Zero Hedge

In Landmark Free Speech Case, SCOTUS Rules Schools Can't Police Social Media Posts Made Off-Campus

In Landmark Free Speech Case, SCOTUS Rules Schools Can't Police Social Media Posts Made Off-Campus

Authored by Angela Morabito via Campus Reform,

In a landmark decision on campus free speech, the Supreme Court today ruled in an 8 to 1 vote in Mahanoy Area School District v. B.L. that students' social media speech conducted off campus is protected by the First Amendment.

The case involved a disgruntled cheerleader, B.L. was a student at Mahanoy Area High School in Mahanoy City, Pennsylvania, who tried out for the school’s varsity cheerleading squad.

When she did not make the varsity cheer, she was offered a spot on the cheerleading squad’s junior varsity team.

Justice Stephen Breyer states with considerable restraint:

“B.L. did not accept the coach’s decision with good grace, particularly because the squad coaches had placed an entering freshman on the varsity team.”

B.L. met a friend at the Cocoa Hut, a local convenience store, and used her phone to post two photos on Snapchat.

In the first image, both B. L. and her friend are shown with middle fingers raised with the caption:

“F**k school f**k softball f**k cheer f**k everything.

In the second image, there is just a caption, which read:

“Love how me and [another student] get told we need a year of jv before we make varsity but tha[t] doesn’t matter to anyone else?”

Critically, she was off campus when posting the Snapchat on a weekend day.

A lower court decided that the school overstepped by kicking B.L. off of the junior varsity squad, but the school district appealed.

Justice Breyer, writing for the majority, noted:

"It might be tempting to dismiss B.L.’s words as unworthy of the robust First Amendment protections discussed herein. But sometimes it is necessary to protect the superfluous in order to preserve the necessary. "

Only Justice Clarence Thomas dissented.

As a result of this decision, schools will no longer be able to retaliate when students voice their opinions off campus, so long as the speech in question is not disruptive to the function of the school.

The "substantial disruption" test was established in Tinker v. Des Moines, which found that students were within their rights to wear arm bands protesting the Vietnam War to school because it did not substantially disrupt the school's operations.

During oral arguments in April, B.L.'s lawyer told the Court that she "was punished for merely expressing frustration with a four-letter word to her friends outside of school on a weekend. Her message may seem trivial, but for young people, the ability to voice their emotions to friends without fear of school censorship may be the most important freedom of all."

Campus Reform has reported on several instances of colleges overstepping their control of student speech on social media. Wesleyan College expelled a student for racist social media posts and then reversed the expulsion when it learned that she didn't make the offensive posts. The University of Tennessee nearly expelled a student for posting Cardi B lyrics on social media. 

Tyler Durden Wed, 06/23/2021 - 12:59

"I Regret Any Harm": Short Seller Posts Public Apology In Rare Win For Targeted Company

"I Regret Any Harm": Short Seller Posts Public Apology In Rare Win For Targeted Company

Usually, when short sellers target a company, it's the executives that wind up posting apologies - or in the case of a company like Lordstown Motors or Nikola, resigning.

But in a rare win for a targeted company, an activist short seller has posted a public apology online this week to a company that they targeted. Real estate investment trust Farmland Partners Inc. won the day against short seller Quinton Mathews, who had posted criticism of the company under the pseudonym Rota Fortunae.

As a result of a lawsuit against him, he has settled by paying the company restitution and "a multiple" of the profits on his short bet in 2018, according to Reuters. His research helped wipe "as much as $115 million" off the value of Farmland Partners. 

As part of the settlement, Mathews conceded that "many of the key statements" in his report were wrong. "I regret any harm the article and its inaccuracies caused," he said in an announcement on both Twitter and Seeking Alpha. 

"Investors already recognize that the company was the victim of a short and distort scheme," said Paul Pittman, Farmland's chief executive officer. 

Jacob Frenkel, an attorney with Dickinson Wright not involved in the case, said Farmland's win could embolden other companies that are targets of short sellers. "It's highly unusual and refreshing to see a company take on this fight, because most will take the short term blow of the attack without pursuing legal vindication," he said.

Abby Estikangi-Carmel of Seeking Alpha noted that authors certify that they were "not paid to post" and, for short reports, "that the assertion was run by the target company."

"Regardless of the steps you take, a bad actor may decide to defraud us by violating our policies, as evidently happened here. Thankfully, it appears to be an isolated incident," Estikangi-Carmel concluded.

The settlement concludes: "Given the many inaccuracies in the article, I will refrain from commenting on FPI, its employees and its performance going forward."

Tyler Durden Wed, 06/23/2021 - 12:42

Navy Chief Defends Recommending Sailors Read "Anti-Racist" Book

Navy Chief Defends Recommending Sailors Read "Anti-Racist" Book

Authored by Zachary Stieber via The Epoch Times,

The high-level U.S. Navy officer on Tuesday defended including a so-called anti-racist book on his recommended reading list.

Adm. Mike Gilday, chief of naval operations, said he does not agree with everything in the book, “How to Be an Antiracist” by Ibram Kendi, but believed in exposing his sailors to the ideology outlined in it.

“I chose a variety of books. There are over 50 books on my reading list to give my sailors a wide range of information from which I hope they can make facts-based decisions on both their ability to look outwardly at potential aggressors like China and Russia, as well as looking inwardly and being honest with themselves in areas they need to improve.

“In talking to sailors over the past year, it’s clearly obvious to me and others that the murder of George Floyd and the events surrounding that, the discussions in this country about racism which go back for years and years and years, are still a painful part of our culture and that talking about them, understanding them, is the best approach,” Gilday told Sen. Tom Cotton (R-Ark.) during a Senate panel hearing in Washington.

“They don’t have to agree with every assertion that Kendi makes - I don’t accept every assertion that Kendi makes, and I wouldn’t think that all sailors would as well, but they need to be exposed to it, so that they’re making facts-based - we need critical thinkers in the Navy and throughout the military, and our enlisted force. Again, we don’t only think outwardly but inwardly so they make objective, hopefully objective, facts-based decisions or draw conclusions in a world that it’s increasingly more difficult to get an unbiased view of a really tough problem,” he added.

Kendi’s book is among the fast-growing segment of works that attempt to promote “racial equity and justice,” an ideology that has Marxist roots. Critics like Cotton argue that the book pushes racial discrimination.

Cotton said the segment of works include “the notion that capitalism is essentially racist and racism is essentially capitalist; that the only remedy for past discrimination is present discrimination; the only remedy for present discrimination is future discrimination; that some individuals by virtue of his or her race are inherently oppressive or privileged while others are victimized or oppressed; that individuals can bear some kind of collective responsibility or collective guilt for the actions committed by members of his or her race,” he said.

Ibram Kendi discusses the book “Stamped: Racism, Antiracism and You” at Build Studio in New York City on March 10, 2020. (Michael Loccisano/Getty Images)

Pressed on whether he believes capitalism is racist, Gilday said he wouldn’t engage “without understanding the context of statements like that.”

“In what context could the claim that capitalism is essentially racist possibly be something with which you would agree?” Cotton wondered.

“I’d have to go back to the book to take a look at that,” Gilday responded.

While Republicans have criticized Kendi’s work and others like it, some Democrats have praised the author. Rep. Jim McGovern (D-Mass.), for instance, dubbed Kendi among the “extraordinary leaders” that were part of a council meeting last year.

A week earlier, Gilday was questioned on the same book recommendation while appearing before the House Armed Services Committee.

“Do you personally consider advocating for the destruction of American capitalism to be extremist?” Rep. Jim Banks (R-Ind.) asked, before quoting other portions of the book.

“Here’s what I know: there is racism in the United States Navy. … I am not going to sit here and defend cherry-picked quotes from somebody’s book. This is a bigger issue than Kendi’s book. What this is really about is trying to paint the United States military, and the United States Navy, as weak, as woke,” Gilday said at the time, confirming he read the book before adding later: “We are not weak. We are strong.”

Gilday’s reading list attracted pushback earlier this year, with Banks denouncing it as promoting views that are “explicitly anti-American.” Gilday reportedly responded by saying he included the book because “it evokes the author’s own personal journey in understanding barriers to true inclusion, the deep nuances of racism and racial inequalities.”

Tyler Durden Wed, 06/23/2021 - 12:20

Germany, France Seeking EU-Russia Summit After 'Positive' Putin Op-Ed & Black Sea 'Warning Shots'

Germany, France Seeking EU-Russia Summit After 'Positive' Putin Op-Ed & Black Sea 'Warning Shots'

A day after Russian President Vladimir Putin published an op-ed in the German weekly newspaper Die Zeit which urged openness to positive Russia-Europe relations toward "partnership" and not confrontation - an op-ed wherein he dubbed NATO "a relic of the Cold War" - there are fresh, somewhat unexpected reports that Germany and France are now urging a new EU strategy for "closer engagement" with Moscow.

It also comes exactly a week after the historic Biden-Putin summit where contrary to the apparent hopes of much of the US mainstream media, there were generally "friendly" vibes between the two leaders in Geneva. According to the new FT report on Wednesday: "Diplomats stated that German Chancellor Angela Merkel hopes that the European Union will consider inviting the Russian President to participate in a summit with EU leaders, an initiative supported by French President Emmanuel Macron."

During a December 2019 summit in Paris, via Reuters.

The report cites diplomatic insiders who say "at a meeting in Brussels on Wednesday, ambassadors representing Berlin and Paris put forward new proposals on relations with the Kremlin, which made other EU capitals untenable."

EU communications with Putin have remained at a low-point, and essentially non-existent in terms of any formal mechanism, since Crimea came under Russia which the West has long condemned as an act of "annexation" and expansionist aggression committed against Ukraine. 

The FT report notes crucially that Biden's Secretary of State Antony Blinken has been quietly meeting with EU leaders in order to keep positive momentum going in the direction of diplomatic reengagement with Russia. "US Secretary of State Anthony Brinken also held talks with the government in Berlin this week," FT reports.

And more details are being reported as follows:

Germany believes that the Biden-Putin summit provides a template for restoring relations with Russia. Merkel meets regularly with Putin, but advocates finding a form for the EU to express its opinions on Russia.

...The proposed new outreach activities with Moscow may alarm some EU member states, such as the Baltic States and Poland, which are adjacent to Russia and want to take a tougher stance against the Kremlin.

No doubt what could be hastening such efforts is the growing state of military tensions in the Black Sea, where on Wednesday major escalation came in the form of "warning shots" fired by a Russian frigate on a British warship as it came near Crimea.

So now on the ground Russia is showing willingness to "shoot first" if it perceives its territory is under threat, while in the media on a broader diplomatic scale Putin is signaling an olive branch if only serious dialogue gets off the ground again (...also after a series of sanctions in the past months related to Navalny and human rights in Russia).

Recall some of Putin's own words yesterday...

The whole system of European security has now degraded significantly. Tensions are rising and the risks of a new arms race are becoming real. We are missing out on the tremendous opportunities that cooperation offers – all the more important now that we are all facing common challenges, such as the pandemic and its dire social and economic consequences.

Why does this happen? And most importantly, what conclusions should we draw together? What lessons of history should we recall? I think, first and foremost, that the entire post-war history of Greater Europe confirms that prosperity and security of our common continent is only possible through the joint efforts of all countries, including Russia. Because Russia is one of the largest countries in Europe.

A foremost factor threatening to derail any early attempts to restore regular diplomatic communications and EU-Russia cooperation is the US domestic factor (and this holds true in a number of European countries as well), where politics has of late turned into a competition in Russia-bashing of sorts, making positive communications which might avert eventual conflict increasingly difficult.

Additionally, in recent months there's been escalating tit-for-tat sanctions and travel bans against officials leveled between the Kremlin and some European capitals, related to Alexei Navalny but also accusations and counteraccusations of spy operations run out of consulates and embassies. 

Biden and Putin agreeing last week to restore each side's diplomats could be the start of a major reversal of the prior trend of "ambassadors being sent home"; however significant hurdles still remain - not the least of which are continued ratcheting sanctions, the latest of which were announced by Washington as recently as this past Sunday.

Tyler Durden Wed, 06/23/2021 - 12:05

Congratulations To Chicago & Las Vegas, The Only Major Cities Whose Home Prices Have Declined Since 2007

Congratulations To Chicago & Las Vegas, The Only Major Cities Whose Home Prices Have Declined Since 2007

Authored by Mike Shedlock via,

The Chicago and Las Vegas metro areas are the only Case-Shiller top-10 metros whose prices have not yet exceeded their 2006-2007 housing bubble high.

The latest Case-Shiller data is as of March 2021. 

Although home prices are not in the CPI, for an alternate calculation I am giving the Fed a break it does not deserve with that replication. Home prices have risen 111 consecutive months through May 2021.

Case-Shiller 10-City Comparison 

Case-Shiller 10-City Percent Change

10 Key Points
  1. Chicago home prices are down 7.28% from March 2007

  2. Las Vegas prices are down 6.42% from April 2006.

  3. Chicago, Las Vegas, Miami, New York, and D.C., have negative or minimal appreciation since the housing bubble peak.

  4. Denver had the shallowest decline (-11.64%) and the largest percentage increase (85.39%) since its bubble peak. 

  5. Trough to now, the biggest gainers have been San Diego (172.1%), San Francisco (154.97%), Denver (109.81%), and Los Angeles (108.45%)

  6. Nationally, home prices declined 20.61% from the bubble peak to trough. 

  7. Nationally, home prices rose 66.30% from the trough to now. 

  8. Nationally, prices are 32.03% higher than the previous peak.

  9. 10-City prices underperformed the national averages to the trough (-32.97% vs -20.67%).

  10. 10-City prices underperformed the national averages from trough to now (16.83% vs 32.03%).

Important Note

Those are NOT median prices. Case-Shiller tracks resales of the exact same home over time.

Questions of the Day
  • Do you really want to be chasing housing now? If so, where?

  • Who will you be buying from? 

Note that Blackstone Became the World’s Biggest Landlord (paywalled, the idea is what's important). 

Also, please see Existing Home Sales Decline 4 Consecutive Months, Lowest Reading in 11 Months.

The WSJ reports Blackstone Bets $6 Billion on Buying and Renting Homes

Here's a few paragraphs that caught my eye. 

The investment firm confirmed Tuesday that it has reached a deal to acquire Home Partners of America Inc., which owns more than 17,000 houses throughout the U.S. Home Partners buys homes, rents them out and offers its tenants the chance to eventually buy. 

Blackstone was among the big investment firms to buy houses in bulk in the aftermath of the subprime crisis, when lenders sold off foreclosed homes at marked-down prices. The New York firm built a portfolio of tens of thousands of single-family homes, then rented them out through a company called Invitation Homes Inc.

In 2019, Blackstone exited from the single-family rental business when it sold its last shares in Invitation Homes, which had become the largest U.S. firm in this industry with 80,000 homes for lease. 

The firm is rejoining an expanding roster of Wall Street powerhouses that have acquired single-family rental companies. Canadian property giant Brookfield Asset Management Inc. recently acquired a stake in a landlord that owns more than 10,000 U.S. homes. J.P. Morgan Asset Management and Rockpoint Group LLC also have made big investments in single-family rental operators.

The NAR expects housing inventory to rise. If so, who is selling? Why?

If not, who are you competing with to buy?

In Search of Inflation
  1. How the Fed's Inflation Policies Benefited the Top 1% In Pictures Part 1
  2. How the Fed's Inflation Policies Benefited the Top 1% In Pictures Part 2

*  *  *

Like these reports? I hope so, and if you do, please Subscribe to MishTalk Email Alerts.

Tyler Durden Wed, 06/23/2021 - 11:40

John McAfee May Die In Prison After Spain Approves US Extradition For Tax Charges

John McAfee May Die In Prison After Spain Approves US Extradition For Tax Charges

Antivirus software pioneer John McAfee may die in a US prison, after Spain's National Court approved an extradition request by the United States to face tax-related criminal charges which carry a sentence of up to 30 years if convicted.

The 76-year-old McAfee has been charged by Tennessee prosecutors with evading taxes after failing to report consulting income he received while promoting cryptocurrencies, along with income from speaking engagements and the rights to his life story as a documentary, according to MarketWatch.

Last week, McAfee tweeted "I have nothing. Yet, I regret nothing."

The charges apply to income received between 2014 and 2018. He was arrested last October at Barcelona's international airport, after which a judge ruled that he should be held in jail while awaiting the results of his extradition hearing.

Earlier this month, McAfee argued in a videolink hearing that charges against him are politically motivated, and that he would die in prison if he was returned to the US.

As CoinTelegraph notes:

McAfee’s life behind bars appears to be one of contemplation, as he regularly tweets messages with tones that switch between sorrow, acceptance for his circumstances, mixed in with sparks of aggression towards the U.S. governing bodies.

In the June 9 tweet, he notes that “after uncountable lawsuits and the reach of the FED's I now have nothing. But inside these prison bars I have never felt more free. The things you believe you own, in reality own you.”

It is a stark contrast to McAfee’s earlier years in which his net worth grew to $100 million from his successful anti-virus software firm. McAfee used to own a mansion worth more than $5 million in Colorado Springs, and even lived on a luxury yacht out in Dominican Republic waters, which he dubbed a “freedom boat.”

According to the June 2020 indictment from the Justice Department’s Tax Division and Tennessee prosecutors, McAfee faces a minimum of five years on each count of tax evasion and a one-year minimum on each count of willful failure to file a tax return. -CoinTelegraph

Tyler Durden Wed, 06/23/2021 - 11:18

Iran Says US Websites Seizure Could Disrupt Nuclear Talks

Iran Says US Websites Seizure Could Disrupt Nuclear Talks

Tehran has warned that the latest move by the US Department of Justine to seize over 30 websites run by Iranian state-linked media, including most notably PressTV's English-language website, could be detrimental to the Biden White House's desire to negotiate a restored nuclear deal in Vienna.

Starting Tuesday websites across the Middle East began showing messages where their homepages once were of "This website has been seized" for violating laws related to sanctions on US foreign enemies (as they were hosted on US-owned domains). This included Iranian, Palestinian, Yemeni, Iraqi news channels - with 33 websites being deemed controlled or at least closely associated with the Islamic Republic.

The Iranian presidency's office slammed the drastic action as "not constructive" to the ongoing nuclear dialogue in Vienna, suggesting it could put a finalized deal in doubt - also at a sensitive moment that a new hardline president was just elected, set to take office at the start of August.

"We are using all international and legal means to... condemn... this mistaken policy of the United States," the Chief of Staff of the President of Iran, Mahmoud Vaezi, told reporters. "It appears not constructive when talks for a deal on the nuclear issue are under way."

AFP describes further of Tehran's response: "Iran's state broadcaster accused the US of repressing freedom of expression, while the president's office questioned the timing of the move as talks on bringing Washington back into the 2015 nuclear agreement between Tehran and major powers are reportedly making headway."

And here's more on the IRGC links to many of the outlets, which reportedly made them a target for the US domain seizures:

The 33 websites were held by the Iranian Islamic Radio and Television Union (IRTVU), itself controlled by the Islamic Revolutionary Guard Corps' Quds Force (IRGC).

Both the IRTVU and IRGC have been placed on the US sanctions blacklist, making it illegal for Americans, US companies, and foreign or non-American companies with US subsidiaries to have business with them or their subsidiaries.

Kataeb Hezbollah, the Iraqi group which owned three sites that were seized, is a hardline military faction with close ties to Tehran that Washington has formally designated a terror group.

In recent years there's been notable instances of the federal government actually charging individuals on US soil for providing access to Lebanese Hezbollah's television network.

However, this week's action appears to the most far-reaching crackdown effort yet on Iranian-linked media. Likely many of the websites will simply migrate over to a .ir domain in order to evade the DOJ order.

Tyler Durden Wed, 06/23/2021 - 11:05

Fannie, Freddie Plummet Most In 13 Years After Supreme Court Ruling

Fannie, Freddie Plummet Most In 13 Years After Supreme Court Ruling

The seemingly endless crusade to reincarnate the GSEs - Fannie and Freddie - and to restore some value for their equity shareholders after the two companies collapsed in the early days of the Global Financial Crisis appears to have come to a crashing end moments ago when the Supreme Court gave Fannie Mae and Freddie Mac investors a mixed ruling in their challenge to the government’s collection of more than $100 billion in profits from the government-sponsored enterprises.

According to Bloomberg, justices threw out claims that the Federal Housing Finance Agency exceeded its authority under federal law, effectively crippling the key argument of GSE bulls in their decade-long quest to recover value in the two pennystocks. However, the court also left some hope to investors, saying they might be able to win damages on a separate claim that the so-called profit sweep was illegal because the FHFA director was unconstitutionally insulated from being fired by the president.

The second part of the ruling could mean President Joe Biden will be able to oust Mark Calabria, the FHFA director and an advocate for releasing the mortgage giants from government control.

The justices also sent the case back to the lower-court level, where the investors will have a chance to show they were harmed by the lack of presidential control over FHFA directors who implemented the agreements.

The decision is crippling firms like Paulson, Pershing Square and Fairholme Funds that have sought for over a decade to persuade the government to release Fannie and Freddie from government control, thereby earning billions of dollars on their shares.

Instead, the hedge funds are nursing hundreds of millions in losses, with shares of Fannie Mae slumped as much as 42% and those of Freddie Mac plunged 44%, their biggest drop since Sept 2008...

... and hardly the outcome bullish hedge fund holders had been expecting.

Tyler Durden Wed, 06/23/2021 - 10:48

Adams Has Big Lead In NYC Mayoral Democratic Primary; Guardian Angels Founder Sliwa Wins GOP Primary

Adams Has Big Lead In NYC Mayoral Democratic Primary; Guardian Angels Founder Sliwa Wins GOP Primary

Guardian Angels founder Curtis Sliwa sailed to an easy win over restaurateur Fernando Mateo in Tuesday’s Republican mayoral primary in New York City.

The Epoch Times' Tom Ozimek reports that Sliwa received 68.9 percent of the Republican votes to 26.9 percent for Mateo, with over 96 percent of precincts reporting, according to preliminary results from the Board of Elections.

“Ladies and gentlemen, we have just won the Republican Party in an overwhelming way,” Sliwa said Tuesday at the Empire Steakhouse in Midtown, according to the New York Post.

“It was a long period of time that took going door-to-door, street by street, subway station by subway station, and spreading the word,” he said, according to the outlet.

With public attention on crime and safety, both Republican candidates campaigned on a law-and-order platform, with Sliwa resorting to some colorful stunts as he sought to capitalize on his history with the Guardian Angels, a group of volunteer crime fighters.

Sliwa made headlines in May when he embarked on a 24-hours-straight subway ride after challenging Democrats to join him on the journey, part of his bid to draw attention to his tough-on-crime policy posture.

“Hey, Democrats! Wanna be mayor? Gotta ride the subway,” Sliwa said at the time in a video on Twitter, in which he held up a pair of hockey masks and said, “I know some of you are afraid of getting slashed—I brought masks for you to protect you from getting slashed.”

Sliwa told The Epoch Times after he completed the challenge that no Democrats joined him to ride New York City’s number 4 train, which he dubbed the “Slasher’s Express” after two attackers punched, slashed, and robbed multiple victims on the train a week prior.

On the Democrat side,'s Mike Shedlock details that, with about 90% of the vote in, Eric Adams has 31% of the vote to Maya Wiley at 21.74%, Kathryn Garcia at 20.30%, and Andrew Yang at 11.64%.

Ranked Voting Coming Up

There were 13 candidates in the New York City Democratic primary. The top 4 candidates had 84.68% of the vote.

These totals are as of 2:00 AM Eastern.

No candidate had a majority and that triggers the city's new Ranked Vote Procedure.

Under the system, the candidate with the fewest votes is eliminated. The ousted candidate’s votes get redistributed to the voters’ second choices. That continues until there is a winner.

Board of Elections officials said they won’t declare an official winner in the race until all the rounds of ranked-choice voting have been completed and all absentee ballots have been counted. The final results may not come until the week of July 12, they said.

Who's Who?

I discussed Who's Who on June 12 in Who's Who and Who's Leading in the 13 Candidate NYC Mayoral Race

Eric Adams
  • Adams Platform: The Brooklyn borough president and a former New York Police Department officer, 60 years old, has focused on public safety,

  • Endorsements: Mr. Adams has multiple labor endorsements, including 32BJ SEIU, the Hotel Trades Council, District Council 37, Unite Here! Local 100 and the Amalgamated Transit Union. He also has the support of Queens Borough President Donovan Richards, former New York state Comptroller Carl McCall and Bronx Borough President Ruben Diaz Jr., all Democrats.

Maya Wiley
  • Wiley Platform: Wiley, a civil-rights lawyer and former counsel to Mr. de Blasio, is one of the most progressive candidates in the race. She has called for defunding the NYPD by moving $1 billion from the department’s budget to community resources.

  • Endorsements: 1199 SEIU; The Working Families Party; Rep. Alexandria Ocasio-Cortez (D., N.Y.); Rep. Hakeem Jeffries (D., N.Y.); Rep. Nydia Velazquez (D., N.Y) and Public Advocate Jumaane Williams (D.)

Kathryn Garcia
  • Garcia Platform: Free child care for families making less than $70,000 a year and wants to streamline the permitting process to open up a small business or restaurant to just one permit. On issues of crime and safety, she has called for an increased reward for the city’s gun buyback program.

  • Endorsements: Uniformed Sanitationmen’s Association; Teamsters Local 831; SEIU Local 246 Auto Mechanics Union; Teamsters 813; The Sanitation Officers Association SEIU Local 444; Uniformed Sanitation Chiefs Association; state Assemblywoman Nily Rozic (D., Queens;) state Assemblyman Danny O’Donnell (D., Manhattan); and state Sen. Liz Krueger (D., Manhattan).

Likely Winner

Most likely Adams will win, but it will be one of those three. Wiley or Garcia could win if those eliminated have a huge preference for someone other than Adams. 

If second choices are split three ways, Adams should win easily. 

Progressive Foolishness

Wiley, backed by AOC, preaches true Progressive foolishness and seeks to defund the police. Nonetheless, she is in second place. Wow.

Outside the top 4, there is only 15.32% of the vote to split. I suspect she will get a big chunk of this bottom 9 candidate rehash as there are 8 candidates who want to defund the police!

Does Yang Hold the Key?

Yang has close to 12% of the voted and I doubt that favors Wiley.

But even if Adams were to get 100% of Yang's second place votes, we probably still would not know who won after his votes were parsed.

For example, assume Adams gets a third of the bottom 9 and all of Yang's 11%, Adams still falls way short.

Looking ahead further, those backing Wiley (seeking to defund police) might instead opt en masse for Garcia. That possibility is Garcia's best shot, assuming Wiley goes first.

Conversely, if Garcia goes before Wiley, I suspect Adams benefits more. Whoever eventually comes in third will likely decide this election.

Tyler Durden Wed, 06/23/2021 - 10:45

WTI Fails to Extend Overnight OPEC+ Gains Despite Big Crude Draw

WTI Fails to Extend Overnight OPEC+ Gains Despite Big Crude Draw

Oil prices are up overnight, with WTI topping $74 (and Brent topping $75 - a fresh two year high), after a bigger than expected crude draw reported by API. Prices were also buoyed by reports that OPEC+ is considering raising production by 500k barrels a day (which is less than the widely expected 1mm b/d).

In another supportive voice for oil prices, OPEC Secretary General Mohammad Barkindo said on Wednesday at the meeting of the organization’s economic think-tank, the Economic Commission Board (ECB), that “the latest market developments point to much better conditions and improved outlooks” of the oil market and global economy.

U.S. Oil inventories were expected to drop by 6.3 million barrels for the week ended June 18, aided by the lifting of domestic restrictions amid vaccinations, and by exports. However, the emergence of a new variants in regions where vaccinations are slower may pressure the global economic recovery, and with it demand, according to Vince Piazza, senior energy analyst at Bloomberg Intelligence.


  • Crude -7.199mm (-6.3mm exp)

  • Cushing -2.55mm

  • Gasoline +959k (+1.3mm exp)

  • Distillates +992k (+1mm exp)


  • Crude -7.614mm (-6.3mm exp)

  • Cushing -1.833mm

  • Gasoline -2.93mm (+1.3mm exp)

  • Distillates  +1.754mm (+1mm exp)

Crude inventories dropped for the 5th straight week...

Source: Bloomberg

US crude production was flat over last week and remains surprisingly well disciplined given the rising price and rig counts...

Source: Bloomberg

WTI hovered just below $74 ahead of the official data and despite a very brief spike, was unable to extend gains...

"There's a lot of people talking about $100 crude and that's driving the market," said Bob Yawger, director of energy futures at Mizuho.

"(Because) of tight physical markets and healthy demand perceptions, the risk remains skewed to the upside," oil brokerage PVM said.

Finally, we note that gas prices (at the pump) are higher now that at any time during the Trump administration, directly benefiting Russia. And seasonally, this is the highest price (over $3 a gallon) for gas for this time of year since 2014...

Source: Bloomberg

The global supply deficit and further spikes in oil prices could loosen the lid that the U.S. shale industry has kept on their production and Saudi Arabia will want to avoid giving producers a reason to bring wells online, according to Tariq Zahir, managing member of the global macro program at Tyche Capital Advisors LLC. “They don’t want to see shale come back quickly.”

Tyler Durden Wed, 06/23/2021 - 10:35

Rabobank: Current Reality Can Only Be Described As Anarchic Surrealism

Rabobank: Current Reality Can Only Be Described As Anarchic Surrealism

By Michael Every of Rabobank

The Dove From Above

Back in the mid-1990s when irony was still a thing, British TV had a popular celebrity gameshow called Shooting Stars hosted by comedians Vic Reeves and Bob Mortimer. It was filled with slapstick, surreal, anarchic humor, and while it appeared to stick to standard gameshow conventions, everything was actually arbitrary: rules could be made up or ignored as and when Vic and Bob felt like it. For example, there would sometimes be a random "Maverick Round", where a celebrity guest would have to stand centre stage and represent something "via the medium of dance", or "The gift of the air guitar". A regular center-piece, however, was "The Dove from Above" - a large, poorly-constructed prop bearing six key words for further questions that had to be “coo”-ed down by the guests as part of a silly ritual. If a contestant answered a Dove question incorrectly, Vic shouted "UVAVU" and pulled a silly face in close up; and if they chose correctly, Vic pulled a different silly face and yelled "ERANU". Like I said, it was a big hit at the time.

This may all seem irrelevant in the irony-free 2020s, but I can’t help but think that anarchic surrealism does a far better job of capturing current reality than the po-faced, analysis-lite commentary I see around me. Indeed, this morning all I see are glowing reports of how Fed Chair Powell appeared before a celebrity panel in the US Congress, acted as “The Dove From Above”.

After shifting its dot-plot forward by a year, and several FOMC members talking about bubbles, tapering, and loss of dollar reserve currency status, Powell was as dovish as they come. Yes, inflation had been much stronger than he had expected – but it is still transitory. Yes, it may prove more persistent than he had expected – but it is still transitory. As Bloomberg (berg berg berg!) summarises it, “The Fed is nowhere near to raising rates”; and to quote Powell himself, the Fed “will wait for actual evidence of actual inflation or other imbalances before tightening”. Because what we have now isn’t actual inflation?

We agree the balance of risks is that actual present inflation *is* transitory, albeit very painful and disruptive - unless/until fiscal policy or supply chains shift. But both of these ideas are still floating around the stage like a celebrity guest waiting to finally express themselves via the medium of air guitar – and emanating from the White House, not left field. Neither this, nor how the Fed’s ultra-low interest rates can address deep-rooted economic injustice rather than exacerbating it via asset inflation, were addressed yesterday. Frankly, Powell might as well have answered “UVAVU” and “ERANU” at times: markets and market media would still have given it rave reviews provided rates aren’t going up. Indeed, stocks were up; bonds were up slightly; commodities too - as China announced the scale of the sale of reserves of aluminium, copper, and zinc from its state reserves; the dollar mostly down; and that surreal, anarchic Shooting Star Bitcoin, up.    

Of course, a more ironic lens is needed for the world in general nowadays. The EU probably wouldn’t allow a follow-up to Shooting Stars to be shown on TV because it’s too British. One can imagine there will soon be a black market in such things: “Have you got any ‘Fools and Horses’?”; “No, but I do have some ‘Top Gear’.

That is presuming the UK is capable of any irony itself, which is questionable when you see that this Friday, the government wants every schoolchild to sing a song called “Strong Britain” as part of a new One Britain One Nation day. The lyrics, sung by a children’s choir similar to that which brought us “There’s no-one quite like Grandma” go like this:

We are Britain, and we have one dream. To unite all people in one great team. Strong Britain, Great Nation; Strong Britain, Great Nation; Strong Britain, Na-a-ation.”

Really. I am not joking - sadly.

The UK can do these kind of unifying musical events extremely well. I recall *everyone* singing “Football’s Coming Home” in 1996, and “Hey Jude” along with Paul McCartney for the Queen’s Golden Jubilee in 2002, and actually meaning it. Yet with the Chancellor and PM at apparent loggerheads over the need for austerity, one wonders if a child chorus of cloying, jingoist elevator muzak is really going to be the soundtrack to a successful ‘Levelling Up’ and ‘Building Back Better’ that brings together as one team in a Great Nation. As the UK press is still just about capable of pointing out, this 2021 musical iteration is both rubbish and worryingly North Korean.

Wherein, on the back of international criticism over human rights, even from Canada’s Prime Minister Trudeau, China’s Global Times has printed a withering rebuttal including that: “Chinese people do not buy into the forces that are "fighting" for our human rights. The only thing we want to say is: please stay away from China and the Chinese people.” Which will be a lot easier in practical terms now China plans to keep pandemic border restrictions in place for at least another year amid fears over the emergence of new variants and a calendar of sensitive events, according to the Wall Street Journal. A related survey of 121 China-focused professionals (scholars, journalists, former diplomats, and civil society workers) by ChinaFile showed only 27% stating they would definitely return once border controls are lifted – with qualifications such as being on official passports, as part of delegations affiliated with prominent institutions, or at the invitation of a Chinese government-affiliated institution; 17% said probably; 22% said definitely not; 18% said probably not; and 16% were unsure. We await the equivalent survey for the UK.

On Covid, Israel, which used Pfizer vaccines, and had only last week removed indoor mask mandates, has now reinstituted them, and is asking its citizens not to go abroad over concerns the Delta variant is surging. By contrast, the musical UK, with a far larger Delta variant spike, is apparently preparing to allow everyone to travel internationally from August; and Thailand, where Covid variants are also spreading, is opening up to tourism from 1 July (in Phuket) and nationally from October. Academic Bret Weinstein has meanwhile found a new platform for his podcast, currently touching on many things Covid-related, outside of the embrace of all-knowing YouTube.

At some point, someone is going to make an epic black comedy about the real-life Shooting Stars that is the 2020s.  

Tyler Durden Wed, 06/23/2021 - 10:15

US New Home Sales Unexpectedly Plunged In May To Lowest In A Year

US New Home Sales Unexpectedly Plunged In May To Lowest In A Year

Following yesterday's slightly better than expected existing home sales (which was still a 4th straight monthly decline), analysts expected May new home sales to rebound very modestly from the 5.9% plunge in April... they were wildly wrong!

New home sales plunged 5.9% MoM in May and April's crash was revised even lower (-7.8% MoM)...

Source: Bloomberg

This unexpected drop pushed the SAAR sales print to 769k (against expectations of 865k) - the lowest since May 2020

Source: Bloomberg

The median new home price is up 18.1% YoY to $374,400 (average selling price at $430,600) and is being blamed for the drop in sales as affordability collapses.

None of this should come as a surprise given the total collapse in homebuyer sentiment (and when did homebuilder sentiment actually count for anything?)...

Source: Bloomberg

With The Fed 'talking about, talking about' tapering and raising rates (at some point in the future), mortgage rates are already starting to rise...

Source: Bloomberg

Get back to work Mr.Powell.

Tyler Durden Wed, 06/23/2021 - 10:06

US Services Sector Unexpectedly Plunges In June As Manufacturing Survey Hits Record High

US Services Sector Unexpectedly Plunges In June As Manufacturing Survey Hits Record High

Despite the serial disappointment in hard economic data, 'soft' survey data has continued to soar in 2021 but analysts expected today's Markit PMIs to retrace some of those gains. However, reality was notably different with Manufacturing jumping more than expected as Services plunged...

  • Markit US Manufacturing rose to 62.6 (from 62.1) beating expectations of 61.5.

  • Markit US Services plunged to 64.8 (from 70.4) hugely missing expectations of 70.0

Source: Bloomberg

That is the lowest reading since March for Services and highest reading ever for Manufacturing.

Employment issues remained prevalent during June, as numerous panellists mentioned difficulties finding suitably trained candidates for current vacancies.

Price pressures also remained elevated in June. The rate of input price inflation softened slightly but was the second-fastest on record. Manufacturers continued to note rapid increases in raw material and fuel costs, whilst service providers highlighted higher wage bills to attract workers plus greater transportation fees and fuel costs.

US continues to be the world's "strongest" economy based on these soft surveys, even as the US Composite PMI dropped to 63.9...

Source: Bloomberg

Commenting on the PMI data, Chris Williamson, Chief Business Economist at IHS Markit, said:

“The early PMI indicators point to further impressive growth of the US economy in June, rounding off an unprecedented growth spurt over the second quarter as a whole.

“While both output growth and inflows of new orders have come off their peaks in both manufacturing and services, this is as much due to capacity constraints limiting firms’ abilities to cope with demand rather than any cooling of the economy.

“Although price gauges have also slipped from May’s all-time highs, it’s clear that the economy continues to run very hot. Prices charged for goods and services are still rising very sharply, record supply shortages are getting worse rather than better, firms are fighting to fill vacancies and manufacturers’ warehouse stocks are being depleted at a worrying rate as firms struggle to meet demand.

“While the second quarter will likely represent a peaking in the pace of economic growth, a concomitant peaking of inflation is far less assured.”

So - what happens next? Does all that "hope" collapse back to reality? Or is "hope" the new strategy?

Source: Bloomberg

Get back to work Mr.Powell and make it so!

Tyler Durden Wed, 06/23/2021 - 09:52

New Google Tool Allows Workers To See How Their Pay Might Change If They Move Offices

New Google Tool Allows Workers To See How Their Pay Might Change If They Move Offices

A few days ago, Morgan Stanley CEO James Gorman told a reporter that if MS employees want to continue earning 'big bank' money, then they will need to report back to the office sooner rather than later. The announcement elicited criticism from some corners, as Gorman was slammed for supposedly ignoring the valuable lessons learned by corporate America during the pandemic.

As more banks opt to recall employees to the office, American megabanks are leading the way, with JPM and Goldman Sachs out front (while rivals like Bank of America trail not too far behind).

Meanwhile, bankers' rivals in America's burgeoning tech industry are finding more ways to improve the flexibility of working from home.

To wit, Google on Tuesday released internal tools for its employees to request office changes or apply to become fully remote workers. The internal software is being released as companies around the world look ahead to a post-pandemic work environment and try to figure out the logistics of managing a more sprawling work force.

CNET reported that in May, CEO Sundar Pichai announced plans for 20% of the company to permanently work remotely.

Another 20% of Googlers can work from a Google office other than their normally assigned one if they so desire. The other 60% will be working from their normal office campus a few days a week.

But one of the most useful aspects of the new toolkit works like this: if Google employees request transfers to new markets or offices, their compensations would be adjusted to the rates of the local region. That could mean a decrease in pay for many employees working in San Francisco or New York should they decide to move out to the suburbs. If they are moving to smaller markets. The new software, called the Work Location Tool, will show employees estimates of how their salaries might change depending on location.

A Google spokeswoman said the company will pay employees at the top of the local market, and equity won't decrease for transferring US employees.

"With our new hybrid workplace, more employees are considering where they live and how they work," a Google spokeswoman said in a statement. "To better equip people with the information they need to explore their options, we've built a tool that will allow all employees to request to move to a new location, or go remote."

As recent employment data have shown, thousands of workers across the US have decided to quit their jobs rather than return to the office, per WSJ.

“People are seeing the world differently,” says Steve Cadigan, a talent consultant who led human resources at LinkedIn during its early years. “It’s going to take time for people to think through, ‘How do I unattach where I’m at and reattach to something new?’ We’re going to see a massive shift in the next few years."

Still, given their overwhelming preference for working from home, thousands of workers just might see Gorman's and Google's demands as justified.

Tyler Durden Wed, 06/23/2021 - 09:40

The Fed In A Box, Part 1: They Cannot Raise Interest Rates

The Fed In A Box, Part 1: They Cannot Raise Interest Rates


3 Key Takeaways
  1. The US Government has over $28 Trillion in Debt

  2. Much of the debt is short-term, making it extra sensitive to higher rates

  3. Higher Interest Rates would immediately start putting strain on the Federal Budget


The US has over $28 Trillion dollars in debt and it continues to grow at an alarming rate. Even before COVID-19, the problem was becoming unwieldy. Ironically, despite adding $4T+ in debt over the last year, the pandemic may have given the US Government short-term reprieve as it gave the Federal Reserve a green light to drop rates back to zero.

First and foremost, this took pressure off the Treasury as it refinanced the ballooning short-term debt outstanding at lower rates. However, even more relief occurred as the Federal Reserve absorbed +90% of the long term debt issued since last March. This allowed more room in the private markets to purchase the issuance of new short-term Treasury Bills. Because the Fed pays interest revenue back to the Treasury, and since interest rates on Treasury Bills are sitting at 0%, this has effectively given the Treasury a $4.5T loan at 0% interest in 15 months!

While this sounds like a great deal, it comes with major risks and has now put the Fed in a box. This will be explained in detail over two articles. Part 1 will explain why the Fed can no longer raise interest rates, and Part 2 will show how the Fed is unable to taper and may even need to increase Treasury purchases to maintain control over the long end of the yield curve.

$28 Trillion and Growing

The US Government cannot stop spending money. Spending is now far in excess of what is being collected in tax revenues. The US economy continues to experience nominal increases in growth, which has increased Federal Tax receipts, but Federal Spending is growing far faster. Figure 1 below, shows this clear trend.

Source –

Excess spending has to be paid for using debt. This massive excess in spending has led to proliferate borrowing by the Federal Government resulting in over $28T in total debt outstanding. See figure 2 below.

Source –

For anyone struggling to wrap their mind around the size of $1T, please see this great visual. Now, multiply that by 28!

For most governments, this would be unsustainable as interest rates would rise. This puts pressure on a borrower to bring down spending. The US Government has benefited from three major advantages that are not available to most governments. First, it has the exorbitant privilege of issuing the global reserve currency (for now), which creates far more demand for dollars than would otherwise be the case. The petro-dollar should have its own dedicated article, so that will be skipped in this analysis.

It is important to highlight two other key facts that have allowed spending and borrowing to continue unabated. It has been able to borrow from the Social Security Trust Fund, and the Federal Reserve has absorbed a large chunk of debt issuance in recent years. Not only does this equate to $11T in interest-free loans (as all interest payments return back to the Treasury), but it has prevented the private markets from absorbing all new debt issuance keeping interest rates lower. As Figure 3 below shows, since Jan 2010, the private markets have “only” had to absorb $9T of the $14.5T issued.

Source – and

Since Jan 2020, the numbers are even more stark. The Treasury has issued $4.5T, of which the Fed has taken on $2.6T (Note: The Fed balance sheet has expanded by greater than $4T, but not all of this was Treasury Debt). Looking deeper into the numbers shows the Fed had an even bigger appetite for longer-dated maturities. With Short Term rates at 0%, the Treasury can sell Treasury Bills to the private sector and still have an interest-free loan. Thus, it has been critical for the Fed to absorb almost all (~90%) the long-term debt issued by the Treasury to keep interest payments low!

Source –

The Treasury has so far avoided higher interest payments

Zooming back out, the three charts below show why the maneuvers over the last year have been so important. Take one more look at the US Debt load, this time categorized by vehicle. Non-Marketable is debt the government owes itself, Notes represent 1-10 year maturity, Bills less than 1 year, and Bonds >10 years. The two charts below show both the absolute growth in debt and how the makeup of the debt has changed. Since 2008, Notes have experienced the largest growth increasing from 25% of total outstanding to 42%. Non-Marketable went the other way, shrinking from 45% to 25% as the Social Security Trust Fund is no longer a source to borrow from.

Source –

Source –

It is important to notice the growth in Treasury Bills above. Bills are the highest risk to the Treasury because higher interest rates will affect Bills within months, so it is important to note that in 2015 during the last rate hike cycle they accounted for only $1.4T but now make up $4.3T. This means every .25% rate hike will almost immediately add $10B to Federal spending. The chart below clearly shows the impact of the last interest rate hike cycle. The Pink line shows how Bills followed the Fed hike cycle topping out near 2.25%.

If the Fed attempted to raise rates in a similar fashion it would immediately add $100B to Federal Spending on ONLY interest due for Treasury Bills. In a scenario where the Fed shrunk its balance sheet back to $1T (no more interest free loans) AND raised interest rates back to 4%, the Treasury would incur an extra $160B in interest rates for Treasury Bills and a whopping $290B on Treasury Notes! This would not factor in any new debt added over that time, which now includes an extra $.5T a year just on interest payments!

Source –

The chart below shows a much clearer impact of how falling interest rates have kept debt payments relatively stable for nearly 20 years. The chart shows the average weighted interest rate and the annualized monthly interest payments. The orange line (average weighted interest rate) is moving in direct opposition to the growth in debt seen above. In the last rate tightening cycle, the chart shows just how quickly higher interest rates increased the debt burden ($150B). The Fed owns very few Treasury Bills ($320B), so those interest payments are NOT returning to the Treasury.

Source –

One final chart to consider. How do these interest payments compare to tax revenue collected by the IRS? In this context, it becomes very clear how much impact the 2015 rate cycle increases had on debt payments.

Source –

Wrapping Up

Nothing in this article should be surprising to anyone who even closely watches the US Debt situation or follows financial markets. The charts and graphs attempted to show the trends and put hard numbers behind what most people already know anecdotally. This article does not even touch on how devastating higher interest rates would be on the housing market, corporate debt market, and consumer debt market. Instead it only focuses on the Treasury, which just so happens to be run by the old chair of the Federal Reserve (Janet Yellen).

None of this math is overly complex, and all the data is freely available on the Treasury and Fed website. This begs the question, does the Fed realize interest rates cannot go up or are they only looking in the rear-view mirror and assuming that an increase to 2.25% will be similar to 2015 which was “only” derailed by COVID-19? To reiterate, the drop in interest rates gave the Treasury relief from the higher interest payments. Next time they might not even get halfway to 2% with the added debt burden. Unfortunately, for the Fed, their box is tighter than most realize. If the Fed hasn’t figured it out by now, even before they fail to raise interest rates, they will be unable taper Quantitative Easing (debt monetization) much less shrink their balance sheet, without serious consequences. That data will be reviewed in Part 2. Stay tuned!

Tyler Durden Wed, 06/23/2021 - 09:21

Transgender U.S. Olympic BMX Rider Says Her Goal Is To "Burn A US Flag" On The Olympic Podium

Transgender U.S. Olympic BMX Rider Says Her Goal Is To "Burn A US Flag" On The Olympic Podium

Transgender BMX Freestyle rider Chelsea Wolfe said in a now deleted Facebook post that her goal was to "burn a US flag" on the Olympic podium. 

That's one way to decrease your chances of making the Olympic team. At least, it used to be...

Wolfe had previously qualified as an alternate for the U.S. Olympic team at the upcoming Tokyo Olympics, according to Newsweek and Fox

"My goal is to win the Olympics so I can burn a US flag on the podium. This is what they focus on during a pandemic. Hurting trans children," Wolfe wrote in March 2020. She was referring to a PinkNews story about "the Trump administration's stance on transgender girls in female athletics."

She told Fox that the post "doesn't mean she doesn't care about her home country", stating: "Anyone who thinks that I don't care about the United States is sorely mistaken."

She continued: "One of the reasons why I work so hard to represent the United States in international competition is to show the world that this country has morals and values, that it's not all of the bad things that we're known for. I take a stand against fascism because I care about this country and I'm not going to let it fall into the hands of fascists after so many people have fought and sacrificed to prevent fascism from taking hold abroad. As a citizen who wants to be proud of my home country, I'm sure as hell not going to let it take hold here."

She had also previously joked about "exploding former President Trump's head". 

Wolfe commented: "I would never say that someone should explode the head of the president. That would be illegal."

"But I will say ‘with dynamite.’ Because that's just a sentence fragment and doesn't actually mean anything. It's not necessarily related to the sentence that came before it," she continued. 

Earlier this month, Wolfe was writing less about potentially harming the sitting President and burning the U.S. flag, and more about how happy she was to have made the Olympic team. "I searched for so long trying to find out if there had ever been a professional trans bmx rider to show me that who I am would be okay and unfortunately I found no one," Wolfe wrote on June 12.

"Eventually I started to meet some amazing women who helped me accept that I am a woman just like any other and that I deserve a place to exist in the world just like everyone else."

Maybe next time she's feeling grateful she'll remember what country she lives in...

Tyler Durden Wed, 06/23/2021 - 08:40

Biden Admin Launches "Firearms Trafficking Strike Forces" In Liberal Cities

Biden Admin Launches "Firearms Trafficking Strike Forces" In Liberal Cities

Authored by Jack Phillips via The Epoch Times,

The Department of Justice on Tuesday announced it will use “strike forces” to go after illegal firearms trafficking in major U.S. cities.

The strike forces will be launched within 30 days in Democrat-run New York City, Los Angeles, Chicago, Washington D.C., San Francisco, and their respective metropolitan areas. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) will coordinate with designated U.S. attorneys to target “firearms trafficking corridors,” according to a news release from the Justice Department.

Those strike force groups won’t necessarily be limited to operating within those metropolitan areas, noted the Justice Department, and they will “share information and otherwise collaborate across districts where firearms trafficking schemes cross state or jurisdictional boundaries to focus enforcement against entire trafficking networks, from the places where guns are unlawfully obtained to the areas where they are used to commit violent crimes.”

Attorney General Merrick Garland said the measure is designed to bolster cooperation between the federal government and “local partners,” while adding that the announcement Tuesday is “another concrete step to address violent crime and illegal firearms trafficking.”

“Our firearms trafficking strike forces will investigate and disrupt the networks that channel crime guns into our communities with tragic consequences,” he added.

“This effort reflects our shared commitment to keep communities safe.”

Deputy Attorney General Lisa Monaco said during a virtual forum on Tuesday that the focus is to support “local communities to prevent, investigate, and prosecute violent crime.”

The U.S. attorneys and ATF will focus on “where the guns are originating, where they’re used in violent crime, where they’re transiting, and going after the entire network,” Monaco added.

The initiative is part of the Justice Department’s recently unveiled “Violent Crime Reduction Initiative” that is designed to make clear “that firearms traffickers that provide weapons to violent offenders are an enforcement priority across the country,” said the agency.

According to FBI data, a number of U.S. cities have seen significant increases in homicides in 2021 as compared with the same time last year.

During a news conference on Monday, White House press secretary Jen Psaki told reporters that President Joe Biden is slated to soon deliver a speech “addressing gun violence and gun safety in the country,” adding that Biden “feels a great deal of the crime we are seeing is a result of gun violence.”

The announcement on Tuesday comes as Democrat members of Congress have introduced a series of gun-control bills, including bans on so-called “assault weapons,” bans on magazines that hold more than 10 rounds, and would expand background checks.

Tyler Durden Wed, 06/23/2021 - 08:19

Futures Flat As Traders Wait For Next Green Light From Fed

Futures Flat As Traders Wait For Next Green Light From Fed

S&P 500 futures erased earlier gains, and after rising as much as 0.3% when they traded at all time highs, Eminis were last seen down 4 points or 0.1% to 4,232, as European stocks also struggled to gain momentum on Wednesday despite reassurances from U.S. Federal Reserve Chair Jerome Powell that the Fed is not rushing to hike rates contrary to the market's post-FOMC freakout last week. Treasuries fell, the dollar was flat and bitcoin soared after tumbling on Tuesday.

On Tuesday, Powell sought to reassure investors on Tuesday, saying that the central bank will watch a broad set of job market data to assess the economic recovery from COVID-19, rather than rush to raise rates on the basis of fear of inflation. New York Fed President John Williams echoed Powell, saying that a discussion about raising interest rates is still “way off in the future.”

“The market’s still digesting the Fed news,” said Mo Kazmi, portfolio manager and macro strategist at UBP. “I think a lot of that move was exacerbated by stretched positioning and now what we’re seeing is perhaps reflation trades being put back on and the market normalising to some extent, realising that for now it’s just a subtle shift from the Fed.”

At 7:30 a.m. ET, Dow e-minis were down 8 points, or 0.02%, S&P 500 e-minis were down 4 points, or 0.1%, and Nasdaq 100 e-minis were down 21.25 points, or 0.10%. In early trading, energy stocks Occidental Petroleum, ConocoPhillips and Exxon Mobil gained about 1% as oil prices jumped to a more than two-year high. Among meme stocks, software firm Alfi Inc dropped 10.1% after more than doubling in value in the prior session, while Torchlight Energy Resources dropped in U.S. premarket trading, extending losses from Tuesday triggered by the Reddit-hyped oil explorer’s sale of $100 million in new shares. Stock declines as much as 13% after Tuesday’s 29% plunge. Xpeng ADRs climbed in U.S. premarket trading after the electric-vehicle maker is said to have received the green light from the Hong Kong stock exchange to list in the city. Cryptocurrency-exposed stocks also edged higher as Bitcoin recovered bigly after dipping below the $30,000 level in the prior session, and was currently trading around $34,100. Here are some of the biggest U.S. movers today:

  • Cryptocurrency-exposed stocks edge higher in premarket trading following a volatile day for digital assets on Tuesday. Riot Blockchain (RIOT) climbs 2.4% and Marathon Digital (MARA) rises 2.3%, while Bit Digital (BTBT) gains 3.1%.
  • Gemini Therapeutics (GMTX) slumps 30%, extending postmarket losses, after the company announced initial data from its Phase 2a ReGAtta study of GEM103 in patients with geographic atrophy (GA) secondary to dry age-related macular degeneration. Jefferies said the stock was oversold in postmarket trading and the data was “encouraging but early.”
  • Xpeng ADRs (XPEV) rise 4.7% after the electric-vehicle maker is said to have received the green light from the Hong Kong stock exchange to list in the city. Peer Li Auto (LI) rises 2.4%, while Nio (NIO) gains 2.1%.

The MSCI world equity index was up 0.1% on the day at 1101 GMT, having recovered from the one-month low it hit in the aftermath of the Fed’s meeting.

In Europe, the Stoxx 600 Index fell as much as 0.5% to a session low, with travel and leisure and retail shares underperforming the most.  All sectors in the red except energy and mining shares. Luxury shares are down after analyst downgrades. Here are some of the biggest European movers today:

  • Pernod Ricard shares jump as much as 4.3% to a record high after the French distiller upgraded its full-year Ebit growth guidance more than anticipated, according to Jefferies. Peers also advance: Diageo gains as much as 2%, Remy Cointreau +1.5% and Campari +1.2%
  • Abivax climbs as much as 15% to the highest since Feb. 16 following positive data from clinical trials of its rheumatoid arthritis drug.
  • Bank of Ireland drops as much as 6.4% to the lowest since April 21 after the Irish government said it will sell part of its stake in the lender.
  • Kering slips as much as 3.1% after HSBC downgraded luxury- goods stocks and said investors may “take a break” from names trading close to record valuations. Peers also fall: Hermes drops as much as 2.5%, LVMH -1.8%, Richemont -2.2%, Burberry -2.3%
  • Shop Apotheke Europe drops as much as 5.1% after Metzler downgraded the stock to hold from buy, with analyst Tom Diedrich saying the latest news flow on e-prescriptions could dampen market optimism. Zur Rose Group falls as much as 5.8%

Early European PMI data showed that euro zone business growth accelerated at its fastest pace in 15 years in June as the easing of more lockdown measures and the unleashing of pent-up demand drove a boom in the bloc’s dominant services industry. The Euro area composite flash PMI increased by 2.1pt to 59.2 in June, continuing to beat consensus expectations. In a reversal of the cross-country pattern from May, the area-wide improvement was led by Germany, with a softer-than-expected PMI in France but further gains in the periphery. In the UK, the composite PMI declined by more than expected but remained close to its all-time high from May.

  • Euro Area Composite PMI (June, Flash): 59.2, consensus 58.8, last 57.1.
    • Euro Area Manufacturing PMI (June, Flash): 63.1, consensus 62.3, last 63.1.
    • Euro Area Services PMI (June, Flash): 58.0, consensus 58.0, last 55.2.
  • Germany Composite PMI (June, Flash): 60.4, consensus 57.6, last 56.2.
  • France Composite PMI (June, Flash): 57.1, consensus 59.0, last 57.0.
  • UK Composite PMI (June, Flash): 61.7, consensus 62.5, last 62.9.

Germany’s private sector growth was also lifted to its highest level in more than a decade in June, the PMI survey showed. In France, business activity edged higher, but not as much as expected. In Britain, growth in the private sector cooled slightly from the all-time high hit in May, but inflation pressures faced by firms hit record levels. The Bank of England meets on Thursday.

Berenberg economists Holger Schmieding and Kallum Pickering wrote in a note to clients that the euro zone economy is likely to recover to its pre-pandemic level of GDP in Q4 2021, while for Britain it will be Q1 2022.

UBP’s Kazmi said that he is positioned for higher yields in Europe, as it overtakes the United States in terms of vaccinations, lockdown easing and economic recovery from COVID-19.

“It will be interesting to see if the German Bund can follow the U.S. rate move with yields moving higher in Europe – it is something that we think could happen,” he said. “The fact that the Fed has moved more hawkishly will allow the ECB to be more comfortable perhaps in moving more hawkish, or less dovish, over time.”

Earlier in the session, Asian equities posted a modest advance, led by Hong Kong and Taiwan. The MSCI Asia Pacific Index was up 0.3%, set for a second straight day of gains. Property and IT shares climbed, offsetting a decline in consumer staples and industrial stocks. Hong Kong’s Hang Seng Index rose by the most in more than two months while Taiwan’s benchmark also jumped, driven by an advance in tech shares including Meituan, TSMC and MediaTek. The Asian measure’s mild move on Wednesday lies in contrast to its outsized swings in the past few sessions following the Fed’s hawkish pivot last week. Fed officials moved to clarify their stance this week, with Powell on Tuesday saying authorities would be patient in waiting to lift borrowing costs. “Powell is trying to calm the markets, and I think that should be a positive turn of pace through Asia,” said Gary Dugan, chief executive officer at Global CIO Office in Singapore. The current valuations of Asian stocks are “cheap,” he added. Japan stocks steadied after a wild two-day ride that saw the Nikkei 225 slump 3.3% on Monday and then recoup almost all those losses in the following session. Indonesia’s Jakarta Composite Index was the worst performer among major national benchmarks as the country struggles to contain the coronavirus outbreak.

Japan’s Topix declined as the market attempted to settle following a dramatic swing over the past two days. Electronics and auto makers were the biggest drags on the benchmark, which fell 0.5%. The Nikkei 225 closed little changed, with Fast Retailing the largest support while Eisai dropped. The Topix slid 2.4% on Monday before rebounding 3.2% on Tuesday, as investors reassessed the rally in cyclical-heavy Japan since late 2020 amid concerns over inflation and the timing of interest-rake hikes. The blue-chip Nikkei 225 is currently hovering around 29,000, in the middle of the 2,000-point range in which it has traded for most of the year. “It’s likely for investors to be inclined to take profits whenever the Nikkei 225 tops the 29,000 mark,” said Shingo Ide, chief equity strategist at NLI Research Institute. “Still, local corporate earnings are likely to improve, meaning more companies will likely revise up their forecasts, so the downside will be firmly supported with people kicking in to buy when the Nikkei 225 falls below 29,000.”

India’s benchmark equity index declined the most in two weeks, dragged by Reliance Industries after struggling for direction during the day.  Out of 30 shares in the Sensex index, 8 rose, while 22 fell. Sixteen of the 19 sector indexes compiled by BSE Ltd. tumbled, with a measure of oil and gas companies leading the losers. Stocks swung between gains and losses several times through the session against the backdrop of a steady ramp up in coronavirus vaccinations and the reassurance of policy support from the U.S Federal Reserve. The S&P BSE Sensex closed down 0.5%, with the NSE Nifty 50 Index falling by a similar magnitude. “Nifty continues to witness selling pressure at higher levels,” Manish Hathiramani, technical analyst at Deen Dayal Investments said in a note. “A buy-on-dips approach would be the most prudent way to trade this market.” Reliance Industries Ltd. was the biggest drag on both indexes, falling 0.9%. The nation’s largest company by market capitalization will hold its annual general meeting on Thursday.

In rates, Treasuries were slightly cheaper and the yield curve is steeper, with 10-year yields at around 1.477%, cheaper by 1bp. The long end steepened the 5s30s curve by more than 1bp, although the spread at close to 124.2bp it remains inside Tuesday’s range. The Asian session saw light volumes and low activity, while open interest points to a continued unwinding of positions into the ongoing Treasuries bear steepening move. Treasury auctions continue Wednesday with a $61b 5-year note sale at 1pm ET; offering follows a soft 2-year sale on Tuesday. In Europe, Bund futures are just off session highs having traded at -0.176%. Peripheral spreads tighten to core, 10y Bund/BTP spread narrows ~2bps.

In FX, the Bloomberg Dollar Spot Index hovered around its 200-day moving average as it gave up an earlier advance when the euro erased losses following better-than-forecast PMIs out of Germany and the euro-zone. The greenback was mixed versus its Group-of-10 peers though most currencies traded in more confined ranges compared to moves over the past week. The krone advanced as oil prices rose after an industry report pointed to another decline in U.S. crude stockpiles. The pound swung between modest losses and gains against the dollar, as investors positioned for a potentially more hawkish tone from the Bank of England at its Thursday decision. Options show the pound may stay above recent lows even if the BOE makes a case for selling pressure. Australian and New Zealand dollars reversed an Asia-session loss, even as Covid-19 restrictions were tightened in both nations. The yen fell toward its lowest level in more than a year as sentiment got a boost after Federal Reserve officials said interest rates are unlikely to rise anytime soon.

In commodities, Brent crude oil futures rose above $75 a barrel, their highest in more than two years, after an industry report pointed to another decline in U.S. crude stockpiles.

Elsewhere, bitcoin was up around 5% on the day, above the $34,000 mark. The cryptocurrency dropped to as low as $28,600 on Tuesday - its lowest since January. Ether was trading around $2,000.

The U.S. is set to report new home sales in May on Wednesday. The data “is unlikely to offer any major surprises,” Kaia Parv, head of investment research at FXPRIMUS, wrote in emailed comments. “These figures should mimic the trend of rolling off as we saw with existing home sales earlier this week.”

To the day ahead now, data releases include US new home sales for May, while from central banks, we’ll hear from ECB President Lagarde, Vice President de Guindos, and the Fed’s Bowman, Bostic and Rosengren.

Market Snapshot

  • S&P 500 futures up 0.1% to 4,240.50
  • STOXX Europe 600 down 0.1% to 455.92
  • MXAP up 0.4% to 206.75
  • MXAPJ up 0.9% to 693.70
  • Nikkei little changed at 28,874.89
  • Topix down 0.5% to 1,949.14
  • Hang Seng Index up 1.8% to 28,817.07
  • Shanghai Composite up 0.2% to 3,566.22
  • Sensex little changed at 52,613.89
  • Australia S&P/ASX 200 down 0.6% to 7,298.45
  • Kospi up 0.4% to 3,276.19
  • Brent Futures up 0.9% to $75.50/bbl
  • Gold spot up 0.3% to $1,783.78
  • U.S. Dollar Index little changed at 91.71
  • German 10Y yield fell 0.4 bps to -0.167%
  • Euro little changed at $1.1941

Top Overnight News from Bloomberg

  • Chancellor Angela Merkel’s cabinet approved plans to increase borrowing by 99.7 billion euros ($119 billion) next year to help finance Germany’s pandemic response
  • IHS Markit said its key index of activity in the U.K. was only slightly below the record posted in May, with firms responding to rising workloads by taking on staff at the fastest pace since it began collecting data in 1998; output-price inflation hit a new record as firms passed on higher costs to customers
  • “In the second quarter of the year as well as in the second half of the year, we expect very significant growth in the euro-area,” ECB Vice President Luis de Guindos said in online event
  • Treasury moves have been large post- Fed, but changes in curvature have been historically extreme. The past four sessions have seen futures open interest collapse, with the equivalent of $37 billion in 10-year bond positions being wiped out
  • Morgan Stanley plans to bar employees who aren’t vaccinated against Covid-19 from entering its offices in the New York area, as a growing number of major Wall Street firms delay the return of staff who aren’t protected against the deadly virus
  • Poland should shrug off inflationary fears and keep its key interest rate near zero until its economy fully bounces back, central banker Jerzy Zyzynski said
  • The Czech Republic will probably follow regional neighbor Hungary by starting a campaign to lift borrowing costs to eliminate the risk of inflation spiraling out of control

Quick look at global markets courtesy of Newsquawk

Asia-Pac equities saw mixed trade and failed to fully benefit from the firmer performance seen on Wall Street, where the Nasdaq Composite closed at an all-time high as Microsoft joined Apple in the USD 2trl club, whilst the S&P 500 was just short of a new closing record. US equity futures held a mild upside bias - the NQ (+0.2%), ES (+0.1%), RTY (+0.1%), and YM (+0.1%) all saw modest broad-based gains ahead of the next raft of Fed speakers. ASX 200 (-0.4%) was pressured as the gains across its mining, telecoms, and tech stocks failed to offset the losses in the Financials and Healthcare sectors. The Nikkei 225 (Unch) briefly topped 29k as the softer currency underpinned the exporter-heavy index. The KOSPI (+0.4%) remained cautious as tensions between Washington and Pyongyang simmered in the background. The Hang Seng (+1.6%) was bolstered by gains across its large-cap oil and financial stocks, whilst the Shanghai Comp (+0.5%) was contained, with friction reported in the Taiwanese Strait after a US destroyer sailed through the waters in what was seen as a sign of provocation in Beijing. Finally, JGB futures are relatively flat as it tracks price action across UST futures.

Top Asian News

  • Apple Daily to Shut Down at Midnight After Hong Kong Arrests
  • China, U.S. May Hold Diplomatic Talks Next Week, FT Reports
  • Australian Law Could Force Facebook, Google to Strip Content
  • Monthly Bargain Days Boost Southeast Asia’s Online Spending

European equities (Stoxx 600 -0.5%) painted a relatively mixed picture at the start of the session with initial pressure seemingly stemming from misses across the board on French flash PMIs for June. A better-than-expected report from Germany and the Eurozone was unable to help revive sentiment with the Stoxx 600 unable to surmount the index’s record high of 460.5 posted on June 14th. As the morning progressed the initial equity pressure has picked up with fresh catalysts slim though cash bourses remain somewhat mixed as the FTSE 100, for instance, benefits from mining strength. Separately, analysts at JP Morgan note that Europe is currently experiencing a faster pace of upgrades than any other region and still has room to continue its uptrend vs. the US. Stateside, futures trade largely unchanged ahead of the US entrance to market with no real bias towards growth/value. From a sectoral standpoint, Oil & Gas names sit at the top of the leaderboard with Brent crude rising to its best level since October 2018. Basic Resources are also performing well with BHP (+0.8%) a notable gainer in the sector after being upgraded to overweight from equal weight at Morgan Stanley. While Pernod Ricard (+2.4%) is currently the biggest gainer in the Stoxx 600 after raising guidance amid a stronger than expected recovery from the pandemic. At the other end of the spectrum, Luxury names have been in focus after a slew of broker moves at HSBC which has sent the likes of Kering (-3.0%), Hermes (-1.9%) and Burberry (-0.2%) lower.

Top European News

  • U.K. Poised to Ease Travel Curbs as Airlines Step Up Demands
  • London Looks Past Brexit to Eclipse Rivals in Emerging Markets
  • Private Equity Faces Off Hedge Fund Shorts in Bid for U.K. Plc
  • Londoners Snap Up Luxury Homes as Rich Foreigners Are Locked Out

In FX, a stellar start to Wednesday’s session for Sterling amidst reports of optimism on both sides of the NI protocol divide that a stop-gap solution can be found to the trade spat, while the Pound also scaled several chart and psychological hurdles vs the Dollar and Euro respectively that have been capping upside momentum. Specifically, the 100 DMA at 1.3944 and yesterday’s 1.3963 high that aligns with a Fib retracement (38.2% of the retreat from 1.4250 peak on June 1st to this Monday’s 1.3787 low) were all breached to expose 1.4000 in Cable, and Eur/Gbp crossed 0.8550 to the downside on the way to a circa 0.8530 multi-month low before bouncing in wake of somewhat contrasting flash UK PMIs. Conversely, the Yen’s fortunes are going from bad to worse it seems as Usd/Jpy has now surpassed 111.00 inching beyond prior YTD peaks and now eyeing 111.10, with reports that the Japanese Government is thinking about tightening regulations regarding foreign investment in important tech firms hardly helping.

  • USD - Aside from Yen underperformance and a fragile Franc (latter still straddling 0.9200), the Greenback is gradually losing more of its post-FOMC vigour vs G10 peers and EM counterparts. Indeed, the DXY is slipping further from 92.000 having already retreated into another lower range from last week’s peak (92.408), and in tech terms closing below a Fib support level for the 2nd consecutive day following a round of Fed speak offering a less hawkish/more dovish spin compared to Monday. However, the index is holding just above yesterday’s 91.643 trough, for now, within a 91.900-682 band awaiting more US housing data, Markit’s prelim PMIs and the next batch of Fed officials, including Bowman, Bostic and Rosengren.
  • NZD/AUD - The Kiwi and Aussie have both recovered well from overnight lows just under 0.7000 and sub-0.7550 against their US rival irrespective of latest COVID-19 outbreaks in Wellington and NSW that prompted NZ to lift the capital’s alert status to level 2 and the state premier to announce new restrictions for hotspots including Sydney. Nzd/Usd is back up near 0.7050 and Aud/Usd is eyeing 0.7575 having cleared the 200 DMA (0.7560) with some belated assistance perhaps via the CBA revising its RBA outlook markedly (the bank now anticipates a hike in November 2022 vs 2024 previously).
  • CAD/EUR - Another and firmer rebound in oil prices has helped the Loonie pare more of its recent losses to probe resistance offers through 1.2300 in the run up to Canadian retail sales, while mostly better than expected Eurozone flash PMIs (after an initial French scare) are contributing to the Euro’s efforts to stay comfortably afloat of 1.1900.
  • SCANDI/EM - Brent’s bounce beyond Usd 75/brl alongside WTI on the back of bullish private crude inventory data is boosting the Nok, Rub and Mxn, while the Sek is deriving some underlying support from a sharp upgrade to this year’s GDP estimate from the Swedish Finance Ministry and the Try is taking remarks from the CBRT about protecting the Lira at face value. Elsewhere, the Zar has shrugged off slightly weaker than forecast SA core CPI against the backdrop of relative stability in Gold, but the Cnh and Cny remain on a weaker footing in line with PBoC fixings.

In commodities, a slower session for the crude complex in terms of newsflow updates after yesterday’s multiple source reports relating to OPEC+ potentially considering increasing production and the benchmarks are now back at prices near/above yesterday’s best levels. Specifically, WTI and Brent August’21 contracts post gains of ~1.0% on the session at the top end of a USD 1/bbl range for Brent which is now trading in the mid USD 75.50/bbl region. Focus this morning has been on yesterday’s bullish private inventory report, particularly referencing the headline crude figure which posted a draw of -7.2mln vs exp. -3.9mln, ahead of the EIA release due later today. Elsewhere, geopolitical development has seen outgoing Iranian President Rouhani’s Chief of Staff announced that parties in Vienna have agreed to lift economic sanctions on Iran; however, Rouhani is the outgoing President so it remains to be seen how relations will transfer and develop when Raisi, who has already refused a President Biden meeting, takes over. Subsequently, Germany’s Foreign Minister says that there are still some issues but acknowledges progress has been made on the nuclear talks. Moving to metals, spot gold and silver have been very contained throughout the morning though modestly firmer on the session taking advantage of USD pressure. For base metals attention remains firmly on the action of China whose State Planner has sent teams to begin investigation commodity pricing and supply. Nonetheless, the likes of platinum, palladium and LME copper remain firmer on the session.

US Event Calendar

  • 8:30am: 1Q Current Account Balance, est. -$206.2b, prior -$188.5b
  • 9:45am: June Markit US Services PMI, est. 70.0, prior 70.4
  • 9:45am: June Markit US Manufacturing PMI, est. 61.5, prior 62.1
  • 10am: May New Home Sales, est. 865,000, prior 863,000; MoM, est. 0.2%, prior -5.9%;

DB's Jim Reid concludes the overnight wrap

5 years ago today we saw the U.K. vote for Brexit. Since this day, Sterling is -6.24% vs the Dollar and +4.87% vs the Euro, 10yr gilts have rallied -59bps (10yr Treasuries and Bunds have rallied -28bps and -26bps for context) and the FTSE is +11.9% (S&P 500 + 100.9% and Stoxx 600 +31.8%). Those who believe it was a bad idea continue to feel as strongly as ever and those who believe it was a good idea also share the same convictions. My only comment is that I can’t believe how quickly five years has gone.

I wonder what we’ll be saying about the Fed actions in recent weeks in five years time? For now calming remarks from Fed officials meant that risk assets have now regained their poise after last week’s FOMC wobble. Before the numerous Fed speakers, even 10yr US yields briefly traded higher than their pre-FOMC levels (European bonds closed above). However a steady but notable bond rally started with the Fed commentary which in turn helped equity markets power ahead.

The early speakers indeed helped set the tone with New York Fed President Williams reassuring markets that rates hikes were “still way off in the future”, while Cleveland Fed President Mester (a non-voter this year) said that they weren’t at a point to dial back accommodation, but that it may come under consideration this Autumn.

Fed Chair Powell later testified before the House of Representatives’ Select Subcommittee on the Coronavirus Crisis. The Chair received numerous questions on inflation and the Fed’s role and ability to curtail it. Chair Powell stuck to the script that, “a pretty substantial part, or perhaps all of the overshoot in inflation comes from categories that are directly affected by the re-opening of the economy such as used cars and trucks.” However as he mentioned last week, that view requires some level of humility and he acknowledged that those price “effects have been larger than we expected and they may turn out to be more persistent than we expected.” Powell also noted that the FOMC “will wait for actual evidence of actual inflation or other imbalances” before moving rates higher and not react to projections. The S&P 500 rose about 0.35% during the testimony before moderating a bit into the close, while US 10yr treasury yields fell another -1.5bps having rallied with the earlier Fed speak.

Running through the moves in response, US equities continued to advance as the S&P 500 (+0.51%) moved to within just quarter of a per cent of last week’s all-time closing high, whilst the VIX index of volatility fell a further -1.2pts as it subsided from its own recent high on Friday. New records were also set, with the NASDAQ (+0.79%) hitting a new record as tech stocks continued to power ahead, though small-cap stocks fared less well with the Russell 2000 closing up +0.43%. The US equity rally was fairly broad based with 18 of 24 industry groups gaining with a mix of technology and cyclicals stocks amongst the best performers. In fact the only two industries that fell over -0.25% yesterday were the defensive, bond-proxies real estate (-0.44%) and utilities (-0.68%). There were similar advances in Europe too, where the STOXX 600 (+0.26%), the FTSE 100 (+0.39%) and the DAX (+0.21%) all moved higher on the day.

For US Treasuries, yesterday saw a further steepening in the yield curve, albeit small, with the 2s10s (+0.1bps) and the 5s30s (+0.9bps) both moving higher. That was driven by a rally at the front end, with 2yr yields moving down -2.6bps on the day to 0.228%, whereas 30yr yields were down -2.4bps to 2.09%. We also saw a 2nd day running of higher inflation expectations, with the 10yr breakeven up +4.2bps to 2.32%, which brings its rise over the last 2 sessions to +8.2bps, although lower real yields helped the 10yr Treasury yield to move -2.5bps lower on the day, closing at 1.463%. At the day’s highs (1.507%) 10yr yields were actually +2.3bps higher that just before the FOMC announcement and 30yr yields (2.147%) were just -3bps lower than their pre-FOMC levels. At those intraday highs, the respective bonds were +15.5bps and +22.1bps higher than their Monday morning Asian yields lows. So a wild swing but markets are slowly getting acclimatised to the fact that the Fed didn’t say anything that outlandish last week. They just caught up closer to reality. For Europe it was a slightly different picture however, as 10yr yields on bunds (+0.7bps), OATs (+0.3bps) an BTPs (+2.2bps) all rose on the day.

Asian markets are largely posting gains this morning with the Nikkei (+0.07%), Hang Seng (+1.46%), Shanghai Comp (+0.46%) and Kospi (+0.38%) all up. Futures on the S&P 500 are also up +0.14% while the dollar index is up +0.11% in early trade today. Elsewhere, commodity prices are mostly trading up with DCE iron ore (+4.17%), Copper (+1.00%), SHF steel rebar (+2.12%) and oil prices (c. 0.50%) all higher. Treasury yields are broadly flat.

Looking ahead, the main highlight today will be the release of the flash PMIs for June. Back in May, the final numbers showed that growth was still maintaining decent momentum, with the Euro Area composite PMI coming in at 57.1, the strongest in over 3 years, while the US composite PMI was at 68.7, which is the strongest since the data goes back to in October 2009. Price pressures will be scrutinised and it’s possible the recent commodity dip will ease input prices even if supply chain issues still remain. Overnight, we’ve already had the numbers in from Japan and Australia, which showed Japan’s preliminary manufacturing PMI softening to 51.5 from 53.0 last month while the services reading improved to 47.2 from 46.5. Australia’s manufacturing PMI also softened to 58.4 (vs. 60.4 last month), the same trend as the Services PMI which came in at 56.0 (vs. 58.0 last month).

While Bitcoin ended the session up +0.98% at $32,903, at one point the cryptocurrency fell beneath $30,000 in trading for the first time since late January. The cryptocurrency is on track for its 3rd successive monthly decline now, and given it started the year at $28,996 it’s not too far away from having erased its entire YTD gains (it did intra-day), after peaking at an intra-day high of $64,870 back on April 14. So in spite of being all the rage during its ascent in Q1, you’d actually have better YTD returns right now from the mast majority of traditional assets in our monthly performance review suite.

In terms of the latest on the pandemic, there were signs that border restrictions could still be around in 2022 after Dow Jones reported that China would keep its pandemic border restrictions for at least another year, according to those familiar with the matter. Separately in the UK there was continued concern about the spread of the delta variant, as yesterday saw the 7-day average of new cases surpass 10,000 for the first time since February. That said, the one good piece of news is that the latest wave has seen the age distribution of cases shift substantially lower relative to previous waves, and younger groups are much less likely to be severely affected by the virus relative to older groups.

Concerns around the spread of the delta variant has also led to Wellington, capital city of New Zealand, raising its alert level to 2, a step below a lockdown while in Australia, Sydney has decided to impose new restrictions, including compulsory mask-wearing at all indoor venues such as workplaces and shops to control the outbreak. Taiwan has also decided to extend its soft lockdown by another two weeks to June 28. Elsewhere, the White House noted that the US is unlikely to reach 70% of adults with at least one shot by July 4th, however they are likely to get to 70% of all those over the age of 27 by the holiday.

Looking at yesterday’s data, US existing home sales fell to an annualised rate of 5.80m in May (vs. 5.73m expected), marking the 4th consecutive monthly decline. Separately, the Richmond Fed’s manufacturing survey for June saw the composite index rise to 22 (vs. 18 expected). And over in Europe, the European Commission’s advance consumer confidence reading for the Euro Area in June rose to -3.3 (vs. -3.1 expected), which is its highest level since January 2018.

To the day ahead now, and the aforementioned flash PMIs for June will likely be the main highlight. Otherwise, data releases include US new home sales for May, while from central banks, we’ll hear from ECB President Lagarde, Vice President de Guindos, and the Fed’s Bowman, Bostic and Rosengren.

Tyler Durden Wed, 06/23/2021 - 08:08

Warren Buffett Resigns From Gates Foundation Board

Warren Buffett Resigns From Gates Foundation Board

In another potential indicator of how public opinion has turned against Bill Gates in the weeks since he and his now ex-wife Melinda Gates disclosed their divorce plans, financier Warren Buffett has resigned as a trustee of the Bill and Melinda Gates Foundation. Buffett's position on the board was a major PR coup for the foundation, which is one of the world's biggest charitable enterprises.

Buffett, now 90, announced his decision to step down from the Gates Foundation board in a statement that also announced he had reached the halfway point in giving his Berkshire Hathaway shares to charity. Buffett gave away another $4.1 billion in Berkshire shares to give foundations.

In a statement shared with CNBC, Buffett said he was resigning from the Gates Foundation board "just as I have done at all corporate boards other than Berkshire's".

"For years I have been a trustee – an inactive trustee at that – of only one recipient of my funds, the Bill and Melinda Gates Foundation. I am now resigning from that post, just as I have done at all corporate boards other than Berkshire’s," Buffett said in a statement. "The CEO of BMG is Mark Suzman, an outstanding recent selection who has my full support. My goals are 100% in sync with those of the foundation, and my physical participation is in no way needed to achieve these goals."

While it's true that Buffett has slowly been pulling back from his non-Berkshire activities for years now, the timing of his departure from the Gates Foundation board is certainly curious. As Buffett himself concedes, he was an "inactive" member of the board. The board includes two other members, Bill and Melinda. Maybe Buffett simply couldn't stomach the awkwardness at board meetings.

Melinda Gates reportedly divorced her husband over his friendship with Jeffrey Epstein, something that Buffett has been mum about - though Warren Buffett was never tied to Epstein like many other titans of American business and finance have been.

Buffett has contributed $27 billion to the Gates Foundation over the past 15 years. Mark Suzman, the foundation’s chief executive officer, told employees last month that he was in talks to strengthen "the long-term sustainability and stability of the foundation."

Suzman "is an outstanding recent selection who has my full support," Buffett said. Suzman has insisted that both Bill and Melinda remain committed to the Foundation even after their divorce.

Tyler Durden Wed, 06/23/2021 - 07:50

​​​​​​​Russian Black Sea Fleet Warship Fired Warning Shots Near British Destroyer

​​​​​​​Russian Black Sea Fleet Warship Fired Warning Shots Near British Destroyer

Tensions are heating up between NATO and Russia in the Black Sea Region as a Russian patrol ship fired warning shots near HMS Defender, a British Royal Navy destroyer, for violating Russia's maritime borders, according to Russian state-owned news agency RIA, citing the Russian Ministry of Defence. 

At 1152 local time, HMS Defender sailed across "the Russian border and entered the territorial sea at Cape Fiolent for three kilometers," RIA said. 

Around 1206 and 1208, the Russian patrol ship fired warning shots. After nine minutes, Sukhoi Su-24 attack aircraft performed warning bombing maneuvers towards the British vessels. 

According to Bloomberg a Su-24 attack plane "dropped 4 bombs in ship's path." 

At 1233, the British warship exited the maritime borders of Russia. 

Russian Senator Sergei Tsekov told RIA the warship's movements were a "flagrant violation of international norms." 

*This story is developing... 

Tyler Durden Wed, 06/23/2021 - 07:21