Zero Hedge

"Do Not Touch Me... I Am A Faculty Member": Cornell Professor Disrupts Coulter Speech

"Do Not Touch Me... I Am A Faculty Member": Cornell Professor Disrupts Coulter Speech

Authored by Jonathan Turley,

Monica Cornejo, an assistant professor of interpersonal communication, was forcibly removed from a Cornell University event this week after disrupting a speech by conservative commentator Ann Coulter. She is only the latest faculty member to seek to prevent others from hearing opposing views. The question now is what Cornell will do about her conduct.

To its credit, Cornell resolved to reinvite Coulter to speak after a prior event was disrupted by protesters.

On March 13, Cornell Provost Michael Kotlikoff  stated that:

 “Having been deeply troubled by an invited speaker at Cornell (any speaker) being shouted down and unable to present their views, I agreed that there could be few more powerful demonstrations of Cornell’s commitment to free expression than to have Ms. Coulter return to campus and present her views.”

Kotlikoff should be commended for taking a principled stance in favor of free speech.

The question, however, is how he will handle Cornejo. In a 36-second video posted by The College Fix officers indicate that she is under arrest for “disorderly conduct.”

According to the site,  she repeatedly responded “don’t touch me — do not touch me,” and tells them “I am a faculty member.”

(I could not make out the last reported statement on the tape itself).

Cornejo is described in media reports as “one of the first undocumented tenure-track faculty members at Cornell.”

She was interrupting a speech by Coulter titled “Immigration: The Conspiracy To End America.”

Her bio states that

“Dr. Monica Cornejo is an Assistant Professor in Interpersonal Communication in the Department of Communication at the College of Agriculture and Life Sciences. Dr. Cornejo’s research uses qualitative and quantitative methodologies to examine the structural barriers that lead to inequities among undocumented immigrants, how undocumented immigrants draw on communication identity management and advocacy strategies to challenge those barriers, and how those strategies relate to undocumented immigrants’ health and wellbeing.

…Dr. Cornejo focuses on teaching students about different ways in which interpersonal communication can reduce or create disparities and inequities in the United States (e.g., discrimination towards sexual orientation minorities and immigrant communities), as well as the strategies members of minoritized communities (and allies, co-conspirators, families) utilize to challenge the disparities and inequities that position minoritized group members in a second-class position.”

I have previously written that universities must draw a clear distinction between free speech and this type of disruptive conduct. Cornejo has every right to protest outside of the event. However, preventing others from speaking or hearing opposing views is not free speech. It is the antithesis of free speech. It will continue until universities show the courage to discipline faculty or students engaging in such conduct.

The removal of Cornejo showed a commitment to free speech by the school. Often schools remain passive or enforce a heckler’s veto in such cases.

Yet, removal alone is not sufficient.

Protesters will often plan a series of disruptions to effectively shutdown an event. Moreover, the university stated publicly that it wanted to show that such an event could occur on campus without disruption. This faculty member defied that policy and elected to heckle and disrupt the event.

She is not the first.

Years ago, many of us were shocked by the conduct of University of Missouri communications professor Melissa Click who directed a mob against a student journalist covering a Black Lives Matter event. Yet, Click was hired by Gonzaga University. Since that time, we have seen a steady stream of professors joining students in shouting down, committing property damage, participating in riots, verbally attacking students, or even taking violent action in protests.

Blocking others from speaking is not the exercise of free speech. It is the very antithesis of free speech. Nevertheless, faculty have supported such claims. CUNY Law Dean Mary Lu Bilek showed how far this trend has gone. When conservative law professor Josh Blackman was stopped from speaking about “the importance of free speech,”  Bilek insisted that disrupting the speech on free speech was free speech. (Bilek later cancelled herself and resigned). Even student newspapers have declared opposing speech to be outside of the protections of free speech.

At Fresno State University public health professor Dr. Gregory Thatcher, recruited students to destroy pro-life messages.

At the University of California Santa Barbara, professors actually rallied around feminist studies associate professor Mireille Miller-Young, who physically assaulted pro-life advocates and tore down their display.  Despite pleading guilty to criminal assault, she was not fired and received overwhelming support from the students and faculty. She was later honored as a model for women advocates.

At Hunter College in New York, Professor Shellyne Rodríguez was shown trashing a pro-life display of students.

She was captured on a videotape telling the students that “you’re not educating s–t […] This is f–king propaganda. What are you going to do, like, anti-trans next? This is bulls–t. This is violent. You’re triggering my students.”

Unlike the professor, the students remained calm and respectful. One even said “sorry” to the accusation that being pro-life was triggering for her students.

Rodríguez continued to rave, stating, “No you’re not — because you can’t even have a f–king baby. So you don’t even know what that is. Get this s–t the f–k out of here.” In an Instagram post, she is then shown trashing the table.

Hunter College, however, did not consider this unhinged attack to be sufficient to terminate Rodríguez.

It was only after she later chased reporters with a machete that the college fired Rodríguez. She was then hired by another college.

Another recent example comes from the State University of New York at Albany, where sociology professor Renee Overdyke shut down a pro-life display and then resisted arrest. One student is heard screaming, “She’s a [expletive] professor.”

That of course is the point. She is a professor and was teaching these students that they do not have to allow others to speak if they oppose their viewpoints.

In watching their faculty engage in such conduct, one can understand why students believe that they have license to prevent others from speaking on campus. The only way to change that view is to suspend, fire, or expel those who seek to prevent others hearing opposing views by disrupting events. Again, the universities must show equal commitment in protecting their right to protest outside of events.

Yet, disrupting a class or event from within these spaces is a denial of the essential commitment of higher education to the free exchange of ideas.

Tyler Durden Wed, 04/17/2024 - 15:40

Boeing Whistleblower Tells Lawmakers: "They Are Putting Out Defective Airplanes"

Boeing Whistleblower Tells Lawmakers: "They Are Putting Out Defective Airplanes"

Update (1530ET): 

"I have serious concerns about the safety of the 787 and 777 aircraft, and I'm willing to take on professional risk to talk about them," Boeing whistleblower Sam Salehpour said in his opening statement on Capitol Hill today at the second Senate committee investigating the plane manufacturer's safety problems. He said when he raised concerns about the 787 Dreamliner, he was "ignored" by the company and "told not to create delays. I was told, frankly, to shut up."

Salehpour warned that the 787 Dreamliner fuselage was improperly put together and that the company "rushed to address the bottlenecks in production." The result, he warned, is "premature fatigue failure" on these planes. He noted, "They are putting out defective airplanes." 

"If something happens to me, I am at peace because I feel like coming forward, I will be saving a lot of lives," he added.

Boeing did not have any witnesses at the hearing, but a spokesperson for the company told The Hill the company "understands the important oversight responsibilities of the Subcommittee and we are cooperating with this inquiry. We have offered to provide documents, testimony, and technical briefings, and are in discussions with the Subcommittee regarding next steps."

Sen. Richard Blumenthal (D-Conn.), the committee chair, thanked the whistleblower for "speaking truth to power in the best sense of that word. Thank you for facing down one of the most powerful companies in the world." 

Blumenthal added, "We intend to uncover what has enabled the culture of safety disregard to exist, so that we can change it for good."

In early March, the last Boeing whistleblower was found dead in his car from a "self-inflicted wound." 

*   *   *

Update (1113ET):

The second Senate hearing on Boeing is about to begin (1115 ET). Lawmakers will hear whistleblower allegations about significant safety lapses in Boeing's manufacturing of the 787 Dreamliner. 

*   *   *

Update (0955ET):

Boeing faces two hearings on Capitol Hill today: 

First: Senate Commerce Committee

US Senator Maria Cantwell (D-Wash.), Chair of the Senate Committee on Commerce, Science and Transportation, will convene a full committee hearing titled "FAA Organization Designation Authorization (ODA) Expert Panel Report" on Wednesday, April 17, 2024, at 10:00 AM EDT. This hearing will review the findings and recommendations from the Organization Designation Authorization (ODA) Expert Review Panel's final report. The landmark Aircraft Certification, Safety, and Accountability Act required the FAA to convene an independent expert panel to review the safety management processes and culture of ODA holders like Boeing and make recommendations to address any safety deficiencies.

Watch Live:

The whistleblower hearing begins at 1115 ET.  

*   *   *

The Senate Commerce Committee, which oversees the Federal Aviation Administration and Boeing, will kick off today's first hearing at 1000 ET. This will feature a panel of aviation experts who recently released a report criticizing Boeing's "inadequate" and "confusing" safety culture and has called for significant changes. 

The report states, "The procedures and training are complex and in a constant state of change, creating employee confusion, especially among different work sites and employee groups." The experts noted "a lack of awareness of safety-related metrics" across all levels of the company. 

Sen. Tammy Duckworth (D-Ill.), chair of the Senate Commerce Aviation subcommittee, said Tuesday that the Federal Aviation Administration "needs to look at what Boeing does, not just what it says it's doing." 

Duckworth, who will attend the first of today's two hearings, said there is a real possibility that the FAA "is willing to use its "civil enforcement authority when appropriate" against Boeing. 

The second hearing (beginning at 1115 ET) will feature a Boeing quality engineer turned whistleblower who will testify before the Senate Homeland Security Committee's Permanent Subcommittee on Investigations about the alleged poor manufacturing quality of the 787 Dreamliner. 

The whistleblower is Sam Salehpour, a quality engineer at Boeing. In a report released last week, he told The New York Times about large sections of the 787's fuselage that were improperly connected and could break down over time. 

"The entire fleet worldwide, as far as I'm concerned right now, needs attention," Salehpour told NBC News, adding, "The attention is that you need to check your gaps and make sure that you don't have the potential for premature failure."

"The is going to surface some really shocking allegations about failures and safety practices and culture and light and retaliation that should shock the conscience of corporations as well as Americans," subcommittee Chair Richard Blumenthal (D-Conn.) told The Hill.

Blumenthal added, "The whistleblower will have the guts to show up, and I'm hoping that Dave Calhoun will as well at some point." 

Meanwhile, Boeing CEO David Calhoun plans to step down at the end of this year. He has repeatedly stated that he wants to improve manufacturing quality and safety culture. Calhoun has not publicly said if he will attend the hearings today. 

Tyler Durden Wed, 04/17/2024 - 15:30

Beige Book Reveals Economy In Far Worse Shape Than White House Claims

Beige Book Reveals Economy In Far Worse Shape Than White House Claims

There was something odd about the latest Beige book (which was prepared based on information collected on or before April 8, 2024, so before the latest CPI print): if accurate, it would suggest that the rosy economic picture painted by the White House is woefully incorrect, whether on purpose or not (spoiler alert: it is on purpose).

Reading the Beige Book, we find that contrary to the official GDP print which claims the economy is cruising at a brisk 3%, ten out of twelve Districts experienced "either slight or modest" economic growth, while the other two reported no changes in activity.

What is more concerning for the economy where spending amounts for 70% of all economic growth, the Beige Book found that consumer spending "barely increased" overall, but reports were quite mixed across Districts and spending categories:

  • Several reports mentioned weakness in discretionary spending, as consumers' price sensitivity remained elevated.
  • Auto spending was buoyed notably in some Districts by improved inventories and dealer incentives, but sales remained sluggish in other Districts.
  • Tourism activity increased modestly, on average, which is odd considering the recent Conference Board survey found a record number of people planned on traveling abroad. Almost as if they lied...

  • Manufacturing activity declined slightly, as only three Districts reported growth in that sector.
  • Contacts reported slight increases in nonfinancial services activity, on average, and bank lending was roughly flat overall.
  • Residential construction increased a little, on average, and home sales strengthened in most Districts. In contrast, nonresidential construction was flat, and commercial real estate leasing fell slightly.
  • The economic outlook among contacts was cautiously optimistic, on balance.

Next, we turn to employment, where contrary to the BLS claims that jobs are soaring month after month (even if they are all part-time workers, mostly going to illegal aliens), the Beige Book found that employment rose at a slight pace overall, with nine Districts reporting very slow to modest increases, and the remaining three Districts reporting no changes in employment.

Not surprisingly, most Districts noted increases in labor supply - which makes sense in a country where 10 million Biden voters illegals have entered in the past year. Yet despite the improvements in "labor supply", many Districts described persistent shortages of qualified applicants for certain positions, including machinists, trades workers, and hospitality workers. Guess you can only have so many gardeners and construction workers. Several Districts reported improved retention of employees, and others pointed to staff reductions at some firms.

There's more: contrary to the surging wages of the post-covid era, the Beige Book found that Multiple Districts said that annual wage growth rates had recently returned to their historical averages. On balance, contacts expected that labor demand and supply would remain relatively stable, with modest further job gains and continued moderation of wage growth back to pre-pandemic levels.

Last but not least, the Beige Book commented on inflation and found that price increases were modest, on average, running at about the same pace as in the last report, as disruptions in the Red Sea and the collapse of Baltimore's Key Bridge caused some shipping delays but so far did not lead to widespread price increases. Movements in raw materials prices were mixed, but six Districts noted moderate increases in energy prices. Another widely known fact: several Districts reported sharp increases in insurance rates, for both businesses and homeowners.

Most ominously, another frequent comment was that firms' ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins. That's hardly the stuff soft- or no-landings are made of.

Inflation also caused strain at nonprofit entities, resulting in service reductions in some cases.

On balance, contacts expected that inflation would hold steady at a slow pace moving forward. At the same time, contacts in a few Districts—mostly manufacturers—perceived upside risks to near-term inflation in both input prices and output prices.

Turning to the specific regional Feds, we found these summaries notable:

  • Boston: Business activity expanded at a modest pace in recent weeks, and prices rose slightly. Employment was flat overall, but one retailer reported significant layoffs. Convention and tourism activity grew at a robust pace. Home sales increased on a year-over-year basis, marking a turnaround. The outlook ranged from cautiously optimistic to bullish.
  • New York: On balance, regional economic activity remained flat. Labor market conditions were solid and continued to normalize as labor supply and labor demand came into better balance. Consumer spending was unchanged after a weak first quarter. Housing markets strengthened, with the spring selling season picking up beyond the seasonal norm. The pace of selling price increases remained modest.
  • Philadelphia: On balance, business activity was flat in the current Beige Book period—after declining slightly last period. Employment edged up, despite staffing and recruitment efforts slowing to a crawl. Wage and price inflation continue to moderate; however, housing affordability continues to be a concern. Overall, the outlook is positive, as firms remained optimistic about expectations for future growth.
  • Cleveland: District business activity increased modestly, as did employment. Firms anticipated greater ease filling open positions, including those that have been particularly challenging, because of increased labor availability. Wage pressures continued to normalize, and some contacts reduced starting wages for new roles. Cost and price pressures changed little.
  • Richmond: The regional economy grew at slight pace since our previous report. Consumer spending on retail goods was mixed but spending on travel and tourism was up slightly. Fifth District port activity slowed and was impacted by the collapse of the Francis Scott Key Bridge. Employment growth slowed from a moderate to a modest rate in recent weeks, but wages continued to grow moderately. Price growth also remained moderate.
  • Atlanta: The Sixth District economy grew modestly. Labor markets continued to stabilize; wage pressures eased. Many nonlabor costs moderated. Retail sales were steady, but consumers remained price conscious. Tourism remained robust. Commercial real estate conditions slowed. Transportation activity was mixed. Manufacturing grew slightly. Loan demand was flat. Energy activity improved.
  • Chicago: Economic activity increased slightly. Employment increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw no change in activity; and manufacturing and construction and real estate activity were flat. Prices and wages rose moderately, while financial conditions were stable. Prospects for 2024 farm income were unchanged.
  • St. Louis: Economic activity has continued to increase slightly since our previous report. Prices have increased modestly, as contacts are broadly feeling the pressures of increases in both labor and non-labor costs. The outlook was neutral to slightly optimistic, which is generally unchanged from our previous report, but better than one year ago.
  • Minneapolis: District economic activity grew slightly. Employment grew some, but labor demand was softer. Wage pressures were present but continued to ease, while price pressures ticked up. Consumer spending was mostly flat, and manufacturing slowed modestly. Commercial and residential construction improved slightly. Agricultural conditions were steady at low levels.
  • Kansas City: The District economy expanded modestly. Demand for auto loans and residential mortgages rose as borrowing rates declined. Demand for HELOC also increased as a means to consolidate or refinance household debt. Job gains were modest even as worker availability improved slightly.
  • Dallas: The Eleventh District economy expanded modestly. While activity in services and housing grew, manufacturing output, retail sales, and loan demand declined slightly. Employment growth slowed as wages, input costs, and selling prices grew at a moderate pace. Overall, Texas firms noted an uptick in uncertainty.
  • San Francisco: Economic activity continued to grow at a slight pace, employment levels were little changed, and prices and wages rose slightly. Retail sales were unchanged, and demand for services grew modestly. Demand for manufactured products changed little, and conditions in agriculture were mixed. Real estate activity was slightly down. Financial sector conditions were largely unchanged.

More in the full beige book

Tyler Durden Wed, 04/17/2024 - 15:20

Footage Shows Hezbollah Drone Slam Into Northern Israel Community Center, 18 Wounded

Footage Shows Hezbollah Drone Slam Into Northern Israel Community Center, 18 Wounded

Israeli emergency authorities are reporting that casualties from a suicide drone attack on a northern Israeli village have risen to at least 18 people wounded.

Hezbollah took responsibility for launching the suicide drone which ultimately scored a direct hit on a community center, with Israeli media noting that air warning sirens failed to sound during the attack. However, Hezbollah claimed it was targeting a building used by the Israeli military.

According to Times of Israel, "The victims were taken to Galilee Medical Center in Nahariya. which said that one victim was listed in critical condition and two others were seriously wounded."

"Another four people were listed in moderate condition, while the remaining victims were lightly hurt, the hospital added," the report indicates. Public broadcaster Kan published dramatic footage showing the small drone slam into a building, erupting into a large fireball...

The IDF says it is investigating why the crucial air raid warning systems failed during the attack, only apparently turning on in the aftermath of the strike.

Israel's military further said it immediately retaliated by striking Hezbollah launch positions in southern Israel, as has been typical in what's become a daily tit-for-tat and intensifying cross-border fire.

Also on Wednesday, the IDF conducted strikes on the southern Lebanese town of Aita al-Shaabb, as well as aerial attacks on Yarin and Naquora.

Footage from another angle captures a clearer picture of the suicide drone sent by Hezbollah...

Hezbollah earlier in the week 'congratulated' Iran following the Saturday overnight massive missile and drone attack on Israel, saying in a statement: "Hezbollah extends its blessings and congratulations to the leadership of the Islamic Republic of Iran and its people for the effective and unprecedented attack targeting the unjust aggressor … [We praise] the brave and wise decision to respond firmly to the Zionist aggression against the Iranian consulate in Damascus."

At this moment some 80,000 residents of northern Israel still remain unable to access and live in their homes, given that six months ago northern Israeli communities close to the border were ordered evacuated due to the daily threat of rocket and drone attack from Hezbollah.

Via CNN

It's widely believed that Hezbollah sources their more sophisticated drones from Iran, which has long supplied the bulk of the Shia paramilitary group's missile arsenal as well. Iran has also supplied the Houthis in Yemen, which have effectively closed the Red Sea to commercial shipping through constant attacks.

Tyler Durden Wed, 04/17/2024 - 15:00

New NPR CEO Gave Ted Talk Asserting "Truth" Is A "Distraction"

New NPR CEO Gave Ted Talk Asserting "Truth" Is A "Distraction"

Authored by Paul Joseph Watson via Modernity.news,

New NPR CEO Katherine Maher gave a Ted Talk during which she asserted that “truth” is a “distraction” which is “getting in the way of getting things done.”

Calls are growing for NPR to have its government funding withdrawn after a series of tweets by Maher were uncovered in which she supported far-left causes, including endorsing racial reparations and making claims that the planet is “burning.”

But the content of the Ted Talk she gave is raising even more eyebrows.

Maher ludicrously suggested during the speech that far-left Wikipedia had a model “which actually works really well” in determining “what the truth really is.”

Acknowledging that Wikipedia writers are “not focused on the truth, they’re focused on something else, which is the best of what we can know right now,” Maher suggested the “truth” was not a priority.

“In fact, our reverence for the truth might be a distraction that’s getting in the way of finding common ground and getting things done,” she said.

Maher went on to claim “there are many different truths” based on the feelings, environment and perception of different individuals.

In other words, there is no objective truth and the truth is whatever left-wing journalists and biased Wikipedia editors say it is.

Elon Musk has blasted NPR in recent days, asserting that the network has “become a hard left propaganda machine that tolerates no dissent.”

That was in response to comments by award-winning veteran senior NPR editor Uri Berliner, who was suspended after sharing concerns about the state of the mainstream media.

Berliner lamented the “declining ratings” and “sorry levels of trust,” calling on the legacy press to go back to square one “with the basic building blocks of journalism.”

[ZH: Berliner just resigned, explaining that "I cannot work in a newsroom where I am disparaged by a new CEO whose divisive views confirm the very problems at NPR I cite in my Free Press essay."]

Musk also highlighted how Maher (who puts pronouns in her bio) has a history of working for corrupt, globalist institutions.

“While NPR often claims that public funding accounts for only a small portion of its budget, the outlet’s parent company, the Corporation for Public Broadcasting, received $525 million this year, $126 million of which went to public radio stations. Because much of NPR’s public funding is indirect, channelled through member fees paid by local stations, it is able to claim financial independence,” reports Unherd.

Last year, Twitter placed a label on NPR’s account describing the outlet as “State-affiliated media,” with owner Elon Musk commenting that the description “seems accurate.”

*  *  *

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

Tyler Durden Wed, 04/17/2024 - 14:00

"War In The Middle East": Opinions Clash In Today's ZeroHedge Debate

"War In The Middle East": Opinions Clash In Today's ZeroHedge Debate

Watch Live

This weekend marked a major escalation in the long-running conflict between Israel and Iran, with the latter launching what some called a "performative" barrage of missiles at Israel amid the backdrop of the Israel-Hamas conflict.

Iran says the matter is "concluded" (for now) but remains "in a state of readiness" to deliver a "massive and harsh response" if Israel launches the "tiniest invasion," while Israel's former chief of Mossad, Zohar Palti, warned that striking Iranian nuclear facilities "is on the table."

The UK, France, and Germany have sent top-ranking diplomats to Israel in order to urge de-escalation of the crisis, while the Biden administration is also said to be not be on board with Israel directly striking back on the Islamic Republic. PM Netanyahu, however, said 'we will make our own decisions' on security.

Meanwhile, there is no hope in sight for any resolution on the ongoing conflict between Israel and Hamas in Palestine where an unprecedented humanitarian crisis has erupted.

Let's Debate

Tonight, April 17th, ZeroHedge is hosting a debate on the issue: participants will discuss everything from how the Biden administration should (or should not) respond, to whether Israel's actions in Gaza, Syria and Lebanon are morally justified vs. the actions of Hamas.

  • Defending Israel will be talk show host Dennis Prager and Newsweek opinion editor Batya Ungar-Sargon.
  • Taking the opposing position will be Young Turks founder Cenk Uygur and libertarian Dave Smith.
  • The debate will be moderated by Saagar Enjeti, founder of Breaking Points.

Tune in to our live stream Wednesday evening at 7 PM Eastern, right here at ZeroHedge.com. Additionally, you may subscribe to the ZeroHedge Rumble channel.

Tyler Durden Wed, 04/17/2024 - 13:41

Stellar 20Y Auction Sends Yields Sliding To Session Lows

Stellar 20Y Auction Sends Yields Sliding To Session Lows

With yields surging yesterday to a 2024 high in a move which sent stocks sliding for a 3rd consecutive day, a dump which extended today as more CTA selling kicked in, but unlike yesterday it is now also manifesting in a flight to bond safety which has pushed yields sharply lower, moments ago the Treasury sold $13BN in 19-Year 10-month reopening of 20Y Treasury cusip TZ1 in what was a stellar auction.

The high yield of 4.818% was 28bps higher than March's 4.542% ad the highest since October's record high 5.257%, but it also stopped through the 4.843% When Issued by 2.5bps, the biggest stop through since Jan 2023.

The bid to cover was also impressive, rising from 2.79 to 2.82, the highest since June 2023 and clearly well above the six-auction average.

The internals also impressed with Indirects awarded 74.7%, up from 73.5% last month and the highest since February 2023. And with Directs awarded 16.2%, just below the 18.3% six-auction average, dealers were left holding just 9.1%, the lowest since June 2023.

Overall this was a stellar auction, and one which pushed 10Y yields to session lows of 4.58%, down nearly 10bps on the day, before giving up some of the gains.

 

Tyler Durden Wed, 04/17/2024 - 13:29

Gold's Resilience Shows A Currency Crisis Isn't Far Away

Gold's Resilience Shows A Currency Crisis Isn't Far Away

First it was Michael Hartnett, warning that the "Explosion In Gold Shows Investors Are Preparing For The Endgame", now it's Bloomberg's turn.

According to BBG Markets Live reporter Mark Cranfield, the resilience of precious metals in the face of rising bond yields and a strong US dollar suggests investors are hedging against currency debasements. Central banks adding to their gold holdings in recent months only supports that view.

As Cranfield correctly notes, there is nothing better to concentrate the mind of conservative investors than being fearful that whichever currency they hold isn’t being wholeheartedly defended by its lender of last resort. Indeed, there is more than a hint of a competitive devaluation cycle going on in the developed and emerging worlds.

This week has seen a flurry of verbal intervention rounds to support currencies from policymakers, but traders can see through the smokescreen. There is almost no appetite to deplete central bank reserves, especially when Jerome Powell says the Fed can take its time to lower rates, which will keep the US dollar underpinned.

Gold is even defying the trend of falling ETF holdings (although as shown in the chart below, there is no mystery why gold decoupled from gold ETFs in the middle of 2022 amid a record central bank buying bonanza).

Finally, the Bloomberg commentator observes that there is an icing on the cake for lovers of precious metals when geopolitical angst stays in the forefront of daily news summaries. Gold and silver are portable. They may be a bit heavy to carry, but everybody knows what they are and what they are worth when you show them a coin or a bar. And in case they get too heavy, there is always bitcoin...

Tyler Durden Wed, 04/17/2024 - 13:20

Omens For The Nasdaq As Technical Signal Proliferates

Omens For The Nasdaq As Technical Signal Proliferates

Authored by Simon White, Bloomberg macro strategist,

A technical sell signal for the Nasdaq has hit levels not seen since the tech bubble.

However, it should be taken in the context of a still supportive economic backdrop, with buoyant excess liquidity and low near-term recession risk.

The Hindenburg Omen compares the percentage of stocks in a stock index making new 52-week lows versus 52-week highs.

When both are rising above a certain threshold, and we are near a one-year high in the index, the signal activates.

For the Nasdaq, more omens have triggered so far this year than in any calendar year since the 2000 tech-driven top.

As the chart shows, previous rises in the number of omens have coincided with the Nasdaq selling off or moving sideways.

But before traders hit the sell button, there are some caveats to take into account.

  • First of all, it’s obviously unwise to base an investment strategy around one signal, especially one with such a small sample size. Indeed, there has been one instance where the annual number of omens exceeds today’s value, in the mid 1990s, but this happened in the midst of that decade’s potent bull rally.

  • Secondly, there are currently no omens for the NYSE. Stock markets within a country tend to move similarly, and the Nasdaq does not stand out as being more overbought than e.g. the NYSE index (the NYA).

  • Thirdly, the US economy is doing OK and near-term recession risk is low. Furthermore, excess liquidity continues to be supportive for risk assets.

Still, it would be remiss to ignore the notable short-term risks in equities, which the Hindenburg Omens are potentially drawing attention to.

Hedged portfolios, taking advantage of still relatively cheap hedges (e.g. a 10% OTM put on the Nasdaq 100 expiring in December is ~2.6%), are better placed to weather short-term attendant risks.

 

Tyler Durden Wed, 04/17/2024 - 13:00

Zelensky Angry That Israel Prioritized By West, Says Ukraine Running Out Of Missiles To Defend Airspace

Zelensky Angry That Israel Prioritized By West, Says Ukraine Running Out Of Missiles To Defend Airspace

On Wednesday Russian missiles slammed into the northern Ukrainian city of Chernihiv, killing at least 17 people and wounding scores more, according to local officials. The attack came during a busy time of the day in a downtown district.

President Volodymyr Zelensky in the wake of the deadly strikes, which involved at least three missiles hitting targets, lashed out at the West for failing to provide more vital anti-air defenses and missiles. "This would not have happened if Ukraine had received enough air defense equipment and if the world’s determination to counter Russian terror was also sufficient," he stated.

Aftermath of attack on Chernihiv, handout/file image

The wording of the statement strongly suggested his view that allies' determination is not sufficient, despite tens of billions already spent by the West. "Terrorists can destroy lives only when they first manage to intimidate those who are able to stop terror and protect life," he added.

Later in the day, Ukraine emergency authorities reported that over 60 civilians were injured in the attack, in addition to the at least 17 dead - a casualty toll which could rise.

In prior statements published Tuesday, Zelensky commented on last week's Russian attack which destroyed the largest power-generating plant in the Kyiv region. He described that his military had run out of missiles to mount an adequate defense.

"There were 11 missiles flying. We destroyed the first seven, and four (remaining) destroyed Trypillia. Why? Because there were zero missiles. We ran out of missiles to defend Trypillia," he told PBS.

He and his top officials have of late accused the West of turning a "blind eye" at a moment they are simultaneously focusing on Israel's defense against Iran. Reuters has said there remains the possibility that at this rate Ukraine could run out of effective anti-air measures altogether:

Reuters was not able to independently verify the account. Zelenskiy has earlier warned that Ukraine has already had to make tough choices about what to protect and said his country could run out of defensive missiles entirely if Russian attacks continued apace.

Destroyed in 11 March strike, Trypilska thermal power plant was the biggest energy facility near Kyiv and was built to have a capacity of 1,800 megawatts, more than the pre-war needs of Ukraine's biggest city. Other stations and imports have filled the gap for now but residents have been urged to save power.

Ukraine has further in observation of the weekend Iran attack on Israel asked why the US won't also intercept inbound missiles over Ukraine like it did for Israel.

This has become a talking point also picked up by some European allies. NBC reports:

The United States and its partners helped Israel, so why — Ukraine is asking — won’t they help protect us from Russian attacks?

It "looks extremely strange," Ukrainian presidential adviser Mykhailo Podolyak told NBC News in an interview on Tuesday.

"How does the civilian population of Ukraine or the civilian infrastructure of Ukraine differ from the civilian population of Israel from a humanistic point of view?" he asked bluntly.

Zelensky himself in a Monday night address described, "European skies could have received the same level of protection long ago if Ukraine had received similar full support from its partners in intercepting drones and missiles."

"We can now see how unity can work," Zelensky added, while also expressing frustration that the West rushed to directly intervene in Israel's defense but not Ukraine's. This big difference of course is that Russia is a known nuclear power, and much more formidable, while Iran is not.

Tyler Durden Wed, 04/17/2024 - 12:40

New York College Suspends Professor "Energized" By Hamas Attack On Israel

New York College Suspends Professor "Energized" By Hamas Attack On Israel

Authored by Lisa Schiffren via The College Fix,

A tenured professor is suspended throughout the rest of the semester after writing an essay celebrating Hamas’ attack on Israel.

“McCarthyism is real. I’ve been relieved of teaching responsibilities,” Hobart and William Smith Colleges Professor Jodi Dean wrote Saturday on X. “Don’t stop talking about Palestine.”

“The images from October 7 of paragliders evading Israeli air defenses were for many of us exhilarating,” the New York political scientist wrote the week prior in a blog post for Verso Books.

She wrote further:

Here were moments of freedom, that defeated Zionist expectations of submission to occupation and siege. In them, we witnessed seemingly impossible acts of bravery and defiance in the face of the certain knowledge of the devastation that would follow (that Israel practices asymmetric warfare and responds with disproportionate force is no secret).

Who could not feel energized seeing oppressed people bulldozing the fences enclosing them, taking to the skies in escape, and flying freely through the air?

Mark Gearan, the president of HWS Colleges, wrote, in a letter to the college community, “I deeply regret that as a result of Professor Dean’s comments, there now may be students on our campus who feel threatened in or outside the classroom.” 

 “Not only am I in complete disagreement with Professor Dean, I find her comments repugnant, condemn them unequivocally, and want to make clear that these are her personal views and not those of our institution. One of my priorities as president is to build an intellectually vibrant and relationship-rich campus community,” President Gearan wrote.

“The Colleges recognize and affirm the importance of free dialogue on ideas,” he wrote.

“We have worked tirelessly to create an environment where we can discuss hard issues upon which we may disagree. But we can never and will never condone or praise violence, particularly when that violence is directed at individuals based on their religion, race or national origin.”

The Chronicle of Higher Education reported that a follow up message from the provost, Sarah Kirk, explained that “the colleges are obligated under Title VI, a federal antidiscrimination law, to investigate potential ‘hostile environments’ involving national origin, shared ancestry, or other protected classes.’” 

Some defended the professor’s right to speak freely, even if disagreeing with her views, according to The Chronicle.

Princeton University Professor Robert George “said that while he found the views Dean expressed in her article appalling, the colleges’ response seemed to conflict with their own endorsement of the American Association of University Professors’ principles on academic freedom, which are included in the faculty handbook.”

“None of the unprotected categories of speech are relevant here,” the conservative professor said. “Jodi Dean did not threaten anybody. She did not harass anybody. She did not engage in defamation or accuse somebody of a crime falsely.” 

However, Cornell University law Professor William Jacobson had different views.

“You endorse the academic boycott of Israel depriving Israelis and American students and scholars who want to study in or with Israelis of their academic freedom,” Jacobson wrote on X, responding to a post from Professor Dean. “You’re not just a ghoulish depraved communist supporter of Islamist terrorism, you’re an academic freedom fraud.”

The news outlet also reported Dean will continue to be paid.

She also “has access to her office, and can continue to do research. [The spokesperson] rejected any suggestion that Dean’s academic freedom had been violated, and added that the professor had made comments similar to the controversial essay at a campus lecture on March 28.”

Tyler Durden Wed, 04/17/2024 - 12:20

Nationwide Ground Stop Lifted For Alaska Air After "Tech Problem Cropped Up During System Upgrade"

Nationwide Ground Stop Lifted For Alaska Air After "Tech Problem Cropped Up During System Upgrade"

Update (1216ET):

Alaska Air resumed departures around noon after an hour-long ground stop for all departure flights nationwide.

The Wall Street Journal says the ground stop was due to a "technology problem that cropped up during a system upgrade."

Even though the ground stop has been lifted, Alaska Air passengers can expect delays throughout the afternoon.

*   *   * 

Update (1120ET):

Phil LeBeau reports on CNBC television that an earlier malfunction of Alaska Airlines' IT system, which calculates planes' weight and balance, triggered a nationwide ground stop.

For all those pilots out there, weight and balance are critical before running up the pre-flight checklist. 

*   *   * 

Shares of Alaska Airlines are tumbling in New York after the Federal Aviation Administration's Air Traffic Control System Command Center says all of the carrier's mainline and subcarrier flights (excluding SkyWest Airlines) are placed on a "ground stop."

  • FAA: ALL ALASKA MAINLINE AND SUBCARRIER FLIGHTS GROUND STOPPED (SKYWEST EXCLUDED)

Here's the advisory from the FAA: 

Alaska Airlines shares tumbled on the news. Still up on the session. 

The FAA did not explain the reasoning behind the ground stop. 

*This is a developing story. 

Tyler Durden Wed, 04/17/2024 - 12:16

US Prepares To Reimpose Venezuela Oil Ban As Biden Seeks Scapegoat To Resume Draining SPR

US Prepares To Reimpose Venezuela Oil Ban As Biden Seeks Scapegoat To Resume Draining SPR

For much of the past year, we had joked that behind the facade of western Democratic ideals, was a cold hard truth: the price of oil must not be allowed to go up in an election year. This was obvious in Biden's "kid gloves" treatment of Iran's regime, it was obvious when the US implemented "sanctions" on Russian oil that were breached within months with zero enforcement, it was also obvious when the US president became best friends with Venezuela's dictator Nicolas Maduro last October when, in exchange for a few thousands barrels of Venezuela's oil, the US lifted sanctions on the person that for years was one of western "democracies" biggest enemies.

Of course, there had to be some at least optical quid-pro-quo in exchange for the Biden detente so that the US president doesn't look not just senile but also totally stupid and incompetent, and sure enough Maduro agreed that he will hold "free elections" only to renege a few weeks later, while also rubbing Biden's face in Maduro's sudden leverage over the US president as we reported on various occasions:

And so, nearly half a year later after Biden's shocking detente with Venezuela's strongman, and having become the butt of all jokes, Bloomberg reports that Joe Biden’s administration intends to reimpose oil sanctions on Venezuela, ending a six-month reprieve, if Nicolas Maduro’s regime does not take steps in the next two days to honor an agreement to allow a fairer vote in elections scheduled for July.

The US plans to allow a Treasury Department license permitting oil and gas production to expire without renewal on Thursday, according to people familiar with the plan, who asked not to be identified without permission to speak publicly, if Venezuela fails to act.

The report goes on to note that the Biden administration has been trying to buy as much time as possible before finalizing the decision in hopes for an unlikely breakthrough that could change its plan, although that has clearly not happened.

Reimposing sanctions would end a brief respite that had foreign oil executives flocking to the South American nation. Renewed sanctions would set back Maduro’s efforts to restart Venezuela’s economy, which requires significant foreign investment to rebuild the country’s decaying oil infrastructure. Sanctioning the nation’s limited production will bear little immediate impact on the global oil market. But over the medium- to long-term, the lack of investment from Chevron Corp. and other outside investors could ultimately see Venezuela’s oil output decline.

Cracking down on the oil flowing from the country also threatens to drive rising US gasoline prices even higher. That poses a threat to Biden, who has struggled to calm voter anxiety over persistently high inflation in the US in an election in which the state of the economy is taking center stage.

But why now? Why would Biden's handlers lose so much foreign policy credibility over the past 6 months, just to U-turn now and go back to square one?  Well, as Bloomberg notes, if the license expires, "US actions would be taken to ease the impact on Americans and the US oil market."

Actions like what? Well, the same actions Pizza afficionado and White House senior adviser John Podesta said yesterday were on the docket unless oil prices drop, namely draining even more SPR oil.

"The president did it (release oil from SPR) before ... and I think he wants to keep the price of gasoline affordable and he will do what he can to make sure that happens," Podesta said at the BNEF Summit in New York. He stopped short of saying there would be a release from the SPR any time soon.

Of course he did, knowing the political outcry that would follow. But if the White House has a trigger, say an uncooperative Maduro to point the finger to, then an SPR drain is all but guaranteed.

Meanwhile, it was back when oil was $73 when various idiots made fun of us for pointing out that the SPR will never be refilled, aside for the occasional barrel here and there, injected purely for theatrical purposes.

We wonder what these upward-failing hacks will say when in its last days, the Biden admin's parting gift to the US will be to fully drain the SPR.

Tyler Durden Wed, 04/17/2024 - 12:00

Are We On Japan's Path Of Stagnation?

Are We On Japan's Path Of Stagnation?

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

We recently wrote Japan’s Lost Decades to appreciate better why Japan’s GDP is smaller than it was in 1995 and why it took 35 years for its stock market to set its recent record high.

Many pundits claim the U.S. is following Japan’s path. The path includes a stagnant economy, massive government debt, and a central bank that must dominate financial markets to keep the economy and financial markets afloat.

There is merit to that opinion. The U.S. government has excessive debt and is increasingly negligent in managing its budget. Also, the nation’s economic growth rate has been trending lower for thirty years, and fiscal dominance is becoming the norm, not the exception.

While we may be on a similar path as Japan, we are not nearly as far along. There are many differences between Japan and the United States worth considering.

All Asset Bubbles Are Not Alike

At the heart of Japan’s current problems were its massive real estate and stock bubbles that popped in 1989.

To appreciate the enormity of their bubbles, consider the following from Ben Carlson’s article The Biggest Asset Bubble In History.

From 1956 to 1986 land prices in Japan increased by 5000% even though consumer prices only doubled in that time.

By 1990 the Japanese real estate market was valued at 4x the value of real estate in the United States, despite being 25x smaller in terms of landmass and having 200 million fewer people.

Tokyo itself was on equal footing with the U.S. in terms of real estate values.

The grounds on the Imperial Palace were estimated to be worth more than the entire real estate value of California or Canada at the market peak.

There were over 20 golf clubs that cost more than $1 million to join.

In 1989 the P/E ratio on the Nikkei was 60x trailing 12-month earnings.

Japan made up 15% of world stock market capitalization in 1980. By 1989 it represented 42% of the global equity markets.

From 1970-1989, Japanese large cap companies were up more than 22% per year. Small caps were up closer to 30% per year. For 20 years!

Stocks went from 29% of Japan’s GDP in 1980 to 151% by 1989.

Japan was trading at a CAPE ratio of nearly 100x which is more than double what the U.S. was trading at during the height of the dot-com bubble.

The aftershock could have been dealt with in many ways, but at its core, it came down to whether to pay a dear price over a short period or draw out the costs over decades. They elected the latter, saving their banks and relying on massive government spending to insulate the economy.

Over the last 25 years, the U.S. dot com and subprime bubbles have popped. While economically costly, the bubbles were minor compared to Japan’s. Accordingly, when they popped, the economic and financial consequences paled compared to Japan’s.

Banking Sector

The real estate and stock bubbles were supported with massive leverage via bank loans. When the asset values plummeted, the debt supporting them was often worthless. The banking system would have collapsed if the banks had written off the bad loans. The government aimed to keep the banking system out of harm’s way. Essentially, the banks didn’t have to recognize the losses. However, the non-performing loans were still on their books, significantly impeding their lending capabilities. 

Further crippling the banks were the BOJ monetary policies which pinned interest rates at zero and below zero for long periods. The result was a flat yield curve. In addition to having a limited ability to lend, BOJ policies severely reduced the financial incentive to lend. Japan’s private sector economy could not contribute to growth nearly as much as possible if the banking sector were healthy and incentivized to lend.

Conversely, U.S. banks are healthy and well-capitalized. Additionally, the Fed is very in tune with the amount of reserves in the banking system and stands ready to provide more when needed. Reserves are the fodder banks require to make loans.

The graph below compares the net interest margin for Japanese and American banks to show how much more financial incentive to lend versus their Japanese competitors.

Barring a significant financial crisis, there is no reason to expect U.S. banks to be as restricted as Japanese banks have been.

State-Led Capitalism

As noted in the prior section, Japanese banks have had a minimal ability to lend for much of the last 35 years. As a result of their zombie-like status, the government was heavily obligated to promote economic growth. Accordingly, the government played a much more significant role in managing the economy than is typical in a capitalistic economy.

A key tenant of capitalism states that when the free market sets prices based on the supply and demand for goods and services, it can most efficiently allocate resources to their most productive uses. Commonly, the most productive use of resources benefits economic growth and allows for higher wages and a broad distribution of wealth. Government interference reduces capitalism’s value as capital is often not put to its most productive uses.

Post-World War II Policies

Following World War II, Japan followed a path of capitalism, but it was state-led. Such was probably necessary in the decade or two after the war as the country was physically and emotionally devastated. Japan benefited immensely from the government’s push for rapid industrialization and economic development. But through loose monetary policy, financial deregulation, tax incentives, and infrastructure spending, its policies played a crucial role in inflating the real estate and stock bubbles.

After the bubble, the government was called upon to stimulate the economy. Their interference ultimately resulted in the unproductive allocation of resources, which, in the long term, likely reduced economic activity, thereby prolonging their weakness.

The United States form of capitalism is not as pure as it could be, but it is not nearly as dictated to the same degree as Japan. The Fed and government do reduce the value of capitalism and certainly foster speculation and leverage. But, they have yet to create policies that induce bubbles to the degree Japan saw in the 1980s. 

The Yen Versus The World’s Reserve Currency

The U.S. dollar is the world’s reserve currency, and enormous rewards and complications come with it. In our article, Our Currency The World’s Problem we discuss the value of the reserve currency to the U.S.

Foreign nations accumulate and spend dollars through trade. They keep extra dollars on hand to manage their economies and limit financial shocks. These dollars, known as excess reserves, are invested primarily in U.S.-denominated investments ranging from bank deposits to U.S. Treasury securities and a wide range of other financial securities. As the global economy expanded and more trade occurred, additional dollars were required. As a result, foreign dollar reserves grew and were lent back to the U.S. economy.

Making the world even more dependent on the dollar, many foreign countries and companies issue U.S. dollar-denominated debt to better facilitate trade and take advantage of America’s liquid capital markets.

The bottom line is that the U.S. has a constant source of capital to fund our debts, support our asset markets, and buoy the economy. The Japanese Yen provides no such benefits to Japan.

Other Factors

In Japan’s Lost Decades, we discuss Japan’s demographic challenges. To summarize, Japan has an aging population with low birth rates and a meager immigration rate. These factors and others have resulted in a declining population, which weighs on economic growth. While the United States also faces demographic headwinds that are and will negatively impact economic growth, they are not nearly as pronounced as those in Japan.

The United States has a much larger and more diverse economy. This is in part because we are rich in natural resources. The U.S. economy encompasses a wide range of industries, including technology, finance, manufacturing, agriculture, and services. In contrast, Japan’s economy focuses heavily on manufacturing and exports.

Various cultural differences also shape economic policies and affect consumer and corporate behaviors. The business culture in Japan is characterized by lifetime employment contracts and close relationships between corporations and banks (keiretsu). Japan’s population emphasizes consensus and harmony. In contrast, the United States has a more competitive culture centered more on the individual than the nation.

Summary

Fiscal dominance, whereby the Federal Reserve must help the Treasury fund their debts at reasonable costs, is upon us. Japan has relied on fiscal dominance for 35 years. This is one of a few clues that the U.S. is on Japan’s path.

However, as we have written, our nations have significant differences. While we may be on a similar path as Japan, our paths will differ. Since we have not traveled as far on the path as Japan, we have time to learn their lessons and fix them. Will this happen?

Tyler Durden Wed, 04/17/2024 - 11:40

7 Jurors Sworn In For Trump Trial, More To Come

7 Jurors Sworn In For Trump Trial, More To Come

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

The first seven jurors have been selected and sworn in to serve on former president Donald Trump’s criminal trial in New York, with the selection process continuing to pick another five to make up the 12-member jury panel, as lawyers grilled members of the jury pool to determine whether they can sit in fair judgment of the former president.

Former President Donald Trump sits in the courtroom during the second day of his criminal trial at Manhattan Criminal Court in New York City on April 16, 2024. (Justin Lane-Pool/Getty Images)

Potential jurors faced hours of questions on April 16, with dozens of potential members quizzed on their occupation, marital status, social media posts, and where they got their news.

Each side used several preemptory strikes to reject certain jurors, while others were stricken over politically charged social media posts.

In one case that sparked a spate of controversial online reactions, Judge Juan Merchan ruled that the juror who joined an election victory parade for President Joe Biden was not disqualified because the juror claimed she thought it was celebration of essential workers.

“This doesn’t seem just,” Tesla CEO Elon Musk wrote in a post on X, commenting on the development.

“Now imagine if Biden were on trial in red Mississippi & the judge declared that a juror wearing a MAGA hat who attended a Trump Victory Party was impartial,” former Republican presidential candidate Vivek Ramaswamy wrote in a post. “The MSM would have a meltdown & Antifa would be on the streets. This trial isn’t about justice, it’s election interference.”

A man originally from Texas whose circle of associates was in accounting and finance said it was possible he could lean Republican and have an unconscious bias. The potential juror was excused after Judge Juan Merchan said that the bar for serving on the panel is unequivocal assurance of impartiality.

At one point, the judge granted the defense’s request to strike down one of the jurors over a social media post that pointed to an anti-Trump bias. The judge read the post into the record (“Good news!!  Trump lost his court battle on his unlawful travel ban!!!” and ”Get him out, and lock him up.“) adding that the prospective juror ”expressed the desire … that Mr. Trump be locked up.”

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

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

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

Jurors Sworn In

The judge swore in six jurors just before 4 p.m., telling them as they took their places in the jury box that, “this will be your permanent seat for the duration of the trial.”

Later, the judge swore in a seventh juror, remarking that he hoped the process of seating all the jurors would wrap up this week and opening statements in the trial could begin Monday.

Another five jurors still need to be selected, as do another six alternates.

The methodical process of jury selection highlights the challenge of finding people able to sit in fair judgment of President Trump, a polarizing figure in U.S. politics who has argued that extensive negative media coverage would make it impossible for him to get a fair trial.

The former president sought an adjournment of the trial on the premise of too much prejudicial pretrial publicity but Judge Merchan rejected that reasoning. The judge said that President Trump’s concern about getting a fair hearing would be assuaged by “conducting a thorough, thoughtful and effective voir dire,” referring to the process of questioning potential jurors to identify potential bias.

On Tuesday, prosecutor Joshua Steinglass told would-be jurors that attorneys were not looking for people who had been “living under a rock for the past eight years,” just that they needed to keep an open mind.

The seven jurors sworn in are as follows:

Juror No. 1 is a middle-aged salesman who likes the outdoors. He said he normally gets his news from The New York Times, Daily Mail, Fox News, and MSNBC.

Juror No. 2 is an oncology nurse who likes taking her dog for walks in the park. She said she typically gets her news from The New York Times, CNN, Google, and Facebook.

Juror No. 3 is a corporate attorney who likes hiking and running. He said he usually gets his news from The New York Times, The Wall Street Journal, and Google.

Juror No. 4 is an IT consultant who normally gets his news from the Daily News, The New York Times, and Google.

Juror No. 5 is an English teacher who usually gets her news from Google and TikTok.

Juror No. 6 is a software engineer who likes going dancing and watching TV, and gets her news from The New York Times and TikTok.

Juror No. 7 is a civil litigator from North Carolina who now lives in New York City’s Upper East Side.

After swearing in the seventh juror, the judge concluded the proceedings for the day.

What’s the Case About?

In the case, Manhattan District Attorney Alvin Bragg charged President Trump with 34 counts of falsifying business records.

Under New York state law, falsifying business records is a misdemeanor. But the charge could be elevated to a felony if the fraud was used to cover up or commit another crime.

Mr. Bragg has elevated the charge to a felony by alleging that the underlying crime was a scheme to influence the 2016 election by burying unfavorable news coverage of an alleged affair with adult performer Stephanie Clifford, also known as Stormy Daniels, in exchange for $130,000 in “hush money” payments.

The former president has denied the affair and has claimed that the case is a politically motivated “witch hunt.”

The trial is expected to last for six weeks or more, with some jury members bringing up plans they have for Memorial Day, and one being excused on Monday due to a wedding in late June.

Tyler Durden Wed, 04/17/2024 - 10:45

WTI Down For 3rd Day After Crude Inventory Build (Thanks To Surge In 'Adjustment Factor')

WTI Down For 3rd Day After Crude Inventory Build (Thanks To Surge In 'Adjustment Factor')

Oil prices are extending their decline (third day in a row) this morning as, after a tumultuous period of geopolitics, traders are returning their focus to market fundamentals. A lack (so far) of response from Israel to Iran's retaliatory attack combined with The American Petroleum Institute reporting a gain in US stockpiles before government data later Wednesday has key timespreads weakening in recent days, pointing to softening sentiment.

API

  • Crude +4.09mm (+600k exp)

  • Cushing -169k

  • Gasoline -2.51mm (-1.0mm exp)

  • Distillates -427k (-400k exp)

DOE

  • Crude +2.375mm (+600k exp)

  • Cushing +33k

  • Gasoline -1.154mm (-1.0mm exp)

  • Distillates -2.76mm (-400k exp)

Crude stocks rose for the fourth straight week (well above expectations - but smaller than API), but that was offset by sizable product draws. Cushing stocks were flat...

Source: Bloomberg

And in case you wondered, the 'ol 'adjustment factor' is back... to its highest in 2024...

Source: Bloomberg

The Biden administration continued (for now) to add to the SPR (see below for why that may end soon)...

Source: Bloomberg

US crude production was flat - near record highs

Source: Bloomberg

WTI was trading around $84.40 ahead of the official data (though had been chopping around prior)

However, Joe and Jerome still have a problem as pump-prices just keep going higher...

Source: Bloomberg

President Biden “wants to keep the price of gasoline affordable, and we’ll do what we can to make sure that that happens,” White House senior adviser John Podesta says at the BloombergNEF Summit in New York, responding to a question about a potential release of oil from the nation’s Strategic Petroleum Reserve amid forecasts that already rising prices at the pump will spike this summer.

  • JOE BIDEN'S APPROVAL RATING FALLS TO 38% FROM 40% IN MARCH - REUTERS/IPSOS POLL

Source: Bloomberg

Who could have seen that coming?

'Strategic' - "you keep using that word... I do not think it means what you think it does."

Tyler Durden Wed, 04/17/2024 - 10:41

Semi Shock: ASML Craters As Orderbook Plummets After China Frontrunning Ends With A Bang

Semi Shock: ASML Craters As Orderbook Plummets After China Frontrunning Ends With A Bang

Exactly three months ago, AI stocks were soaring, semiconductor names were flying and the tech sector was euphoric after Dutch chip giant ASML - the world’s sole producer of equipment needed to make the most advanced chips and Europe’s most valuable technology company - reported a record surge in its orderbook (just days after its Asian peer Taiwan Semi did the same)...

... and which the market immediately concluded, in its infinite stupidity, that this was the definitive confirmation of a flood of demand for AI chips and infrastructure with Bloomberg pouring oil on the fire, saying that the ASML results were "a sign that the semiconductor industry may be recovering" adding that "chipmakers are increasingly optimistic the sector’s outlook following a slump that dates back to the Covid-19 pandemic, with TSMC last week projecting strong revenue growth in 2024."

Not so fast, we countered and as we clearly warned in a January article titled "Tech Euphoria Sparked By ASML Surge To All-Time High On Flood Of Chinese Orders... There's Just One Problem"...

... the reason for the surge in ASML orders was that China, and its proxies in Taiwan and other Asian countries, has been flooding the market with chip purchase orders ahead of Biden's escalating China chip sanctions, knowing that the door is closing amid a barrage of sanctions limiting exports of high tech chips - and chipmaking devices - and that it needs to buy today what it may need for the next few years, if not indefinitely. (as explained in "Behind The Tech Meltup: A One-Time Chinese Chip Buying Frenzy To Frontrun Export Curbs").

And sure enough, China accounted for 39% of ASML’s sales in the fourth quarter and became the Veldhoven-based company’s largest market in 2023! Before speculation of chip sanctions, China accounted for only 8% in January to March.

So what? Well, such one-time buying spurts are - as the name implies - one-time... and as we reported 3 months ago, ASML has been targeted by the US effort to curb exports of cutting-edge technology to China, and Bloomberg reported that ASML exports to China have now effectively been halted, vaporizing whatever portion of the order backlog is thanks to China. This led us to conclude the following:

And so with China now scrubbed from the list of ASML clients - forget being its top customer - the question is who will fill the void. Luckily, demand for AI is keeping the chip sector afloat... or so the experts say, the same experts who fawned over ASML's result today which sparked a buying frenzy in the shares, which soared over 9% today, the biggest increase since November 2022, and hitting an all time high.

Good luck keeping that all time high with your largest customer now barred from future purchases by the State Department. As for "record AI chip demand", this quarter will prove very informative how much is real and how much is vapor once the volatility from China's erratic orderflow is finally removed.

So fast forward three months when "this quarter" is now in the history books, and this morning we got confirmation that everything we said was correct (and that the market, in its infinite stupidity wisdom, was wrong. Case in point: on Wednesday, ASML stock was one of the worst performers among the European tech sector, after the largest European company posted orders that fell short of analysts’ expectations, as Taiwanese chipmakers held off buying the Dutch firm’s most advanced machines.

Bookings at Europe’s most valuable technology firm fell 61% in the first quarter from the previous three months to €3.6 billion ($3.8 billion), wildly missing the market's ridiculous estimates of €4.63 billion, just as we said it would.

As Bloomberg notes, the world's top chipmakers like Taiwan Semi and Samsung Electronics held off new orders as manufacturer clients work through stockpiles of hardware used in smartphones, computers and cars. That’s hurting ASML, which also forecast sales this quarter below analyst expectations. And why did TSMC and Samsung over-order? Simple: they too, were expecting the flood of Chinese last-ditch orders, and were looking to frontrun it.

Well they did... and now everyone has a huge surplus of equipment!

Investors had expected TSMC to book significant EUV tools in the first quarter, according to Redburn Atlantic analyst Timm Schulze-Melander (but not according to ZeroHedge). The disappointment in orders leaves earnings and revenue for next year “vulnerable,” he said, confirming what we said one quarter ago when everyone was rushing to buy the stock on a one-off surge in orders.

The level of EUV orders is “extremely low,” indicating major ASML clients like TSMC, Samsung and Intel didn’t increase investments in the high-end equipment, Oddo BHF analyst Stephane Houri said. ASML saw the biggest slump in demand for its top-end extreme ultraviolet machines. Orders for them plunged to €656 million in the period from €5.6 billion in the previous quarter.

In other words, the frontrunning of China's order book is now dead and buried.

And now comes the hangover, ASML now sees sales in the current quarter between €5.7 billion and €6.2 billion, missing estimates of €6.5 billion before demand picks up. And while the company scrambled to reassure the market that "nothing is fucked here", and pushed demand into the second half as every company does when it misses quarterly expectations...

“Our outlook for the full year 2024 is unchanged, with the second half of the year expected to be stronger than the first half, in line with the industry’s continued recovery from the downturn,” Chief Executive Officer Peter Wennink said in a statement Wednesday. “We see 2024 as a transition year.”

... the market was less than willing to buy the BS this time, and with the company admitting that as much as 15% of China sales this year will be affected by the new export control measures - 50% is a more realistic number - the stock finally tumbled as the hangover finally arrives, if with a three month delay, and today the stock tumbled more than 6%....

... the biggest one day drop since last June.

Tyler Durden Wed, 04/17/2024 - 10:30

After Judicial Tyranny, Tesla Asks Shareholders To Approve Musk's $56 Billion Comp... Again

After Judicial Tyranny, Tesla Asks Shareholders To Approve Musk's $56 Billion Comp... Again

At his peak, Elon Musk was worth $340BN (Nov 2021) and stood alone as the world's richest man/women/other. According to Bloomberg's billionaires list, he is now worth mere $175BN... sliding to just the fourth-richest in the world as Tesla's share price has declined and after a Delaware judge decided in January that Musk was just paid too damn much for creating a $1.2 trillion company by Nov 2021.

But now, he may be about to climb that wealth ladder back to the top once more as Tesla has asked shareholders to vote again on the same $56 billion compensation package that was voided by a Delaware court early this year.

Tesla Chair Robyn Denholm criticized the Delaware Chancery Court’s January decision, writing in the proxy that it amounted to second-guessing shareholders who had approved Musk’s performance-based award in 2018.

“Because the Delaware Court second-guessed your decision, Elon has not been paid for any of his work for Tesla for the past six years that has helped to generate significant growth and stockholder value,” Denholm wrote.

The filing went on to say that negotiating a new pay package would take time and lead to incurring billions of dollars in additional compensation expense.

Therefore, ratifying the 2018 package will be faster and “avoid a prolonged period of uncertainty regarding Tesla’s most important employee.”

Additionally, the filing shows Tesla considered nine other states as alternatives to Delaware before narrowing its choice down to California, Nevada, New York or Texas.

It settled on the state where it’s headquartered and is home to its newest EV plant.

“Tesla is all-in on Texas,” the company said.

“Tesla’s corporate identity is increasingly intertwined with Texas.”

Finally, Bloomberg reports that, according to the filing, dozens of institutional shareholders have contacted Tesla and expressed support for the 2018 compensation plan, including four of the top 10. The carmaker also said that thousands of retail investors have sent letters and emails to the board expressing the same sentiment.

Of course, if this passes the shareholder vote, we assume the honorable Chief Judge Kathaleen St. J. McCormick - who described the company’s directors as “supine servants of an overweening master” - will have problems asserting that they hadn’t looked out for the best interests of investors... since it was the investors themselves, now fully informed, that democratically voted for Musk's compensation plan.

...or does democracy (and capitalism) die in Delaware?

Tyler Durden Wed, 04/17/2024 - 10:05

Stocks Will Get Bad Breadth From Higher Yields

Stocks Will Get Bad Breadth From Higher Yields

Authored by Simon White, Bloomberg macro strategist,

Higher yields threaten to make already-fraying breadth in US stocks even worse. This points to heightened short-term risks for the market, although the medium-term positive trend remains intact.

Breadth measures for the US market have in many cases deteriorated to levels last seen in November. The net number of stocks on the NYSE making new highs has fallen to its November lows, and the same for the S&P 500 advance-decline line. The percentage of S&P stocks with their RSI below 30 has hit six-month highs.

Higher yields are poised to worsen the outlook. Since last summer, there has been a good inverse relationship with the 10-year yield and the percentage of S&P stocks trading above their 200-day moving average. Breadth on this measure is currently higher than the straight-line relationship would imply, and further rises in yields potentially mean more S&P stocks will weaken.

Mark Cudmore has previously pointed out that higher yields in the next few weeks might be less of a problem for stocks, as they are more spurred by growth than inflation. Perhaps that will be the case, but we have not seen any capitulation yet in breadth measures, which would bring more comfort that the current downwards spasm is over.

Nonetheless, the medium-term upwards trend in the market remains intact. One of the simplest and most reliable timers to tell you when to be in and out of the market is the 13 and 26-week moving average crossover for the S&P. The 13-week MA remains above the 26-week, suggesting the market remains in a positive regime over the medium term, despite shorter-term risks.

Resurgent inflation will dominate the medium and longer-term outlook for markets. While the deteriorating risk-reward of shorting Treasuries or buying gold or Bitcoin is more established, there are several other trades that are historically way offside compared to where they have been in previous inflation regimes, and therefore have the most catch-up potential.

Tyler Durden Wed, 04/17/2024 - 09:45

Biden Calls For Tripling Tariffs On Chinese Steel Ahead Of Speech In Swing State Of Pennsylvania

Biden Calls For Tripling Tariffs On Chinese Steel Ahead Of Speech In Swing State Of Pennsylvania

The White House announced on Wednesday morning that President Biden will call for tripling tariffs on Chinese steel and aluminum in a speech later today to steelworkers in Pennsylvania, a key battleground state.

Biden is set to speak with United Steelworkers union members in Pittsburgh. This is part of a multi-day campaign across the swing state to convince unions and residents about more years of failed 'Bidenomics.' While Biden campaigns, New York Judge Juan Merchan warned former President Trump he would be arrested if he skipped the trial in his hush-money case in Manhattan. 

"President Biden knows that steel is the backbone of the American economy, and a bedrock of our national security. American steel fueled the country's industrialization and helped build the middle class," the White House wrote in a press release.

The Financial Times said Biden will ask trade representative Katherine Tai to triple the import tariff on Chinese steel and aluminum from the current 7.5%. 

"It is important for us to get ahead of China's new export surge and their continued pressure on prices that make it hard for American steel companies to compete," a senior US official told FT, who added that the actions had "nothing to do with elections."

Anyone with common sense can see these actions were entirely related to elections in the key battleground state. 

FT continues: 

Tai is nearing completion of a statutory review of the tariffs that former president Donald Trump levied in his trade war against China.

She is also set on Wednesday to unveil a probe into unfair practices in the Chinese shipbuilding industry, following a petition from United Steelworkers.

White House National Economic Adviser Lael Brainard told reporters, "China's policy-driven overcapacity poses a serious risk to the future of the American steel and aluminum industry," adding, "Beijing is simply too big to play by its own rules." 

Meanwhile, a senior administration official told NBC News, "If taken, these actions will not increase inflation ... and it will protect American jobs and the steel industry."

Basic economics says that higher tariffs can spark inflation and drive a negative supply shock, raising the prices of inputs to production and thus increasing output prices. 

Revisiting the Biden's Inflation Reduction Act... Has it brought inflation back to Fed Powell's comfort zone of sub-2 %? The answer is no. Inflation is reaccelerating. 

The Pittsburgh announcement is nothing more than a political stunt as Biden attempts to win Pennsylvania and New York courts have tied Trump's hands so that he can't campaign in the swing state for now. 

Tyler Durden Wed, 04/17/2024 - 07:20

Pages