Today, in the Calculated Risk Real Estate Newsletter: Part 1: Current State of the Housing Market; Overview for mid-May 2024

A brief excerpt:

This 2-part overview for mid-May provides a snapshot of the current housing market.

I always like to start with inventory, since inventory usually tells the tale!
...
Here is a graph of new listing from Realtor.com’s April 2024 Monthly Housing Market Trends Report showing new listings were 12.2% year-over-year in April. This is still well below pre-pandemic levels. From Realtor.com:

However, providing a boost to overall inventory, which has been a drag on sales the past couple of years, sellers turned out in higher numbers this April as newly listed homes were 12.2% above last year’s levels, matching last month’s growth rate. This marked the sixth month of increasing listing activity after a 17-month streak of declines.

Note the seasonality for new listings. December and January are seasonally the weakest months of the year for new listings, followed by February and November. New listings will be up year-over-year in 2024, but still below normal levels.

There are always people that need to sell due to the so-called 3 D’s: Death, Divorce, and Disease. Also, in certain times, some homeowners will need to sell due to unemployment or excessive debt (neither is much of an issue right now).

And there are homeowners who want to sell for a number of reasons: upsizing (more babies), downsizing, moving for a new job, or moving to a nicer home or location (move-up buyers). It is some of the “want to sell” group that has been locked in with the golden handcuffs over the last couple of years, since it is financially difficult to move when your current mortgage rate is around 3%, and your new mortgage rate will be above 7%.

But time is a factor for this “want to sell” group, and eventually some of them will take the plunge. That is probably why we are seeing more new listings now.

There is much more in the article.

FDA Preparing For Possible Bird Flu Spread Among Humans: Commissioner

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

Food and Drug Administration Commissioner Dr. Robert Califf in Washington in a file image. (Joe Raedle/Getty Images)

The U.S. Food and Drug Administration (FDA) is preparing for a scenario in which the highly pathogenic avian influenza starts spreading among humans, the agency’s commissioner said on May 8.

“This virus, like all viruses, is mutating. We need to continue to prepare for the possibility that it might jump to humans,” Dr. Robert Califf, the commissioner, told senators during a hearing in Washington.

The influenza, also known as the bird flu or H5N1, has recently started spreading among cattle and other species. One person in Texas has had a confirmed case this year.

So far, genetic sequencing and other data indicate that influenza poses little risk to people, and there are no signs that the flu is transmitting from person-to-person, according to U.S. officials. But they are working on getting treatments, tests, and vaccines ready in case that changes.

“We’ve been busy getting prepared for if the virus does mutate in a way that jumps into humans on a larger level,” Dr. Califf told the Senate Appropriations Committee’s Agriculture Appropriations Subcommittee.

The patient in Texas primarily experienced one symptom: inflamed eyes. Neither the patient nor many of the cows that have been infected have suffered respiratory symptoms. H5N1 commonly infects the respiratory tracts of birds.

“The real worry is that it will jump to the human lungs, where, when that has happened in other parts of the world for brief outbreaks, the mortality rates have been 25 percent,” Dr. Califf said. The worry is based in part on how viruses typically mutate, such as in the case of COVID-19.

From 2003 to April 1, 2024, 889 cases of H5N1 have been confirmed across the globe, according to the World Health Organization (WHO). Of the patients, 52 percent have died.

WHO chief scientist Jeremy Farrar said recently that H5N1 has developed into a “global zoonotic animal pandemic” and that scientists are concerned that the virus could evolve to spread among humans.

Tedros Ghebreyesus, the director-general of the organization, said Wednesday that “the virus does not show signs of having adapted to spread among humans, but more surveillance is needed.”

Many experts consulted by the U.S. government are concerned about the jump of the influenza to cattle and other species and how cattle intermingle with pigs, chickens, and humans on farms, according to Dr. Califf. A May 3 study from U.S. and Danish researchers said testing of tissues from cattle indicated the animals could serve as a “mixing vessel” for avian influenza because receptors from chickens, ducks, and humans were expressed in the cows.

While the risk is still low, “if we institute the countermeasures now and reduce the spread of the virus now, then we’re much less likely to see a mutation that jumps to humans for which we’re ill-prepared,” Dr. Califf added.

Current U.S. rules mandate testing of some cattle before being moved to another state. The guidance includes advising workers on farms to wear protective equipment when dealing with animals that may be or are sick with the bird flu.

The FDA is focusing in part on ensuring the country’s milk supply is safe to drink. The agency and its partners have tested samples of milk from grocery stores. Although some samples tested positive, no live virus has been detected, meaning the milk supply is safe, according to the agency.

Test results from beef have also found beef is safe, according to the U.S. Department of Agriculture.

The agency has confirmed H5N1 infections in 36 herds across nine states, including Colorado, Kansas, and Michigan. Data from affected cows indicate H5N1 began circulating in cattle in late 2023, according to a preprint paper from the department.

About 70 farm workers are being monitored in Colorado, officials said in a briefing this week, but none have displayed symptoms as of yet.

Tyler Durden Fri, 05/10/2024 - 12:35

"Worst Case Scenario": MacroGenics Crashes After Five Patient Deaths In Experimental Drug Trial 

A Rockville, Maryland-based biotech company called MacroGenics crashed in premarket trading in New York after it revealed five deaths in a clinical trial of its investigative therapy for prostate cancer, according to Bloomberg.  

MacroGenics finished enrolling participants for the TAMARACK Phase 2 study of vobra duo in November 2023. This study involves patients with metastatic castration-resistant prostate cancer who have previously received one treatment targeting the androgen receptor pathway. These participants might also have had one prior treatment, including taxane, but no other chemotherapy. The study aims to test two different doses of vobra duo, either 2.0 mg/kg or 2.7 mg/kg, given every four weeks. 

"The interim safety and anti-tumor activity observed to date in the TAMARACK study look very promising for patients with metastatic castration-resistant prostate cancer," Johann DeBono, Regius Professor of Cancer Research and Professor in Experimental Cancer Medicine at The Institute of Cancer Research, London and The Royal Marsden NHS Foundation Trust, stated in a release.

DeBono continued, "With the limited treatment options currently available to these patients, this novel ADC molecule could potentially become the first therapy targeting B7-H3 in patients with prostate cancer and would represent an important new treatment for this population."

Further in the release, MacroGenics revealed five deaths in the study. They said two deaths have been considered unrelated to the study, while the other three are being investigated. 

A total of five events with fatal outcome occurred as follows: one Grade 5 event in the 2.0 mg/kg dosing cohort: acute myocardial infarction (considered unrelated to study drug by the investigator); three Grade 5 events in the 2.7 mg/kg dosing cohort: one •  cardiac arrest (considered unrelated to study drug by the investigator) and two events of pneumonitis. In addition, a patient in the 2.7 mg/kg dosing cohort had a Grade 3 pleural effusion that is recorded as having a fatal outcome. The latter three deaths are being investigated, as follow-up is incomplete on this ongoing trial. 

In premarket trading, shares crashed 67% on fears of updated efficacy and safety information regarding the clinical trial. 

Wall Street analysts were very sour about the new developments. Here's what they're saying (list courtesy of Bloomberg):

BMO Capital Markets (downgrades to market perform from outperform)

• Analyst Etzer Darout has lower conviction on MacroGenics' prostate cancer program, with both efficacy and safety updates for TAMARACK falling short of expectations

Stifel (downgrades to buy from hold)

• Analyst Stephen Willey's primary concerns are not efficacy- driven, but rather reflect safety and tolerability data

• The data doesn't appear meaningfully differentiated from the prior P1 dose-expansion experience

SVB Securities (outperform)

• TAMARACK data was notable for its meaningfully deteriorated safety profile which "likely represent one of the worst case scenarios," says analyst Jonathan Chang

... bears shorted 16.29% of the float or 10 million shares. 

This sets up for a high volume day and wild volatility. 

Tyler Durden Fri, 05/10/2024 - 12:10

Senate Bill Seeks To Place Campus Protesters On No-Fly List

Authored by Kyle Anzalone via The Libertarian Institute,

A bill introduced in the Senate by two Republicans seeks to place campus protesters on a no-fly list. Across the country, pro-Palestinian students are gathering on campuses and demanding their universities cut ties with the Israeli government over Tel Aviv’s ruthless military operation in Gaza. Across the political spectrum, US politicians attempt to smear all protesters' pro-Palestinian viewpoint as antisemitic.  

According to the legislation posted on Senator Marsha Blackburn’s website on Wednesday, S.4274 will require the US government to place the campus protesters on a no-fly list. A press release from Blackburn and her Republican colleague Roger Marshall explains, "The No Flights For Terrorists Act, would put any individual including: students, faculty, professors, or paid agitators, on the No-Fly List if they have called for violence against Jewish people, pledged allegiance to US-designated Foreign Terrorist Organizations, or have been subject to disciplinary action by the institution of higher education related to such action."

Via Getty Images

It adds, "This legislative action comes in response to the continued antisemitic, pro-Hamas protests and encampments that have wreaked violence and chaos on college campuses nationwide." Blackburn has also called for campus protesters to have their student loans revoked and supports a separate bill that would prevent the activists from having federal student loans relieved. 

Last month, pro-Palestinian protests spread from Columbia in New York City to the rest of the country. The rallies and encampments have been overwhelmingly peaceful and involved Jewish students and organizations. The protesters are demanding their universities cut ties with the Israeli government as they have charged Tel Aviv with conducting a genocide in Gaza.

Still, the students and their supporters have been smeared as anti-Semitic and anti-American by leaders across the political spectrum. Sen. Marshall said, "Hamas terrorist sympathizers don’t just hate Israel, they hate America and everything we stand for. These radical Marxists who are doing Hamas’ bidding across the country on college campuses, threatening the safety of our Jewish students and communities, should be treated the same way we treat the terrorist organization.” 

President Joe Biden made similar remarks on Tuesday. "On college campuses, Jewish students blocked, harassed, attacked while walking to class. Antisemitism — antisemitic posters, slogans calling for the annihilation of Israel, the world’s only Jewish State."

Wow! Sens. Roger Marshall (R-KS) and Marsha Blackburn (R-TN) have introduced a bill that would designate student protesters "Terrorists" and add them to the "No Fly List" (with zero judicial oversight) for protesting Israel, which is deemed "violence against the Jewish people"! pic.twitter.com/ITa7aWFQbS

— Michael Tracey (@mtracey) May 8, 2024

The President continued, "There is no place on any campus in America — any place in America — for antisemitism or hate speech or threats of violence of any kind — whether against Jews or anyone else. Violent attacks, destroying property is not peaceful protest."

He added, "It’s against the law. And we are not a lawless country. We’re a civil society. We uphold the rule of law."

Tyler Durden Fri, 05/10/2024 - 11:45

​​​​​​​Biden Reportedly Set To Quadruple Tariffs On Chinese EVs In Major Announcement Next Week

Update (1130ET):

The Wall Street Journal, citing people familiar with the matter, has revealed more details about President Biden's big announcement regarding China tariffs scheduled for next Tuesday. 

Officials are particularly focused on electric vehicles, and they are expected to raise the tariff rate to roughly 100% from 25%, according to the people. 

An additional 2.5% duty applies to all automobiles imported into the US. The existing tariff has so far effectively barred Chinese electric vehicles, often cheaper than Western-made cars, from the US market. Biden administration officials, automakers and some lawmakers worried that 25% wouldn't be enough given the scale of Chinese manufacturing.

Bloomberg first reported that the Biden administration was planning to announce China tariffs on semiconductors, solar power, and electric vehicles. 

We suspect Beijing is actively planning a tit-for-tat move later next week as the administration has made their next move very clear in news stories published in US corporate media outlets through anonymous sourcing. 

*   *   * 

The Biden administration is expected to make a major announcement on China tariffs as soon as next week that will impact semiconductors, solar power, and electric vehicles, according to Bloomberg, citing people familiar with the matter. While the possibility of additional tariffs has been widely known, the specific industries to be targeted have now been identified. Moreover, Beijing will likely release angry comments after Biden's speech next week, followed by a tit-for-tat response. 

Two of the people said the decision to hit China's "new three" green goods comes after a review of Section 301 tariffs, which were first implemented under former President Trump in 2018. The tariffs primarily target electric vehicles, batteries, and solar cells, with existing tariffs being maintained. They said the announcement is planned for Tuesday. 

The Biden administration is making a bold move against Beijing in an election year as polling data spirals lower as Bidenomics has become a complete failure. It's not us just saying this. Billionaire investor and Duquesne Family Office Chairman & CEO Stan Druckenmiller told CNBC's Joe Kernen earlier this week that Bidenomics is a disaster. 

Last month, the president said he would impose  25% tariffs on Chinese steel and aluminum. Earlier this week, the administration said it would revoke Intel and Qualcomm's export license to supply semiconductors to Chinese firm Huawei. 

If China were to retaliate, in a tit-for-tat effort, they could hit Elon Musk's Tesla or continue reducing US agricultural exports of corn and soybean. 

"Instead of correcting its wrong practices, the United States continued to politicize economic and trade issues," Chinese Foreign Ministry spokesperson Lin Jian said Friday, adding, "To further increase tariffs is to add insult to injury." 

Meanwhile, if reelected, Trump has promised to hit China with a tsunami of tariffs, vowing a 60% tax on all Chinese imports. 

US Senator Chuck Grassley, an Iowa Republican, warned Beijing will respond:  

"We know how China reacted when Trump put tariffs on ... and they hit agriculture with it. I can't be sure that China would hit agriculture the same as they did in the Trump ones, but they're going to hit back."

In markets, Chinese shares of solar firms fell on the news:

• Longi shares drop 1.8% in Shanghai, JA Solar -1.7% in Shenzhen, Xinyi Solar -3.8% in Hong Kong

The yuan weakened in both onshore and offshore markets, while CSI 300 Index fell: 

• USD/CNH gains 0.1% at 7.2270, pair on track to rise 0.5% on the week, biggest weekly advance since the week ended March 22

• USD/CNY rises 0.1% at 7.2251

• Bloomberg's dollar spot index steady; USD/HKD is little changed at 7.8139

• CSI 300 Index, benchmark of onshore China stocks, falls as much as 0.6% before paring about half of its decline.

"It'll definitely cause investors to pause on stocks that are potentially exposed," said Xin-Yao Ng, director of investment at abrdn. He added, "Everyone knows it's a risk." 

Here's what other Wall Street analysts are saying (list courtesy of Bloomberg):

AllianceBernstein (John Lin)

• We are not overly concerned about that because to us geopolitics is now a structural part of investing in China" 
• "Everybody understands that there will be periods where things get a little worse and there will be periods where things get a little better. And that fluctuation to us is really an opportunity to add or reduce risk but not a reason to stay away from the market overall"

ANZ Banking Group (Khoon Goh)

• News of the US imposing more tariffs against some Chinese imports has seen the yuan weaken slightly
• The threat of more tariffs have been known, but if the final outcome is for a more targeted approach, then there is unlikely to be much of a lasting effect on the yuan

Maybank (Fiona Lim)

• "You can't say that this was not expected. Such trade-war era kind of tensions have been in the making ever since Trump spoke about imposing 60% tariff"
• People's Bank of China is keeping the yuan in a tight grip via the fix and offshore liquidity management and that may limit bearish swings to a certain extent
• "USDCNH-USDCNY premium could widen in such an environment"

TD Securities (Alex Loo)

• It wasn't a total surprise to us. Trade tensions would likely increase if Biden puts heavy tariffs on China's products in the coming weeks
• We anticipate that yuan would trade on the backfoot given such unfavorable news but expect the PBoC to continue to intervene and smooth out any excessive weakness in the CNY 
• Regional currencies are more sensitive to moves in the USD path now since China has been effectively anchoring the yuan

Eastspring Investments (Ken Wong)

• This news on the proposed tariffs in particular for Chinese EVs was widely expected
• Even so, we are seeing a bit of a pullback in EVs and renewable stocks in HK/China this morning

Saxo Capital Markets (Charu Chanana)

• The tariff announcement is a reminder that geopolitics remains a key aspect in considering exposure to China market, and valuations or government support measures are not the only catalysts
• This means valuations may continue to "take the ebb and flow of geopolitics into account" and also "increased exposure to domestic-oriented sectors"

IG Markets (Hebe Chen)

• "The US's latest tariff hike on China EV is poised to trigger unprecedented shockwaves through the industry" 
•  This move not only deals a crippling blow to China's new strategic ambitions, but it also marks a potential tipping point, broadening the trade war between Washington and Beijing to a new level 
• For Chinese stocks, particularly EV companies, the new tariff decision is akin to a looming tsunami. Investors are bracing for a significant upend as the full impact of the new tariffs unfolds

Shanghai Jade Stone Investment Management (Chen Shi)

• We've long been expecting more anti-China rhetoric and policies to be amplified closer to the election, and though this is surely a piece of negative news, to us, and to investors in general, the marginal effect is diminishing 
• "China has proven through the years that its core edge lies in a strong and comprehensive industrial structure, and that cannot be challenged with tariffs" 
• There are plenty of ways for companies to work around this

Deepening a trade war with China comes as Biden's polling data is absolutely awful. 

This shows Biden's polling data versus headlines in corporate media featuring trade war-related news.  

A tough-on-China stance could be a new strategy the administration attempts to win back voters.

... it won't work. 

Tyler Durden Fri, 05/10/2024 - 11:30

From Goldman:

We boosted our Q2 GDP tracking estimate by 0.1pp to +3.4% (qoq ar) and left our domestic final sales estimate unchanged at +2.7%. [May 7th estimate]
emphasis added

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2024 is 4.2 percent on May 8, up from 3.3 percent on May 2. After recent releases from the US Bureau of Economic Analysis, the US Census Bureau, the Institute for Supply Management, and the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth increased from 3.2 percent and 4.1 percent, respectively, to 3.9 percent and 6.8 percent, while the nowcast of the contribution of the change in real net exports to second-quarter real GDP growth decreased from -0.05 percentage points to -0.10 percentage points. [May 8th estimate]

After Cocoa Crash, Rabobank Says Bull Rally Likely Peaked 

Rabobank analyst Paul Joules wrote in a note to clients that cocoa prices have likely peaked after crashing in the last several weeks. 

"A combination of weakening global demand and production responses, particularly from countries without a fixed farmgate price, will help alleviate the pronounced uncertainty baked into current futures pricing," Joules said. 

Still, "it's likely that inflated cocoa prices will stick around for the next few years," he noted, adding prices are unlikely to return to "normal" levels quickly but have passed their peak. 

Cocoa futures peaked in New York on April 19, a little above the $12,000 a ton mark, and have since crashed 43%. Prices bottomed at $7,000 and have traded sideways just below the $9,000 level in the last several sessions. 

Traders monitor crop conditions in West Africa, which is the mecca of cocoa growing. The region has been battered by adverse weather conditions and disease, denting harvests and sparking the third annual global deficit. 

New data from forecaster Maxar Technologies shows that precipitation is expected across the Ivory Coast and Ghana over the next five days, thus potentially improving soil moisture in those growing areas. 

In a separate report, analysts from BMI, a unit of Fitch Solutions, noted that the cocoa crash had nothing to do with market fundamentals but everything to do with market liquidity. 

Recall in early April, Bloomberg's Javier Blas warned:

Liquidity in cocoa markets is quickly evaporating.

The number of outstanding contracts (open interest) in New York and London combined has tumbled 40% since mid-January. NY open interest is at a 12-year low.#cocoa #chocflation

— Javier Blas (@JavierBlas) April 9, 2024

Rabobank estimates cocoa prices in the fourth quarter of 2024 will average around $7,000. 

Meanwhile, commodity trader Pierre Andurand stands by his $20,000 price target for later this year. 

Tyler Durden Fri, 05/10/2024 - 11:20

What’s Behind America’s Doctor Crisis?

Authored by Autumn Spredemann via The Epoch Times (emphasis ours),

(Illustration by The Epoch Times, Getty Images, Shutterstock)

Securing an appointment to see a doctor in the United States is exacerbated by soaring health care demand and fewer doctors. Many specializations are increasingly affected by this trend, but primary care and emergency medicine are among the hardest hit.

The average wait time to see a doctor has increased since 2017 and continued to rise after the demand spike brought on by COVID-19. A survey conducted by AMN Healthcare in 2022 of 15 large metro markets revealed the average time to see a physician was 26 days—an 8 percent increase from 2017 and a 24 percent spike since 2004.

Staff constraints are also felt in hospital emergency departments. Nearly 140 million Americans visited a hospital emergency department in 2021, based on data from the Centers for Disease Control and Prevention. Of those, about 13 percent resulted in hospital admission; while thousands waited hours to see a health care provider.

Consequently, many patients leave before being seen by a doctor.

One study analyzed more than 1,000 hospitals between 2017 and the end of 2021 and found those with the worst performance had 4.4 percent of emergency room patients leave before a medical evaluation was conducted. At the end of 2021, that number had risen to upwards of 10 percent.

Compounding the issue is that nearly half of the doctor population will reach retirement age within the next 10 years and career burnout is hitting the rest harder than ever, according to data from Association of American Medical Colleges.

Almost 50 percent of doctors report that they feel burned out, according to a 2024 Medscape report.

These are key factors driving America’s growing scarcity of doctors. Physician Thrive’s 2023 study noted that the United States may have a shortage of 124,000 doctors by 2034. Within that shortfall, up to 48,000 will likely be lost from primary care, while the industry is projected to lose another 58,000 specialists, surgeons, and nurse practitioners.

“This is definitely coming down the pipeline. It’s been coming for a long time, and we’re seeing this all across health care,” emergency physician Dr. Jared Ross told The Epoch Times.

Dr. Ross is also president of Missouri-based Emergency Medical Services, Education & Consulting. He’s watched America’s health care worker crisis unfold on the front lines and says the shortage of physicians is an old problem that’s reached a tipping point.

“We’ve talked about this for years. It’s nothing new. There’s been a number of attempted stop-gap measures that haven’t been all that successful,” he said.

A person walks past an 'Emergency Entrance' sign at Mount Sinai Hospital in New York City on Sept. 22, 2020. (Spencer Platt/Getty Images)

Some of these provisional solutions include bringing in more practitioners from foreign countries, medical school loan forgiveness programs, expanding telehealth services, and increasing the number of resident physician training supported by Medicare.

Dr. Ross has seen doctor shortages impact emergency medicine but maintains primary care has “really struggled” to retain physicians.

This is critical for two reasons. One is because health care demands in the United States are rising. The average number of times Americans visit a doctor per year by age group is four times for adults, nine for infants, and twice for children between the ages of five and 15, according to Vanguard Medical Group.

The other reason is due to what Dr. Ross called the “corporatization of medicine.”

“The problem is we have an insurance system that is a massive bureaucracy,” he said.

During a recent conference with other medical leaders, Dr. Ross said it was discussed how America has “really pushed away from the model of traditional health care.”

There was a general consensus within the group that insurance companies have become too powerful in medicine.

“The administrative burden or hassle, as many doctors describe it, is very disheartening,” Dr. William Schaffner, infectious disease specialist at the Vanderbilt University Medical Center, told The Epoch Times.

Having worked in medicine for more than 40 years, Dr. Schaffner has witnessed it evolve into something “aggressively more complicated” as insurance companies expand power over doctors. He says this trend became more noticeable by the 1990s.

“Doctors didn’t go to medical school in anticipation of arguing with insurance companies. It’s depressing and discouraging,” Dr. Schaffner said.

In 2020, for the first time, fewer than 50 percent of U.S. physicians worked in private practice, according to the American Medical Association (AMA). Most have chosen to become employees of large medical groups, which has drastically changed the paradigm of health care.

“The shift away from independent practices is emblematic of the fiscal uncertainty and economic stress many physicians face due to statutory payment cuts in Medicare, rising practice costs, and intrusive administrative burdens,” AMA President Dr. Jesse M. Ehrenfeld said in a 2023 statement.

A health care professional suits up to enter a room in the ICU at Van Wert County Hospital in Van Wert, Ohio, on Nov. 20, 2020. (Megan Jelinger/AFP via Getty Images) Battling With Insurance

The move from independent practice to medical group employee presents its own dilemma. Aside from increased patient loads, it has left doctors at the mercy of having to get prior approval from insurance companies to carry out a medical treatment or procedure.

This forces a quantity-over-quality approach to treatment, according to Dr. Ross.

Prior authorizations are “an absolute headache,” he said. Physicians are now stuck battling with a third party who creates “as many roadblocks as possible because they don’t want to pay out.”

Dr. Schaffner said it took “numerous telephone conversations” with an insurance provider so a family member could get a necessary medical procedure done.

He said part of why it’s challenging is because there needs to be a level of trust on the insurance company’s end. “It’s not just a formal relationship that happens, but there also has to be a trust that develops with the benefits manager. It can take time,” Dr. Schaffner said.

Read more here...

Tyler Durden Fri, 05/10/2024 - 10:55

Bidenomics Implodes: Consumer Sentiment Unexpectedly Craters In Biggest Miss On Record As Inflation Expectations Surge

Moments ago the University of Michigan released the latest "report card" on Bidenomics, and to nobody's surprise - except perhaps a certain senile teleprompter reading, diaper wearing puppet in the White House - it was a total disaster, as Sentiment "unexpectedly" plunged from 77.2 to 67.4, the 9.8 point drop the biggest since August 2021...

... and was not only a 7-sigma miss to expectations of a 76.2 print...

... but was the biggest miss on record!

The collapse in sentiment was broad based, and hammered both current conditions - which plunged from 79.0 to 68.8, badly missing estimates of 79.0 - and also expectations, which plunged from 76.0 to 66.5 (and far below the 75.0 estimated).

The decline in sentiment was broad across age, income and education groups, and also reflected growing concerns about high interest rates. While the labor market has driven economic growth over the last year, the downbeat assessment highlighted in the report adds to evidence of a slowdown.

“Strength in household incomes has been the primary source of support for robust consumer spending over the past couple of years, so a softening in labor market expectations is concerning and -- if it continues -- may lead to a pullback in consumers’ willingness to spend,’’ Joanne Hsu, director of the survey, said in a statement.

But wait there's more, because if that was the "stag" part of the report, the UMich report also confirmed that the "flation" isn't far behind, as the inflation outlook suddenly deteriorated quite dramatically, to wit: 1Year inflation expectations jumped from 3.2% to 2.5%, the highest since November 2023 (and far above estimates of 3.2%), while 5-10 Year inflation expectations also rose from 3.0% to 3.1%, the highest since November.

If that wasn't enough, the university's measure of buying conditions for durable goods, some of which are financed, also decreased to a one-year low. And finally, consumers’ perception of their financial situation, as well as short- and long-term economic outlooks, decreased this month.

“Worse yet, consumers expect the pain to continue, as expectations for interest rates deteriorated considerably this month,” Hsu said. “Only one quarter of consumers expect interest rates to fall in the year ahead, compared with 32% in April.”

One possible reason for the shocking collapse in the print is that, as Pantheon Macro noted ahead of the print, UMich is in the process of switching from phone to an online survey, which according to Pantheon was, get this, "likely to weigh on the headline sentiment because people on the phone are more optimistic than the online applications." Riiight. If anything the transition from phone to online just means that people are actually more truthful in their responses and, well... we just saw the result!

In short: the verdict for Bidenomics is in, and it's a complete disaster, as for Powell's recent laughable comment that he can't see the "stag" nor the "flation"... well, Fed chair, they just bit you on the ass.

Tyler Durden Fri, 05/10/2024 - 10:26

Dog Gone: Kristi Noem Cuts Short Book Tour Citing 'Bad Weather'

Authored by Philip Wegmann via RealClear Wire,

South Dakota Gov. Kristi Noem has cut short a disastrous book tour after receiving withering criticism for her story of shooting an ill-behaved puppy and unverified claims of meeting North Korean dictator Kim Jung Un, RealClearPolitics is first to report. The book, released Tuesday, is titled “No Going Back.”

Noem sat for a series of in-person interviews in New York and was scheduled to travel later in the week to Washington, D.C., before canceling the tour, citing inclement weather.

“Gov. Noem has sold a lot of books on this tour and is back in South Dakota to be prepared for some potential emerging bad weather systems,” spokesman Ian Fury told RCP. Tornadoes touched down in the state Monday, according to the National Oceanic and Atmospheric Administration. Noem sat for interviews Monday and Tuesday in New York before returning home.

Noem was slated to sit down with RealClearPolitics on Thursday before her team canceled the interview and declined to make her available over the phone.

Once heralded as a rising star on the right, in one week the governor was reduced to a punchline. She provided all the material. “We were supposed to have Gov. Kristi Noem on the show tonight, but she canceled. Her staff blamed bad weather,” deadpanned Greg Gutfeld Tuesday night. “We go to locals for reaction.” The Fox News funnyman then cut to a clip of barking dogs.

Noem had billed her book as “a how-to guide” for political activism, pegging its publication to the ongoing veepstakes to join former President Trump on the GOP ticket. Calamity followed when an excerpt leaked to The Guardian, and what was planned as a national audition was overshadowed by the grisly stories the governor told about herself.

Noem writes of dragging a 14-month-old dog into a gravel pit on her property after the poorly trained animal spoiled a pheasant hunt and attacked a neighbor's chickens. She killed the puppy named “Cricket” with a shotgun. After dispatching the dog, she turned her attention to an unruly goat. Noem took a shot, but the billy jumped. She writes in her memoir that she left the goat tethered, retrieved more ammunition, then “hurried back to the gravel pit and put him down.”

Despite a growing firestorm of criticism, the author went ahead with her tour, sitting down on Sunday with Margaret Brennan of CBS News. The story from two decades ago, Noem insisted, showed her willingness to make tough decisions.

“This dog was a working dog and had come from a family that had issues with this dog and I had put months and months of training into this dog. This dog had gone to other trainers as well,” Noem said.

“So all of that is the facts of the story, and all of that shows that when you put someone in a position where they have to make a decision and they want to protect their family and protect children and other people from getting attacked from an animal that has attacked others and killed livestock, that’s the choice I made over 20 years ago. And that I didn’t ask somebody else to take that responsibility for me,” she continued.

Noem also appeared to joke in the book about euthanizing President Biden’s dog, Commander, who was removed from White House grounds after numerous biting incidents.

“What would I do if I was president on the first day in office in 2025? Thanks for asking. I happen to have a list. The first thing I’d do is make sure Joe Biden’s dog was nowhere on the grounds (‘Commander, say hello to Cricket for me’),” Noem wrote. The White House was not amused.

“We learned last week, obviously like all of you, in her book that she killed her puppy," White House press secretary Karine Jean-Pierre told reporters Monday. “You heard me say that was very, very sad. We find her comments from yesterday disturbing. We find them absurd.”

Perhaps more disastrous was the claim Noem made about traveling to North Korea and meeting Kim Jung Un when she served on the House Armed Services Committee in Congress.

“I’m not going to talk about my specific meetings with world leaders. I’m just not going to do that. This anecdote shouldn’t have been in the book and as soon as it was brought to my attention, I made sure that that was adjusted,” she said when pressed about whether the meeting took place.

The publisher of the book, Center Street, announced that subsequent printings of the book would not include the reference. An audiobook, which the governor narrated, is also expected to be edited and updated. The passage in question is brief and sparse in detail.

The North Korean anecdote is two sentences in a 260-page book: “I remember when I met with North Korean dictator Kim Jong Un. I’m sure he underestimated me, having no clue about my experience staring down little tyrants (I’d been a children’s pastor, after all).”

Prior to the book tour, Noem made little secret about her ambitions for national office. She was quick to criticize the field challenging Trump for the nomination, and in February, the governor traveled to Mar-a-Lago to meet with Trump and pitch him on joining the ticket. According to sources with knowledge of the meeting, Noem showed Trump polling from Kaplan Strategies that showed her boosting his chances in Wisconsin and Michigan with her as a running mate.

Doug Kaplan, the pollster who conducted the survey, cautioned in a brief interview with RCP that those positive numbers were from “a lifetime ago.”

Noem is now haunted by the dog she dispatched two decades ago. During a Tuesday interview with Stuart Varney on Fox Business, the governor became impatient with the host when he kept returning the conversation to how the dead puppy affected her chances at the vice presidency.

“Enough, Stuart. This interview is ridiculous, which you are doing right now,” Noem said. “So you need to stop. It is OK. It is. Let’s talk about some real topics that Americans care about.”

“I’m afraid we’re out of time,” Varney responded.

Tyler Durden Fri, 05/10/2024 - 09:30

Boxing Promoter Don King Endorses Trump For President

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

Boxing promoter Don King attends the Presidential Debate at Hofstra University, in Hempstead, N.Y., on Sept. 26, 2016. (Drew Angerer/Getty Images)

Iconic boxing promoter Don King has endorsed former President Donald Trump for president in the 2024 election.

The 92-year-old made the remarks on May 8 on the sidelines of an event after being asked if he has a message for President Trump, who’s facing a bevy of court cases that threaten to derail his presidential campaign.

“Get reelected,” Mr. King said. “And we must reelect him to save ourselves. You know, a vote for Trump is a vote for yourself. Because we’ve got to fight the system of lies and the creation of wrong being right and right being wrong. That’s got to be eliminated.”

He called President Trump “the only man who’s got the intestinal fortitude to be able to stand up and fight the system like it should be fought,”

Mr. King said the former president “underestimated the power of this strong system of corruption and hypocrisy.”

While Mr. King didn’t elaborate on the “system of corruption and hypocrisy” that he had in mind, it could be a reference to the numerous legal battles that the former president is fighting that he and his supporters argue are thinly veiled attempts to use lawfare to derail his comeback bid.

“I want to say to him, let’s [save] America, let’s save ourselves, and then we can help others to be safe,” Mr. King added.

President Trump shared the video on his social media platform, Truth Social, thanking Mr. King for his endorsement and message of encouragement.

‘He’d Be Muhammad Ali’

Mr. King’s sympathies for the former president are well-established, with the boxing promoter being one of few celebrities who endorsed then-candidate Trump in the 2016 election.

Introducing then-candidate Trump at a church event in Ohio in 2016, Mr. King called him “courageous and brave” and said he believed the future president would fix the “corrupt” and “rigged” system and bring the country “back to inclusiveness.”

In mid-2017, after President Trump had spent several months in office, Mr. King told Politico Magazine in an exclusive interview that he believed he was doing an “excellent job” while lamenting the fact that his presidency was being overshadowed by the so-called “Russian collusion” scandal, which later turned out to be a hoax.

At the time, Mr. King told Politico that he believed President Trump was constantly in the crosshairs of the Washington establishment, saying that they would try to “keep him down” at almost any cost—even saying that he warned the president to be on guard for assassination attempts.

“If Trump were a boxer, who would he be?” the interviewer asked the legendary boxing promoter.

“He'd be Muhammad Ali...because he’s going to win,” Mr. King replied. “He’s going to run his mouth, he’s going to talk a lot and he’s going to win.”

The then-U.S. President-elect Donald Trump, along with boxing promoter Don King, answers questions from the media after a day of meetings at Mar-a-Lago in Palm Beach, Fla., on Dec. 28, 2016. (Don Emmert/AFP via Getty Images)

The former president has won the support of a number of prominent figures in the fight world, including Mr. King’s best-known protege, former heavyweight boxing champion Mike Tyson, and Dana White, CEO and president of the Ultimate Fighting Championship (UFC).

Mr. Tyson endorsed then-candidate Trump for the 2016 election, while Mr. White said recently he supports his 2024 comeback bid.

“He should be president of the United States,” Mr. Tyson told HuffPost in an exclusive interview in 2015. The former champion said he thought a business-minded leader like Trump was exactly what the country needed.

“Let’s try something new. Let’s run America like a business, where no colors matter. Whoever can do the job, gets the job,” Mr. Tyson said.

‘Unfazed’

Mr. White gave his endorsement in an appearance on the Lex Fridman podcast in April, calling President Trump “the most resilient human being I’ve ever met.”

“They’re trying to attack him. They’re trying to ruin him—unfazed,” the UFC president said. “He will walk through fire.”

Former President Donald Trump (R), alongside UFC CEO Dana White (L), attends the Ultimate Fighting Championship (UFC) 299 mixed martial arts event at the Kaseya Center in Miami, Fla., on March 9, 2024. (Giorgio Viera/AFP)

Asked if he thinks President Trump will win reelection, Mr. White said he’s unsure given the “dirty” and “ugly” nature of politics.

“Obviously, I’m rooting for him and I’m behind him and I hope he does.”

It comes as the former president has complained about being stuck in a New York courtroom for his so-called “hush money” trial while he could be out campaigning for reelection.

In a case officially known as The People of the State of New York v. Donald J. Trump, the former president is accused of hiding so-called hush money payments to an adult performer by falsifying business records. If found guilty, he could face a prison sentence.

President Trump has repeatedly denied wrongdoing, and before he entered the courtroom on April 15, the first day of the trial, he reiterated his position that the case is politically motivated.

“This is really an attack on a political opponent. That’s all it is,” he told reporters outside the courtroom before going inside.

Tyler Durden Fri, 05/10/2024 - 08:40

US Futures, Global Markets Storm Higher, Eye All-Time Highs

US equity futures pointed to even more gains on the last day of trading, leaving the S&P 500 set for a third weekly rise — the longest run since February. The rally was given fresh legs yesterday by more earnings optimism coupled with disappointing economic data - this time the highest initial jobless claims since last August - that supported the case for Fed rate cuts, but the real test will come with a key US inflation print next week (where we laid out a case for why as OER catches down to real-time rates, CPI may print a big miss).  As of 8:00am, S&P 500 futures higher by 0.3% after the index closed less than 1% away from its all-time high, with Nasdaq futures rising 0.4%. European stocks are up 0.9% set for a new record high with Asian stocks also gaining. Treasuries and the dollar were flat; earlier on Friday, the yuan weakened on the news that Biden’s administration is poised to unveil a sweeping decision on new China tariffs as soon as next week, with the measures expected to focus on industries such as electric vehicles, batteries and solar cells, with existing levies largely being maintained. The macro slate includes May preliminary University of Michigan sentiment and April monthly budget statement.

In premarket trading, 3M Co. rose 1.2% in premarket trading after HSBC raised its recommendation to buy from hold. The bank notes the company’s earnings showed nascent signs of an “inflection in growth and margin gains from restructuring” at the manufacturing giant. Akamai fell 10% after its forecast for adjusted earnings per share for the second quarter missed the average analyst estimate. Analysts note weakness in the infrastructure software company’s content-delivery network business. Here are some other notable premarket movers:

• Bumble rises 3.1% as BofA upgrades the online dating company to buy from neutral on both valuation and upside to growth.
• CRH gains 4.3% after what the analysts see as a positive start with performance driven by pricing, early-season activity and favorable weather in important markets, despite lower volumes in Europe.
• Dutch Bros gains 2.6% after Cowen raises the drive-thru coffee chain’s rating to buy from hold, expecting that 2024 will be a “beat & raise year.”
• Ginkgo Bioworks slumps 11% after the genetic engineering company cut its revenue forecast for the full year, following first-quarter sales that fell short of Wall Street’s expectations. The miss and outlook cut triggered a downgrade at William Blair.
• JFrog drops 12% as the software development company’s earnings report failed to impress investors after this year’s rally. The results could prompt questions around the timing and potential contribution from AI-led workloads, which didn’t appear to have much effect this quarter, Bloomberg Intelligence analyst Sunil Rajgopal wrote in a research note.
• MacroGenics sinks 68% after the drug developer reported five deaths in a mid-stage trial of its investigative therapy for prostate cancer. Analysts downgraded their ratings on the stock as confidence in the firm’s program takes a hit following the safety data.
• Natera rises as much as 20% after boosting its revenue guidance for the full year.
• Novavax surges as much as 217% after the vaccine maker signed a licensing agreement with Sanofi that includes commercializing a combined Covid-19 and flu shot.
• Progyny drops 25% after it reported first quarter revenue below average analyst estimates and cut revenue guidance for the full year. KeyBanc analysts downgraded the fertility benefits management company to sector weight from overweight, writing that they “are becoming weary” as more questions arise on visibility into revenue and customer trends.
• SoundHound AI rises 15% after the voice AI software company reported first-quarter revenue that beat expectations and gave a revenue outlook range for the full year that met the average analyst estimate.
• Sweetgreen climbs 19% after the salad restaurant chain’s revenue topped estimates and it boosted its same-store sales forecast for the full year.
• Unity Software falls as much as 4.2% after the video-game software development company reported an 8% drop in first-quarter revenue. Analysts say the shares will remain rangebound until the company’s new CEO crystallizes his own strategy.
• Yelp drops 4.1% after it adjusted Ebitda guidance for the full year and missed the average analyst estimate. Macro headwinds for restaurants and growing competition from delivery platforms could also pressure the online review company’s revenue, according to Jefferies analysts.

The rebound in stocks found fresh momentum from very poor US unemployment claims Thursday, which backed the case for rate cuts before next week’s key US inflation print. Meanwhile, so-called value and cyclical sectors are helping to broaden out a rally that had been fueled by tech giants. Traders will be watching for hints on the timing of policy easing from Fed officials including Michelle Bowman and Neel Kashkari before next week’s CPI data.

"A rally of the laggards is our key allocation call, and so far, we’re witnessing signs that it’s happening,” said Florian Ielpo, head of macro research at Lombard Odier Asset Management. “For this to persist, the market needs to maintain a delicate balance — a sweet spot where the job market remains mildly soft and earnings growth continues.”

European stocks are set for their best week since the end of January on a slew of better-than-expected earnings reports and growing confidence that interest rate cuts are still possible this year. The Stoxx 600 rises 0.9% to a record high with mining, utility and construction shares leading gains. Here are the biggest European movers:

• Enel shares rise as much as 3.5% after 1Q earnings came in materially above expectations, de-risking the utility firm’s full-year outlook and suggesting it could deliver the top end of its guidance.
• Munich Re shares rise as much as 2.6% after BofA lifts its rating on the company to buy from neutral in a note citing “underappreciated earnings strength.”
• Legrand shares advance as much as 3.3% to highest since January 2022 after Citi double-upgrades to buy from sell.
• EDP shares climb as much as 4.6% after the company said investment will decelerate in 2024-2026 as it focuses on “top projects.”
• IAG shares climb as much as 1.8% after the airline group posted a operating profit beat for the first quarter, driven by ongoing recovery in leisure traffic and the timing of Easter.
• Fluidra shares gains as much as 5.5% after JPMorgan upgrades the Spanish pool maker to overweight from neutral.
• Iveco shares rise as much as 7.1% following its first-quarter results, which Morgan Stanley says represent a positive start to the year for the Italian commercial vehicle maker.
• CCC shares jump as much as 19% after the Polish fashion retailer reported strong 1Q preliminary earnings with a 39% beat on Ebitda.
• Dino Polska shares drop as much as 4.4% after it reported further erosion of Ebidta margin, reflecting an ongoing price war in the Polish food retail market.
• Rightmove shares fall as much as 5.3%. The online property portal reiterated its revenue and margin guidance after tweaking other targets.
• Getinge shares drop as much as 9.7%, the most in more than three months, following a US FDA letter to health care providers expressing safety and quality concerns about some of the Swedish medical technology firm’s cardiovascular devices.
• BFF Bank shares plunge as much as 32%, the most on record, after Bank of Italy ordered a temporary halt on profit distribution and expansion abroad as a result of a probe into the Italian specialty finance company.

Asian stocks tracked the gains in the US where a rise in initial jobless claims spurred a dovish reaction. Hang Seng & Shanghai Comp traded mixed with Hong Kong stocks surging on reports China is considering a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via the Stock Connect, while the mainland faded its initial gains with the US reportedly set to impose tariffs on China EVs and key sectors after a review which could be announced as soon as next week. Nikkei 225 rallied at the open but then slipped from intraday highs with participants reflecting on Household Spending data, US-China and tensions and amid a busy day of earnings releases for Japan. ASX 200 was led by energy, telecoms and financials but with gains capped amid mixed consumer stocks.

In FX, the Bloomberg Dollar Spot Index steadied and Treasury yields were little changed across the curve as traders awaited commentary from several Fed officals; Sterling rose after a much stronger than expected UK GDP print, which saw the country emerge from recession, provided a modicum of support to the pound which is up 0.1% against the dollar. The Norwegian krone tops the G-10 FX pile, rising 0.3% after CPI topped estimates.

• USD/NOK dropped 0.3% to 10.8155 as the Norwegian krone led G-10 gains against the dollar; Norway’s underlying inflation rate fell less than analysts expected last month
• AUD/USD fell as much as 0.3% to 0.6599, while NZD/USD dipped as much as 0.3% to 0.6014, on a report that the US is poised to unveil a sweeping decision on China tariffs
• GBP/USD inched up as much as 0.1% to 1.2541, after data showed the UK economy bounced back from a shallow recession

In rates, treasuries are little changed with futures holding Thursday’s advance, underpinned by gains for gilts following UK data raft including GDP, manufacturing and industrial production. US yields are within 1bp of Thursday’s closing levels, 10-year around 4.46%, with gilts and bunds outperforming by 2bp and 3bp in the sector; curve spreads likewise little changed, 2s10s holding Thursday’s flattening move. Gilts have rallied despite stronger-than-expected UK GDP figures, with UK 10-year yields falling 3bps to 4.11%.

In commodities, Oil prices advance, with WTI rising 0.6% to trade near $79.80 a barrel and near the week’s high. Spot gold climbs 1.1% to around $2,372/oz.

Looking at today's calendar, the US economic data slate includes May preliminary University of Michigan sentiment (10am New York time) and April monthly budget statement (2pm). Fed officials’ scheduled speeches include Bowman (9am), Logan (10am), Kashkari (10am, 2:15pm), Goolsbee (12:45pm, 2:15pm) and Barr (1:30pm)

Market Snapshot

• S&P 500 futures up 0.3% to 5,254.00
• STOXX Europe 600 up 0.7% to 520.47
• MXAP up 0.8% to 177.68
• MXAPJ up 0.9% to 554.50
• Nikkei up 0.4% to 38,229.11
• Topix up 0.5% to 2,728.21
• Hang Seng Index up 2.3% to 18,963.68
• Shanghai Composite little changed at 3,154.55
• Sensex up 0.2% to 72,580.19
• Australia S&P/ASX 200 up 0.4% to 7,748.96
• Kospi up 0.6% to 2,727.63
• German 10Y yield little changed at 2.46%
• Euro little changed at $1.0783
• Brent Futures up 0.2% to $84.02/bbl
• Gold spot up 0.9% to $2,367.89
• US Dollar Index little changed at 105.23

Top Overnight News

• Stocks rallied on earnings optimism and US data that supported the case for interest-rate cuts. A raft of Federal Reserve speakers are slated for Friday as traders await a key US inflation print next week.
• President Joe Biden’s administration is poised to unveil a sweeping decision on China tariffs as soon as next week, one that’s expected to target key strategic sectors while rejecting the across-the-board hikes sought by Donald Trump, people familiar with the matter said.
• Britain bounced back strongly from a shallow recession, providing some relief for Prime Minister Rishi Sunak who has so far struggled to deliver on his promise to grow the economy.
• Money managers are piling into the European Union’s bonds in anticipation of a major shift in their status that would open up the bloc’s debt to a bigger pool of investors.
• JPMorgan Chase & Co. is on track to include India in its emerging market debt index from June with most of its clients ready to trade despite some “teething issues,” according to the firm’s global head of index research.
• China CPCA said China sold 1.55mln passenger cars in April, -5.8% Y/Y; Tesla (TSLA) exported 30,746 China-made vehicles in Apr
• US Treasury Secretary Yellen said inflation has come down substantially but is not where it needs to be, according to a Marketplace interview.
• White House is poised to nominate Kristin Johnson to fill a top role at the Treasury overseeing banks, according to Bloomberg citing sources.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks mostly tracked the gains in the US where a rise in initial jobless claims spurred a dovish reaction. ASX 200 was led by energy, telecoms and financials but with gains capped amid mixed consumer stocks. Nikkei 225 rallied at the open but then slipped from intraday highs with participants reflecting on Household Spending data, US-China and tensions and amid a busy day of earnings releases for Japan. Hang Seng & Shanghai Comp traded mixed with Hong Kong stocks surging on reports China is considering a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought via the Stock Connect, while the mainland faded its initial gains with the US reportedly set to impose tariffs on China EVs and key sectors after a review which could be announced as soon as next week.

Top Asian News

• US is set to impose tariffs on China EVs and key sectors after its Section 301 review as early as next week, according to Bloomberg.
• China is unlikely to lift home purchase restrictions completely, according to CCTV.
• Honda (7267 JT) FY (JPY): Pretax profit 1.64tln, +86.7% Y/Y, Op. Profit 1.38tln, +77% Y/Y; says it will buy back of up to 3.7% of own shares worth JPY 300bln.
• Earthquake felt in Taiwan's capital Taipei; magnitude 5.7, via EMSC.
• China Auto Industry CPCA says market sluggishness was worse than expected while some automakers still derived to produce and resulted in rising inventories at dealerships

European bourses, Stoxx600 (+0.7%) are entirely in the green, taking the lead from a mostly positive APAC session. Both the FTSE 100 and the DAX 40 made fresh ATHs today. European sectors hold a strong positive tilt, with the exception of Autos and Media, with the former continuing the losses seen in the prior session. Utilities takes the top spot, lifted by post-earning strength in Enel (+3.6%) and EDP (+2.5%). US Equity Futures (ES +0.3%, NQ +0.3%, RTY +0.4%) are entirely in the green, albeit modestly so, attempting to build on yesterday’s advances.

Top European News

• UBS expects the BoE to start cutting interest rates in June (prev. expected Aug)
• Over one in two firms with Germany's residential construction sector reported a lack of orders in April, via Ifo; 55.2% (prev. 56.2%) reported this

FX

• Steady trade for the USD after yesterday's data-induced losses dragged DXY to a low of 105.20. Uni. of Michigan is the main data highlight but is very much in the shadow of next week's CPI print. If DXY trundles lower once again, support ahead of the 105 mark comes via the 7th May low at 105.03.
• EUR is steady vs. the USD with EZ drivers once again lacking in today's session. EUR/USD made an incremental high at 1.0786 but catalysts today for a push beyond 1.08 are not obvious. ECB Minutes due at 12:30 BST / 07:30 EDT.
• GBP is the marginal best performer across the majors following hotter-than-expected UK GDP metrics which sent GBP/USD higher from 1.2519 to a 1.2540 peak before running into resistance at the 200DMA.
• USD/JPY's ascent has once again continued after a brief blip yesterday in a week that has seen jawboning from officials fail to stop the rot. The next inflection point will likely be US CPI data.
• Antipodeans are both marginally softer vs. the USD after benefitting yesterday from the dollar's post-data selling pressure. AUD/USD remains on a 0.66 handle in quiet newsflow with the monthly high at 0.6647.
• NOK: A slightly hotter than expected CPI which has sparked some modest NOK strength, sending EUR/NOK lower from 11.6940 to 1.6820.
• PBoC set USD/CNY mid-point at 7.1011 vs exp. 7.2102 (prev. 7.1028).
• CNB Minutes (May): Easing process could be paused/terminated at any point at still restrictive levels. Holub & Frait mentioned the possibility of 75bp of easing, ultimately went for 50bp

Fixed Income

• USTs are flat with specifics light thus far though the docket ahead is packed with multiple Fed speakers. USTs are holding at 109-03+ matching yesterday's auction-driven high but still a handful of ticks shy of the WTD peak at 109-09.
• Gilts gapped higher by 15 ticks despite hawkish direction from the strong UK GDP numbers earlier in the morning. Upside which has continued and extended to a 98.29 fresh WTD high as markets digest the BoE beginning to thread-the-needle to a first cut in the near term.
• Bunds are bid but to a slightly lesser degree than Gilts with specifics light thus far. Upside which has paused at a 131.40 peak shy of 131.63-86 from earlier in the week.
• Italy sells EUR 9.25bln vs exp. EUR 7.5-9.25bln 2.95% 2027, 1.10% 2027, 3.45% 2031, 5.00% 2040, 2.15% 2072 BTP.
• Orders for Italy's BTP Valore reach EUR 11bln (circa. EUR 10bln on Thursday). Books close at 12:00BST

Commodities

• Crude benchmarks in the green but only modestly so as markets await an update to the Israel-Hamas situation after hostage negotiations ended and Israel pledged to continued with its operation in Rafah. Brent July off best levels and currently resides around USD 84.20/bbl.
• Precious metals are supported and seemingly benefitting from the modestly bullish tone for fixed income thus far. XAU up to a USD 2370/oz peak thus far, eclipsing the 21-DMA of USD 2337/oz with ease and bringing USD 2400/oz and then USD 2431/oz into view.
• Base metals are firmer, lifted by the broader risk tone and somewhat softer Dollar; though Aluminium is the standout laggard after a sizeable LME stock update of +424k (prev. -2.75k).
• Saudi's crude oil supply to China to fall by 5.8mln/bbl in June vs May, via Reuters citing sources.
• LME Stocks: Aluminium +424k (prev. -2.75k)

Geopolitics

• Israeli PM Netanyahu said they have destroyed 20 of Hamas's 24 battalions so far and hopes he and US President Biden can overcome disagreements, while he added that they have to defeat Hamas in Rafah.
• Israel's army reportedly carried out bombing operations on buildings east of Rafah in the southern Gaza Strip, according to Al Jazeera.
• US State Department said Secretary of State Blinken confirmed to his Egyptian counterpart US President Biden's "clear" position not to support the Rafah operation, according to Al Arabiya.
• US Secretary of State Blinken is expected to submit Israel conduct report to Congress today and is expected to criticise Israel but say it isn't breaking weapons terms, according to Axios.
• Group of 20 US Senators introduced a bill that would restrict funding to the UN or any organisation that gives the Palestinian Authority higher than observer status, according to Asharq News.

US Event Calendar

• 10:00: May U. of Mich. Sentiment, est. 76.2, prior 77.2
• 10:00: May U. of Mich. Current Conditions, est. 79.0, prior 79.0
• 10:00: May U. of Mich. Expectations, est. 75.0, prior 76.0
• 10:00: May U. of Mich. 1 Yr Inflation, est. 3.2%, prior 3.2%
• 10:00: May U. of Mich. 5-10 Yr Inflation, est. 3.0%, prior 3.0%
• 14:00: April Monthly Budget Statement, est. $250b, prior $176.2b

Central Bank Speakers

• 09:00: Fed’s Bowman Speaks on Financial Stability Risks
• 10:00: Fed’s Logan Participates in Moderated Q&A
• 10:00: Fed’s Kashkari Participates in Q&A
• 12:45: Fed’s Goolsbee Speaks in Moderated Q&A
• 13:30: Fed’s Barr Gives Commencement Speech
• 14:15: Fed’s Kashkari, Goolsbee on CNBC

DB's Jim Reid concludes the overnight wrap

Risk assets posted further gains yesterday, thanks to growing confidence that central banks would still cut rates this year. In part, that was because of the weekly initial jobless claims in the US, which hit an 8-month high and added to fears that the labour market was cooling further. But alongside that, the Bank of England announced their latest policy decision, where Governor Bailey said it was “ likely that we will need to cut bank rate over the coming quarters ”. So this all cemented the theme that global monetary policy was heading towards a less restrictive stance, not least after the Riksbank’s rate cut earlier in the week. The next hurdle will be the US inflation numbers for April next week, but so far this month at least, investors have moved to expect a more dovish stance of monetary policy than they thought would happen at the end of April.

This trend was very helpful for equities, with several European indices up to new records yesterday, including the STOXX 600 (+0.19%), the FTSE 100 (+0.33%) and the DAX (+1.02%). Indeed, it marked a 5th consecutive advance for all three indices, and it leaves the DAX on track for its best weekly performance since November, having risen by +3.81% since the start of this week. Meanwhile in the US, the S&P 500 (+0.51%) was up to a 5-week high, and the index remains on track for a third consecutive weekly gain for the first time since February. On top of that, it’s also been the strongest performance for the S&P 500 over 6 sessions so far this year, having advanced by +3.90% since its recent low on May 1. The gains for the S&P 500 were broad-based with 10 of 11 industry groups higher on the day, and came even as the Magnificent 7 (-0.07%) was weighed down by losses for Nvidia (-1.84%) and Tesla (-1.57%).

That jobless claims data was the initial catalyst for the advance yesterday, and up until that point, S&P 500 futures had actually been in negative territory. The release showed that initial jobless claims were up to 231k (vs. 212k expected) in the week ending May 4, which was their highest level since late-August, and above every economist’s estimate on Bloomberg. But even though the data was weaker than expected, it meant investors grew more confident that the Fed would still cut rates this year, as it added to recent prints suggesting the labour market could be cooling. For instance, last week’s data showed job openings were down to a 3-year low in March, whilst the broader U6 measure of unemployment (which includes the underemployed and those marginally attached to the labour force) rose to its highest in over two years in April, at 7.4%.

But even with the uptick in jobless claims, this isn’t necessarily a leading indicator of a downturn. For instance, there was a previous spike last year, which pushed the 4-week average above 250k by late-June. But after that, the numbers came down again shortly afterwards, and there wasn’t a notable rise in the unemployment rate. And for the time being at least, the smoother 4-week average is still only at 215k, so it’s important to bear in mind that lots of other indicators are still looking more positive, and the Atlanta Fed’s GDPNow indicator is suggesting that Q2 growth will come in at an annualised +4.2% rate.

This belief in future rate cuts was supported by the Bank of England’s latest decision as well. The main headline was that they kept rates unchanged at 5.25%, in line with expectations. But unlike the March meeting, when the vote was 8-1 to keep rates on hold, there was now a 7-2 split after Deputy Governor Ramsden also voted for a cut. Moreover, there was an additional line in the statement, which said that the committee would “consider forthcoming data releases and how these inform the assessment that the risks from inflation persistence are receding.” Then in the press conference, Governor Bailey said that a cut at the next meeting in June was “neither ruled out nor a fait accompli ”, and he suggested that the reductions in bank rate could be “possibly more so than currently priced into market rates”. There are two more CPI prints coming out ahead of the BoE’s next decision, so those will be in focus ahead of that, and this morning we’ve also got the Q1 GDP release shortly after we go to press.

Overall, the decision and these comments led investors to price in a growing probability of a rate cut by the next BoE meeting in June, with overnight index swaps raising the chance from 55% the previous day to 60% by the close. Front-end gilts also rallied on the prospect of faster rate cuts, with the 2yr yield coming down by -5.7bps. 10yr gilts did lose a bit of ground, with yields up +0.2bps, but that was actually an outperformance relative to the rest of Europe, where yields on 10yr bunds (+3.3bps), OATs (+4.3bps) and BTPs (+3.7bps) all saw larger moves higher.

Meanwhile in the US, Treasuries outperformed after the jobless claims data led futures to dial up the likelihood of rate cuts this year. For instance, 46bps of cuts were priced in by the December meeting at the close, up +1.9bps relative to the previous day. In turn, the 2yr yield was down -2.1bps to 4.82%. And 10yr yields were down -4.1bps to 4.45%, with long-dated Treasuries supported by a solid 30yr auction that saw the highest direct bidder share since July.

Overnight in Asia, this strength for risk assets has broadly continued, with the Hang Seng (+1.74%) rising to its highest level in almost nine months, whilst the Nikkei (+0.24%) and the KOSPI (+0.60%) have also advanced. The exception to this has been in mainland China, where the CSI 300 (-0.28%) and the Shanghai Comp (-0.22%) have both lost ground, which comes as a Bloomberg report said that the US would announce new tariffs on China. The report cited people who said an announcement was scheduled for Tuesday, and there would be a focus on strategic sectors including electric vehicles. Elsewhere, US equity futures are also positive this morning, with those on the S&P 500 up +0.09%.

To the day ahead now, and data releases include the UK GDP reading for Q1, Italian industrial production for March, Canadian employment for April, and in the US there’s the University of Michigan’s preliminary consumer sentiment index for May. From central banks, we’ll hear from the Fed’s Bowman, Logan, Kashkari, Goolsbee and Barr, the ECB’s Cipollone and Elderson, and the BoE’s Pill and Dhingra. We’ll also get the account from the ECB’s April meeting.

Tyler Durden Fri, 05/10/2024 - 08:15

United Airlines Boeing 737 Makes Emergency Return To Japanese Airport After Wing Flap "Irregularity" 

Wednesday:

• Boeing 767 Cargo Plane Crash-Landed In Turkey

Thursday:

• Boeing 737 Crashes After Failed Takeoff At African Airport

Good morning, readers. There has been another Boeing incident overnight. This news is particularly alarming for anyone flying domestically or internationally on a Boeing jet, especially given the two Boeing mishaps earlier this week. 

Aviation news website Simply Flying reported a United Airlines Boeing 737-800 that departed from Fukuoka Airport in Japan earlier today experienced an "irregularity" with a wing flap(s). 

UA166, which was taking off from Fukuoka Airport to Guam Antonio B. Won Pat International Airport, climbed to an altitude of 10,000 feet after takeoff, then leveled off and held a holding pattern. Around this time, pilots detected a wing flap(s) issue. 

"Eventually, after holding for more than 30 minutes, the aircraft began its approach to FUK by descending and lining up on the airport's sole runway, runway 16/34, with the United Airlines aircraft landing at the aircraft on the former configuration," Simply Flying said. 

Simply Flying, local media outlets nor officials provided additional information about the flap 'issue.' 

What's important to understand here is that flaps are crucial for producing additional lift in takeoff and landing procedures. For the pilots out there, the flaps are critical for more lift on a 'normal' approach that provides reduced speed and controlled flight ahead of the round-out phase of landing. In other words, with full flaps deployed, a steep approach on landing means reduced speed and shorter runway distance is needed. A straight-line approach with no flaps deployed means higher speed and more runway distance required.

Given the brief aviation lesson about wing flaps, the 737-800 usually requires 6,500–7,000 feet for landing. Many calculations go into that, including weight and wind. Data shows the plane used the entire 9,186-foot runway, a possible indication of wing flap issues. 

The good news is that the plane landed without an issue, and all 49 souls onboard were safe. 

Another day, another issue with Boeing.

Tyler Durden Fri, 05/10/2024 - 07:45

As The Dollar Falters, Gold Becomes Insurance, Not Speculation

Authored by Douglas French via The Mises Institute,

Economics trumps sentimentality, and gold’s elevated price has some people raiding the family jewelry box to pay bills. 

“Young people are not wearing grandma’s jewels. Most of the young people, they want an Apple watch. They don’t want a pocket watch,” Tobina Kahn, president of House of Kahn Estate Jewelers told Bloomberg.

“Sentimental is now out the door.”

When times are tough, treasures change hands, the late Burt Blumert, once a gold dealer and Mises Institute Board Chairman, used to say.

“Prices are high, and I need cash,” Branden Sabino, a thirty-year-old information technology worker said, adding that with the cost of rent, groceries, and car insurance rising, he doesn’t have any savings. He sold a gold necklace and a gold ring to King Gold and Pawn on Avenue 5 in Brooklyn.

“People are using gold as an ATM they never had,” said store owner Gene Furman.

At King Gold, fifty-five-year-old Mirsa Vijil pawned a bracelet to pay her gas bill.

“Gold is high,” she said, adding she’d never pawned her jewelry before but will do it again if she needs to.

Adrian Ash, director of research at online gold investment service BullionVault says there is twice as much selling as a year ago on BullionVault’s platform. “People are very happy to take this price.”

“It’s very busy and we are getting more calls than ever before about clients wanting to bring in their jewels,” Kahn said.

“I’m telling the clients to bring them in now, as we are at unprecedented levels.”

So while there is plenty of liquidating to pay the bills, demand at the United States Mint is tepid, with sales in March the worst since 2019 for its American Eagle gold coin.

It turns out more than a few of those well-publicized Costco gold bar buyers are having trouble selling them. The bars, not being American Eagles or other similar gold coins, are not as liquid, given that the seller, Costco, will not buy them back. The Wall Street Journal reports, thirty-three-year old Adam Xi called five different gold dealers to get a price he would accept for the gold bar he bought at Costco in October.

He was offered $200 less by one dealer than the $2,000 he had paid. But he found a Philadelphia coin dealer near his home willing to pay $1,960, or twenty dollars under market price.

Mr. Xi has learned, or should have learned, that buying gold to turn a quick profit is a fantasy. His plan was to rack up credit-card points buying the gold and then quickly resell it for a profit.

Buyers can expect their gold to immediately lose around 5 percent of its value, according to Tom Graff, chief investment officer at the wealth advising company Facet. One pays a premium to buy and pays fees to sell.

“You need a holding period that’s long enough to overwhelm that cost,” said Graff.

Luke Greib told the Wall Street Journal that he sold a one-ounce Credit Suisse bar on a Reddit page dedicated to trading precious metals to avoid taxes and fees.

Buying physical gold is purchasing insurance against monetary mischief by the Federal Reserve, not to earn a profit via a quick flip.

Perhaps it’s hard to imagine currency destruction so devastating that your gold would serve as not only a store of value but a medium of exchange. Peter C. Earle explains in a piece for the American Institute for Economic Research, “During the peak of its 2008 hyperinflation, [Zimbabwe] experienced a catastrophic economic downturn, characterized by the issuance of billion—and trillion-dollar banknotes that were, despite their nominal enormity, virtually worthless.”

Dr. Earle writes that twenty-eight years of inflation “topped a total 231 million percent” and “the ZWD was demonetized in 2009.” The government is making its sixth attempt at a new currency, Zimbabwe gold (ZiG). “ZiG is there to stay forever,” said Vice President Constantino Chiwenga. “This bold step symbolizes government’s unwavering commitment to the de-dollarization program premised on fiscal discipline, monetary prudence and economic revitalization.”

Reportedly, ZiG “is backed by a basket of precious metals including about 2.5 tons of gold along with $100 million of foreign currency reserves held by the central bank.” As always, the Zimbabwe authorities are already blaming speculators for price increases. “Speculators should cease,” Chiwenga said. “Behave, or you get shut down or we lock you up.”

Dr. Earle has his doubts about whether the Zimbabwean authorities will maintain the ZiG backing with the required rigor. While he hopes for success, “Without fundamental changes guaranteeing private property protection, pro-market reforms, and safeguards against corruption, though, the ZiG is likely to retrace the unfortunate steps of its predecessors.”

The reason to buy and hold gold is just in case the Federal Reserve goes the way of Zimbabwe.

Tyler Durden Fri, 05/10/2024 - 07:20

Six Reasons To Own Bitcoin In Retirement

Via BitcoinMagazine.com,

For newcomers, especially those in and around retirement age, the idea of investing in or owning bitcoin can evoke reactions from skepticism to disbelief. If you look beyond the popular narratives, however, you might find there is more to the story than first impressions suggest.

Here are six reasons to consider owning at least some bitcoin during retirement.

1. BITCOIN HELPS BROADEN YOUR ASSET ALLOCATION BASE

Traditionally, investors use a strategy called asset allocation to distribute and shield funds from investment risk over time. A sound asset allocation strategy is the antidote to putting all of your eggs in one basket. There are several types of asset “classes” or categories over which to distribute risk. Customarily, advisors seek to establish a dynamic mix between debt instruments (i.e., bonds), equities (i.e., stocks), real estate, cash, and commodities.

The more categories you employ to distribute your assets and the less correlated those categories are, the better your chances of balancing your risk, at least theoretically. Recently, due to unintended consequences caused by the aggressive expansion of societal debt and the money supply, assets that were previously less correlated now tend to behave more in kind with one another. When one sector gets hammered today, several sectors often suffer together.

Regardless of these present-day conditions, asset allocation remains a well-conceived strategy for moderating risk. While still in its relative infancy, bitcoin represents an entirely new asset class. Because of this, owning at least some bitcoin, especially due to its distinct properties when compared to other “cryptocurrencies,” provides an opportunity to broaden your asset base and more effectively distribute your overall risk.

2. BITCOIN OFFERS A HEDGE AGAINST INFLATION AND CURRENCY DEBASEMENT

As a retiree, protecting yourself from inflation is crucial to preserving your long-term purchasing power. In the asset allocation discussion above, we referenced the recent and aggressive money supply expansion. Everyone who has lived long enough to approach retirement age knows that a dollar no longer buys what it used to. When the government issues large amounts of new money, it debases the value of the dollars already in circulation. This generally pushes prices higher as newly created dollars begin to chase the existing limited supply of goods and services.

Our own Parker Lewis touched on this extensively in his Gradually, Then Suddenly series:

In summary, when trying to understand bitcoin as money, start with gold, the dollar, the Fed, quantitative easing and why bitcoin’s supply is fixed. Money is not simply a collective hallucination or a belief system; there is rhyme and reason. Bitcoin exists as a solution to the money problem that is global QE and if you believe the deterioration of local currencies in Turkey, Argentina or Venezuela could never happen to the U.S. dollar or to a developed economy, we are merely at a different point on the same curve.

In contrast to fiat currencies, no one can increase the supply and arbitrarily reduce bitcoin’s value. There are no centralized authorities that govern its monetary policy. Despite arguments to the contrary, bitcoin is similar to gold—but not exactly, because gold miners continue to inflate the supply of gold each year at a rate of 1-2%.

As bitcoin is slowly introduced to the circulating supply (i.e., mined), its inflation rate decreases and will eventually cease. This fact makes bitcoin uniquely scarce among global monetary assets. Ultimately, this scarcity, along with bitcoin’s other monetary properties, should safeguard its purchasing power. As such, owning bitcoin during retirement offers you a hedge against inflation.

3. BITCOIN OFFERS AN OPPORTUNITY FOR ASYMMETRIC RETURNS

Bitcoin’s capacity to mitigate many of the challenges we discuss here rests on its ability to achieve asymmetric returns. Its supply is fixed (there will only ever be 21,000,000 bitcoin), and demand for the asset is growing steadily. As this limited supply collides with increased store-of-value adoption from individuals, institutions, and governments, bitcoin has the potential to dwarf the returns of nearly every competing asset class.

It’s worth noting that people generally improve their returns with bitcoin when they hold it for the long term. In the modern era, retirements lasting decades or more are increasingly common. Over such time periods, even a limited allocation to bitcoin offers ample opportunity to benefit from its upside potential. You just need time to hold through the short-term volatility, which contrary to popular belief, is not evidence of it being a poor store of value.

Sequestering a portion of funds solely for appreciation during retirement runs somewhat counter to conventional wisdom. Modern retirement planning generally optimizes for the liquidation of portfolio funds to provide income. However, setting aside a small amount of bitcoin—kept steadfastly gated from funds earmarked for income—opens the door to benefit from the monetization of bitcoin’s limited supply.

4. BITCOIN OFFERS PROTECTION FROM THE RISK OF LONG-TERM BONDS

Conventionally, high-grade bonds—held directly or as fund shares—make up a significant part of most retirement portfolios due to their low risk levels and tendency toward capital preservation. However, things have changed.

Monetary expansion and increases in societal debt have forced bond yields—or the amount of interest paid (i.e., coupon)—to historically low levels. The yields on most bonds today fall well below the rate of inflation. This “negative real yield” means that owning a bond can cost you money. But the difficulty doesn’t end there.

Because retirees need funds from their portfolios to pay bills, they generally must sell assets at current market rates to derive income throughout retirement. In the case of bonds, at present, this can be very problematic. Consider the following equations.

• How much money does it take for a bond paying a 2% rate to yield $20? Answer: $1,000. ($1,000 x 2% = $20)

• How much money does it take for a bond paying a 4% rate to yield $20? Answer: $500. ($500 x 4% = $20)

These two equations reveal that to yield the same $20 return, the market value of the underlying bond changes based on the interest rate promised.

• When interest rates go up, the market value of bonds goes down.

• When interest rates go down, the market value of bonds goes up.

The market value of bonds has an inverse relationship to interest rates. Consider that interest rates today hover near historic lows. Over the next twenty to thirty years, what will happen to the market value of bonds held by retirees if interest rates increase substantially? The answer: the market value of their bonds will collapse.

This changes the entire risk paradigm for bonds in retirement portfolios and potentially makes them far less safe than typically imagined. Bitcoin exists in a separate asset class from bonds; it is a bearer instrument that is not exposed to the same money market risks. As such, owning bitcoin may help you offset at least some of the potential risk incurred from owning bonds in retirement.

5. BITCOIN OFFERS A POTENTIAL SOLUTION FOR LONG-TERM HEALTHCARE RISK

Another area of concern for retirees is the cost of healthcare. Here, I am not referring so much to ordinary medical bills but rather to the potential to incur long-term care expenses in later age. Insurance is available for long-term care, but it has some unique and increasingly difficult challenges to overcome.

Healthcare, in general, takes a double-hit when it comes to price inflation. Not only do healthcare costs rise due to monetary debasement, but healthcare faces additional headwinds from demand spurred by growth in the aging population.

Source: Administration for Community Living – 2020 Profile of Older Americans

States regulate insurance for long-term care. To keep policyowners safe, insurers face scrutiny over where and how they invest policy premiums. To preserve capital required for future claims, insurers generally rely on low-risk, intermediate and long-term bonds. However, as our discussion above on bonds reveals, low yields and the potential for rising rates complicate this practice. One immediate fallout is that premiums for long-term care insurance policies have risen substantially.

We noted earlier bitcoin’s usefulness as an inflation hedge and its potential for long-term price appreciation. As it relates to long-term healthcare, it may make sense to set aside some bitcoin explicitly dedicated as a hedge for this rapidly increasing expense.

6. BITCOIN OFFERS YOU INDIVIDUAL SOVEREIGNTY

The final reason we’ll consider for owning bitcoin in retirement is that it offers you increased individual sovereignty. Bitcoin provides you a level of ownership that is not achievable with other assets. It can easily be carried across borders with a hardware wallet or seed phrase, for example, or transferred peer-to-peer anywhere in the world at low cost.

If you hold bitcoin securely in a wallet you control, no central bank can steal the value of your bitcoin by printing it into oblivion. No CEO can dilute its value by issuing more of its “shares.” Nor can a bank arbitrarily block access to or confiscate your funds. Unlike centralized financial custodians, which can be ordered to freeze or withhold funds on the whims of government or other third-party authorities, bitcoin with keys properly held is resistant to these kinds of overreach.

Specifically for retirement purposes, you can also hold your own keys for bitcoin in an IRA. Products like the Unchained IRA are a robust tool for building and saving your wealth on a tax-advantaged basis. And holding your bitcoin keys in the form of a multisig collaborative custody vault allows you to eliminate all single points of failure while you do so.

SOUND FINANCIAL PRINCIPLES AND OWNING BITCOIN

Benefitting from bitcoin does not require committing to wild speculation or thoughtless abandonment of sound financial principles. In contrast, the more you look at bitcoin through sound financial principles and apply them to your thinking, the greater the opportunities it provides. One steadfast financial principle that coincides with bitcoin ownership is prudence.

Macro-economic investment strategist Lyn Alden often speaks of establishing a “non-zero position” in bitcoin (i.e., owning at least some). The risk of losing a few portfolio percentage points in a worst-case scenario is, in my estimation, worth the potential upside. But to be clear, each person’s situation is unique. You must do your own research and make the best decisions you can about what works in your particular scenario.

*  *  *

Visit Unchained.com for $100 off any Unchained financial services product with code “BTCMAG100”

Tyler Durden Fri, 05/10/2024 - 06:30

New York Flight Attendants Accused Of Smuggling Millions In Drug Money To Dominican Republic

Four flight attendants from the New York City area have been accused of participating in a multimillion-dollar drug money smuggling operation which saw $8 million make its way to the Dominican Republic, according to the U.S. Attorney’s Office for the Southern District of New York.

The accused, identified as Jarol Fabio, 35, of New York City; Charlie Hernandez, 42, of West New York, New Jersey; Sarah Valerio Pujols, 42, of the Bronx; and Emmanuel Torres, 34, of Brooklyn, allegedly transported the funds over a span of several years, exploiting their positions as flight attendants to bypass the stringent security measures in place at JFK International Airport.

“These flight attendants smuggled millions of dollars of drug money and law enforcement funds that they thought was drug money from the United States to the Dominican Republic over many years by abusing their privileges as airline employee[s]," stated U.S. Attorney Damien Williams. "Today’s charges should serve as a reminder to those who break the law by helping drug traffickers move their money that crime doesn’t pay."

According to prosecutors, the scheme involved using their status as "Known Crewmembers"—a designation that allows flight crew members to undergo less rigorous security screenings—to smuggle large sums of cash without detection. This privilege, intended to streamline operations for crew members, became their tool for illegal activities.

Delta Airlines, where two of the defendants were employed, has been cooperative with the authorities following the revelation that security protocols meant to protect the passengers were systematically abused.

According to court documents, the detailed operation was exposed with the help of two cooperating witnesses, themselves previously arrested on money laundering charges. These witnesses played a pivotal role in unveiling the transactions that tied some of the smuggled funds to fentanyl sales, adding a dire public health dimension to the criminal activities.

In one incident, prosecutors detailed how Hernandez and Pujols divided over $120,000 in drug money in December 2019, with each taking their share on subsequent trips to the Dominican Republic. Such episodes illustrate the methodical approach taken to avoid detection while exploiting their roles within the airline industry.

If convicted, the penalties are severe. Torres and Fabio face up to 15 years in prison, Hernandez could see 20 years, and Pujols, facing an additional smuggling charge, could be sentenced to up to 25 years. These stiff potential sentences reflect the serious nature of their alleged crimes, which compromised airport security systems and endangered public trust in the safety of air travel.

Tyler Durden Fri, 05/10/2024 - 05:45

Peter Schiff: Printing Money Is Not the Cure for Cononavirus



In his most recent podcast, Peter Schiff talked about coronavirus and the impact that it is having on the markets. Earlier this month, Peter said he thought the virus was just an excuse for stock market woes. At the time he believed the market was poised to fall anyway. But as it turns out, coronavirus has actually helped the US stock market because it has led central banks to pump even more liquidity into the world financial system. All this means more liquidity — central banks easing. In fact, that is exactly what has already happened, except the new easing is taking place, for now, outside the United States, particularly in China.” Although the new money is primarily being created in China, it is flowing into dollars — the dollar index is up — and into US stocks. Last week, US stock markets once again made all-time record highs. In fact, I think but for the coronavirus, the US stock market would still be selling off. But because of the central bank stimulus that has been the result of fears over the coronavirus, that actually benefitted not only the US dollar, but the US stock market.” In the midst of all this, Peter raises a really good question. The primary economic concern is that coronavirus will slow down output and ultimately stunt economic growth. Practically speaking, the world would produce less stuff. If the virus continues to spread, there would be fewer goods and services produced in a market that is hunkered down. Why would the Federal Reserve respond, or why would any central bank respond to that by printing money? How does printing more money solve that problem? It doesn’t. In fact, it actually exacerbates it. But you know, everybody looks at central bankers as if they’ve got the solution to every problem. They don’t. They don’t have the magic wand. They just have a printing press. And all that creates is inflation.” Sometimes the illusion inflation creates can look like a magic wand. Printing money can paper over problems. But none of this is going to fundamentally fix the economy. In fact, if central bankers were really going to do the right thing, the appropriate response would be to drain liquidity from the markets, not supply even more.” Peter explained how the Fed was originally intended to create an “elastic” money supply that would expand or contract along with economic output. Today, the money supply only goes in one direction — that’s up. The economy is strong, print money. The economy is weak, print even more money.” Of course, the asset that’s doing the best right now is gold. The yellow metal pushed above $1,600 yesterday. Gold is up 5.5% on the year in dollar terms and has set record highs in other currencies. Because gold is rising even in an environment where the dollar is strengthening against other fiat currencies, that shows you that there is an underlying weakness in the dollar that is right now not being reflected in the Forex markets, but is being reflected in the gold markets. Because after all, why are people buying gold more aggressively than they’re buying dollars or more aggressively than they’re buying US Treasuries? Because they know that things are not as good for the dollar or the US economy as everybody likes to believe. So, more people are seeking out refuge in a better safe-haven and that is gold.” Peter also talked about the debate between Trump and Obama over who gets credit for the booming economy – which of course, is not booming.

We are living in crazy times. I have a hard time believing that most of the general public is not awake, but in reality, they are. We've never seen anything like this; I mean not even under Obama during the worst part of the Great Recession." Now the Fed is desperately trying to keep interest rates from rising. The problem is that it's a much bigger debt bubble this time around , and the Fed is going to have to blow a lot more air into it to keep it inflated. The difference is this time it's not going to work." It looks like the Fed did another $104.15 billion of Not Q.E. in a single day. The Fed claims it's only temporary. But that is precisely what Bernanke claimed when the Fed started QE1. Milton Freedman once said, "Nothing is so permanent as a temporary government program." The same applies to Q.E., or whatever the Fed wants to pretend it's doing. Except this is not QE4, according to Powell. Right. Pumping so much money out, and they are accusing China of currency manipulation ? Wow! Seriously! Amazing! Dump the U.S. dollar while you still have a chance. Welcome to The Atlantis Report. And it is even worse than that, In addition to the $104.15 billion of "Not Q.E." this past Thursday; the FED added another $56.65 billion in liquidity to financial markets the next day on Friday. That's $160.8 billion in two days!!!! in just 48 hours. That is more than 2 TIMES the highest amount the FED has ever injected on a monthly basis under a Q.E. program (which was $80 billion per month) Since this isn't QE....it will be really scary on what they are going to call Q.E. Will it twice, three times, four times, five times what this injection per month ! It is going to be explosive since it takes about 60 to 90 days for prices to react to this, January should see significant inflation as prices soak up the excess liquidity. The question is, where will the inflation occur first . The spike in the repo rate might have a technical explanation: a misjudgment was made in the Fed's money market operations. Even so, two conclusions can be drawn: managing the money markets is becoming harder, and from now on, banks will be studying each other's creditworthiness to a greater degree than before. Those people, who struggle with the minutiae of money markets, and that includes most professionals, should focus on the causes and not the symptoms. Financial markets have recovered from each downturn since 1980 because interest rates have been cut to new lows. Post-2008, they were cut to near zero or below zero in all major economies. In response to a new financial crisis, they cannot go any lower. Central banks will look for new ways to replicate or broaden Q.E. (At some point, governments will simply see repression as an easier option). Then there is the problem of 'risk-free' assets becoming risky assets. Financial markets assume that the probability of major governments such as the U.S. or U.K. defaulting is zero. These governments are entering the next downturn with debt roughly twice the levels proportionate to GDP that was seen in 2008. The belief that the policy worked was completely predicated on the fact that it was temporary and that it was reversible, that the Fed was going to be able to normalize interest rates and shrink its balance sheet back down to pre-crisis levels. Well, when the balance sheet is five-trillion, six-trillion, seven-trillion when we're back at zero, when we're back in a recession, nobody is going to believe it is temporary. Nobody is going to believe that the Fed has this under control, that they can reverse this policy. And the dollar is going to crash. And when the dollar crashes, it's going to take the bond market with it, and we're going to have stagflation. We're going to have a deep recession with rising interest rates, and this whole thing is going to come imploding down. everything is temporary with the fed including remaining off the gold standard temporary in the Fed's eyes could mean at least 50 years This liquidity problem is a signal that trading desks are loaded up on inventory and can't get rid of it. Repo is done out of a need for cash. If you own all of your securities (i.e., a long-only, no leverage mutual fund) you have no need to "repo" your securities - you're earning interest every night so why would you want to 'repo' your securities where you are paying interest for that overnight loan (securities lending is another animal). So, it is those that 'lever-up' and need the cash for settlement purposes on securities they've bought with borrowed money that needs to utilize the repo desk. With this in mind, as we continue to see this need to obtain cash (again, needed to settle other securities purchases), it shows these firms don't have the capital to add more inventory to, what appears to be, a bloated inventory. Now comes the fun part: the Treasury is about to auction 3's, 10's, and 30-year bonds. If I am correct (again, I could be wrong), the Fed realizes securities firms don't have the shelf space to take down a good portion of these auctions. If there isn't enough retail/institutional demand, it will lead to not only a crappy sale but major concerns to the street that there is now no backstop, at all, to any sell-off. At which point, everyone will want to be the first one through the door and sell immediately, but to whom? If there isn't enough liquidity in the repo market to finance their positions, the firms would be unable to increase their inventory. We all saw repo shut down on the 2008 crisis. Wall St runs on money. . OVERNIGHT money. They lever up to inventory securities for trading. If they can't get overnight money, they can't purchase securities. And if they can't unload what they have, it means the buy-side isn't taking on more either. Accounts settle overnight. This includes things like payrolls and bill pay settlements. If a bank doesn't have enough cash to payout what its customers need to pay out, it borrows. At least one and probably more than one banks are insolvent. That's what's going on. First, it can't be one or two banks that are short. They'd simply call around until they found someone to lend. But they did that, and even at markedly elevated rates, still, NO ONE would lend them the money. That tells me that it's not a problem of a couple of borrowers, it's a problem of no lenders. And that means that there's no bank in the world left with any real liquidity. They are ALL maxed out. But as bad as that is, and that alone could be catastrophic, what it really signals is even worse. The lending rates are just the flip side of the coin of the value of the assets lent against. If the rates go up, the value goes down. And with rates spiking to 10%, how far does the value fall? Enormously! And if banks had to actually mark down the value of the assets to reflect 10% interest rates, then my god, every bank in the world is insolvent overnight. Everyone's capital ratios are in the toilet, and they'd have to liquidate. We're talking about the simultaneous insolvency of every bank on the planet. Bank runs. No money in ATMs, Branches closed. Safe deposit boxes confiscated. The whole nine yards, It's actually here. The scenario has tended to guide toward for years and years is actually happening RIGHT NOW! And people are still trying to say it's under control. Every bank in the world is currently insolvent. The only thing keeping it going is printing billions of dollars every day. Financial Armageddon isn't some far off future risk. It's here. Prepare accordingly. This fiat system has reached the end of the line, and it's not correct that fiat currencies fail by design. The problem is corruption and manipulation. It is corruption and cheating that erodes trust and faith until the entire system becomes a gigantic fraud. Banks and governments everywhere ARE the problem and simply have to be removed. They have lost all trust and respect, and all they have left is war and mayhem. As long as we continue to have a majority of braindead asleep imbeciles following orders from these psychopaths, nothing will change. Fiat currency is not just thievery. Fiat currency is SLAVERY. Ultimately the most harmful effect of using debt of undefined value as money (i.e., fiat currencies) is the de facto legalization of a caste system based on voluntary slavery. The bankers have a charter, or the legal *right*, to create money out of nothing. You, you don't. Therefore you and the bankers do not have the same standing before the law. The law of the land says that you will go to jail if you do the same thing (creating money out of thin air) that the banker does in full legality. You and the banker are not equal before the law. ALL the countries of the world; Islamic or secular, Jewish or Arab, democracy or dictatorship; all of them place the bankers ABOVE you. And all of you accept that only whining about fiat money going down in exchange value over time (price inflation which is not the same as monetary inflation). Actually, price inflation itself is mainly due to the greed and stupidity of the bankers who could keep fiat money's exchange value reasonably stable, only if they wanted to. Witness the crash of silver and gold prices which the bankers of the world; Russian, American, Chinese, Jewish, Indian, Arab, all of them collaborated to engineer through the suppression and stagnation of precious metals' prices to levels around the metals' production costs, or what it costs to dig gold and silver out of the ground. The bankers of the world could also collaborate to keep nominal prices steady (as they do in the case of the suppression of precious metals prices). After all, the ability to create fiat money and force its usage is a far more excellent source of power and wealth than that which is afforded simply by stealing it through inflation. The bankers' greed and stupidity blind them to this fact. They want it all, and they want it now. In conclusion, The bankers can create money out of nothing and buy your goods and services with this worthless fiat money, effectively for free. You, you can't. You, you have to lead miserable existences for the most of you and WORK in order to obtain that effectively nonexistent, worthless credit money (whose purchasing/exchange value is not even DEFINED thus rendering all contracts based on the null and void!) that the banker effortlessly creates out of thin air with a few strokes of the computer keyboard, and which he doesn't even bother to print on paper anymore, electing to keep it in its pure quantum uncertain form instead, as electrons whizzing about inside computer chips which will become mute and turn silent refusing to tell you how many fiat dollars or euros there are in which account, in the absence of electricity. No electricity, no fiat, nor crypto money. It would appear that trust is deteriorating as it did when Lehman blew up . Something really big happened that set off this chain reaction in the repo markets. Whatever that something is, we aren't be informed. They're trying to cover it up, paper it over with conjured cash injections, play it cool in front of the cameras while sweating profusely under the 5 thousands dollar suits. I'm guessing that the final high-speed plunge into global economic collapse has begun. All we see here is the ripples and whitewater churning the surface, but beneath the surface, there is an enormous beast thrashing desperately in its death throws. Now is probably the time to start tying up loose ends with the long-running prep projects, just saying. In other words, prepare accordingly, and Get your money out of the banks. I don't care if you don't believe me about Bitcoin. Get your money out of the banks. Don't keep any more money in a bank than you need to pay your bills and can afford to lose.











The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more













The Financial Armageddon Economic Collapse Blog tracks trends and forecasts , futurists , visionaries , free investigative journalists , researchers , Whistelblowers , truthers and many more

The FBI released a summary of its file from the Hillary Clinton email investigation on Friday, showing details of Clinton's explanation of her use of a private email server to handle classified communications. The release comes nearly two months after FBI Director James Comey announced that although Clinton's handling of classified information was "extremely careless," it did not rise to the level of a prosecutable offense. Attorney General Loretta Lynch announced the next day that she would not pursue charges in the matter. "We are making these materials available to the public in the interest of transparency and in response to numerous Freedom of Information Act (FOIA) requests," the FBI noted in a statement sent to reporters with links to the documents. The documents include notes from Clinton's July 2 interview with agents, as well as a "factual summary of the FBI's investigation into this matter," according to the FBI release. Throughout her interview with agents, Clinton repeatedly said she relied on the career professionals she worked with to handle classified information correctly. The agents asked about a series of specific emails, and in each case Clinton said she wasn't worried about the particular material being discussed on a nonclassified channel.