House Panel Calls To Defund Federal Agencies That Stonewall Congressional Probes

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Republicans on the House Oversight Committee are calling for budget cuts to federal agencies that refuse to cooperate with lawmakers’ investigations, warning that failure to discipline agencies that deny oversight-related requests risks setting a dangerous precedent for stonewalling future probes.

Rep. James Comer (R-Ky.) speaks during a press conference in the U.S. Capitol in Washington on April 30, 2024. (Madalina Vasiliu/The Epoch Times)

Led by Rep. James Comer (R-Ky.), chairman of the House Oversight Committee, the GOP lawmakers called on the House Appropriations Committee to leverage the power of the purse to force the executive branch to turn over documents and information in response to congressional oversight requests, according to a May 3 letter addressed to Rep. Tom Cole (R-Okla.), who chairs the Appropriations Committee.

The GOP lawmakers accused the Biden administration of defying congressional authority by being reluctant to comply with legitimate oversight requests.

“Agency heads appointed by President Biden, and at times, the White House itself, have repeatedly defied congressional authority to conduct oversight over the operations of the executive branch and how the Administration is carrying out its duties under the law,” the lawmakers wrote in the letter while accusing various federal agencies of responding to House Oversight requests with “reluctance, recalcitrance, and outright obstruction.”

Stonewalling Probes

The letter lists a number of examples of alleged obstructive behavior on the part of Biden administration agencies.

In one example, the Food and Drug Administration (FDA) was singled out for providing limited documents and communications regarding the FDA’s response to the infant formula crisis.

The FDA has faced criticism over its response to a nationwide shortage of baby formula in 2022, with the agency itself acknowledging various shortcomings that exacerbated the shortage, including a delayed response to whistleblower complaints about a baby formula manufacturing facility.

In another instance cited in the letter, the U.S. State Department failed to provide documents and communications related to taxpayer funds going to the United Nations for the purpose of serving the environmental, social, and governance (ESG) agenda. The ESG movement has faced backlash from conservatives, and others, who allege that it’s rooted in leftist or even neo-Marxist political advocacy and targets industries like fossil fuels or encourages taking progressive positions on big social issues like transgenderism.

Controversy around ESG and its impact on U.S. businesses was also the subject of a request to the Securities and Exchange Commission (SEC) for various documents related to its actions regarding regulatory proposals around the ESG phenomenon.

The SEC, which the letter says provided only “limited responsive documents after significant pressure” from the Oversight Committee, has been criticized for giving special privileges to ESG activists, reducing oversight of proxy firms, and proposing rigid ESG mandates that burden manufacturers without benefiting investors.

“It is well past time for Congress to leverage its authority by using the power of the purse to compel compliance with oversight,” the lawmakers wrote in the letter.

They called on the Appropriations Committee to use the power of the purse to hold government agencies accountable by withholding funding in the Fiscal Year 2025 budget from those agencies that have failed to cooperate with oversight investigations.

“Federal agencies obstructing meaningful congressional oversight should have their budgets cut,” Mr. Comer, who chairs the House Oversight Committee, said in a statement.

The Epoch Times has reached out to the White House and to the House Appropriations Committee with a request for comment.

Defunding ‘Woke’ Programs

The U.S. Constitution gives Congress the primary authority to raise and spend money, known as the “power of the purse.”

Conservatives have long argued that vast swathes of the federal government have been captured by the progressives over the years, with billions in taxpayer dollars being channeled to fund left-leaning agendas.

Some House Republicans have sought to use the constitutionally appointed congressional power of the purse to defund certain “woke” programs through the appropriations process.

U.S. Rep. Jim Banks (R-Ind.) questions witnesses in a hearing of the House Select Committee on Strategic Competition between the United States and the Chinese Communist Party in the Cannon House Office Building in Washington on Feb. 28, 2023. (Kevin Dietsch/Getty Images)

Last year, Rep. Jim Banks (R-Ind.) led a group of House Republicans in launching a new Anti-Woke Causus whose aim was to “root out all far-left political programs from the federal government.”

In a series of letters to House appropriations leaders, Mr. Banks and his colleagues identified various “woke” programs and initiatives in 2024 spending bills and called for them to be defunded.

Each letter flagged examples of “woke” offices or policies that were funded in the prior year’s spending bills and called for those “and all programs that discriminate based on race, gender, and sexual orientation or seek to disparage our nation’s core ideals and history [to] be decreased to $0” in the 2024 versions of the bills.

The effort to defund “woke” programs saw some success, with various “anti-woke” amendments ending up included in the 2024 National Defense Authorization Act, such as suspending the Navy Digital Ambassador Program, which used drag queen videos in its recruitment efforts.

“We saw today that the open amendment process gives anti-woke legislators the chance to defund and eliminate radical-far left programs in the federal government,” Mr. Banks said in a statement at the time.In a more recent initiative, Mr. Banks introduced an initiative to defund National Public Radio (NPR), accusing the station of being a “liberal looney bin” and calling on Congress to stop “spending other people’s hard-earner money on low grade propaganda.”

NPR did not respond to a request for comment.

Tyler Durden Mon, 05/06/2024 - 17:40

Tyson Foods Warns Low-Income Consumers Are Cracking Under Inflation Storm

Tyson Foods, the second-largest producer of animal protein globally, plunged the most in one year after cautioning that heightened inflation is severely impacting its working poor customers, leading them to reduce their purchases of ready-to-eat products from its brands. This ominous warning comes one week after McDonald's and Starbucks warned that low-income consumers are starting to crack.  

During an earnings call on Monday, Melanie Boulden, who oversees Tyson's Prepared Foods business, was asked by BofA's Peter Galbo about "commentary around quick-service, casual dining and non-commercial." 

Boulden responded: 

"So, Peter, in both retail and foodservice, as you know, the consumer is under pressure, especially the lower-income households. And in retail, we're seeing roughly 20% cumulative inflation over the last three years." 

"Now the inflation impact coupled with historically low savings rates has created a more cautious, price-sensitive consumer. And we're also seeing a cautious consumer prioritize essential staples over discretionary categories." 

Boulden's comments raise serious questions about the company's ability to boost profitability after sliding in recent quarters.

As for the rest of the year, Chief Financial Officer John Tyson warned investors, "uncertainties remain around consumer strength and behavior." 

Tyson added, "When we factor in these variables with Pork and Prepared Foods seasonality, there are reasons to believe that Q3 could be weaker than Q4." 

The gloomier outlook weighed on shares in New York on Monday, sliding more than 8%. If intraday losses hold, it will be the worst day since May 8, 2023. 

Last week, McDonald's and Starbucks both warned about faltering consumer demand. 

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

Tyler Durden Mon, 05/06/2024 - 16:40

The Washington 'Blob' Seems "Ready To Wreck The Republic To Save Themselves"

Authored by James Howard Kunstler via Kunstler.com,

Prisoners of Themselves

“Ok, let’s be clear. If the intelligence community led by the CIA is not the 'deep state', what is?”

- Jeffrey Tucker

You realize, don’t you, that the gross misconduct of government officials from RussiaGate on down to the courtroom of Judge Juan Merchan has amounted to one continuous operation against the American people?

If it were ever honestly adjudicated, many hundreds of them might go to prison, or worse.

Each successive seditious and treasonous action they attempt against their arch-nemesis, Mr. Trump, only compounds their criminal liability — the Steele Dossier, CIA agent Eric Ciaramella’s 2019 impeachment prank, the Covid-19 caper, the George Floyd-BLM hustle, the 2020 election hijinks, the J-6 op and the House J-6 Committee conjured up to spin it, the present battery of farcical court cases — and yet the Golden Golem of Greatness not only remains defiantly at large, but seems to amass ever more electoral mojo.

The epic failure of these mighty efforts, and the humiliation entailed, has lately driven this vast bureaucratic cabal - collectively styled as “the blob” - to a stage of abject desperation that looks a lot like insanity.

They fear for their lives, their fortunes, their chattels, and their families, and they seem ready to wreck the republic to save themselves. They have so far pretty much wrecked American justice with their lawfare tactics — a degenerate campaign to use the vested authority of prosecutors and judges to twist and cheat the law at the cost of the law’s legitimacy. Merrick Garland, Norm Eisen, Andrew Weissmann, Mary McCord, Lisa Monaco, Marc Elias, Christopher Wray, Letitia James, Fani Willis, Alvin Bragg have made law the enemy of the people.

All this becomes more obvious each day, for instance events of the past week in Judge Aileen Cannon’s federal courtroom in Florida where the Mar-a-Lago documents case proceeds. Turns out that Special Counsel Jack Smith has deliberately messed with the evidence, which is patently felonious. Also, turns out that sometime between the “Joe Biden” inauguration and the FBI raid on Mar-a-Lago in August, 2022, boxes of presidential documents stored by the US General Services Administration were “delivered” to Mr. Trump’s mansion without any proper accounting for what might have been in them. A set-up you suppose? Why not? After everything else the FBI and the DOJ have attempted since 2015?

Christopher Wray in particular might have wanted some surefire probable cause to get his agents into Mar-a-Lago where, rumor has it, Mr. Trump kept his own dossier of evidence against the FBI and DOJ officials who concocted the “Crossfire Hurricane” chapter of RussiaGate. Even if you assume that Mr. Trump had multiple copies of the thing, FBI Director Wray — in position since 2017 throughout most of RussiaGate — surely wanted to see what Mr. Trump was holding if it would become necessary for current and former FBI / DOJ officials to defend themselves in court against very serious charges.

You see the desperation, don’t you? And how stupendously amateurish these machinations have been? Planting evidence and then fiddling around with it? I’m waiting for the moment when Judge Cannon summons Jack Smith and announces to his face that she is tossing the case for prosecutorial misconduct. Will she add a criminal referral to that? How will that affect the other case (attempting to overturn the 2020 election) brought against Mr. Trump in Judge Tanya Chutkan’s DC federal district court? Who will prosecute it if Jack Smith can no longer function as Special Counsel? And since the case was contrived in his name — even if Eisen, McCord, Weissmann, and others are really the authors — does that case blow up, too?

Letitia James’s real estate case under Judge Arthur Engoron was so idiotic it can’t possibly survive an ultimate appeal, and the Alvin Bragg confection under Judge Merchan is playing out like something that usually only happens in places like Honduras or Liberia. Yet the American Left, the “progressive” Democratic Party, is staking everything on it. It’s all they have left Lawfare-wise, at least for now.

Which brings us to the question:

Why do the non-governmental elites of this land, the managerial and thinking classes, the college presidents, the cable news producers, the corporate execs, the movie directors, the whole arts establishment. . . why do they feel compelled, for nearly a decade now, to hitch their identity and their self-respect to this fantastic train of Kafka-esque corruption, tyranny, and abuse? How did they get owned by the blob?

We may never find out, and they may never know either, even after they snap out of the mass formation they’ve been in thrall to. But they have made themselves ridiculous — figures like Sam Harris, Stephen Colbert, and Rob Reiner — yelling about “saving our democracy” while the blob they worship systematically disassembles the US Constitution, and makes American law a global laughingstock.

Most of my old ex-friends are riding the same ideological bus. You have to wonder: how did the likes of “Joe Biden,” Merrick Garland, Liz Cheney, Adam Schiff, Christopher Wray, Fani Willis, Anthony Fauci, Klaus Schwab, and Bill Gates become their heroes?

Did the Covid vaccines destroy their minds? Are they really avid for central bank digital money and surveillance of their every move? Do they want to be told how to live by the WHO?

Things are going south fast now in our country. If these people ever cherished the idea of being free to think their own thoughts and live their own lives, it’s getting late in the game. They will end up prisoners of themselves.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

Tyler Durden Mon, 05/06/2024 - 16:20

'Squeezey' Stock Market Extends Gains; Bonds & Bullion Bid

More of the same today after last week's tepid payrolls and dovish Powell with gold, stocks, and bonds bid as rate-cut hopes inched higher.

The market is now pricing in two rate-cuts in 2024 and three more cuts in 2025...

Source: Bloomberg

For now the market appears to prefer the 'bad news' from declining growth expectations to the 'bad news' from soaring inflation prints...

Source: Bloomberg

But, hey, for now, as Goldman's trading desk noted, the market feels "squeezey" and 12% gains for the basket of 'most shorted' stocks in the last three days would support that thesis (and overall activity was lower than average)...

Source: Bloomberg

That helps explain why Small Caps (dominated by the heavily shorted names) outperformed but Mag7 stocks also continued higher today with all the majors green on the day (Dow lagged)...

All the majors rallied back above their 50DMAs (but The Dow fell back to test its key technical level)...

A mixed picture in bonds today with the short-end underperforming (2Y +1.5bps, 30Y -2bps), but the whole complex sold off from its US open...

Source: Bloomberg

The dollar ended basically unchanged on the day, recovering small losses from overnight...

Source: Bloomberg

An early surge in bitcoin - up to $65,500 - was quickly sold following headlines that Robinhood had received a Wells Notice...

Source: Bloomberg

As a reminder, we saw huge net inflows into ETFs on Friday, so it will be fascinating to see what happened today...

Source: Bloomberg

Oil prices roller-coastered amid confusing headlines in Israel-Hamas peace deal proposals but ended the day higher with WTI finding support at $78...

Source: Bloomberg

Gold prices completed 'ye olde 'W' formation' extending gains from Friday's bounce...

Source: Bloomberg

Finally, Goldman's Vol Panic Index has tumbled back to 'normal...

...just as the buyback-blackout window lifts...

...and with CTAs back in 'buy mode' and sentiment back off its extremes, short-term tacticals (until a hot CPI print) remain positive.

But bear in mind....

...there's a reason why Warren Buffett has a record cashpile here.

Tyler Durden Mon, 05/06/2024 - 16:00

Florida Bans 'Indoctrination' In Teacher-Training Programs

Authored by Patricia Tolson via The Epoch Times,

Florida Republican Gov. Ron DeSantis has signed a bill into law on May 2 banning “indoctrination” programs for teachers.

The measure, HB 1291, prohibits programs, courses, and curricula in teacher training from “distorting” historical events or promoting political ideologies regarding race, sex, and gender.

Accredited postsecondary institutions can seek Florida Department of Education approval to create institutes to educate teachers on improving classroom instruction and meeting requirements for certification or recertification.

They can also seek approval for instruction on educating existing and potential substitute teachers on how to perform classroom duties and to teach those with baccalaureate degrees how to become certified.

However, teacher preparation, training, and certification programs will not be allowed to teach “identity politics” or to make claims that systemic racism, sexism, oppression, or white privilege are inherent in America’s culture.

In addition, Gov. DeSantis’s office said in a statement that he is working with Attorney General Ashley Moody’s office to safeguard Florida’s workforce from being subjected to ideological discrimination and harassment.

The governor said he does not believe that companies have the right to force their employees to attend training courses designed to convince them that they are “inherently racist or sexist” or to diminish their sense of self-worth because of their religious or social upbringing.

At a press briefing and signing ceremony at the VyStar Tower in Jacksonville, Mr. DeSantis said he did not want teacher-preparation programs “to become captive to someone’s ideological agenda.”

“This bill prohibits the indoctrination in teacher preparation,” he summarized.

“So, there’s not going to be DEI [diversity, equity and inclusion]. There’s not going to be any of the bogus history. It’s just going to be standard, teacher preparation without having an ideological agenda.”

The law becomes effective on July 1.

‘You Have to Be Precise’

In an interview with The Epoch Times, Jonathan Butcher, the Will Skillman Senior Research Fellow in Education Policy at The Heritage Foundation, said there is ambiguity in the legislation that should be addressed.

It isn’t readily clear in the bill’s introduction which kind of teachers are subject to the mandates. He said it isn’t until the list at the bottom of page two of the bill that you learn it applies to substitute teachers, teachers’ assistants, baccalaureate holders who want to become certified teachers, and college graduates who didn’t major in education.

It applies to part-time and full-time, non-degreed teachers for “career programs” associated with higher education programs, such as technical colleges.

Given the context of this bill, he said, it will be important to make sure definitions are clear and that enforcement is kept “within the bounds of appropriate civil rights law.”

“You have to be precise in your language,” he said. “I think the intent of the bill is laudable. Evidence is clear that teacher training programs regularly use materials that is Marxist in nature.”

“When you look at the terms used in these provisions,” he explained, “it will be incumbent on the State Board of Education to say very precisely what they mean by ‘identity politics’ and what they mean by the word ’distort,‘ because the language says they ’may not distort significant historical events.’

“You should define that whole thing. What does ‘distort’ mean? What does ’significant' mean?”

Other parts of the legislation, he said, are sound, such as the requirement that training courses for teachers cannot  teach students that the United States is built upon racism and is a racist nation.

He noted that Paulo Freire’s “Pedagogy of the Oppressed” has been one of the most assigned books in teacher training programs for 50 years.

“Pablo Freire’s stuff is Marxist. Critical race theory is racially discriminatory,” he said.

Federal grant programs also encouraged teaching critical race theory until public backlash caused them to strip the words from the grant descriptions. But they simply changed the name to social emotional learning.

The U.S. Department of Education announced in 2023 that President Joe Biden’s administration was awarding $14 million in federal grant money to foster more inclusive diversity programs to address racial inequity.

Grants offered by nonprofit organizations like FIRST also push DEI policies in education.

“There is no disputing the idea that teacher training programs use radical ideas that are being passed on to prospective teachers,” Mr. Butcher said.

Mr. Butcher adds that he expects the law to be challenged by leftist groups whose goal, he said, is to establish protected classes, not equality under the law.

Tyler Durden Mon, 05/06/2024 - 15:45

Where Is "Growth" Coming From? Fed Says Banks Tighten Credit Standards While Loan Demand Drops Further

The first quarter Fed's Senior Loan Officer Opinion Survey (SLOOS) - the one place where every three months investors go to find information on changes to both loan demand and bank lending tightness - was released and revealed more of the same: despite daily propaganda of economic improvement, the SLOOS found that more US banks reported stricter credit standards in the first quarter, while loan demand declined. As a reminder, without ease credit and without rising loan demand, it is virtually impossible for an economy - especially one that is as financialized as the US - to grow; and yet we are bombarded day after day with lies to the contrary.

Taking a closer look at the SLOOS survey which was conducted between March 25 and April 8, we find that the net share of US banks that tightened standards on the all important C&I (commercial and industrial) loans for mid-sized and large businesses rose to 15.6% in the first three months of the year, from 14.5% in the fourth quarter.

Other types of loans that saw tightening lending standards include New and Used Auto Loans (tighter standards at 9.8% from 6.3%), and small firm credit (19.7% from 18.6%). At the same time credit eased modestly - even if it was still tighter relatively to baseline - for Consumer Credit Card loans, Construction loans, Multifamily residential loans and nonfarm residential loans.

(for those unfamiliar, the figures in the SLOOS report are calculated as net percentages, or the shares of banks reporting tighter conditions or stronger demand minus the proportion of banks reporting easier standards or weaker demand).

On the demand side, the picture was mixed as well: while demand declined across the board relative to baseline, it dipped modestly for C&I loans at 23.0, down from 22.4, with Credit card loan demand, auto loan demand and C&I loan demand all dropping sequentially, while demand for jumbo loans (both qualifying and non-qualifying) seeing a notable jump.

Excerpting from the report we find the following:

• Survey respondents reported tighter standards regarding loans to businesses, and weaker demand for commercial and industrial (C&I) loans to firms of all sizes. Meanwhile, banks reported tighter standards and weaker demand for all commercial real estate (CRE) loan categories.
• Banks also responded to a set of special questions about changes in lending policies and demand for CRE loans over the past year. For all CRE loan categories, banks reported having tightened all queried lending policies, including the spread of loan rates over the cost of funds, maximum loan sizes, loan-to-value ratios, debt service coverage ratios, and interest-only payment periods.
• For loans to households, banks reported that lending standards tightened across some categories of residential real estate (RRE) loans while remaining unchanged for others on balance. Meanwhile, demand weakened for all RRE loan categories. In addition, banks reported tighter standards and weaker demand for home equity lines of credit (HELOCs); finally, standards reportedly tightened and demand weakened for credit card, auto, and other consumer loans.
• While banks, on balance, reported having tightened lending standards further for most loan categories in the first quarter, lower net shares of banks reported tightening lending standards than in the fourth quarter of last year across most loan categories

Banks have been tightening credit standards since the second quarter of 2022, following a string of high-profile regional bank failures. Meanwhile, the Fed hiked its rate last year to a two-decade high in a bid to curb inflation, and high borrowing costs have weighed on businesses and households.

And here is the bit on the "special question" asked regarding changes in banks’ credit policies on commercial real estate loans over the past year.

A set of special questions asked banks about changes in their credit policies for each major CRE loan category over the past year. These questions have been asked in each April survey for the past eight years.

Banks reported having tightened all the terms surveyed for each CRE loan type. The most widely reported change in terms, cited by major net shares of banks across all CRE loan types, was the widening of interest rate spreads on loans over the cost of funds. Additionally, significant net shares of banks reported tightening maximum loan sizes, lowering loan-to-value ratios, increasing debt service coverage ratios, and shortening interest-only payment periods for all CRE loan types. In addition, significant net shares of banks also reported tightening the maximum loan maturity for nonfarm nonresidential and multifamily loans, and a moderate net share of banks reported doing so for construction and land development loans. Furthermore, significant net shares of banks reported reducing the market areas served for nonfarm nonresidential and construction and land development loans, while a moderate net share of banks reported doing so for multifamily loans. Foreign banks reported tightening across almost all terms for each CRE loan type.9

The most cited reasons for tightening credit policies on CRE loans over the past year, cited by almost all banks, were less favorable or more uncertain outlooks for CRE market rents, vacancy rates, and property prices. Additionally, major net shares of other banks cited a reduced tolerance for risk, increased concerns about the effects of regulatory changes or supervisory actions, and a less favorable or more uncertain outlook for delinquency rates on mortgages backed by CRE properties.

The survey also asked banks about the reasons why they experienced weaker or stronger demand for CRE loans over the past year. More banks responded with reasons for weakened demand than for strengthened demand for CRE loans. The most frequently cited reasons for weaker demand, as reported by major net shares of banks, were an increase in the general level of interest rates, a decrease in customer acquisition or development of properties, and a less favorable or more uncertain customer outlook for rental demand. Of the smaller but sizable share of banks that reported stronger demand, the most frequently cited reasons for stronger demand, as reported by significant net shares of banks, were an increase in customer acquisition or development of properties, a shift in customer borrowing to respondent banks from other banks and non-bank sources, and a decrease in internally generated funds by customers.

Banks also tightened lending standards for consumers: “a significant net share of banks reported increasing minimum credit score requirements for credit card loans, while moderate net shares of banks reported doing so for auto loans and other consumer loans,” the Fed said.

In summary: the US economy remains badly credit-constrained on both the supply (fears of renewed bank shocks) and demand (lack of faith and visibility into the economic future and concerns how the Biden admin will further destroy the economy) side. Which is ironic because if one listens to Biden's department of propaganda, the US economy has rarely had it this well. It makes one wonder: is it all the latest bubble craze, namely private credit that is funding economic growth, or is there no conundrum at all and all the data is simply manipulated to make it seem that the economy is stronger than it is until the election... and which point we get the long-overdue Wile E. Coyote moment.

Tyler Durden Mon, 05/06/2024 - 15:25

Republicans Attempt Rollback Of Electric Truck Rule

By John Gallagher of FreightWaves

The Biden administration’s recent final rule setting new carbon emissions standards for truck makers could be overturned if Republicans in Congress get their way.

Senate and House Republicans on Wednesday introduced a resolution of disapproval of the Environmental Protection agency’s Phase 3 greenhouse gas emissions rule for heavy-duty trucks.

Co-authored by Sen. Dan Sullivan of Alaska and Rep. Russ Fulcher of Idaho, the resolution invokes the Congressional Review Act (CRA), a legal maneuver created in 1996 that allows Congress to nullify a federal rule.

If a CRA joint resolution of disapproval passes both houses of Congress and is signed by the president — or if Congress overrides a presidential veto — the rule cannot go into effect. If it has already taken effect, it goes out of effect immediately when the resolution is enacted and “shall be treated as though such rule had never taken effect,” according to the Congressional Research Service.

The Phase 3 trucking rule, published in the Federal Register on April 22, takes effect June 21.

“Biden’s latest effort to push electric vehicles is completely out of line and will eliminate consumer choice, grow our reliance on foreign adversaries, directly impact transportation for Idahoans, and have lasting impacts on the U.S. supply chain,” Fulcher said.

“These vehicles consume roughly seven times as much electricity on a single charge as a typical home does in a day and charging centers can require as much power from the electrical grid as a small city. [Charging] infrastructure aside, electric trucks cost roughly twice as much as diesel trucks, and these vehicles are not able to haul nearly as much.”

Trucking praises tactic

In support of the resolution, Ed Gilroy, the American Trucking Associations’ chief advocacy and public affairs officer, said the rule’s post-2030 truck model-year targets are “entirely unachievable” given the state of zero-emission technology and the lack of charging infrastructure.

The resolution “highlights the need for EPA to include the operational realities of trucking in their final regulation.”

Todd Spencer, president of the Owner-Operator Independent Drivers Association, said small truckers could be “regulated out of existence” if EPA’s rule goes into effect.

“This could have devastating effects on the reliability of America’s supply chain and ultimately on the cost and availability of consumer goods. Local mom and pop trucking businesses would be suffocated by the sheer cost and operational challenges of effectively mandating EV trucks.”

CRA successes rare

According to the Congressional Research Service, the CRA has been used to overturn 20 rules: one in the 107th Congress (2001-2002 under President George W. Bush), 16 in the 115th Congress (2017-2018 under President Donald Trump) and three in the 117th Congress (2021-2022 under President Joe Biden).

The law firm Covington & Burling points out that a unique feature of the CRA is a 60-day “lookback period” that allows next year’s Congress time  to review rules issued near the end of the last Congress. “This means that the administration must finalize and publish certain rules long before Election Day to avoid being eligible for CRA review in the new year,” the law firm noted in recent blog post.

Agency rules submitted to Congress before May 22 likely will not be subject to CRA review by the new Congress in 2025, the law firm noted, because it gives the current Congress enough time to take up the legislation. That would make a rollback of the EPA rule unlikely given that the Senate currently is controlled by Democrats who presumably would vote against the resolution. 

Sullivan, however, is confident that enough Senate Democrats will vote for the resolution.

“Senator [Joe] Manchin [D, W.Va.] is fully supportive, and I think it’s likely we’ll get other Democrats to support this because they’re hearing from their constituents,” Sullivan said at a press conference on Wednesday. “Then we’ll see if Joe Biden vetoes what the vast majority of the members of the House and Senate want.”

Legal challenge remains an option

A CRA is not the only option for those looking to overturn the rule. “Legal action is also a possibility,” OOIDA told FreightWaves, referring to a court challenge which, according to a Clean Air Act requirement, would have to be filed in the U.S. Court of Appeals for the District of Columbia Circuit.

In addition, because EPA intended for all the standards finalized in the rule to be entirely separate from each other, based on both the model year and the type of truck, “if a court were to invalidate any one of these elements of the final rule, we intend the remainder of this action to remain effective,” EPA stated in the rule.

“For example, if a reviewing court were to invalidate the MY 2027 standards for [light-heavy duty] vocational vehicles, the other components of the rule, including the other Phase 3 GHG standards, remain fully operable as the remaining components for the rule would remain appropriate and feasible.”

Those opposing the rule can also file a petition asking the EPA administrator to reconsider the rule. Doing so, however, “does not affect the finality of the action for the purposes of judicial review,” EPA states, “nor does it extend the time within which a petition for judicial review must be filed and shall not postpone the effectiveness of such rule or action.”

Tyler Durden Mon, 05/06/2024 - 14:25

Toronto-Dominion Bank Risks Entering "Lost Decade"

Shares of the Toronto-Dominion Bank have fallen nearly 8% since last Thursday's Wall Street Journal report that revealed the bank's involvement in a $653 million drug money-laundering scheme. 

The WSJ said a Justice Department investigation was opened into TD Bank's anti-money-laundering controls, specifically concentrating on how Chinese crime groups and drug traffickers used the Canadian lender to launder money from US fentanyl sales. 

The investigation was launched after agents uncovered an operation in New York and New Jersey that laundered hundreds of millions of dollars in proceeds from illicit narcotics through TD and other banks, according to court documents and people familiar with the matter. In that case and at least one other, prosecutors also allege the criminals bribed TD employees. 

While TD disclosed a Justice Department probe into its anti-money-laundering practices last year, the focus on money laundering related to illegal drug sales hasn't been previously reported. -WSJ. 

On Monday, Jefferies analyst John Aiken warned TD's anti-money-laundering case risks the bank "entering a lost decade." 

"With the bank allegedly a focal institution in a drug money-laundering scheme, the worst-case scenario has become more likely with TD potentially entering a lost decade," Aiken told clients, adding, "Growth in the US will likely be constrained, and the timeline for a fix is extended by several years." 

Last Friday, the bank announced that $450 million was set aside to resolve regulatory penalties. However, Aiken said "simple math" suggests the lender will have to pay as much as $2 billion in fines. 

In a statement, Chief Executive Bharat Masranis said the bank's anti-money laundering program "fell short and did not effectively monitor, detect, report or respond." 

Shares of TD trading in Canada have fallen 7.9% since the WSJ report.

Largest weekly decline since early 2020.

Shares are touching early 2021 levels. 

Meanwhile, Keefe Bruyette & Woods analyst Mike Rizvanovic told clients, "While optics around the new anti-money-laundering details are negative, we believe the market has overreacted." He cut his price target to C$88 from C$92.

Tyler Durden Mon, 05/06/2024 - 14:05

Confidence Boost For The Fed

By Bas van Geffen, Senior Macro Strategist at Rabobank

Last Wednesday, Powell said that there had been a lack of further progress toward the Fed’s 2% inflation objective. Indeed, both the latest CPI and PCE prints had already dashed hopes that the Fed would cut rates by summer. It would, therefore, take more time for the FOMC to gain enough confidence to start cutting rates, the Fed Chair added.

Just two days later, the April employment report gave policymakers quite the confidence boost.

The growth in non-farm payrolls slowed substantially to 175,000. The data suggest that jobs creation peaked at 315,000 in March. Sectors like construction and leisure and hospitality were strong drivers of employment growth, but job growth in these sectors virtually came to a standstill in April. The largest increase in new jobs came from healthcare, which is a non-cyclical sector. What’s more, the household survey reported even weaker employment growth, resulting in an increase in the unemployment rate from 3.8% to 3.9%. In line with the slowing demand for labour, average hourly earnings growth slowed down to 0.2% m/m or 3.9% y/y.

The employment report therefore puts both doors to a first rate cut a bit further ajar: the deceleration in wages should give the FOMC more confidence that inflation will continue to slow in the coming months, and a deterioration in the employment metrics could also convince policymakers that a rate cut is warranted. This strengthens our conviction that the Fed will cut rates in September and December.

The market seems to agree. Following the release of the non-farm payrolls, yields plummeted across the board as traders brought forward their expectations of a first rate cut from November to September. European markets are holding on to this rate cut optimism amidst relatively quiet trading this morning, with equities posting modest gains and bond yields taking another leg down.

Tyler Durden Mon, 05/06/2024 - 13:45

Robusta Coffee Bean Prices Near Half-Century High As Vietnam Supply Woes Spark World Crunch 

A new report from the International Coffee Organization reveals an alarming situation in the coffee market. Robusta coffee prices have skyrocketed to a 45-year high, a clear indication of the severity of the supply crunch and the rampant bean hoarding that is gripping the world's largest bean producer.

The London-based group, in their monthly report, delivered a sobering update. ICO's gauge of wholesale prices, based on spot prices across key markets, surged 17% in April to the highest level since 1979. The report also highlighted Vietnam's struggles in its coffee belt, enduring several years of poor harvests. 

Bloomberg notes, "Farmers and middlemen continue to hold onto beans so they don't miss out on better deals after a weak 2023-24 harvest." This has sparked a tidal wave of exporters defaulting on their contracts due to lack of supply. 

A long El Niño-induced drought in Vietnam has been the main culprit behind a decline in bean production. Robusta beans are typically used for instant drinks and espresso coffee. Vietnam accounts for about a third of the world's bean supply. 

"We can't tell when prices will peak," said Tran Thi Lan Anh, deputy director of Vinh Hiep Co., a major Vietnamese exporter.

Mid-last month, we pointed out robusta bean prices were "hyperinflation' in a note titled "This Next Bean Is Hyperinflating, And It's Not Cocoa."

Bloomberg noted, "Vietnam's coffee belt could start to recover from drought this month, and hedge funds are placing bets on further price gains." 

Soaring bean prices could eventually affect retail coffee prices at the supermarket. And it's not just going to be coffee. Cocoa prices have hyperinflated in recent months but have recently declined. 

Tyler Durden Mon, 05/06/2024 - 13:25

Six Reasons Why Tulsi Gabbard Is Donald Trump's Best Choice As A Running Mate

Authored by Richard Truesdell via American Greatness,

Despite the unprecedented and coordinated lawfare deployed against him, Donald Trump has emerged as the Republican presidential front-runner.

Tulsi Gabbard, a former Democrat who is both a centrist and moderate (by today’s definitions), has emerged as his most compelling and logical selection to be his running mate. I base my analysis on six compelling factors.

Reason Number One: She’s a woman. Let’s face 2024’s political reality. To have any chance to grab his fair share of suburban female voters in crucial swing states, Trump almost definitely has to pick a woman. While I once thought Kristi Noem would have been a great running mate, she committed political suicide last week with a puppy-killing narrative that ended any hope of that, especially after mainstream media gaslighted her in their attempt to destroy her. That narrative will never go away. Neither will the salacious reports that she had a not-too-secret extra-marital affair with Trump-aligned political consultant Cory Lewandowski. Gabbard has no such liability.

In a sane world without gender balance being an overriding consideration, I’d prefer either Kentucky Senator Rand Paul or Louisiana Senator John Kennedy to be Trump’s running mate. But both are more valuable as members of Republican leadership in the Senate. Either would be a great pick to be Majority Leader in a Republican-led Senate during Trump’s second term. And while I hate to say it, being a woman puts Gabbard in the best position among all of Trump’s potential choices to help him defuse any potentially dangerous fallout over the abortion issue—currently the only issue on which Biden has any measurable lead over Trump in polling. Gabbard’s and Trump’s positions on abortion are generally in sync, referring the issue to the states to decide.

Reason Number Two: Gabbard currently holds no elective office. This works against many others reportedly on Trump’s shortlist. These include (in alphabetical order) North Dakota Governor Doug Burgrum, Florida Representative Byron Donalds, Arkansas Governor Sarah Huckabee Sanders, South Dakota Governor Kristi Noem, Florida Senator Marco Rubio, South Carolina Senator Tim Scott, New York Representative Elise Stefanik, and Ohio Senator J. D. Vance—all of whom might be more valuable as surrogates and elected politicians than as Trump’s running mate. I’ve left off this list of other non-elected officials like Tucker Carlson and Ben Carson, as well as Florida Governor Ron DeSantis (who ruled out accepting such a role but who could end up being one of Trump’s most important surrogates in the fall).

Reason Number Three: She’s an ex-Democrat who was forced from her party by its ideological move to the far-left post-2016 after calling the Democrat Party an “elitist cabal of warmongers driven by cowardly wokeness.” On that issue, she’s totally in sync with Trump, bringing a sense of bipartisanship to a potential Trump ticket that is almost unprecedented in national presidential politics. Can she also appeal to the voting base where Trump is weakest—college-educated women? Certainly. Can you think of anyone on Trump’s shortlist who would be better suited in this regard? Can she peel off disaffected Democrats in crucial swing states, especially Pennsylvania, that are already having a hard time voting for a second Biden term after all his policy failures? Yes, I believe she is uniquely qualified to do so.

Reason Number Four: She’s an active, current military reserve officer, another area where Trump is weak (but no weaker than Biden). Her military record and experience are better than any other potential choice among Trump’s short list of candidates. When you combine her military experience with her multicultural background (her mother is from Indiana and her father is from American Samoa), she has wide appeal. Raised Hindu, this is another area where she brings cultural strength to the ticket, certainly as much as Kamala Harris added to the Biden ticket in 2020.

On a side note, before she left the Democrat Party in 2022, she served as vice chair of the Democratic National Committee, so she has intimate knowledge of the kind of dirty tricks the Democrat Party will deploy in the run-up to November 5th. Possibly her biggest political liability is that before leaving the Democrat Party in October 2022, she had endorsed Bernie Sanders in 2016 and Joe Biden in 2020 after ending her presidential bid in March 2020.

Reason Number Five: Temperament. With a strong personality and a well-documented history of political success combined with her military leadership, she is not a potential threat to Trump’s outsized personality. She would not try to upstage him if that was ever a possibility. On the contrary, her measured personality combined with her military experience makes her a perfect counterbalance to help defuse any media criticism of Trump’s lack of service in uniform.

What will the media do to criticize her record? Probably anything, but that’s a non-starter, even for the mainstream media, which previously tried to tar Gabbard, unsuccessfully, as a Vladimir Putin apologist and puppet. But it certainly didn’t stop Hillary Clinton in 2019. She also burnished her foreign policy credentials on a 2017 Middle Eastern visit to Lebanon and Syria, meeting with Syrian President Bashar al-Assad.

Reason Number Six: I’ve saved the best for last. Can you imagine Gabbard again on a debate stage in October, as early voting is starting, across from Kamala Harris? After the way she almost single-handedly wrecked and ended Harris’ 2020 presidential bid, this is one opponent that Harris fears the most. Gabbard, because she’s such a skilled politician, would absolutely destroy Harris a second time. Harris is uniquely unqualified to be vice president after all her policy failures as Biden’s vice president, especially on the border, which is Trump’s biggest winning issue, with the possible exception of the economy.

Selecting a running mate is often a matter of balance, sometimes geographically, and what crucial Electoral College votes the vice presidential pick could bring to a potential ticket. That may have been important decades ago, but is less so today. In 2016, Trump selected Mike Pence as his running mate, thinking that he would bring conservative Christians and evangelicals to the ticket, which it did to a degree. But to measure Gabbard’s strengths, ask yourself this question: Will she help Trump more in 2024 than Pence did in 2016? I think the answer is an unequivocal yes.

Tyler Durden Mon, 05/06/2024 - 13:05

Russia Warns It Can Hit UK's Military "Beyond" Ukraine Amid Nuclear Saber-Rattling

We reported earlier Monday that Russian President Vladimir Putin has ordered his armed forces to conduct tactical nuclear weapons drills in order for the country to be fully 'ready' to deter threats against it.

A specific date for these nuclear drills has yet to be publicized, but importantly the Kremlin has made it clear that the order is directly in response to recent threatening comments by Western powers. For example both the US and UK have lately pledged to continue arming Ukraine "for as long as it takes" - and further British officials have openly stated that Ukraine may use UK-supplied weaponry to attack inside Russia if need be. There's also the example of France's Macron continually talking about being open to Western boots on the ground in defense of Ukraine.

British Foreign Secretary David Cameron was in Ukraine late last week, his second trip there since the war began, where he stated provocatively, "Ukraine has that right. Just as Russia is striking inside Ukraine, you can quite understand why Ukraine feels the need to make sure it's defending itself."

Russian strategic bomber, via Ministry of Defense (MoD)

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

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

The foreign ministry statement further said this constitutes "evidence of a serious escalation and confirmation of London’s increasing involvement in military operations on the side of Kiev."

Ambassador Casey has been urged to "think about the inevitable catastrophic consequences of such hostile steps from London and to immediately refute in the most decisive and unequivocal manner the bellicose provocative statements of the head of the Foreign Office."

French Ambassador Pierre Levy has also been summoned to the Russian foreign ministry on Monday, and the French government likely was also issued similar warnings. Again this comes as Macron is still pushing the idea of NATO troops in Ukraine, which a number of allies have rejected.

A timeline for the drills has yet to be revealed, but the Kremlin has confirmed the exercise will take place "in the near future"...

Russia will test its ability to deploy tactical nuclear weapons, the Defense Ministry announced. The drills will be conducted ‘in the near future’ and were ordered by President Vladimir Putin. pic.twitter.com/QgAza5jDib

— RT (@RT_com) May 6, 2024

Moscow in a follow-up statement said the drills will "cool down the ‘hot heads’ in Western capitals and help them understand the possible catastrophic consequences of the strategic risks they generate."

Tyler Durden Mon, 05/06/2024 - 12:45

A Disbarred, Serial Perjurer Walks Into A Court And Asks To Take An Oath...Seriously, No Joke

Authored by Jonathan Turley,

A disbarred, serial perjurer walks into a courtroom and asks to take an oath . . . No, seriously, this is not a joke. Michael Cohen will soon appear in a Manhattan courtroom in what is sure to be one of the most bizarre moments in legal history.

Cohen nearly comprises the prosecution’s entire case against former President Donald Trump under a criminal theory that still has many of us baffled. It is not clear what crime Trump was supposedly trying to conceal by making “hush-money” payments to former porn actress Stormy Daniels.

What is clear is that none of the witnesses called in recent weeks has had any direct involvement with Trump on the payments.

The witnesses had a lot to say about Cohen, and most of it was not good. They described an unprofessional, self-proclaimed “fix-it man” who created a shell corporation to buy out Daniels with his own money. The money was later paid back by Trump after the election, with other legal expenses.

So Cohen will now make the pitch to the jury that they should put his former client in jail for following his own legal advice.

This would be difficult even for a competent and ethical lawyer. For Cohen, it is utter insanity. But Bragg is betting on a New York jury looking no further than the identity of the defendant to convict.

Cohen has an impressive history of lies and exaggerations that may be unparalleled. Just weeks ago, another judge denounced him as a serial perjurer who was still gaming the system.

This is not the defendant, mind you, but Alvin Bragg’s star witness.

I have been an outspoken critic of Cohen going back to when he was still representing Trump. His unethical acts were matched only by his unprofessional demeanor.

In 2015, after students on the Harvard Lampoon played a harmless prank on Trump, Cohen was quoted by a student on the Lampoon staff as threatening them with expulsion.

When a journalist pursued a story Cohen did not like, he told the reporter that he should “tread very f—ing lightly because what I’m going to do to you is going to be f—ing disgusting. Do you understand me?”

It is not hard to “understand” Cohen. He has long marketed his curious skill of voluntarily saying whatever the highest bidder wants him to say.

He is a convicted perjurer who seems to lie even when the truth would do. Each time he is caught lying, he claims to be the sinner who has finally seen the light, seeking redemption.

When he was called before the House to testify against Trump soon after his plea agreement with the Justice Department (for lying), Cohen was again accused of perjury. House Oversight Chairman Elijah Cummings (D-Md.), warned Cohen repeatedly that he had better tell the truth this time. Cohen then testified that Trump wanted him to work in his administration and offered him multiple jobs, which he turned down. He also claimed, “I have never asked for, nor would I accept, a pardon from President Trump.”

Multiple sources have said that Cohen’s lawyer pressed the White House for a pardon, and that Cohen unsuccessfully sought a presidential pardon after FBI raids on his office and residences last year.

Even after being stripped of his law license and sentenced to three years in prison, Cohen continued the pattern. In 2019, Cohen failed to appear to testify before the Senate Intelligence Committee, citing an inability to travel due to surgery. He was then seen partying before the hearing date with five friends.

Even while in jail, Cohen was accused of lying to a court, in violation of an order for early release due to medical problems. He was ordered back into custody after being spotted at a high-end restaurant.

But the most impressive moment came when Cohen was put back on the stand under oath and matter-of-factly claimed that he had lied in his prior hearing, when he pleaded guilty to lying.

In his 2018 guilty plea before U.S. District Judge William Henry Pauley III, Cohen admitted to this conduct under oath.

Then, when Cohen was asked by Trump’s counsel, “Did you lie to Judge Pauley when you said that you were guilty of the counts that you said under oath that you were guilty of? Did you lie to Judge Pauley?”

Cohen responded, “Yes.”  He was then again asked “So you lied when you said that you evaded taxes to a judge under oath; is that correct?” He again responded, “Yes.”

Most of us expected the Justice Department to bring new perjury charges at that point. It is rare that a defendant will actually take the stand and confess to perjury. However, Cohen was now useful again. This time, he was willing to deliver Trump. The Justice Department and Manhattan prosecutors were clearly willing to tolerate a little perjury for that prize.

Cohen’s conduct has already loomed large in the Manhattan proceedings. When Keith Davidson took the stand — the attorney who represented both Stormy Daniels and former Playboy model Karen McDougal — he recounted how Cohen was furious about not being offered a job in the White House. That directly contradicts Cohen’s congressional testimony. Davidson said that Cohen believed he might be named attorney general.

The account, if true, shows that Cohen is not only unethical, but also delusional. Cohen was found incapable of being an attorney, let alone an attorney general.

As prosecutors set the table for the grand arrival of their star witness, the testimony only got worse. David Pecker, the former owner of the National Enquirer, said charitably that Cohen was “prone to exaggeration.”

Davidson described Cohen’s profane and unprofessional conduct, stating that “the moral of the story is nobody wanted to talk to Cohen.” That may be the first time the word “moral” was used in the same line with Cohen.

Former Trump associate Hope Hicks mocked Cohen on the stand. She said that he constantly tried to insinuate himself into the campaign, without success, and that he “used to like to call himself Mister Fix It, but it was only because he first broke it.”

Mind you, these were his fellow prosecution witnesses, not the defense.

These witnesses also contradicted the basis for the prosecution. Pecker said that he killed stories for various celebrities for years, and that he did so for Trump for over a decade before he ran for office. Davidson testified that he did not consider the deal to be “hush money” but simply “consideration” to kill bad press.

Hicks testified that she believed Trump wanted to kill the stories in significant part to protect his family from embarrassment.

Cohen could not even maintain a consistent position during the trial. Many of us have denounced the gag order on Trump that prevents him from responding to Cohen’s unrelenting attacks in the media. Cohen then promised to stop any further comments. That promise may have set a record for Cohen. He kept it for roughly three days before being accused of trolling for dollars on social media by attacking Trump.

District Attorney Bragg will now call this disbarred, serial perjurer to make the case against a former president.

Under New York law, the oath administered by the court is supposed “to awaken the conscience and impress the mind of the witness in accordance with that witness’s religious or ethical beliefs.”

Before the bailiff administers the oath to Cohen, Judge Juan Merchan may have to warn spectators in the courtroom not to laugh. For anyone familiar with Cohen, it will sound like the ultimate punchline to a bad joke.

Tyler Durden Mon, 05/06/2024 - 12:25

Boeing Faces 10 More Whistleblowers After Mysterious Deaths

In the span of two months, two Boeing whistleblowers have died under mysterious circumstances.

John Barnett (L), Joshua Dean

The first, 62-year-old John Barnett, died from an apparent self-inflicted gunshot wound on March 9. He was found dead in his Dodge Ram truck holding a silver pistol in his hand in the parking lot of a South Carolina hotel after he failed to show up for the second half of his testimony for a lawsuit against the company. Barnett, who retired in 2017, warned that Boeing had cut corners to speed its 787 Dreamliners into service. He gave numerous interviews in which he described how he lodged internal complaints about serious security flaws. 

The second, 45-year-old Joshua Dean, a former Spirit AeroSystems quality auditor, died last Tuesday from a fast-growing infection. In 2022 he raised the alarm over improperly drilled bulkhead holes for the 737 MAX, and was fired less than a year later.

"I think they were sending out a message to anybody else," Dean told NPR, adding "If you are too loud, we will silence you."

Now, Boeing faces 10 more whistleblowers - and attorneys for the deceased men are hoping that the deaths don't spook the rest away, the NY Post reports.

Boeing whistleblowers (from left) quality engineer Sam Salehpour; Ed Pierson, executive director of the Foundation for Aviation Safety and a former Boeing engineer; Joe Jacobsen, aerospace engineer and technical adviser to the Foundation for Aviation Safety and a former FAA engineer; and Shawn Pruchnicki, PhD, professional practice assistant professor for integrated systems engineering at the Ohio State University, are sworn in before they testify at a Senate hearing to examine Boeing’s broken safety culture (AP)

"These men were heroes. So are all the whistleblowers. They loved the company and wanted to help the company do better," attorney Brian Knowles - who represented both Barnett and Dean, told the Post. "They didn’t speak out to be aggravating or for fame. They’re raising concerns because people’s lives are at stake."

According to Knowles, "I knew John Barnett for seven years and never saw anything that would indicate he would take his own life," but added "Then again, I’ve never dealt with someone who did (commit suicide). So maybe you don’t see the signs. I don’t know."

Knowles pointed out that the Charleston, SC, police are still wrapping up their investigation of Barnett’s death — and that it may take some weeks for tests to reveal more about Dean’s passing.

“It’s a stunning loss,” Spirit AeroSystems spokesman Joe Buccino said of Dean. (The company is not to be confused with Spirit Airlines.) “Our focus here has been on his loved ones.”

Buccino insisted that Spirit “encourages” employees to come forth with their concerns and that they are then “cloaked under protection.” -NY Post

And while Boeing says they also "encourage" employees to speak up, that's news to other Boeing whistleblowers who say they've either face retaliation or been ignored.

For example, Ed Pierson, 61, a former senior manager at Boeing's Renton, Washington 737 factory, left Boeing six years ago and created the Foundation for Aviation Safety - after trying in vain to get Boeing execs to shut down production of the plane prior to two 737 MAX crashes in 2018 and 2019 which left 346 people dead.

"It’s an unstable company right now from the top to the bottom," Pierson told the Post. "Senior corporate leadership is so fixated on not admitting the truth that they can’t admit anything."

Last month, Pierson told Congress about what he characterized as a "criminal cover-up" by Boeing bosses.

"Boeing is an American icon," Pierson said. "This company is incredibly important to our country, both economically and in terms of national security with its commercial aviation side and its military defense work. But it doesn’t work when you have the wrong people driving the bus."

Following Barnett's death, Boeing employees told The Post that he had made "powerful enemies," and one said that they were skeptical that it was a suicide.

This guy is about to become Boeing’s highest-paid employee. https://t.co/QcUPFz0D1h pic.twitter.com/qoOEvndPHe

— Robert Sterling (@RobertMSterling) May 5, 2024

Tyler Durden Mon, 05/06/2024 - 12:05

Hungarian Foreign Minister Warns Macron Risks Sparking World War III

Authored by Paul Joseph Watson via Modernity.news,

Hungarian Foreign Minister Peter Szijjarto has warned that French President Emmanuel Macron’s threat to send NATO troops to Ukraine risks sparking World War III.

In an interview with The Economist last week, Macron said the question of sending western troops to Ukraine would “legitimately” arise if Russia broke through the Ukrainian front lines and Kyiv made such a request.

Kremlin spokesman Dmitry Peskov reacted by describing Macron’s statements as “very dangerous.”

Now Hungarian diplomat Peter Szijjarto warns that the French leader’s comments represent a stunning escalation.

“If a NATO member commits ground troops, it will be a direct NATO-Russia confrontation and it will then be World War Three,” said Szijjarto.

He also drew attention to the fact that such a conflict would likely escalate into nuclear confrontation.

“Let’s be clear: if there is a nuclear war, everything and everyone will be lost. If there is a nuclear war, everyone will die and everything will be destroyed, which no one with any common sense can wish for,” said Szijjarto.

Meanwhile, senior Italian government officials have joined the growing number of prominent voices condemning Macron over his comments.

“Sending Italian soldiers to fight outside the EU borders? Follow the obsessions of some dangerous and desperate European leader like Macron? No thanks, never in the name of the League,” remarked Deputy Prime Minister Matteo Salvini.

Italian Defence Minister Guido Crosetto also told the Corriere della Sera newspaper, “I don’t judge a president of a friendly country like France, but I don’t understand the purpose and usefulness of these declarations, which objectively raise tensions.”

As we previously highlighted, the former commander of the UK’s Joint Forces Command General Sir Richard Barrons said Ukraine is at “serious risk” of having to admit defeat to Russia this year.

Barrons said that pessimism is starting to set in amongst the population, generating a general malaise and a feeling that Ukraine “can’t win.”

*  *  *

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Tyler Durden Mon, 05/06/2024 - 11:45

Saudi Arabia's Price Hike May Signal Oil Bottom

One of the recent positives for bonds and non-energy stocks could have run its course after Saudi Arabia raised the price of its flagship crude to Asia for a third consecutive month, according to Bloomberg markets live reporter Garfield Reynolds

Over the weekend, state-owned Saudi Aramco raised the June official selling price of Arab Light crude for customers in Asia by 90 cents to $2.90 a barrel above the regional Oman-Dubai benchmark, Bloomberg reported. It compares with an increase of 60 cents forecast in a Bloomberg survey of six refiners. Prices for other lighter and heavier varieties were also increased from May.

The hike highlights Saudi Arabia’s efforts to keep the market tight amid fading war risk in the Middle East, which has helped drive oil prices in London lower. Most traders and analysts predict that the Organization of the Petroleum Exporting Countries and its allies will extend their output curbs, potentially to the end of the year.

Crude took a marked step lower last week thanks to a surge in US inventories and optimism that Middle East tensions can cool further, but there’s a decent chance it’s busy finding a new floor rather than settling in for sustained declines according to Reynolds who notes that if Israel and Hamas can agree on a truce — a substantial if with the status of talks unclear after the latest round in Cairo — that would likely set off a fresh, rapid drop in the short term for crude.

But even then it looks as though Saudi Arabia and the other producers would be likely to respond with further efforts to trim supply to prop up prices.

With two-year US inflation swaps sitting at ~2.5% that shows bonds remain vulnerable to sticky oil prices even with WTI under $80/barrel.

Tyler Durden Mon, 05/06/2024 - 11:25

Despite Powell's QTeasing, The Correction May Not Be Over Yet

Authored by Lance Roberts via RealInvestmentAdvice.com,

The latest FOMC meeting caused a stock rally as Jerome Powell turned more “dovish” than expected. While Powell did note that progress on inflation has been lackluster, the announcement of the reversal of “Quantitative Tightening” (QT) excited the bulls.

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”

Of course, the reversal of QT means a buyer of Treasury bonds is returning to the market, increasing overall market liquidity. It also means the Treasury will issue $105 billion less in gross in Q3. The bond market also got the memo, as the Fed’s return to the bond market suggests lower yields in the months ahead, easing financing pressure in the economy.

We have previously discussed the following chart of “liquidity,” which subtracts the Treasury General Account and Reverse Repo from the Federal Reserve’s balance sheet. The recent market decline coincided with a sharp drop in liquidity as the TGA account surged to almost $1 trillion from April tax receipts. Over the next few months, that liquidity in the TGA will get released into the economy. At the same time, the Federal Reserve will reduce its balance sheet runoff, which will further add to overall liquidity.

Notably, the market has weathered the reduction in liquidity to date. While higher rates and the reversal of “Quantitative Easing” led to a 20% market decline in 2022, investors began to “front run” the Fed in anticipation of rate cuts and a return to balance sheet expansion.

Given that “QE” programs increase bank reserves by crediting their reserve accounts for bonds bought, the introduction of the tapering of “QT” is the first step in increasing system liquidity.

This is why there was a vicious stock rally last week. For the markets, this rang “Pavlov’s Bell.”

The Correction May Not Be Over Just Yet

While the stock rally last week certainly surprised many, given the weaker-than-expected economic data, there are some reasons to suspect the correction may not be complete just yet.

In mid-March, we suggested that due to the “buyback blackout” window, a 5-10% correction was likely. To wit:

“As noted, the market remains in a bullish trend. The 20-DMA, the bottom of the trend channel, will likely serve as an initial warning sign to reduce risk when it is violated. That level has repeatedly seen ‘buying programs’ kick in and suggests that breaking that support will cause the algos to start selling. Such a switch in market dynamics would likely lead to a 5-10% correction over a few months.“

The following month, the market violated that 20-DMA, and selling commenced, leading to a 5.5% drawdown. However, buyers initially stepped back in at the 100-DMA, which has now acted as support over the last two weeks. With the rally last week, the stock rally is now testing crucial resistance at the 50-DMA.

The stock rally is at a critical juncture, and what happens next will determine whether the current market correction is over. Three possible scenarios over the next month or so exist.

Path A: The market breaks above the 50-DMA and retests previous highs. While this path is indeed possible, the markets are overbought on a very short-term basis, suggesting further price appreciation will become more challenging.

Path B: Many investors were surprised by the recent market decline. As such, these “trapped longs” will likely use the current stock rally as an opportunity to reduce risk. Another retest of the 100-DMA seems probable before the next leg of the current bull rally ensues.

Path C: With earnings season mostly behind us and stock buybacks set to resume, a reversion to the 200-DMA seems the least probable. However, as is always the case, it is a risk that we should not ignore. A sharp uptick in inflation or stronger-than-expected economic data could spark concerns about a “higher for longer” Fed policy. Such an event would likely lead to a further repricing of risk assets.

I am less concerned about “Path C” for three reasons.

Little Evidence Of Market Stress

While a more profound decline is certainly possible, there is little evidence of market stress. For example, even during the latest correction, volatility remained very subdued. Yes, volatility increased during the decline but failed to reach the levels witnessed during the 10% correction last summer.

Secondly, a substantially deeper market decline would likely widen credit spreads between junk bonds and treasuries. That was not evident during the latest market decline, as spreads remain well below the long-term average. Watching credit spreads is the best indicator for investors to determine market risks.

Third, the window for stock buybacks reopens this week, and with Apple and Google announcing $110 and $70 billion programs, respectively, those two companies alone will account for roughly 18% of this year’s slated activity.

Combining current sentiment, buybacks, and liquidity hopes makes the stock rally over the last two weeks logical. Furthermore, given that early summer months tend to be bullish for markets during election years, it is likely too soon to be overly bearish.

However, we are also not completely oblivious to the numerous risks that lie ahead. Weaker economic data, the lag effect from higher rates, and sticker inflation pose portfolio risks worth monitoring. Furthermore, in the two months before the election, investors tend to de-risk their portfolios. This year, we could see a larger-than-normal event, given the risks associated with the current matchup.

While Powell’s “dovish” twist fueled the current stock rally, continue to manage risk accordingly. There is a reasonable chance this correction is not over just yet.

Tyler Durden Mon, 05/06/2024 - 11:05

Key Events This Week: Things Finally Quiet Down

After a whirlwind two weeks which saw both the latest FOMC decision and the April jobs report, not to mention the peak of earnings season when all of the top tech companies reported, the calendar takes a quieter turn after the deluge of macro events last week, and the focus shifts on whether markets can continue to find a more solid footing. The latter half of last week saw strong gains for most asset classes thanks to an FOMC meeting that avoided hawkish surprises coupled with a softer payrolls report on Friday that reignited hopes of a soft landing for the US economy. 10yr Treasury yields saw their largest weekly decline of the year so far (-15.5bps) while the S&P 500 posted its best 2-day run in 10 weeks (+2.18%).

Looking forward, the health of the US economic cycle will remain in focus with today’s Senior Loan Officer Survey from the Fed. The SLOOS has seen a gradual improvement in the past few quarters after the sharp tightening following the regional banking stress last March. A key question is whether the rise in yields since the start of the year could derail the nascent improvement in bank credit conditions. Later in the week, the University of Michigan consumer survey will attract attention on Friday given the recent softening in US consumer confidence indicators.

The main macro event in Europe will be the latest BoE decision on Thursday. Our UK economist expects this week’s meeting to set the stage for the first rate cut in June and foresees dovish shifts in the MPC’s modal CPI projections and its forward guidance. You can see the full preview here. We will also have the RBA decision on Tuesday (see our economists' preview here), while on Wednesday the Riksbank could deliver the first rate cut of the cycle there. Finally, we’ll have the accounts of April ECB meeting due on Friday. These are unlikely to deliver major surprises, with April's clear if conditional signal of a June rate cut having solidified in recent ECB commentary. But we will watch for any hints on the ECB reaction function beyond June, including on what sort of data might justify consecutive ECB cuts.

The earnings season will begin to taper off this week, with almost 400 of S&P 500 members having already reported. Notable releases will include Walt Disney, Vertex, Uber and Airbnb in the US, Ferrari, Telefonica and Leonardo in Europe and Toyota and Nintendo in Japan.

Day-by-day calendar of events

Monday May 6

• Data : China April Caixin services PMI, Italy April services PMI, Eurozone March PPI
• Central banks : Fed's SLOOS, Barkin and Williams speak, ECB's Villeroy, Nagel and Panetta speak
• Earnings : Vertex, Palantir, Williams Cos, Simon Property Group, Realty Income

Tuesday May 7

• Data : US March consumer credit, UK April construction PMI, new car registrations, China April foreign reserves, Germany March trade balance, factory orders, April construction PMI, France Q1 wages, private sector payrolls, March trade balance, current account balance, Eurozone March retail sales, Switzerland April unemployment rate
• Central banks : Fed's Kashakari speaks, ECB's De Cos speaks, RBA decision
• Earnings : Walt Disney, BP, Arista Networks, Duke Energy, McKesson, Occidental Petroleum, Kenvue, Nintendo, Ferrari, Electronic Arts, Rockwell Automation, Leonardo, Reddit, Lyft
• Auctions : US 3-yr Notes ($58bn)

Wednesday May 8

• Data : US March wholesale trade sales, Italy March retail sales, Germany March industrial production
• Central banks : Fed's Cook, Jefferson and Collins speak, ECB's Wunsch speaks , Riksbank decision
• Earnings : Toyota, Arm, Uber, Airbnb, Emerson Electric, Teva, Shopify, Vistra, Affirm, Siemens Energy, AB InBev
• Auctions : US 10-yr Notes ($42bn)

Thursday May 9

• Data : US initial jobless claims, UK RICS house price balance, China April trade balance, Japan March leading and coincident index, labor cash earnings
• Central banks : BoE decision, April DMP survey, Pill speaks, BoJ summary of opinions April MPM, ECB's Cipollone and Guindos speak, BoC's financial system review
• Earnings : Constellation Energy, Roblox, Telefonica, Enel, Warner Bros Discovery, Warner Music Group
• Auctions : US 30-yr Bonds ($25bn)

Friday May 10

• Data : US May University of Michigan survey, April monthly budget statement, UK Q1 GDP, March monthly GDP, trade balance, industrial production, index of services, construction output, China Q1 current account balance, Japan March trade balance, current account, household spending, April Economy Watchers survey, bank lending, Italy March industrial production, February industrial sales, Canada April jobs report, Norway, Denmark April CPI
• Central banks : Fed's Goolsbee, Barr and Bowman speak, ECB's account of the April meeting, Cipollone speaks, BoE's Pill speaks
• Earnings : Tokyo Electron

* * *

Finally, looking at just the US, Goldman notes that the key economic data release this week are the University of Michigan report on Friday. There are several speaking engagements by Fed officials this week, including remarks from Vice Chair Jefferson, Vice Chair for Supervision Barr, Governors Cook and Bowman, and Presidents Barkin, Williams, Kashkari, Collins, and Goolsbee.

Monday, May 6

• 12:50 PM Richmond Fed President Barkin (FOMC voter) speaks: Richmond Fed President Thomas Barkin will deliver a speech on the economic outlook in Columbia, South Carolina. Audience and media Q&A are expected. On April 10, Barkin said “of course it’s conceivable that we’re going to get to a soft landing, the numbers in a big picture have been great… We need to be humble about how easy it is to get there.”
• 01:00 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will participate in a fireside chat conversation at the Milken Institute Global Conference. A Q&A is expected. On April 18, Williams said “I definitely don’t feel urgency to cut interest rates.” He went on to say, “I think interest rates will need to be lower at some point but the timing of that will be based on the economy.”
• 02:00 PM Senior Loan Officer Opinion Survey 2023Q4

Tuesday, May 7

• There are no major economic data releases scheduled.
• 11:30 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a fireside chat at the Milken Institute Global Conference. A Q&A is expected. On April 4, Kashkari said “in March I jotted down 2 rate cuts this year. But if inflation continues moving sideways, that would make me question whether we need to do those rate cuts at all.”

Wednesday, May 8

• 10:00 AM Wholesale inventories, March final (consensus -0.4%, last -0.4%)
• 11:00 AM Fed Vice Chair Jefferson speaks: Vice Chair Philip Jefferson will participate in a moderated discussion on careers in economics. On April 16, Jefferson said “my baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labor market will remain strong, with labor demand and supply continuing to rebalance.” He went on to say that “the outlook is still quite uncertain, and if incoming data suggests that inflation is more persistent than I currently expect it to be, it will be appropriate to hold in place the current restrictive stance of policy for longer.”
• 11:45 AM Boston Fed President Collins (FOMC non-voter) speaks: Boston Fed President Susan Collins will provide remarks to MIT students followed by a fireside discussion. Speech text and a Q&A are expected. On April 11, Collins said “I expect to see further evidence that inflation is durably, if unevenly, returning toward 2 percent, and that the economy is coming into better balance, with demand and supply more closely aligned amid a healthy labor market.”
• 01:30 PM Fed Governor Cook speaks: Fed Governor Lisa Cook will discuss the Fed’s latest semi-annual Financial Stability Report at an event hosted by Brookings. Remarks will be followed by a panel discussion. A Q&A is expected. On March 25, Cook said “the path of disinflation, as expected, has been bumpy and uneven, but a careful approach to further policy adjustments can ensure that inflation will return sustainably to 2% while striving to maintain the strong labor market.”

Thursday, May 9

• 08:30 AM Initial jobless claims, week ended May 4 (GS 215k, consensus 212k, last 208k): Continuing jobless claims, week ended April 27 (consensus 1,785k, last 1,774k)

Friday, May 10

• 09:00 AM Fed Governor Bowman speaks: Fed Governor Michelle Bowman will speak on financial stability risks at the Texas Bankers Association Annual Convention. Speech text and a moderated Q&A are expected. On May 3, Bowman said “with annualized 3-month core PCE inflation jumping to 4.4 percent in March, well above average inflation in the second half of last year, I expect inflation to remain elevated for some time,” but went on to say “my baseline outlook continues to be that inflation will decline further with the policy rate held steady, but I still see a number of upside inflation risks that affect my outlook.”
• 10:00 AM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will speak in a moderated Q&A to the Louisiana Bankers Association Annual Conference in New Orleans. On April 5, Logan said “I’m increasingly concerned about upside risks to the inflation outlook. To be clear, the key risk is not that inflation might rise – though monetary policymakers must always remain on guard against that outcome – but rather that inflation will stall out and fail to follow the forecast path all the way back to 2 percent in the timely way.”
• 10:00 AM University of Michigan consumer sentiment, May preliminary (GS 76.2, consensus 76.8, last 77.2); University of Michigan 5-10-year inflation expectations, May preliminary (GS 3.1%, consensus 3.0%, last 3.0%): We expect the University of Michigan consumer sentiment index decreased to 76.2 in the preliminary May reading. We estimate the report's measure of long-term inflation expectations rose 0.1pp to 3.1%, reflecting higher gasoline prices and the higher-than-expected price data reported in 2024. The transition to web-based interviews could also exert upward pressure.
• 12:45 PM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will speak in a moderated Q&A at the Economic Club of Minnesota luncheon. On April 19, Goolsbee said “so far in 2024, that progress on inflation [we saw in 2023] has stalled. You never want to make too much of any one month’s data, especially inflation, which is a noisy series, but after three months of this, it can’t be dismissed."
• 01:30 PM Fed Vice Chair for Supervision Barr speaks: Fed Vice Chair for Supervision Michael Barr will give a commencement speech for American University School of Public Affairs Graduation.

Source: DB, Goldman

Tyler Durden Mon, 05/06/2024 - 10:55

Where Unsold EVs Go To Die: Belgium's Ports Drowning Under Glut Of Chinese Imports

Ten years ago this week, we posted one of out most viral stories, highlighting the over-capacity in the auto industry:  "Where the World's Unsold Cars Go To Die," which highlighted the 'endgame' of automakers' 'channel stuffing' efforts to disguise the sudden lack of demand for all the exciting new models that they had forecast would boom to the moon...

And now, as MishTalk's Mike Shedlock reports,  we are seeing similar pictures across Europe...

"Some are parked here for a year, sometimes more."

Le Monde reports Belgium’s ports drowning under glut of Chinese electric cars: ‘Some are parked here for a year, sometimes more’

Due to China’s overcapacity in production – as it aims to capture a quarter of the European electric vehicle market – the ports of Antwerp and Zeebrugge are inundated.

You probably need to see it to appreciate the challenges the automobile industry faces in transitioning to electricity. You also need to come here to understand how the Chinese industry’s overcapacity has flooded the European market. That morning, as the sun unexpectedly lit up the maze of highways leading to this remote arm of the port of Antwerp, Belgium, a huge cargo ship from the Norwegian company Höegh Autoliners unloaded thousands of cars at one of the terminals of International Car Operators (ICO), a subsidiary of the Japanese group Nippon Yusen Kaisha.

Alongside Swedish-Norwegian Wallenius Wilhelmsen, it is one of the main operators of the now merged port of Antwerp-Bruges, the world’s largest automotive terminal, through which the production of some 40 brands used to transit. But that was before the emergence of their Chinese competitors.

Car Parks

Quartz reports Cars are piling up at European ports at an alarming rate

Imported vehicles are seriously piling up at European ports, turning them into “car parks.” Automakers are distributors are struggling with a slowdown in car sales as well as logistical bottlenecks that make it hard to alleviate the buildup of new, unsold vehicles.

Some Chinese brand EVs had been sitting in European ports for up to 18 months, while some ports had asked importers to provide proof of onward transport, according to industry executives. One car logistics expert said many of the unloaded vehicles were simply staying in the ports until they were sold to distributors or end users.

“It’s chaos,” said another person who had been briefed on the situation.

This is another part of the escalating trade war between China and the rest of the world.

China Produces 55 Percent of All Steel, Biden and Trump Eye Tariffs

Yesterday, I commented China Produces 55 Percent of All Steel, Biden and Trump Eye Tariffs

On April 22, I cautioned A Big Deflationary Push From China But Will Biden or Trump Allow That?

China keeps returning to a well that has run dry, using exports as a means for growth. China is about to hit a brick wall, with global consequences.

My #1 issue looking ahead to 2025 is a global trade war with serious repercussions.

Tyler Durden Mon, 05/06/2024 - 10:40

Shell Sold Millions In Carbon Credits That It Never Earned

The carbon credit con band plays on...

The most recent chapter in the 'green' initiative has been supermajor Shell being found to have sold 'phantom' carbon credits that were twice the volume of emissions the company actually avoided, according to FT.

Shell has reportedly sold millions of carbon credits, tied to CO₂ removal, to Canada’s main oil sands companies, despite doubts arising over the validity of the claimed emissions reductions.

Keith Stewart with Greenpeace Canada commented: “Selling emissions credits for reductions that never happened . . . literally makes climate change worse.”

Under a subsidy initiative by Alberta's provincial government to support the industry, Shell was permitted to register and sell carbon credits double the amount of emissions purportedly avoided by its Quest carbon capture facility from 2015 to 2021. However, this subsidy was phased out by 2022.

Consequently, Shell managed to register 5.7 million credits which were then sold to leading oil sands producers including Chevron, Canadian Natural Resources, ConocoPhillips, Imperial Oil, and Suncor Energy.

Alberta's environment ministry stated that the crediting support scheme did not lead to "additional emissions" by industrial polluters.

Energy firms globally, including those in Canada, are advocating for increased government backing for carbon capture and storage initiatives. Alberta, known for its vast and carbon-intensive oil resources, has seen a surge in production, hindering Canada's efforts to meet emission reduction goals.

The Financial Times report noted that the Quest facility, operated by Shell Canada and co-owned by Canadian Natural Resources, Chevron, and Shell Canada, is integral to the Scotford processing and refining complex. At Quest, CO₂ is extracted during hydrogen gas production, crucial for converting bitumen from oil sands into synthetic crude oil.

Canada offers substantial incentives for CCS projects, yet the industry's profitability remains challenging. Quest's annual report revealed a total cost of $167.90 per tonne of carbon avoided in 2022, compared to Alberta's $50 carbon price for major industrial emitters.

Documents obtained by Greenpeace Canada, shared with the Financial Times, disclosed that Shell initially sought a three-for-one deal on carbon credits at Quest. Alberta introduced a two-for-one scheme in 2011, exclusively for plants operational by the end of 2015, such as Quest. The incentive decreased to three-quarters of a credit by 2022 and was eventually phased out with the rise in carbon prices.

“At the end of the day, the oil and gas sector and the oil sands firms in particular need to get going with respect to emissions reductions,” concluded Jonathan Wilkinson, Canada’s minister of energy and natural resources.

Tyler Durden Mon, 05/06/2024 - 10:20