recent regulatory filing, an investment firm representing the Canadian billionaire pledged 1.8 million Lululemon shares, nearly 20% of his total holdings, as collateral for a $200 million margin loan from the US bank.

Wilson's stake, valued at approximately $660 million based on Tuesday's closing price, comes at a challenging time for Lululemon, with its stock declining by 25% since late March due to disappointing US sales and sales projections.

While representatives for Lululemon and Wilson declined to comment, this transaction sheds light on how wealthy individuals leverage their public holdings for substantial liquidity. For Wilson, who relinquished daily management of Lululemon over a decade ago, it signifies a broader investment diversification strategy.

The report states that the 69-year-old entrepreneur has expanded his investments beyond Lululemon, increasing his stake in Amer Sports Inc. and establishing a real estate firm, Low Tide Properties, among other ventures.

Additionally, he is actively investing in research to find a cure for his rare form of muscular dystrophy.

Pledging shares as collateral is common among the ultra-rich, with examples including Elon Musk leveraging Tesla Inc. stock for personal loans.

While borrowing against shares offers tax advantages, it also carries risks, as evidenced by margin calls during market downturns, such as those experienced at the onset of the pandemic.

Wilson founded Lululemon in 1998 and stepped down as chairman in 2013 following controversies and disagreements with the company's leadership.

Despite selling a significant portion of his stake a decade ago, he retains control of approximately 8% of Lululemon's shares, making it his largest individual asset.

Now he better hope yoga pants stay in style...

Tyler Durden Wed, 05/01/2024 - 13:45

The Great Gold Vs Bitcoin Debate: ZeroHedge Presents Roubini And Schiff Against Scaramucci And Voorhees

The Great Gold Vs Bitcoin Debate: ZeroHedge Presents Roubini And Schiff Against Scaramucci And Voorhees

Proponents of gold and bitcoin often hail from the same ideological background: Austrian economists, dollar bears, Libertarians tired of State manipulation of fiat currencies and, generally, the anti-Fed crowd. Yet shared principles have not eased the age-old rivalry between the two assets.

Relative to Bitcoin, gold lost considerable value last year as an ounce of gold fell from 0.11 BTC to almost 0.03 BTC, a historically important level. The last month has seen the precious metal rebound somewhat relative to 'digital gold':

However, as Benjamin Graham said: “In the short run, the market is a voting machine, but in the long run, it is a weighing machine.” So we are more interested in the fundamentals:

  • Does Bitcoin’s instant transferability and infinite portability make it the superior asset/security? Or is it a worthless string of numbers with infinite substitutes?

  • Will gold’s thousand-year history as the preferred monetary commodity continue in the digital age? Or does its reliance on third-party custodians (at least at scale), and significant bulk, make it inferior to BTC?

We’ll answer these questions - and more - this Friday.

On May 3 at 7pm ET, ZeroHedge is partnering with Crypto Banter to bring together top macroeconomic minds to debate.

In the anti-crypto corner is the man whose name is synonymous with “gold”, infamous crypto bear Peter Schiff. Alongside Schiff will be “Dr. Doom”, renowned economist Nouriel Roubini.

Arguing in favor of crypto will be Anthony Scaramucci - wealth manager with over $10 billion in AUM - as well as day-one crypto veteran Erik Voorhees, founder of ShapeShift and torch-bearer for the asset class’ libertarian roots.

The debate will be moderated by Ran Neuner, founder and host of Crypto Banter, one of the largest digital asset news channels on YouTube.

Learn more about our VIP ticket offering to attend the debate in person and grab dinner with the participants here.

ZeroHedge would also like to thank our sponsors for this debate: Preserve Gold and BITLAYER — “Layer 2. The future of Bitcoin.” Whether you’re a fan of gold or Bitcoin, you probably see the wisdom in diversifying away from U.S. dollars. Do so by visiting their websites and checking out their products.

ZeroHedge Goldbugs can access a special offer from Preserve Gold by texting “ZERO” to 50505.

Tyler Durden Wed, 05/01/2024 - 12:10

Feds Scrutinizing Block's Square And Cash App, Eyeing If Transactions Funded Terror And Skirted Sanctions

Feds Scrutinizing Block's Square And Cash App, Eyeing If Transactions Funded Terror And Skirted Sanctions

Federal prosecutors are investigating compliance issues at Block, the fintech firm co-founded by Jack Dorsey, according to a new report from NBC, citing "two people with direct knowledge". 

Questions about the company started swirling back in March 2023 when short seller Hindenburg Research released a report called "Block: How Inflated User Metrics and “Frictionless” Fraud Facilitation Enabled Insiders To Cash Out Over $1 Billion". 

In it, they concluded that "the 'magic' behind Block’s business has not been disruptive innovation, but rather the company’s willingness to facilitate fraud against consumers and the government, avoid regulation, dress up predatory loans and fees as revolutionary technology, and mislead investors with inflated metrics."

Now, a former employee has shared documents revealing insufficient customer information collection, transactions involving sanctioned countries, and cryptocurrency dealings with terrorist groups, the latest report from NBC says.

The employee claims many transactions weren't reported as required, and Block failed to address the breaches despite being notified. The documents detail transactions with entities in sanctioned countries, including Cuba, Iran, Russia, and Venezuela, as recent as last year.

One former told NBC: “From the ground up, everything in the compliance section was flawed. It is led by people who should not be in charge of a regulated compliance program.”

“It’s my understanding from the documents that compliance lapses were known to Block leadership and the board in recent years," Edward Siedle, a former Securities and Exchange Commission lawyer who represents the former employee and participated in the discussions with prosecutors told NBC

Cash App, a mobile payment platform under Block's ownership, faced allegations of compliance failures from two other whistleblowers in mid-February. Introduced in 2013, Cash App enables instant money transfers and stock and Bitcoin purchases. By December, it boasted 56 million active transacting accounts and $248 billion in inflows over the previous four quarters.

Block commented to NBC: “Block has a responsible and extensive compliance program and we regularly adapt our practices to meet emerging threats and an evolving sanctions regulatory environment. Our compliance program includes systems, tools, and processes for sanctions screening, as well as investigating and reporting on sanctions issues in accordance with our regulatory obligations."

They continued: "Continually improving the safety and security of our ecosystem is a top priority for Block. We have been and remain committed to building upon this work, as well as continuing to invest significantly in our compliance program.”

Federal prosecutors are also examining Square, another key component of Block's operations, which serves millions of merchants. According to documents provided to prosecutors and reviewed by NBC News, Square allegedly failed in basic customer due diligence on international merchant sellers and mistakenly reimbursed some merchants' funds frozen for sanctions violations.

The documents also reveal that new customers triggering sanctions alerts were allowed to conduct transactions before resolution, with instances of inadequate screening against sanctions keyword lists, the report adds.

Cash App, due to its design, also apparently heightened compliance risks, NBC wrote. A document highlighted the challenge, stating that stored balances in Cash App are typically depleted by the time of review, limiting the platform's ability to block or reject funds.

The former employee also informed prosecutors of findings from an external consultant hired by Block, which identified nearly 50 deficiencies in monitoring suspicious activities and screening for sanctions violations.

Board members including Lawrence Summers and Sharon Rothstein have also recently departed the company.

Tyler Durden Wed, 05/01/2024 - 11:50

Fed Policies Turn The Wealth Gap Into A Chasm

Fed Policies Turn The Wealth Gap Into A Chasm

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

In an op-ed for the Washington Post on November 5, 2010, Ben Bernanke did a victory lap, praising the Fed’s efforts in stemming the financial crisis. In the article, he discusses how QE and other Fed policies eased financial conditions, bolstering investor confidence.

And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion. 

If Bernanke wants credit for his Fed policies that boosted stock prices, he should also take responsibility for the costs. Those same monetary policies, which have been repeated many times since 2008, have played an important role in exacerbating the wealth gap in America. Accordingly, we should question his use of the term “virtuous circle” to describe how modern monetary policy works.

Graphing The Wealth Gap

Inspiration for this article comes from our recent article, Wealth Gap and the Road to Serfdom.

Before discussing the Fed’s role in widening the wealth gap, we put context to the problem. The graphs and quote below are from the article.

For 80% of Americans, the end game of too much debt, an aging demographic, and the push for “socialistic policies” is the continued extraction of wealth from the “middle class” to the “rich.”

Trickledown Economics and Monetary Policy

Trickledown economics” was coined by John Kenneth Galbreth in 1982 and made famous by President Ronald Reagan. The expression is another name for supply-side economic policy. The policy theorizes that the populace benefits when government interference in the economy is minimal. For example, lower taxes and reduced regulations should promote economic activity and prosperity for the entire populace.

The theory is logical, but politicians have done a poor job enacting it.

In 2008, the Fed took a page from the supply-side economic playbook to stem the financial crisis. From that point forward, the Fed’s modus operandi has been trickle-down monetary policies.

Does QE Trickle Down?

Ben Bernanke wasn’t the first Fed Chair or central banker to use QE. But he did make it a household name and seemingly a permanent tool in the Fed’s toolbox.

QE has two significant impacts on the financial markets and the banking system.

First, removing assets from financial markets alters the supply-demand balance in favor of higher prices. Additionally, when investors believe QE is positive for asset prices, as is the case, demand increases, which provides even more impetus for higher asset prices.

Second, the Fed buys bonds from the banks with reserves. Reserves are a form of money that is only viable in transactions between banks or with the Fed. Reserves support bank loans and asset purchases. Therefore, when more reserves are available, banks can more easily make loans and buy assets. Further, some bank loans, specifically margin or repo loans, generate additional demand for assets.

The scatter plot below shows the positive correlation between the one-year percentage change in margin debt and the Fed’s balance sheet.

Higher stock and asset prices coupled with more leverage is a winning combination for investors.

The Graph of All Graphs

With that explanation of how trickledown monetary policy bolsters asset prices to accomplish the Fed’s goals, we share a graph explaining why the Fed’s policies widen the wealth gap.

Since 1990, the dollar’s purchasing power has declined by over 50%. At the same time, the S&P 500 has risen by over 1,300%. Those with a sufficient portfolio of stocks could more than offset the decline in the dollar’s purchasing power. Those without stocks are left behind.

Further, it doesn’t help that real household income for the lowest 20% has been unchanged since 1990. Over the same period, they have risen by about 50% for those in the upper 20% of incomes.

Share Of Wealth

The wealthier have seen their wages and the value of their financial assets rise much more than inflation. At the same time, the lower wealth and income classes have seen marginal real income gains at best and little in the way of benefits from rising stock prices. 

The two graphs below show how the percentage of the wealth owned by the top 1% and the change in the S&P 500 are well correlated.

On the contrary, the aggregate wealth of much of the bottom half of the nation, as a percentage of total wealth, has a negative relationship with the S&P 500.  

There is a straightforward explanation as to why the correlation between the share of the wealth of the rich versus that of the rest of the population has opposing correlations to the S&P 500. 10% of the population holds nearly 90% of the stocks.

Trickledown Monetary Policy Handicaps Capitalism

QE and other Fed policies may help the economy on the margin and save some jobs. However, there is little evidence that, over the longer term, the economic benefits increase the prosperity of most of the populace. Further, as we share, there is compelling evidence it further exacerbates the wealth gap.

Capitalism has proven to be the best economic system for growing the wealth of the entire population. A key tenant of capitalism promises financial incentives for those who work hard and have unique skill sets. That incentive results in productivity gains, which benefit economic growth and allow for higher wages and a broad distribution of wealth.

Unfortunately, when financial incentives are not only a function of capitalism but also an offshoot of government and Fed policies, the benefits of capitalism are reduced.

For example, Elon Musk is extraordinarily wealthy and should be rewarded handsomely for everything he has accomplished. However, how much of his wealth is based on his hard work and ingenuity, and how much was gifted to him by the Fed via their stock-boosting monetary policies. While slightly off-topic, we should also question how much of his wealth is attributable to government subsidies for electric vehicles. 

Summary

President Biden’s poll numbers on economic confidence are poor despite robust economic growth and a historically low unemployment rate. While there are many reasons for the odd divergence, we think it’s fair to say that the benefits of the post-pandemic growth spurt have disproportionately accrued to those in higher-income classes and those with stocks. Those left behind, representing a large majority of the population, are not confident in Biden’s handling of the economy and suffer from higher prices.

Most Americans continue to see wages that cannot combat inflation and have little to no wealth invested in the stock market. Can you blame them for lacking confidence?

QE may have served as an emergency way to add bank reserves to the system and boost confidence. However, its continued use, even during economic prosperity periods, only makes the wealth gap wider.

Tyler Durden Wed, 05/01/2024 - 11:30

AMD's Muted AI Sales Forecast Fails To Unleash Bulls 

AMD's Muted AI Sales Forecast Fails To Unleash Bulls 

Advanced Micro Devices, the second-largest maker of computer processors, disappointed investors with its sales outlook for processors used in data centers. The company also reported weak demand for chips used in gaming hardware, which could serve as a warning for Nvidia bulls as they await the company's earnings report in three weeks.

On Tuesday, AMD reported first quarter earnings that were in line with Wall Street's expectations. However, this wasn't enough to overly excite bulls as shares traded down 6.7% in the early cash session. 

First-quarter earnings, excluding certain items, were 62 cents per share on revenue of $5.47 billion. This report exceeded the estimated profit of 61 cents per share and projected revenue of $5.45 billion.

AMD's computer chip division had around $1.4 billion in revenue, compared with a $1.29 billion estimate. Datacenter chip sales were $2.3 billion, which is in line with Wall Street's expectations. Sales of gaming-related chips reached $922 million, falling short of analysts' expectations of $965.5 million.

The company stated that its second-quarter revenue forecast is around $5.7 billion, plus or minus $300 million, compared with the average estimate of $5.72 billion. 

Although earnings met expectations, the updated guidance of $4 billion for data center chips was considered conservative. Despite being an improvement over the previous $3.5 billion estimate, some Wall Street analysts forecasted a higher figure. 

"We are firm believers in AMD's revitalized product roadmap strategy, and product traction is compelling," KeyBanc strategists led by John Vinh wrote in a note. 

Vinh continued, "However, expectations for share gains and growth are high. We're concerned that any moderate downtick to expectations could add substantial risk to the stock based on valuation levels well above peers."

Oppenheimer analysts led by Rick Schafer noted, "We remain on the sidelines for now as AMD's emergent AI growth story is diluted by sluggish" sales in other areas. Perhaps this is an ominous sign that the parabolic trend of the AI bubble is unsustainable. 

AMD and Nvidia are rivals in the PC GPU and AI data center markets. Nvidia bulls and bears are awaiting the company's May 22 earnings report for hints about the state of the AI industry. 

Qualcomm will be reporting earnings on Wednesday afternoon. Then Arm Holdings on May 8. 

Bloomberg data shows the Philadelphia semiconductor index is priced around 26 times projected profits, down from a March peak of 30 times profits. However, the index trades well above the 10-year average of 17 times. 

Chipmaker valuations are being driven by multiple years of future earnings growth fueled by the AI bubble. Perhaps the collapse of ASML's order book is an ominous sign of what's to come (read here)

Tyler Durden Wed, 05/01/2024 - 11:15

Markets Are Very, Very Nervous Going Into The FOMC Decision

Markets Are Very, Very Nervous Going Into The FOMC Decision

By Michael Every of Rabobank

Higher for Longer Anxiety

Markets are very, very nervous going into the FOMC decision. The Wall Street Journal’s Timiraos tells us the Fed’s message will be “higher for longer”, language that had been dumped in December.

Moreover, if the Fed sees more hot data --following a jump in the Employment Cost Index, US house price inflation rising again, and a New York Fed wage tracker showing pay hikes staying around 5% y-o-y-- then while they may not raise rates again, they will certainly remove some of the implied cuts in the next dot plot; in his words, that would force yields higher along the curve in order to tighten financial conditions. So, higher yields anxiety.

Meanwhile, former President Trump give an interview to Time magazine that underlines how remarkably different, and radical, a ‘Trump 2’ would be. In particular, markets should note:  

Let’s shift to the economy, sir. You have floated a 10% tariff on all imports, and a more than 60% tariff on Chinese imports. Can I just ask you now: Is that your plan?

It may be more than that. It may be a derivative of that. A derivative of that. But it will be somebody - look when they come in and they steal our jobs, and they steal our wealth, they steal our country.

When you say more than that, though: You mean maybe more than 10% on all imports?

More than 10%, yeah. I call it a ring around the country. We have a ring around the country. A reciprocal tax also, in addition to what we said. And if we do that, the numbers are staggering. I don't believe it will have much of an effect because they're making so much money off of us. I also don't believe that the costs will go up that much. And a lot of people say, “Oh, that's gonna be a tax on us.” I don't believe that. I think it's a tax on the country that's doing it…

Mr. President, most economists—and I know not all, there isn't unanimity on this—but most economists say that tariffs increase prices.

Trump: Yeah.

Are you comfortable with additional inflation?

Trump: No, I've seen. I've seen - I don't believe it'll be inflation. I think it'll be lack of loss for our country. Because what will happen and what other countries do very successfully, China being a leader of it. India is very difficult to deal with. India - I get along great with Modi, but they're very difficult to deal with on trade. France is frankly very difficult on trade. Brazil is very difficult on trade. What they do is they charge you so much to go in. They say, we don't want you to send cars into Brazil or we don't want you to send cars into China or India. But if you want to build a plant inside of our country, that's okay and employ our people. And that's basically what I'm doing. And that’s - I was doing and I was doing it strongly, but it was ready to really start and then we got hit with COVID. We had to fix that problem.

So, higher tariffs and, for some, higher inflation anxiety. And it’s not just from Trump: following yesterday’s Global Daily title of ‘Beg, Borrow, or Steel’, Treasury Secretary Yellen flagged higher US tariffs are needed vs. Chinese steel dumping; and the White House wants ethanol aviation fuel subsidies which will boost corn prices – you can tell it’s a US election year.  

Meanwhile, Trump may want to end Fed independence (vs. telling the world rate cuts are coming by end year, and placing doves, not hawks, on the FOMC after a series of scandals). Would this imply “bigly” rate cuts, or open the door to the hybrid higher-rates-for-some/lower-for-others monetary/fiscal/industrial policy I have hypothesized as the only logical solution to the mess we are in? Either way, it would be “bigly” for all asset classes; more so when another headline suggests Trump wants to punish the BRICS who try to dedollarise with high tariffs.

Meanwhile other things are likely seeing central banks reach for their Valium:

  • The West has K-shaped, unequal, unhappy, stagflationary, more emerging-market economies with too much debt and too few good options.
  • Not only the yield curve, but an entire generation is lying flat or inverted in calling for violent revolution or communism in the US; and, at elite universities, to the approval of faculty, administrators, and authorities. As legitimate protest metastasizes into a ‘tentifada’ or, as Alan Dershowitz calls it, “Mein Kampus”, a Harvard-Harris poll shows 43% of US 18-24 year-olds support Hamas over Israel, and a majority want *Iran* to have a nuclear weapon.
  • High geopolitical tensions mean protectionist, inflationary, Hamiltonian rearmament; yet the West currently can’t get the Suez Canal open to its maritime commerce again because of the Houthis; and Poland confirms it’s asked the US to let it host nuclear weapons, which could lead to an EU Cuban Missile Crisis.

In 2019, I suggested we were on the cusp of an ‘Age of Rage’ that risked injecting politics into central banks: within 2 years, the Fed was talking about social justice, which some think perhaps played a partial role in the FOMC’s delayed recognition that rate hikes were necessary. In 2024, a former ECB president is calling for “radical” change, a US presidential candidate may back the end of Fed independence, and the Wall Street elite’s kids want global revolution. Where will things sit in another five years? “25bps lower” is not an answer that captures the real tail risks. However, not many want to ‘go there’, which leads me to high anxiety.

In Mel Brooks’ High Anxiety, psychologist Richard Thorndyke and belle Victoria Brisbane must pass through San Francisco Airport, where the police are looking for them. To hide, they wear clothes from charity and do an impression of many grandparents, as Thorndyke urges Victoria: “Be loud and annoying. Psychologically, when you are loud and annoying, people don’t notice you.” Indeed, when the metal detector is triggered by a forgotten gun, Thorndyke avoids arrest thus:

Thorndyke: “What is this, a gameshow? What did I win, a Pinto?”

Security: “I'm sorry sir, we're going to have to search you.”

Thorndyke: “Please Sir, what did I do? What did I do? What's to my crime?”

Security: “You beeped.”

Thorndyke: “I beeped! I beeped! Take me away! Take me back to Russia! Put me in irons! I beeped! The mad beeper is loose! Take away the beeper! Take me away!”

Security: “It’s alright! It’s alright, please go! Please go!”

We are now living that movie. Tipping-points loom in our ecology, economy, society, theology, psychology, demography, national security – and, yes, markets. Yet many ignore those “loud and annoying” messages right up until the likes of Timiraos spell it out for them. As such, aren’t those focused solely on the next rate cut the real “mad (25) beepers”?

Our Australia/New Zealand strategist Ben Picton will make some very, very nervous: he’s revised his RBA policy rate forecast to include two further 25bps hikes (in August and November) to reach a terminal rate of 4.85%, and has removed future cuts in accordance with our house view that Trump will win the US election and enact tariffs. Those not prepared to make those kind of tough market calls may react as in the High Anxiety shower scene, where the attached clip misses the punchline: “That kid gets no tip.” But I think Ben just gave you a great tip.

Tyler Durden Wed, 05/01/2024 - 10:55

Job Openings Tumble, Quits Plunge, Hires Unexpectedly Crater To January 2018 Levels

Job Openings Tumble, Quits Plunge, Hires Unexpectedly Crater To January 2018 Levels

After several months of relatively boring JOLTS prints, this morning Janet Yellen's favorite labor market indicator once again got exciting, and not in a good way.

Starting at the top, according to the March JOLTS reported, job openings unexpectedly tumbled by 325K - the biggest drop since October 2023 - from an upward revised 8.813 million in February to just 8.488 million, far below the 8.690 million expected - and the lowest number since February 2021 when it last printed below 8 million.

The 192K miss to estimates of 8.690 million, was the biggest since last October.

According to the DOL, in March job openings decreased in construction (-182,000) and in finance and insurance (-158,000), but increased in state and local government education (+68,000) because when all else fails, just "hire" more government zombies, ideally in the form of unionized illegal aliens to boost wages and inflation.

The kicker: construction jobs openings plunged from 456K to 274K, a 182K one-month drop and the biggest on record!

In the context of the broader jobs report, in March the number of job openings was 2.059 million more than the number of unemployed workers (which the BLS reported was 6.429 million), down significantly from last month's 2.355 million and the lowest since June 2021.

Said otherwise, in March the number of job openings to unemployed dropped to 1.32, a sharp slide from the February print of 1.36, matching the lowest level since August 2021 and almost back to pre-covid levels of 1.3.

But even more interesting than the drop in job openings was the number of quits: here we find that the number of people quitting their jobs, an indicator closely associated with labor market strength as it shows workers are confident they can find a better wage elsewhere - unexpectedly plunged by 198K, the biggest montyly drop since last June, to just 3.329 million the lowest number since January 2021!

But perhaps the most notable twist, is that amid the stagnant level of job openings, not only did the number of quits plunge - as workers no longer expect to find better paying jobs elsewhere - but so did the number of hires, which cratered by 281K to just 5.500 million - the lowest since Jan 2018 (excluding the record one-month plunge due to covid), and is now well below pre-covid levels.

Needless to say, a freeze in hiring is always the precursor to a wholesale collapse in the labor market, which we expect will materialize in 2-3 months, but since the election  will determine what econ data is published, expect the US economy to be in freefall the moment Trump wins the election.

It's not just us warning on this metric: the chief economist as Glassdoor, Daniel Zhao, echoes our warning that "employers are hesitant to hire & workers are hesitant to switch to a new job"

His conclusion: "low hires, quits and layoffs are an unusual combination that points to a certain "lock-in" in the job market. For the Fed, that is likely to tamp down wage growth driven by job switchers even if it doesn't slow net jobs growth."

Finally, no matter what the "data" shows, let's not forget that it is all just estimated, and it is safe to say that the real number of job openings remains still far lower since half of it - or some 70% to be specific - is guesswork. As the BLS itself admits, while the response rate to most of its various labor (and other) surveys has collapsed in recent years, nothing is as bad as the JOLTS report where the actual response rate remains near a record low 33%

In other words, more than two thirds, or 70% of the final number of job openings, is estimated!

And at a time when it is critical for Biden to still maintain the illusion that at least the labor market remains strong when everything else in Biden's economy is crashing and burning, we'll let readers decide if the admin's Labor Department is plugging the estimate gap with numbers that are stronger or weaker (we already know that they always get revised lower next month).

Tyler Durden Wed, 05/01/2024 - 10:39

WTI Extends Losses After Bigger Than Expected Crude Build

WTI Extends Losses After Bigger Than Expected Crude Build

Oil prices extended losses overnight (3rd day lower in a row) following API's report showing an unexpected crude build. Rising stocks would add to bearish headwinds for prices driven by hopes that peace (or some such variant of it) may break out in the Middle East.

“The potential for a cease-fire agreement between Israel and Hamas has eased concerns of an escalation of the conflict and any possible disruptions to supply,” ANZ Banking Group Ltd. analysts Brian Martin and Daniel Hynes said in a note.

“Continued signs of inflation also raised concerns about demand for crude oil” ahead of the US driving season, when gasoline consumption rises.

Additionally, OPEC’s crude production stayed steady last month, leaving the group’s latest cutbacks incomplete.

The Organization of Petroleum Exporting Countries pumped 26.81 million barrels a day in April, about 50,000 a day less than the previous month, according to a Bloomberg survey. Minor increases by Libya and Iraq were offset by reductions in Iran and Nigeria.

As a result, supply curbs agreed by the group and its allies at the start of the year to avert a surplus are still unfinished

Will the official data confirm API's unexpected build...

API

  • Crude +4.91mm (-1.5mm exp)

  • Cushing +1.48mm

  • Gasoline -1.48mm (-1.2mm exp)

  • Distillates -2.19mm (+400k exp)

DOE

  • Crude +7.265mm (-1.5mm exp)

  • Cushing -1.089mm

  • Gasoline +344k (-1.2mm exp)

  • Distillates -732k (+400k exp)

The official data showed an even bigger crude build than API (and stocks at Cushing also rose significantly)...

Source: Bloomberg

The Biden admin added another 594k barrels to the SPR last week...

Source: Bloomberg

US Crude production was flat at 13.1mm b/d...

Source: Bloomberg

WTI was hovering around $81.25 (off the morning lows) ahead of the official data and extended losses after the big build...

Finally, we note that oil options are signaling that traders are becoming less worried about conflict in the Middle East driving crude prices higher.

About 1,000 more Brent put options - which give the holder the right to sell at a pre-determined price and time - changed hands than bullish calls on Tuesday. That’s the first time put volumes have outnumbered calls since late March.

Puts are trading at their biggest premium to calls since the end of March.

Tyler Durden Wed, 05/01/2024 - 10:36

Whoopi Goldberg "Enraged" By Donald Trump Saying There Is An "Anti-White Feeling" In America

Whoopi Goldberg "Enraged" By Donald Trump Saying There Is An "Anti-White Feeling" In America

Authored by Paul Joseph Watson via modernity.news,

The View host Whoopi Goldberg said she was “enraged” over Donald Trump asserting that there is “an anti-white feeling in America.”

Goldberg made the remarks as she angrily glared at the camera.

“This is my favorite, and I’m gonna tell you before I say it that it enraged me,” she said before going on to quote Trump, who said, “There is a definite anti-white feeling in the country right now.”

Apparently, Trump pointing out a manifestly factual phenomenon is enough alone to infuriate Goldberg and the audience, which murmured with sanctimonious discontent.

That’s what he said!” continued Goldberg, before going on to suggest that there can’t be any “anti-white feeling” until white people are literally being lynched.

“Yeah, Sir. Nobody in your family was hung. Nobody in your family was chased because of the color of their skin. How dare you? There’s no anti-white issue here. You are perpetrating anti-humanist issues here,” she said.

One respondent on X provided a comprehensive response cataloguing dozens of examples of where the media, academia and major institutions have engaged in deliberate anti-white sentiment.

Another warned that Goldberg’s rage is another example of how “they’re saying the quiet part out loud.”

Others noted how absolutely nobody in Goldberg’s family was hanged, rendering her entire argument obsolete.

As we previously highlighted, Goldberg’s co-host Sunny Hostin faced embarrassment when it was revealed that her ancestors were actually white European slave owners.

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 Wed, 05/01/2024 - 10:15

More Stagflation Signals As Manufacturing Surveys Show Soaring Prices, Orders Tumble

More Stagflation Signals As Manufacturing Surveys Show Soaring Prices, Orders Tumble

While 'hard' data has been improving recently (albeit then downwardly revised a month later), it is the 'soft' survey data that has collapsed amid Bidenomics.

Source: Bloomberg

And this morning continued that trend as S&P Global's US Manufacturing PMI (survey) fell from 51.9 in March to 50.0 as the final print for April (49.9 flash). ISM's Manufacturing survey also missed, dropping from 50.3 to 49.2 (contraction).

Source: Bloomberg

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

Business conditions stagnated in April, failing to improve for the first time in four months and pointing to a weak start to the second quarter for manufacturers. Order inflows into factories fell for the first time since December, meaning producers had to rely on orders placed in prior months to keep busy.

However, there are some encouraging signs. The drop in orders appears to have been largely driven by reduced demand for semi-manufactured goods – inputs produced for other firms – as factories adjust their inventories of inputs. In contrast, consumer goods producers reported a further strengthening of demand, hinting that the broader consumer-driven economic upturn remains intact.

Producers on the whole also seem confident enough in the business outlook to continue adding to payroll numbers at a pace that compares well with the average seen over the past two years, investing further in operating capacity.

But, under the hood it was not pretty - ISM New Orders tumbled, Employment rose modestly, but Prices Paid soared (to their highest since June 2022)...

Source: Bloomberg

Prices charged for goods rose at a slower rate than the 11-month high seen in March. But, as S&P Global notes, the rate of increase nevertheless remains elevated by historical standards – and well above the average seen in the decade prior to the pandemic – as firms continued to pass higher commodity prices on to customers.

However, input costs increased sharply, with the rate of inflation quickening for the second consecutive month. Higher prices for oil and metals were mentioned in particular.

So, stagnating growth and sharply rising input costs... Stagflation signals everywhere.

Tyler Durden Wed, 05/01/2024 - 10:07

Who Is Crossing The English Channel?

Who Is Crossing The English Channel?

Five more people, including a child, died when trying to cross the English Channel by boat last Tuesday (April 23).

The news came the same day that Rishi Sunak’s government pushed through the next steps of its Rwanda legislation, supposed to deter such attempts to cross from happening. The Rwanda bill has sparked backlash, with a majority of the UK public doubtful that it will cut down on small boat arrivals.

The new law will state that any asylum seeker who has arrived in the UK “illegally” after January 2022 could be deported to Rwanda, where their asylum requests would be processed instead of in the UK.

Many of these are people who have arrived to the UK by small boats without the necessary documentation, and as Statista's Anna Fleck shows in the following chart, have had to leave countries of origin that are currently in a state of conflict or unrest.

 Who Is Crossing the English Channel? | Statista

You will find more infographics at Statista

newly published document published by the UK government states that migrants who are granted asylum in Rwanda will stay there and will not be permitted to return to the UK. Meanwhile, those who are not granted asylum will also not be “removed from Rwanda”.

Instead, the document on the bill says:

"Those who are unsuccessful [in their asylum application] would either depart voluntarily or gain another kind of status in Rwanda with equal treatment to those recognised as refugees."

According to official data published on the UK government website, a total of 114,345 people were recorded as having crossed the English Channel from France to the United Kingdom by small boat between 2018 and 2023. An analysis by the Migration Observatory reveals that this route has become increasingly busy in recent years, with a peak of 45,789 people detected making the crossing in 2022. Last year, the official figure was 29,437.

Commenting on the law, Filippo Grandi, theUN High Commissioner for Refugees said:

The new legislation marks a further step away from the UK’s long tradition of providing refuge to those in need, in breach of the Refugee Convention.

Protecting refugees requires all countries – not just those neighboring crisis zones – to uphold their obligations. This arrangement seeks to shift responsibility for refugee protection, undermining international cooperation and setting a worrying global precedent.”

Three quarters of all small boat arrivals between 2018 and 2023 were nationals from just six countries: Iran (21,546), Afghanistan (16,636), Iraq (15,388), Albania (14,480), Syria (8,528) and Eritrea (8,068). The share of nationals from each country ebbs and flows per year depending on various factors, however. For example, where only 32 Indian arrivals were reported in the first quarter of 2022, according to the Migration Observatory, that figure had risen to 670 in the same period in 2023.

Tyler Durden Wed, 05/01/2024 - 05:45

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