BuzzFeed Surges After Vivek Ramaswamy Buys 7.7% Stake In The Cat Slideshow Tabloid

Shares of BuzzFeed, a notorious slideshow clickbait farm and propaganda disseminator - which recently fired its entire "news" division - soared early Wednesday after multi-millionaire and former US presidential candidate Vivek Ramaswamy reported a stake in the online media company and asked for talks with the board.

Ramaswamy, who ended his candidacy in January and threw his support behind Donald Trump, has taken a 7.7% stake in BuzzFeed, worth about $6.81 million. The tiny purchase makes Ramaswamy the fourth largest shareholder in BuzzFeed, trailing Comcast, NEA Management and Hearst Communications, all of whom invested in the nearly insolvent company at a time when its valuation was orders of magnitude higher.

In a filing with the Securities and Exchange Commission, Ramaswamy said he seeks to “engage in a dialogue with board or management about numerous operational and strategic opportunities to maximize shareholder value, including a shift in the company’s strategy.”

The stock surged as much as 55% to $3.94 in premarket trading in New York; it was the biggest one-day gain since February.

BuzzFeed, best known for publishing the salacious and fake Trump dossier, but has since refocused on its core competency of online quizzes, lists of “bests,” and AI-written tabloid articles on pop culture, has imploded in recent years due to cutbacks in internet advertising. Last year, the company eliminated its news division amid broader layoffs, and has long been on the verge of collapse.

Ramaswamy founded pharmaceutical company Roivant in 2014, and co-founded Strive Asset Management in 2022. He stepped away from the asset management firm last year to focus on his presidential run and has said he isn’t returning; instead it now appears he is hoping to become a media baron. Ramaswamy’s position in BuzzFeed marks his latest move since ending his political campaign.

 

Tyler Durden Wed, 05/22/2024 - 09:25

"It's Happening" - Ethereum ETF Bidders Amend SEC Filings, List At DTCC

Five potential spot Ether exchange-traded fund (ETF) issuers have submitted amended 19b-4 filings after receiving last-minute feedback from the United States Securities and Exchange Commission (SEC).

Several filings show changes from asset managers Fidelity, VanEck and Franklin Templeton, along with joint applications from Galaxy and Invesco, and ARK Invest and 21Shares.

Ether prices have soared in the last few days...

And net inflows to BTC ETFs has also reignited...

As Brayden Lindrea reports via CoinTelegraph, the amendments saw Fidelity, Franklin Templeton and ARK 21Shares remove provisions for Ether staking.

“Neither the Trust, nor the Sponsor, nor the Custodian, nor any other person associated with the Trust will, directly or indirectly, engage in action where any portion of the Trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings,” Fidelity’s amended 19b-4 filing read.

The other Chicago Board Options Exchange (CBOE)-sponsored applicants used similar language.

Grayscale also scrapped staking, according to a proxy statement.

However, Adam Cochran, partner at venture capital firm Cinneamhain Ventures, claimed that an approved spot Ether ETF without the staking element would actually boost staking returns.

“ETFs without staking provide the same crucial boost to Ethereum’s legitimacy while avoiding ETF tail risk and diluting my yield,” added Ryan Berckmans, Ethereum community member and investor.

All five CBOE filings came in the 25 minutes between 9:35 pm and 10:00 pm UTC on May 21, according to Bloomberg ETF analyst James Seyffart.

The approved 19b-4 filings will need to be accompanied by signed-off S-1 registration statements for the ETFs to launch, Seyffart iterated.

“Still a potentially long way from a launch. But these filings prove that all of the rumors and speculation and chatter have been accurate,” he added.

Source: James Seyffart

The SEC must decide on VanEck’s application by May 23. However, industry pundits tip the regulator to decide on all or most applicants, similar to how it handled spot Bitcoin ETF applications in January.

Fox Business reporter Eleanor Terrett noted that VanEck’s Ether ETF bid was added to the Depository Trust and Clearing Corporation’s (DTCC) website.

Listing of VanEck’s spot Ether ETF on DTCC’s website. Source: DTCC

The DTCC website often lists securities eligible for trading and settlement within its systems, including ETFs that have completed particular registration or compliance processes. However, this doesn’t indicate that the securities will be approved by the SEC.

BlackRock and Hashdex are the other two spot Ether ETF applicants vying for SEC approval.

It comes as the SEC reportedly started asking applicants to accelerate their 19b-4 filings on May 20.

The sudden change resulted in Seyffart and fellow Bloomberg ETF analyst Eric Balchunas raising their spot Ether ETF approval odds from 25% to 75%.

ETH is up 20.6% to around $3,800 since the SEC’s reported U-turn, according to CoinGecko.

Finally, CoinTelegraph reports that Bitcoin and Ethereum-based exchange-traded products (ETPs) are set to debut on the London Stock Exchange (LSE) following approval by the Financial Conduct Authority (FCA) on May 22.

WidomTree’s physical Bitcoin ETP with ticker symbol WBTC and the physical Ethereum ETP (WETH) will be among the first set of crypto ETPs to be listed in the United Kingdom and are expected to begin trading on May 28, reported ETF Stream.

The physical ETPs will only be available to professional and institutional investors as the retail ban on crypto trading and sale of crypto derivatives and ETPs was enacted in January 2021. The listing of WisdomTree's two ETPs comes nearly two months after the LSE’s public notice.

Alexis Marinof, head of Europe at WisdomTree, said that the FCA approval of their crypto ETPs’ prospectus will make it easier for the UK-based professional investors to invest in crypto-backed products which currently access crypto ETPs via overseas exchanges,

In a public announcement on March 25, LSE notified that applications for the cryptocurrency ETPs are open until April 8; accepted funds will be listed the following month, subject to clearance by the nation’s financial regulator, thFCA.

To gain FCA approval, the crypto ETPs should only be denominated in Bitcoin or Ether, be physically backed, and be non-leveraged. The issuers must also partner with an Anti-Money Laundering licensed custodian in the United States, the United Kingdom, or the European Union and hold the underlying assets in cold storage.

The approval of Bitcoin ETFs by the United States Securities and Exchange Commission and its subsequent success, which saw billions flow into these ETFs weekly, have prompted several other governments around the globe to offer crypto accessibility to investors.

Apart from the U.K., Hong Kong was another region to approve the listing of Bitcoin and Ether ETFs. These spot cryptocurrency ETFs from Hong Kong were regarded as a significant improvement over their U.S. counterparts due to features like in-kind transfers and denominations in three fiat currencies. Investors can instantly purchase and redeem ETF units using Bitcoin or Ether.

Tyler Durden Wed, 05/22/2024 - 09:05

It's Eerily Calm Out There Before Nvidia Earnings

By Michael Msika, Bloomberg Markets Live reporter and strategist

Falling volumes, crushed volatilities and record highs, equity markets seem to price nothing but a rosy outlook. While much has gone right for investors this year, some risks can’t be ignored and deserve attention.

It seems no one wants to be short in this market. Bears are falling like dominoes and positioning is increasing, leaving the market very much one-sided ahead of the Fed minutes and European PMI data, along with the results of the world’s most important stock Nvidia.

Goldman Sachs’ proprietary risk appetite indicator hit its highest level since 2021, which is indicative of lower returns in the medium term, according to strategists including Andrea Ferrario. Volatility structure suggests markets are pricing less risk of a sustained drawdown from here but are worried about temporary spikes in volatility - with high market concentration, idiosyncratic events can also matter, such as Nvidia’s results, they add.

Looking at the volatility curve, very short dated implied volatilities are now trading at the sub-10 point level, a significant decline at the front end. This suggests market is pricing nothing but calm over the coming days.

“As equity vol approaches post-Covid lows, investors may be wondering how far we are from a return to 2017‘s record low vol regime,” say Bank of America derivatives strategists including Vittoria Volta. “Structurally higher idiosyncratic risk today vs 2017, a market arguably at risk of disappointment by the pace of ECB cuts anticipated for the second half of the year, coupled with spillover from US megacap tech fragility, could keep EU stock vol supported through the summer.”

The strategists note that Euro Stoxx 50 skew is flat versus post-Covid history but not quite at 2017 extremes, term structure is steep but not ‘2017 steep’. Meanwhile, 3-month realized index correlation is at 2017 record-low but single stock realized vol is still relatively far. Finally, volatility tends to be supported into the fall during low vol years, they say.

Index future positioning ahead of these events has continued to increase, especially on US equities, as exposure to Europe was already hovering at extreme levels and was slightly trimmed, according to Citigroup data. Separately, Goldman’s derivatives desk points out that single stock put/call skew suggests positioning is 9.5 out of 10, while Deutsche Bank strategists estimate CTAs’ exposure to global stocks are in the 91st percentile. CTA, also known as trend followers, are future funds chasing momentum and can flip positions fast, which can spur volatility episodes.

“Bullish positioning levels continue to rise for the S&P and Nasdaq,” say Citi quantitative strategists including Chris Montagu. “Last week’s activity was led by increased new risk flows. This leaves the S&P extended and almost exclusively one-sided.”

Nvidia’s results are going to be interesting and likely have an impact on the overall market. Expectations are high after a nearly 550% surge in share price and earnings forecasts since the start of 2023. The stock has accounted for about a quarter of the S&P 500’s 11% returns this year and boosted sentiment for tech globally. Tech is the second best performing sector in Europe and has the largest weight in the euro-area benchmark Euro Stoxx index at 15%.

“We note the Stoxx 600 has been flirting around short-term overbought territory of late with five sectors — banks, telecoms, personal care, staples and energy — currently screening that way,” says Carl Dooley, head of EMEA trading at TD Rowen. “That, combined with a lighter volume tape to start the week contributing to what feels like a buyer’s pause.”

Tyler Durden Wed, 05/22/2024 - 08:30

Target Shares Tumble After Retailer Reports 'Caution' About Weak Consumer

Target's shares slumped in premarket trading in New York after the retailer's comparable sales missed Wall Street's consensus estimates for the quarter that ended May 4. This comes as Goldman analysts have warned about faltering low-income consumers in the era of failed Bidenomics. 

Comparable sales—those from stores or digital channels operating for at least 12 months—declined 3.7% in the quarter and were mostly in line with what analysts tracked by Bloomberg estimated. This was the fourth consecutive quarter of declines. However, digital sales offset brick-and-mortar comparable-store declines and lower foot traffic. 

Here's a snapshot of the quarter (courtesy of Bloomberg):

• Comparable sales -3.7%, estimate -3.68%

• Comp digital sales +1.4% vs. -3.4% y/y, estimate -0.73%

• Sales $24.14 billion, -3.2% y/y, estimate $24.13 billion

• Gross margin 27.7% vs. 26.3% y/y, estimate 27.4%

• Ebit $1.33 billion, -1.9% y/y

• Ebitda $2.04 billion, +1.2% y/y, estimate $1.97 billion

• Customer transactions -1.9% vs. +0.9% y/y

• Average transaction amount -1.9% vs. -0.9% y/y, estimate -1.9%

• Total stores 1,963, +0.5% y/y, estimate 1,966

• Operating margin 5.3% vs. 5.2% y/y, estimate 5.34%

• SG&A expense $5.17 billion, +2.8% y/y, estimate $5.07 billion

• Store comparable sales -4.8% vs. +0.7% y/y, estimate -4.65%

• Stores originated sales 81.7% vs. 82.5% y/y, estimate 81% 

• Adjusted EPS $2.03 vs. $2.05 y/y, estimate $2.05

• Operating income $1.30 billion, -2.4% y/y, estimate $1.3 billion

Here's Goldman trading desk take on the earnings report: 

Surprising operating margin miss: We think expectations were for comp sales to be -3.5% and they did a -3.7%. That is not the end of the world but everyone we heard from unanimously expected an operating margin beat, both bulls and bears. Instead, it was a miss. While small in magnitude to EPS, it will have shares down, as the bull case was built on operating margin upside with a sales inflection. It is not a total thesis changer, but certainly a step back in a tougher macro.

Details:  1Q EPS of $2.03 vs Consensus $2.06 on in-line sales and in-line comp sales.  Gross margins did beat pretty handily, with SG&A a miss and driving the modest operating margin downside. Guides 2Q EPS largely in-line with a $2.15 (mid) vs Consensus $2.20 on comps of 0 to +2% vs Consensus +1.5%. Reaffirming the FY guide.

The retailer reaffirmed guidance for the full year: 

• Still sees adjusted EPS of $8.60 to $9.60, estimated at $9.44

•  Still sees comparable sales flat to up 2%, estimate +0.9%

Target Chief Executive Brian Cornell told reporters that high prices are hurting the wallets of customers. 

"We remain cautious in our near-term growth outlook," Christina Hennington, the company's chief growth officer, said. 

Hennington said discretionary spending would be under pressure in the coming months, adding demand for appliances and home products languishes. However, she noted apparel demand is improving.  

To mitigate further sales declines, Target is following Walmart's lead by lowering prices for cash-strapped consumers. The company said earlier this week that it would reduce prices on thousands of products this summer. 

It's not just Target and Walmart slashing prices. McDonald's recently entertained the idea of returning $5 meal deals again because low-income people are broke. 

Covering the faltering consumer theme have been Goldman analysts: 

• The Largest US Trading Desk Is "Getting Bearish On The US Consumer"
• Goldman Warns Consumers Are Cracking As Stagflation Threats Emerge
• Goldman's Commentary On Consumer Health Is An Ominous One

Target is also facing a boycott over its LGBTQ-themed products. Execs have decided to remove some of these controversial products from some stores next month. 

Target's shares slid nearly 8% in premarket trading. 

If premarket losses hold into the cash session and settle later today, then this would be the largest daily decline in two years. 

Wall Street was "underwhelmed"...

Vital Knowledge

“This isn’t a ‘bad’ report, and it really shouldn’t be called anything other than ‘in-line,’ but vs. Walmart last week, Target clearly lagged behind expectations,” analyst Adam Crisafulli writes

Walmart’s results demonstrate how it is using its “enormous scale and huge grocery franchise to drive traffic and capture [market] share at a time when consumers are feeling increased stress,” he says

RBC (outperform, PT $191)

“1Q results were generally in-line with consensus, but as feared, fell short of heightened investor expectations,” analyst Steven Shemesh writes

Thinks buyside was looking for 1Q comp. decline of around 3.5% vs Target’s reported comp. decline of 3.7%, and EPS of $2.03 was “well below” buyside expectations of $2.15+ due to sales deleveraging, continued investments in pay/benefits and higher marketing spend

“We’ll look for additional detail on the call, but at first glance - consensus is likely to remain unchanged, though buyside expectations will likely drift lower, putting pressure on shares,” according to Shemesh

“Shorter-term investor positioning could start to fade given ongoing pressure on comp. sales and Target being “seemingly in the latter innings of the margin recapture story”

Bloomberg Intelligence

“Reiteration of full-year same-store sales and adjusted EPS guidance suggests it will need to see growth accelerate as the year progresses, which may be tough given low discretionary spending,” analyst Jennifer Bartashus writes

Bartashus is encouraged by improving margins, but recently announced price cuts could add pressure, while “persistently weak in-store visits are a concern”

Morgan Stanley (overweight)

“One could argue the EPS bull case for 2024 of 6%+ EBIT margins and significant EPS upside may be less likely,” which may explain the premarket stock decline, analyst Simeon Gutman writes

1Q comparable sales expectations were appropriately “subdued” but investors still expected “meaningful EPS upside” in the quarter driven by gross margin, but higher SG&A offset the gross margin upside and resulted in below-consensus EBIT dollars

The reason for the SG&A miss is unclear, and more details on that, as well as management’s tone around the 2Q sales trajectory will be helpful in “framing the overall story”

Gutman would have thought the flat to +2% 2Q comp. growth forecast would have been good enough to push shares higher today, given Target’s recent pullback in response to slowing consumer spending

And finally, Goldman's Kate McShane commented on earnings and price action in premarket trading: 

The stock is currently down ~7% in the pre-market. On the call, we are interested in the cadence of SSS throughout 1Q; QTD trends by category; the relative impact of the gross margin drivers, including markdowns, mix, and shrink; the view of inflation; details on its inventory position; and the company's promotional outlook. target of $194, based on our risk-reward framework with downside/base/upside relative P/E multiples of 80%/85%/90%.

McShane's team laid out their valuation for the retail following the report: 

• We are Buy rated on TGT with a 12-month price target of $194, based on our risk-reward framework with downside/base/upside relative P/E multiples of 80%/85%/90%.

Also, they outlined four downside risks:

1. Traffic and sales trends decelerate due to weakness in consumer spending;
2. Inflationary pressures related to product costs, freight/transportation, and/or wages;
3. The competitive environment forces TGT to compete more aggressively on price;
4. Margins come under pressure from omni-channel, supply chain investments, and mix shift.

Consumers pulling back on discretionary spending is an ominous sign.

Tyler Durden Wed, 05/22/2024 - 08:15

Futures Drop, Yields Jump On Red-Hot UK Inflation, Nvidia Earnings On Deck

US futures are lower on Nvidia day; with the stock down 56bps in premarket trading, while Mag7 and semis are also all lower pre-mkt. As of 7:20am, S&P futures are down 0.1%, just off session lows amid signs of sticky inflation that dampened bets on early interest-rate cuts; Nasdaq futures drop 0.2% while Europe’s Stoxx 600 gauge slipped 0.3%, with energy shares among the big losers amid an earlier drop in crude prices.  Bond yields are higher by 2-3bps in sympathy with Gilts where yields jumped on much hotter than expected inflation, or rather less than expected disinflation. The USD is higher and commodities are mixed: energy is higher, reversing earlier losses, while precious metals are lower with Ags outperforming. Aside from NVDA, the latest Fed Minutes are also released today, which should align with recent Fedspeak (hikes unlikely in 2024 and need more data to support cuts), as well as some consumer-sector earnings (Target tumbled 8% after guidance disappointed) which, in total, show a still solid aggregate consumer but continued deterioration in the lower income consumers.

In premarket trading, Tesla slid after disclosing European sales fell to a 15-month low in April while Lululemon shares dropped 4.6% after the athleisure brand announced organizational changes, including the departure of chief product officer Sun Choe. Raymond James said Choe leaving the company added to the “wall of worry” in the near term, while Jefferies noted that the adjustments could indicate future issues with top-line growth. Here are some other notable premarket movers:

• Bentley Systems shares fall 3.8% after Schneider Electric says talks with the software firm regarding a potential strategic transaction have been mutually terminated, according to an emailed statement. No transaction was agreed upon.
• Edwards Life shares climb 1.7% after an upgrade to buy at Citi.
• Kraft Heinz shares tick 0.9% higher after an upgrade to overweight from neutral at Piper Sandler, which said there is better visibility on the packaged-food company’s upside in food service, aided by a new innovation in time-saving dispensers.
• Lululemon shares decline 4.6% after the athleisure brand announced organizational changes, including the departure of chief product officer Sun Choe. Raymond James said Choe leaving the company added to the “wall of worry” in the near term, while Jefferies noted that the adjustments could indicate future issues with top-line growth.
• Middleby shares slip 2.2% after a downgrade to underweight at JPMorgan.
• Modine shares decline 9.1% after the maker of heating and air conditioning products provided a fiscal 2025 earnings forecast range with a midpoint that’s short of estimates.
• Rezolute shares jump 31% after the clinical-stage biopharmaceutical company said the Phase 2 study of RZ402 for certain patients with diabetic macular edema met both primary endpoints.
• Urban Outfitters shares jump 5.5% after the clothing retailer reported 1Q net sales that beat the average analyst estimate. Barclays highlighted the performance of Anthropologie, Free People, Free People Movement and Nuuly, which more than made up for the underperformance of its Urban Outfitters banner.

All eyes now turn to AI bellwether Nvidia, which is down 0.6% in thin premarket New York trading. It’s projected to report a 243% gain in revenue, according to Wall Street estimates, but its 90% year-to-date share rally sets a high bar for further gains. Shares have hit a fresh record high this week ahead of the result, seen as the grand finale for a robust US earnings season.

“Nvidia remains the focal point,” Pepperstone Group Ltd. strategist Chris Weston said, noting that options markets are pricing a 7% to 9% swing in the stock after the result. And while Nvidia’s sales and gross margins will grab the initial spotlight, “it’s the guidance on the earnings landscape and product roll-out from CEO Jensen Huang that could dictate if the market really wants to push this one along for a more sustained period,” Weston said.

Markets are also growing jittery about the prospect of stubbornly high inflation that could prevent central banks from easing policy as early as currently anticipated. The latest UK CPI figures lifted the pound and knocked bond prices across Europe as traders pushed back their expected timing for the first Bank of England rate cut. Earlier on Wednesday, the Reserve Bank of New Zealand kept interest rates unchanged and signaled policy will stay tight for longer, while Federal Reserve Governor Waller said on Tuesday he needs to see several more good inflation numbers to begin interest-rate cuts.

“Both the RBNZ and the UK inflation data highlight the fraught nature of the current juncture, with investors struggling to gauge both the timing and extent of long-awaited central bank easing cycles,” Rabobank’s head of rates strategy, Richard McGuire, said.

Meanwhile, two more Fed officials again reinforced a higher-for-longer message on rates. On Tuesday, Loretta Mester and Susan Collins said they need more evidence of slowing inflation before cutting. In response, traders dialed down expectatons for Fed interest rate cuts this year, currently seeing around 40 basis points of rate cuts in 2024, versus the 50 basis-point reduction priced last week. Minutes of the last Fed policy meeting, due later Wednesday, could offer further clues on rate-setters’ thinking.

European stocks dropped, with the Stoxx 600 index slipped 0.3%; travel and leisure stocks lead gains while the autos sector have the largest declines.  Among individual stock movers, shares in Anglo American Plc weakened as investors waited to see if rival BHP Group Ltd. would launch its takeover bid to create a global copper behemoth. BHP has a deadline of 5 p.m. London time to announce a firm intention to make an offer for what could be among the world’s biggest takeover deals this year. Here are some of the biggest European movers Wednesday:

• Evotec climbs as much as 2.6% after first-quarter sales beat market expectations. Still, analysts flag risks to the firm’s reiterated 2024 guidance amid a broader slowdown
• Marks & Spencer jumps as much as 8.3% after reporting adjusted pretax profit that came ahead of estimates, saying it’s in the strongest financial health since 1997
• Swiss Life falls as third-party asset management net inflows came in “much weaker than expected,” and overshadow fee income growth, according to Citi
• SSE falls as much as 2.5% as the lack of EPS guidance by the UK power company disappoints alongside weaker performance in its renewables unit
• RS Group falls as much as 13% after reporting lower sales and profits in the recently-ended financial year, warning that demand remains subdued
• Ypsomed jumps 7.1% after its guidance beat expectations, according to ZKB. The Swiss supplier of auto-injectors also plans to separate its Diabetes Care operations
• Mytilineos drops as much as 6.3% after a shareholder launched an offer to sell shares in the Greek energy company at a discount to yesterday’s closing price
• Close Brothers falls as much as 7.9% after a trading update that saw downgrades to net interest margins and loan book growth
• Eutelsat drops following a downgrade to neutral at Citi, which says the satellite company’s risk profile is currently “heightened”

Earlier, Asian stocks traded in a narrow range as investors awaited new catalysts. The MSCI Asia Pacific Index dropped as much as 0.3% before erasing some losses. Toyota Motor and Alibaba Group dragged on the gauge, while chipmaker TSMC, a top Nvidia supplier, was among the biggest boosts. Stocks rose in Taiwan and New Zealand while benchmarks fell in Japan. Markets were closed for holidays in Singapore, Malaysia and Thailand. The key MSCI Asia stock gauge is trading close to its highest level in more than two years after a recent rally in Chinese stocks and hopes of US rate cuts. Strong gains in Hong Kong have raised some concerns of overheating, however, while two Federal Reserve officials reinforced a higher-for-longer message on interest rates Tuesday.

In FX, the Bloomberg dollar index rose to sessoon highs, tracking the rise in yields. The pound rose to the strongest level in two months against the euro as traders pared UK rate-cut bets after inflation cooled at a slower-than-expected pace. “UK services inflation remains high and suggests the BOE can wait before cutting the policy rate,” said Elias Haddad, a senior strategist at Brown Brothers Harriman & Co. in London. “The upward adjustment to UK interest rate expectations supports a firmer GBP particularly versus EUR.”

• EUR/GBP fell as much as 0.3% to 0.8512, crossing the April low to hit the weakest since March 11
• GBP/USD rose as much as 0.4% to 1.2761, extending a four-day rally to 0.7%; pair continued to trade at the highest since March
• EUR/CHF rose 0.3% to 0.9916, on its longest winning streak since October 2022

Treasuries were pressured lower over early London session, following wider losses seen across gilts which aggressively bear flattened with yields at highest in weeks after inflation slowed far less than expected. Following the UK April CPI, the UK 2-year year yield remains cheaper by around 12bp on the day into early US session with UK 2s10s spread flatter by 3bp and 5s30s by 4bp on the day. Subsequently, UK markets no longer fully priced two Bank of England rate cuts for this year. US yields are also cheaper by 3bp to 5bp across the curve with belly-led losses on the day flattening 5s30s spread by around 1bp; 10-year yields around 4.45%, cheaper by 4bp vs. Tuesday close with UK 10-year underperforming by around 6.5bp in the sector

US session focus also includes supply pressure with $16 billion 20-year bond sale scheduled for 1pm New York, while Fed release latest policy minutes at 2pm.  Treasury auctions resume with $16b 20-year bond sale at 1pm, before $16b 10-year TIPS reopening Thursday. The WI 20-year yield at ~4.66% is roughly 16bp richer than April’s stop-out, which traded 2.5bp through the WI in a strong auction result

In commodities, crude reversed earlier losses, when prices were pressured by the surprise build in private inventories (Crude +2.5mln vs exp. -2.5mln) ahead of today's DoEs; Brent traded as low as $81.50 before rebounding over $82. Precious metals are softer with spot gold subdued amid a lack of notable geopolitical developments in recent days and ahead of FOMC minutes; XAU resides within a USD 2,410.69-2,426.62/oz range. A pullback is seen across most base metals following the recent rally, with profit-taking not to be discounted, with 3M LME copper towards the bottom end of a 10,636.50-10,857.50 intraday range.

In crypto, Bitcoin stabilized around $70K, with Ethereum holding just above $3.7k.

To the day ahead now, and the main highlight will be Nvidia’s earnings after the close. Otherwise, data releases include the aforementioned red hot UK CPI print for April and US existing home sales for April. We’ll get the FOMC minutes from the May meeting, and hear from ECB President Lagarde, BoE Deputy Governor Breeden, and the Fed’s Goolsbee.

Market Snapshot

• S&P 500 futures little changed at 5,340.75
• MXAP down 0.2% to 180.88
• MXAPJ up 0.3% to 568.56
• Nikkei down 0.8% to 38,617.10
• Topix down 0.8% to 2,737.36
• Hang Seng Index down 0.1% to 19,195.60
• Shanghai Composite little changed at 3,158.54
• Sensex up 0.3% to 74,199.82
• Australia S&P/ASX 200 little changed at 7,848.14
• Kospi little changed at 2,723.46
• STOXX Europe 600 down 0.3% to 521.14
• German 10Y yield little changed at 2.53%
• Euro little changed at $1.0849
• Brent Futures down 1.5% to $81.66/bbl
• Gold spot down 0.3% to $2,413.00
• US Dollar Index little changed at 104.70

Top Overnight News

• China’s mega banks are urging branch managers to lend to state-owned companies that buy unsold homes, offering a quick show of support for the government’s housing rescue package unveiled last week. BBG
• China signaled it’s ready to unleash tariffs as high as 25% on imported cars with large engines, as trade tensions escalate with the US and European Union. BBG
• New Zealand’s central bank makes a hawkish tweak to its statement, warning that rates may need to stay at present levels for longer than previously envisioned. WSJ
• UK inflation falls by less than anticipated in April, causing markets to dial back expectations for a June BOE rate cut (headline CPI was +2.3% in Apr, a steep fall from +3.2% in Mar but ahead of the Street’s +2.1% forecast. Core came in at +3.9%, down from +4.2% in Mar but above the Street’s +3.6% forecast). RTRS  
• White House says a deal to normalize relations between Saudi Arabia and Israel is within reach, but its not clear if Netanyahu will agree to Riyadh’s demands (which include committing to the creation of a Palestinian state and a halt to the war in Gaza). Politico
• The US should lift its “absolutely unfair” ban on the Ukrainian army using American-supplied weapons to strike targets inside Russia, in order to help thwart Moscow’s new offensive, Ukraine’s top national security official has said. FT
• Biden’s approval rating falls to the lowest level in nearly two years (the rating sank to 36%, down from 38% in Apr). RTRS
• US gasoline supplies gained by more than 2 million barrels last week, API data is said to show. That would take total holdings to the highest in eight weeks if confirmed by the EIA today. Crude inventories also rose. BBG
• Fed's Mester (voter) said expect above-trend growth for the year and keeping rates restrictive is not that big of a risk right now given job market strength. Mester said she raised her estimate of the long-run neutral rate in the last projection and the current level of policy may not be "as restrictive" as it might otherwise have been, while she needs to see a few more months of inflation coming down and is also watching expectations.
• Fed's Collins (non-voter) said elevated uncertainty continues to be a feature of the economy and cannot overreact to any data point, while she added this is a period when patience really matters and uncertainty is a key factor at this point. Furthermore, she said there are a lot of reasons to think Fed policy is "moderately" restrictive with some impacts still in the pipeline and the neutral rate may be higher at least in the medium term

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly rangebound as global markets brace for the FOMC Minutes and Nvidia earnings. ASX 200 just about kept afloat as strength in the heavy industries picked up the slack from the sluggish consumer and tech sectors. Nikkei 225 underperformed following a retreat beneath the 39,000 level and amid mixed data releases as trade data disappointed but machinery orders topped forecasts and showed a surprise M/M expansion. Hang Seng and Shanghai Comp were somewhat varied as the former mildly resumed its advances with XPeng among the notable gainers in Hong Kong due to its Q2 delivery guidance, while the mainland was contained amid a lack of drivers and lingering trade frictions.

Top Asian News

• RBNZ kept the OCR unchanged at 5.50% as expected, while it noted that monetary policy needs to be restricted and it raised its OCR projections with the OCR seen at 5.61% in September 2024 (prev. 5.60%), 5.54% in June 2025 (prev. 5.33%), 5.40% in September 2025 (prev. 5.15%) and at 2.99% in June 2027. RBNZ said restrictive monetary policy has reduced capacity pressures in the New Zealand economy and lowered consumer price inflation, as well as noted that annual consumer price inflation is expected to return to within the committee's 1%-3% target range by the end of 2024. RBNZ Minutes noted the committee agreed that interest rates need to remain at a restrictive level for a sustained period to ensure annual headline CPI inflation returns to the 1%-3% target range, while the committee agreed that interest rates may have to remain at a restrictive level for longer than anticipated in the February Monetary Policy Statement to ensure the inflation target is met. Furthermore, the committee discussed the possibility of increasing the OCR at this meeting.
• RBNZ Governor Orr said during the press conference that it would take time for domestic inflation to decline, while he added the economy has a lower potential growth rate and he is unsure if that is temporary. Orr also commented that they have limited upside room for inflation surprises and the OCR track is a central projection not an absolute prediction, as well as noted that they had a real consideration on raising rates at this meeting.

European bourses, (Stoxx 600 -0.3%), are subdued across the board, but within recent ranges as the tone from APAC reverberated into Europe. European sectors are mostly lower, with the breadth of the market fairly narrow; Autos are found at the foot of the pile, after EU car registrations showed a fall in EV market share. Energy is also hampered by broader weakness in the crude complex. US equity futures (ES -0.1%, NQ U/C, RTY -0.2%) are trading tentatively in a catalyst-thin session, with focus on the FOMC Minutes and after-market earnings from Nvidia.

Top European News

• EU New car registrations: +13.7% in April 2024; battery electric 11.9% market share (vs 13% in March), according to acea. EU New Car Registrations by company in April Y/Y: Volkswagen (VOW3 GY) +15.5%. Stellantis (STLAP FP/ STLAM IM) +1.7%. Renault (RNO FP) +11.0%. BMW (BMW GY) +11.5%. Mercedes-Benz (MBG GY) +4.2%. Toyota (7203 JT) +47.3%. Nissan (7201 JT) +14.3%. Ford (F) -9.1%. Tesla (TSLA) +3.0%.
• UK ONS House Price Index (Mar) +1.8% (vs -0.2% in Feb).
• Barclays removed its expectations that the BoE will conduct the first rate cut in June.

FX

• DXY is slightly firmer but is showing mixed performance vs. peers (softer vs. NZD and GBP but firmer vs. CHF and JPY). DXY has caught a recent bid and currently trades near session highs at 104.77.
• EUR is marginally softer vs the Dollar but a session of losses vs. the GBP; In terms of price action for EUR/USD, the pair is currently respecting yesterday's 1.0842-74 range.
• GBP is firmer in the wake of an unambiguously disappointing inflation report for the BoE. Y/Y measures fell from their priors but came in hotter-than-expected, as such the first full cut is now priced in November vs September pre-release. Accordingly, Cable vaulted to a high of 1.2761, though has since pared almost the entire move amid the recent Dollar strength, although EUR/GBP holds onto losses.
• Antipodeans are mixed vs. the USD with NZD the best performer across the majors post-RBNZ rate decision. The hawkish lean of the release saw NZD/USD spike higher to 0.6152. AUD/USD is a touch softer vs. the USD in quiet newsflow and as copper prices pull back.
• PBoC set USD/CNY mid-point at 7.1077 vs exp. 7.2376 (prev. 7.1069).

Fixed Income

• USTs are softer following the broader dynamics in fixed income markets but to a lesser extent than peers. Today's FOMC minutes will be parsed for details on what lies ahead for the Fed. Trough thus far at 108.31+ low matched that of yesterday's but failed to make any headway below that level.
• Gilts are notably lagging peers in the wake of the latest UK inflation release whereby Y/Y measures fell from their priors but came in hotter-than-expected. Gilts gapped lower by over a point, printing a low at 96.83, before stabilising on a 97 handle.
• Bunds were already on the backfoot before subsequently being dragged lower by UK inflation metrics. Jun'24 Bund contract went as low as 130.30, tripping below yesterday's trough at 130.53.
• UK sells GBP 4bln 4.125% 2029 Gilt: b/c 3.2x (prev. 3.21x), average yield 4.199% (prev. 4.251%), tail 0.6bps (prev. 0.8bps).
• Germany sells EUR 3.283bln vs exp. EUR 4bln 2.20% 2034 Bund: b/c 2.8x (prev. 2.5x), average yield 2.53% (prev. 2.54%) & retention 17.9% (prev. 19.03%)

Commodities

• Crude is lower in a continuation of the recent trend, with prices also pressured by the surprise build in private inventories (Crude +2.5mln vs exp. -2.5mln) ahead of today's DoEs; Brent July closer to the bottom end of a 81.57-82.63/bbl parameter.
• Precious metals are softer with spot gold subdued amid a lack of notable geopolitical developments in recent days and ahead of FOMC minutes; XAU resides within a USD 2,410.69-2,426.62/oz range.
• A pullback is seen across most base metals following the recent rally, with profit-taking not to be discounted, with 3M LME copper towards the bottom end of a 10,636.50-10,857.50 intraday parameter
• Global crude steel output -5.0% Y/Y; Chinse crude steel output -7.2% Y/Y
• Norway's April Prelim oil production 1.854mln BPD (vs 1.84mln BPD in March), gas output 10.4bcm (vs 364.5mcm/day in March), according to the Oil Directorate
• China's Coal Group said that China's May coal imports are likely to be lower than April's 42.5mln metric tons
• US Private Energy Inventory Data (bbls): Crude +2.5mln (exp. -2.5mln), Cushing +1.8mln, Gasoline +2.1mln (exp. -0.7mln), Distillate -0.3mln (exp. -0.4mln).
• Commerzbank said it expects Gold price to fall to USD 2300/toz in H2'24; raises forecast for Silver to USD 30/toz (prev. USD 29)

Geopolitics

• US senior official said negotiators are nearing a final set of arrangements for the US-Saudi defence deal and it is 'pretty much there to do’, while the deal includes a security component and nuclear agreement but the deal is not done and requires more work. The official said elements such as a credible pathway to Palestinian statehood still have to be completed, while the US talked with Israeli officials and reinforced President Biden's concerns about a Rafah ground invasion. Furthermore, the official said they had a very detailed discussion with Israelis about how to transition to a stabilisation phase in Gaza.
• China's Foreign Minister Wang said in talks with Iran's Deputy Foreign Minister that China will continue to strengthen strategic cooperation with Iran, safeguard common interests, and make endeavours for regional and world peace, according to Reuters.
• Russian Foreign Ministry said Russia's response will not only be political if France sends troops to Ukraine, according to RIA.
• Russian Defence Ministry proposed to change external border of Russian territorial waters in Baltic Sea, via Interfax citing draft bill

US Event Calendar

• 07:00: May MBA Mortgage Applications, prior 0.5%
• 10:00: April Existing Home Sales MoM, est. 0.8%, prior -4.3%
• 10:00: April Home Resales with Condos, est. 4.22m, prior 4.19m
• 14:00: May FOMC Meeting Minutes

Fed speakers

• 09:40: Fed’s Goolsbee Gives Opening Remarks

DB's Jim Reid concludes the overnight wrap

Markets continued to inch higher yesterday, with the S&P 500 (+0.25%) closing at another all-time high. But even with the new record, there were still clear signs of investor caution ahead of Nvidia’s earnings announcement later today, which is now the main focus for investors. It might seem strange that markets are hanging on the results of a single company, but over recent quarters, the release has become one of the most important events on the macro calendar. Moreover, that status has been justified by the massive moves afterwards, and Nvidia’s previous results in February saw the S&P 500 surge by +2.11% the next day, marking its strongest daily performance in over a year. So this is a pivotal event, and the recent releases have seen reactions that rival the sort of moves taking place after a surprise US jobs report or CPI release.

We won’t get Nvidia’s results until after the US close, but in the meantime, investors were focused on several Fed speakers yesterday, who sounded cautious on the prospect for near-term rate cuts. For instance, Fed Governor Waller said that “in the absence of a significant weakening in the labor market, I need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy.” In addition, he said that “We’re not seeing anything right now that looks like staying here for three or four months is going to cause the economy to go off a cliff”. Later on, that message was back up by other speakers, and Vice Chair for Supervision Barr said that “We need to sit tight where we are for longer than we previously thought”. So the comments all added to the sense that any rate cuts (if they happen at all) would be later in the year.

But even as Fed speakers were in no hurry to cut rates, several other developments meant that sovereign bonds still rallied on both sides of the Atlantic. First, we had the Canadian CPI release for April, where inflation slowed to +2.7% year-on-year, in line with expectations. That helped to bolster expectations that the Bank of Canada would cut rates at their next meeting, and overnight index swaps moved up the chance of a June cut to 64%, up from 43% the previous day. Secondly, there was a fresh decline in oil prices, with Brent crude down by -0.99% on the day to $82.88/bbl, and overnight it’s fallen a further -0.68% to $82.32/bbl. And third, we also heard from ECB President Lagarde, who said that “there is a strong likelihood” of a move in June, and that “I’m really confident that we have inflation under control”.

Overall, that meant y ields on 10yr Treasuries fell -3.2bps to 4.41%, whilst Canadian government bonds outperformed, with their 10yr yield down -5.0bps on the day. That was echoed in Europe, where yields on 10yr bunds (-3.0bps), OATs (-2.4bps) and BTPs (-1.8bps) also moved lower. And here in the UK, 10yr gilts were down -3.9bps, which comes ahead of the UK CPI data for April, which is out shortly after we go to press this morning.

For equities however, there was a more divergent performance yesterday on either side of the Atlantic. In the US, the S&P 500 (+0.25%) managed to advance for a 3rd consecutive day to a new record, surpassing its previous closing peak last Wednesday. That was supported by a +1.04% advance to a new record for the Magnificent 7, which was led by a +6.66% gain for Tesla . On the other hand, small-cap stocks struggled, with the Russell 2000 down -0.20%. Meanwhile in Europe, the STOXX 600 (-0.18%) also fell back, alongside losses for the FTSE 100 (-0.09%), the CAC 40 (-0.67%) and the DAX (-0.22%).

That divergence has continued in Asian markets overnight, with losses for the Nikkei (-0.64%), alongside modest gains for the Hang Seng (+0.18%), the CSI 300 (+0.07%), the Shanghai Comp (+0.02%) and the KOSPI (+0.18%). And looking forward, US equity futures are flat this morning, with those on the S&P 500 up just +0.02%.

Elsewhere overnight, the Reserve Bank of New Zealand left interest rates unchanged at 5.5%. However, there were some hawkish elements to the decision, as Governor Orr said raising rates was a “real consideration” at the meeting, and their new forecasts suggest rate cuts will now happen later in 2025 than before. In turn, the New Zealand Dollar has strengthened by +0.43% against the US Dollar this morning, and yields on 10yr New Zealand government bonds are up +3.5bps, with the 2yr yield up +7.0bps.

Finally, there were several interesting commodity moves yesterday, alongside the decline in oil prices. In particular, month ahead TTF natural gas prices in Europe rose +4.13% to EUR 33.01/MWh, with futures for next winter approaching EUR 40/MWh, their highest level since the start of year. Asian LNG prices similarly reached their highest levels since December. So a potential sign of inflationary pressures ahead. The latest moves follow the news of a bankruptcy for an LNG contractor in the US, which added to fears of tighter global LNG supplies at a time of solid restocking demand for LNG in both Asia and Europe. Meanwhile on the food side, wheat prices reached their highest level since August (up by over 25% since mid-April). And finally in metals, copper (+0.62% yesterday) posted another record high, extending its YTD gain to +31.58%.

To the day ahead now, and the main highlight will be Nvidia’s earnings after the close. Otherwise, data releases include the UK CPI print for April and US existing home sales for April. Finally, we’ll get the FOMC minutes from the May meeting, and hear from ECB President Lagarde, BoE Deputy Governor Breeden, and the Fed’s Goolsbee.

Tyler Durden Wed, 05/22/2024 - 07:57

China Slaps Boeing, Lockheed, Raytheon With Sanctions Over Arms Sales To Taiwan

It has been a turbulent week for Sino-US relations. Beijing criticized US Secretary of State Antony Blinken over his support for Taiwan's new president, and the Chinese Ministry of Foreign Affairs (MOFA) imposed sanctions on US defense firms over Taiwan support.

President Lai Ching-te was sworn in early Monday. Shortly after, Blinken released this statement, "We also congratulate the Taiwan people for once again demonstrating the strength of their robust and resilient democratic system."

Blinken added, "The partnership between the American people and the Taiwan people, rooted in democratic values, continues to broaden and deepen across trade, economic, cultural, and people-to-people ties."

These comments did not sit well with Beijing... 

"It's a serious violation of the political commitment made by the US to maintain only cultural, commercial and other unofficial relations with the Taiwan region," Foreign Ministry spokesman Wang Wenbin said Tuesday in response to Blinken's comments. 

Fast-forward to Wednesday, when MOFA imposed sanctions on twelve US defense contractors and ten of their top executives for supplying Taiwan with arms, according to the Hong Kong media outlet Dimsum Daily.

Here's more from Dimsum: 

The sanctions target prominent American defence corporations such as Lockheed Martin Missiles and Fire Control, Lockheed Martin Aeronautics, Javelin Joint Venture, Raytheon Systems, General Dynamics Armament and Tactical Systems, among others. The Chinese government has declared it will freeze its assets within China, impacting both movable and immovable property.

Furthermore, ten executives, including six from Northrop Grumman like Chairman and CEO Kathy J. Warden, will face travel bans restricting their entry into China, Hong Kong, and Macao. This measure extends to four executives from General Dynamics, highlighting the depth of Beijing's retaliatory steps.

The Ministry criticized the US for disregarding China's neutral stance on the Ukraine crisis and leveraging it to justify economic bullying and coercion. According to Beijing, these actions severely infringe upon the legitimate rights of Chinese firms and individuals and breach the foundational norms governing Sino-American diplomatic relations. -Dimsum Daily

Flashpoints such as Taiwan and the South China Sea must be monitored closely through the decade's end. With the world fracturing into a multipolar state, conflict risk is elevated. 

Last month, US Adm. John Aquilino, commander of the US Indo-Pacific Command, warned the timeline for Chinese President Xi Jinping to invade Taiwan is by 2027. 

Tyler Durden Wed, 05/22/2024 - 07:45

Another Sanction Failure: The US Blacklisted Xiaomi Three Years Ago Now it Makes EVs

Authored by Mike Shedlock via MishTalk.com,

Just three years ago, the Chinese company Xiaomi decided to build cars. It succeeded where Apple failed.

The Wall Street Journal reports A Chinese Phone Maker Did Something Apple Couldn’t: Make an EV

Xiaomi is a Chinese company known for its rice cookers, robot vacuums, air purifiers and smartphones. Now, it has pulled off what Apple, its longtime rival, couldn’t: Make an electric car and bring it to market. And it did it in three years.

In its home market, Xiaomi —pronounced SHAU-mee—is cranking out its SU7 sedan to a waiting list of buyers after its launch in late March. Since early April, the Beijing-based company said it had delivered more than 10,000 of the electric vehicles and received nearly 90,000 binding orders.

Priced between $30,000 and $42,000, the company says the SU7 can go up to 500 miles on one charge, undercutting comparable versions of the Tesla Model 3 in China by around $4,000 and outrunning it by around 200 miles per charge.

Xiaomi’s feat illuminates a new reality in the century-old automotive business: The barriers to entry for making a car have shrunk in recent years with the emergence of electric vehicles. And in this new reality, China is speeding way ahead.

To simplify development and reduce costs, Xiaomi adopted Tesla’s process of “gigacasting,” which employs large-scale, high-pressure aluminum die-casting to create the car’s frame. The process combines hundreds of manufacturing steps into one, saving on components, weight, cost and time.

Xiaomi also had to innovate. The liquid aluminum that gets injected into the die-casting machine has to be a certain variety that can withstand an extraordinary amount of pressure. Xiaomi had to come up with its own material, building an artificial-intelligence program that used a method known as deep learning to simulate how different materials would behave when placed inside the die-cast machine.

The company only seriously started looking into entering the car sector after the U.S. government blacklisted it in January 2021 for what it said were ties to China’s military, prohibiting Americans from investing in Xiaomi.

Xiaomi Profitable When?

Xiaomi loses money on cars. To turn a profit, Xiaomi would have to produce 300,000 to 400,000 of the SU7 each year, Xiaomi CEO Lei Jun told CCTV.

It’s unclear if this company succeeds at building cars. But I suspect it will.

Regardless, Xiaomi has proven a company that makes phones can make cars three years later.

What exactly does Tesla have that some Chinese company can’t do better or cheaper? Perhaps self-driving technology, but there Tesla seriously lags Waymo.

Preparation for Growth

On April 15, I noted Elon Musk Fires 10 Percent of Tesla Workforce, Prepares for “Next Phase of Growth”

Preparing for Growth

Preparing for growth by firing working is like trying to lose weight by stocking the pantry with more potato chips.

On May 6, I noted Another Round of Mass Firings at Tesla, Sales Must Be Imploding

Tesla announced yet another round of layoffs today. News came in the typical way, an email starting “Dear Employee”. It seems “Dear Ex-Employee” would be more fitting.

Tiresome Lies

Musk statements are no longer best viewed as excessive hype, but rather tiresome lies.

For four years running, Musk promised to make 50,000 electric semis. Tesla delivered a grand total of 100.

Carbon Credits

Carbon Credits notes Tesla Hits Record High Sales from Carbon Credits at $1.79B

Elon Musk’s Tesla generated a substantial $1.79 billion from carbon credit sales last year, as revealed in their Q4 2023 and annual financial report, bringing its total earnings from such credits since 2009 to nearly $9 billion.

The revenue generated from the sale of carbon credits has become a substantial source of income for the company. In fact, the credits account for a staggering 11% of Tesla’s overall gross margin for the quarter, $4,065 million, down from 25.9% seen in Q4 2022.

Despite its continued dominance in the U.S. EV market, Tesla faces growing competition, particularly from China’s BYD. The Chinese automaker recently surpassed Tesla as the world’s largest seller of EVs.

Tesla’s Lead Has Vanished

Whatever technology lead Tesla once had is now gone.

Tesla’s Full Self Driving FSD technology is essentially vaporware.

On May 14, I noted BYD Unveils the “Shark” a Plug-in Hybrid Pickup Truck Built in Mexico

The Chinese automaker BYD (Build Your Dreams) announces a 700-mile range PHEV that will be built in Mexico, this year.

Also see Biden Wants EVs so Badly That He Will Quadruple Tariffs on Them

Astute readers will immediately notice the title of this post makes no sense. It’s not supposed to. But it is exactly what President Biden is doing.

The EU is too shellshocked and disorganized to do anything. The US is fighting with tariffs and sanctions.

The Blacklisting of Xiaomi led to this result, It’s another “victory” for sanctions.

Tyler Durden Wed, 05/22/2024 - 05:00

Yellen Threatens German Banks With Sanctions; EU Approves Using Russian Asset Profits For Ukraine's Defense

In a rare moment of tensions among allies, US Treasury Secretary Janet Yellen is demanding that German bank executives get serious about complying with anti-Russia sanctions, warning further that German banks could find themselves under sanctions.

She warned them of secondary sanctions meant to thwart deals with Russian entities in a meeting among bank leaders in Frankfurt. "Russia continues to procure sensitive goods and to expand its ability to domestically manufacture these goods. We must remain vigilant and be more ambitious," Yellen said. "I urge all institutions here to take heightened compliance measures and to increase your focus on Russian evasion attempts."

According to Reuters, "In an unusually direct warning, she told the executives to police sanctions compliance among their banks' foreign branches and subsidiaries and reach out to foreign correspondent banking customers to do the same, especially in high-risk jurisdictions."

"Russia is desperate to obtain critical goods from advanced economies like Germany and the United States," Yellen continued. "We must remain vigilant to prevent the Kremlin’s ability to supply its defense industrial base, and to access our financial systems to do so."

Washington's pressure campaign to force out Russian interests from Europe appears to be bearing fruit:

Earlier this month, Raiffeisen Bank International (RBI) dropped a bid for a 1.5 billion euro ($1.6 billion) industrial stake linked to Russian tycoon Oleg Deripaska after intense U.S. pressure.

The deal's collapse was a fresh setback for the lender, which faces criticism for its ties to Moscow more than two years since Russia's invasion of Ukraine. The pressure also underscored Washington's willingness to take European banks to task over their Russia ties.

A spokesman later said, "RBI will continue to work towards the de-consolidation of its Russian subsidiary."

Meanwhile the European Union has finally approved a US-backed plan to use seized Russian assets to generate profits which will in turn help arm Ukraine. 

Associated Press reports that "The 27-nation EU is holding around 210 billion euros ($225 billion) in Russian central bank assets, most of it frozen in Belgium, in retaliation for Moscow’s war against Ukraine. It estimates that the interest on that money could provide around 3 billion euros ($3.3 billion) each year." A first tranche of funds could be available as early as July.

Starting in February, US Treasury Secretary Janet Yellen began getting more vocal on the "moral case" for using Russian assets to aid Ukraine, telling allies they must find a way to "unlock the value" of the hundreds of billions in immobilized Russian assets, also with an eye towards Ukraine's post-war reconstruction.

Previously some Ukrainian officials floated the idea of "reparation bonds" backed by future claims for war damages against Moscow, and utilizing frozen Russian assets. These initiatives have gained steam under US leadership. Most of the $300 billion in frozen Russian assets are held in Europe - particularly France, Germany, and Belgium.

Tyler Durden Wed, 05/22/2024 - 04:15

Taxpayer Costs Skyrocket As Two-Thirds Of Jobless Benefit Recipients In Germany Are Migrants

Authored by Thomas Brooke via ReMix News,

Nearly two-thirds of German residents receiving unemployment benefits have a migration background, new figures from the Federal Employment Agency have revealed.

The statistics published by the federal agency and cited by the Die Welt broadsheet showed that 63.1 percent of those in receipt of the so-called citizen’s income, or “Bürgergeld,” are of migrant origin, and “most do not have a German passport.”

The German newspaper explained that while employment figures are increasing year-over-year, “because the Federal Republic has long allowed very high immigration of low-skilled people, the number of migrants who are unemployed and receiving social benefits is also increasing.”

The figures define “migration background” as anyone who themselves or whose parents were born without German citizenship, i.e., first- and second-generation migrants.

Of the 3.93 million people eligible for the taxpayer-funded benefit as of December 2023, some 2.48 million were classed as being of a migration background, with 1.83 million recipients not having German citizenship.

The percentage varies considerably among the federal states. In Hesse, Baden-Württemberg, and Hamburg, more than 7 in 10 of all recipients are migrants at 76.4 percent, 74.1 percent, and 72.8 percent, respectively.

There exists a strong correlation between the rise in the migrant population and the percentage of welfare benefits going to migrants, giving weight to the argument that mass immigration of low-skilled workers is not a net benefit to Europe’s largest economy.

In 2013, the percentage of the German population with a migration background was 20 percent, with 43 percent of benefit recipients being migrants. Today, 29 percent of the German population are foreign-born and 63 percent of unemployment benefits are handed to migrants.

In July last year, a response by Parliamentary State Secretary at the Federal Ministry of Labor and Social Affairs Anette Kramme to a request made by the Alternative for Germany MP René Springer revealed that the number of German recipients of welfare benefits had halved since 2010, while the number of foreign nationals receiving payments had doubled.

The cost to the taxpayer has skyrocketed since 2010, with a 122 percent increase on the €6.9 billion bill then to around €15.4 billion a year today.

Springer said at the time that Germany desperately needed to implement “a restrictive immigration policy that effectively prevents immigration into our social systems. The citizens’ income introduced by the federal government, on the other hand, acts like an immigration magnet.”

Read more here...

Tyler Durden Wed, 05/22/2024 - 03:30

EU Members Will Have To Arrest Netanyahu After ICC Warrant: Borrell

Will Israel eventually come up with its own Hague Invasion Act? 

EU foreign policy chief Josep Borrell on Tuesday commented on the International Criminal Court (ICC) issuing arrest warrants for top Israeli officials over alleged war crimes in Gaza. He stressed in the statement that all European Union member countries will be legally required to oblige.

He explained that if Israeli Prime Minister Benjamin Netanyahu or Defense Minister Yoav Gallant travel to a European country, they would face arrest. 

EPA/EFE

He said the same for those Hamas leaders listed alongside Netanyahu: "I take note of the decision of the ICC Prosecutor to apply for warrants of arrest before Pre-Trial Chamber I of the International Criminal Court (ICC) against Yahya Sinwar, Mohammed Deif, Ismail Haniyeh, Benjamin Netanyahu and Yoav Gallant," Borrell sated.

"The mandate of the ICC, as an independent international institution, is to prosecute the most serious crimes under international law," Borrell wrote on X. He emphasized "All States that have ratified the ICC statutes are bound to execute the Court’s decisions." He said the EU has taken "note" of the world court's action.

With the exception of Ukraine and Turkey, all of Europe is a signatory to the Rome Statue, requiring them to apprehend those individuals 'wanted' by the ICC.

The ICC has described:

The ICC can prosecute crimes against humanity, which are serious violations committed as part of a large-scale attack against any civilian population. The 15 forms of crimes against humanity listed in the Rome Statute include offences such as murder, rape, imprisonment, enforced disappearances, enslavement – particularly of women and children, sexual slavery, torture, apartheid and deportation.

This could impact Israeli leaders' travel to certain places in the world. It most certainly creates diplomatic pressure to not do so in the case of destination countries which are required to make an arrest under the Rome Statute.

The White House has said that it 'rejects' the ICC's decision, while Israeli leaders have continued to rage, even calling the court's decision 'antisemitic'.

"Charging me for crimes in Gaza is like charging George Bush for 9/11"
pic.twitter.com/GhVdJyEsj1

— The_Real_Fly (@The_Real_Fly) May 21, 2024

The ICC's investigation actually goes all the way back to the 2014 Israel-Hamas war. But also following Oct.7 and Israel's invasion of Gaza, South Africa brought a fresh war crimes case - which has gained the support of countries like Turkey, but especially a number of countries of the Global South.

The Hague-based court in March 2023 issued an arrested warrant for Russian President Vladimir Putin over the Ukraine war, so this means that ironically Netanyahu is now a "wanted" man right alongside Putin.

Tyler Durden Wed, 05/22/2024 - 02:45

Blowback In The African Coup Belt

Authored by Marcel Dumas Gautreau via The Mises Institute,

Starting in 2020, things started to get strange in Africa for those who knew what to look for.

Normally, coups in Africa are nothing to write about. But starting in 2020, we saw six countries flip into a pro-Russian direction in just three years. Individually, they were a curiosity. Taken together, that rate of turnover outpaced even the most optimistic neoconservative ambitions for pro–United States regime changes in the Middle East. As General Wesley Clark summarized, “We’re going to take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”

That fourth country, Libya, is where our story starts.

Muammar Gaddafi and the Disposal Problem

In 2011, the US and the North Atlantic Treaty Organization destroyed the regime of Muammar Gaddafi. They had wanted to do it for a long time. A true cosmopolitan, Gaddafi had provided lawyers, guns, and money to black nationalists in South Africa, Palestinian Nationalists in Tunisia, Irish Nationalists in the British Isles, White Nationalists in Canada, and Armenian Nationalists in Turkey. The one ideology for which the Brotherly Leader and Guide of the Revolution had no patience or tolerance was radical Islamic Salafi jihadism. In March 1998, Libya was the first country to issue an Interpol arrest warrant for Osama bin Laden. The warrant received no attention or action. Five months later, Al-Qaeda bombed the US embassies in Kenya and Tanzania, killing 224.

In September 2001, President George W. Bush told Congress that “every nation, in every region, now has a decision to make. Either you are with us, or you are with the terrorists.” Gaddafi took the US up on the offer, dismantling its weapons of mass destruction program under the United Nations’ supervision. It paid over $1 billion in reparations to victims of terrorism to get removed from the State Sponsor of Terror list. In 2008, future US Ambassador to Libya (and Benghazi embassy casualty) J. Christopher Stephens reported that “Libya has been a strong partner in the war against terrorism and cooperation in liaison channels is excellent.”

Gaddafi had been highly suspicious of the citizens who chose to join the brave Mujahideen fighters of Afghanistan and surveilled them extensively, dutifully reporting them to other intelligence agencies whenever possible. In one particularly obscene case, a Guantanamo detainee named Abu Sufian Ibrahim Ahmed Hamuda bin Qumu was on the ground leading the Salafi jihadist group “Supporters of Sharia.” While hundreds are held in Guantanamo, being tortured without trial, the US knowingly released what it deemed a “probable member of al-Qaeda and a member of the African Extremist Network” to tear things up in Libya for them. A United Kingdom Parliamentary retrospective on the Libya overthrow later admitted, “The possibility that militant extremist groups would attempt to benefit from the rebellion should not have been the preserve of hindsight. Libyan connections with transnational militant extremist groups were known before 2011, because many Libyans had participated in the Iraq insurgency and in Afghanistan with al-Qaeda.”

Gaddafi made a series of dire warnings of what would happen if he died:

“Libya plays a vital role in regional peace and world peace,” he said in an interview with the France 24 television station. “We are an important partner in fighting al Qaeda.”

“There are millions of blacks who could come to the Mediterranean to cross to France and Italy, and Libya plays a role in security in the Mediterranean.”

Saif Gaddafi likewise warned, “Libya may become the Somalia of North Africa, of the Mediterranean. You will see the pirates in Sicily, in Crete, in Lampedusa. You will see millions of illegal immigrants. The terror will be next door.” While the Mediterranean didn’t see a resurgence of literal piracy, Gaddafi’s predictions were otherwise correct if not conservative.

Within five years, US military officials openly conceded that Libya was a failed state. In February 2015, the International Crisis Group warned, “On the current trajectory, the most likely medium-term prospect is not one side’s triumph, but that rival local warlords and radical groups will proliferate, what remains of state institutions will collapse, financial reserves . . . will be depleted, and hardship for ordinary Libyans will increase exponentially.”

As predicted, millions of blacks flocked to Libya’s Mediterranean coast to cross into France and Italy. Many were beaten, raped, and starved in what the United Nations Children’s Fund called “living hellholes” or even sold in open-air slave markets. On the Italian island of Lampedusa, it is not unheard of thirteen years later for hundreds or thousands of illegal African migrants to land in a single night. On May 22, 2017, in a manifestation of what former Senate Foreign Relations Committee investigative counsel Jack Blum called a “disposal problem,” a Manchester-born Libyan named Salman Abedi returned from his MI5-sponsored jihad in Libya and blew himself to pieces in the middle of an Ariana Grande concert. He killed himself and twenty-two others in an audience primarily composed of young girls.

As the second phase of Hillary Clinton’s “bank shot,” the overthrow of Libya’s government and the looting of its arsenals allowed the Central Intelligence Agency to direct those weapons to jihadis in Syria. The scourges of the Islamic world would also use this windfall of weapons to brutalize populations across Africa’s Sahel region, most notably in Mali. After 2011, countries in the Sahel experienced between a tenfold and twentyfold increase in deadly Islamic terror incidents from groups like Boko Haram and the Islamic State following what Vision of Humanity calls a “Jihadization of Banditry.”

French Africa and the Series of Coups

After seizing power in 1969, Gaddafi moved in 1973 to seize land in the former French colony of Chad based on older colonial boundaries between Italy and France. In 1979, Libya intervened in the Chadian civil war on the side of Goukouni Oueddei. When Oueddei demanded the withdrawal of Libyan troops, Libya withdrew from the nondisputed territories. Goukouni implicitly affirmed the new border. France backed Hissène Habré to take over in 1982. General Idriss Déby played a pivotal role in dislodging Libyan troops from northern Chad, but France and President Habré feared his growing influence, exiling him to Sudan.

Gaddafi began supporting Déby’s efforts to raise an army and take over Chad in 1990. When Déby successfully took power, the former rivals became quick friends. Libya withdrew from the disputed strip in 1994, and the two countries locked in a series of security, trade, and refugee resettlement agreements. Most importantly, the two cooperated extensively as two points in a chain along with Nigeria against Islamic militants. In 2021, Déby was killed in battle against Saudi-funded rebels, backed by elements of one of Libya’s three competing revolutionary governments.

During his rapprochement with the West, Gaddafi and Italian prime minister Silvio Berlusconi signed the 2008 Treaty of Benghazi. Italy apologized for colonialism and agreed to pay Libya $5 billion in reparations over twenty years. More importantly, Italy and the European Union would fully modernize Libya’s border patrol infrastructure, including satellite detection and a joint Italian-Libyan coastal patrol to stop the flow of illegal migrants into Europe. With Gaddafi’s death and the failure of any Libyan faction to consolidate control, this infrastructure fell to tatters.

In January 2019, Italy’s populist right began a diplomatic offensive against France, blaming the Republic’s policies in Africa for the migrant flood. At a rally, deputy prime minister Luigi Di Maio posed the question, “If today people are leaving Africa is it because some European countries, with France taking the lead, have never stopped colonizing tens of African states?”

Matteo Salvini likewise said,

There are countries that steal wealth from Africa and France is definitely one of them. France has no interest in making Libya a better place. Paris is interested in taking control of the oil there. And their interests are opposed to the Italian ones. I’m proud to govern a generous country. We don’t take lessons on humanity from France, let alone from Macron. In recent years, France turned back thousands of migrants, including women and children. They took them back to Italy in the middle of the night, like animals. Again, I don’t take lesson from Macron.

Future prime minister Giorgia Meloni joined the attack, explaining to a television audience the CFA franc, “the colonial currency that France prints for 14 African nations to which it applies seigniorage and by virtue of which it exploits the resources of these nations.” Holding a picture of a child at the bottom of a Burkina Faso gold mine, she concluded that “the solution is not to take Africans and bring them to Europe, the solution is to free Africa from certain Europeans who exploit it.”

In its defense, the CFA franc has historically been less inflationary than currencies in adjacent African nations. Still, for once, it was not completely unfair and ahistorical to single out France as particularly incompetent. France’s former colonies have fared unusually poorly relative to those of other colonial powers. From de jure decolonization in 1960 until the end of the Cold War, France launched over a hundred military expeditions into its former African colonies. After the Cold War, more than three-quarters of the coups in sub-Saharan Africa were in former French colonies.

Mali, Burkina Faso, and Niger were the worst hit by the Islamic terror wave. Straddling the border between the three countries is the “Islamic State of the Greater Sahara.” After repeated failures of the French-backed governments to dislodge the insurgents, the militaries seized power with popular support. Sudan, Guinea, and Gabon were likewise overthrown, creating a continuous “coup belt” running from Sudan on the Red Sea to Guinea on the Atlantic. On March 24, Senegal elected Bassirou Diomaye as president, who has vowed to take the country off the CFA franc.

Russia, Russia, Russia

The new military governments of Mali, Burkina Faso, and Niger formed the Alliance of Sahel States, all of them leaving the Nigeria-dominated and Western-backed Economic Community of West African States. They then announced that French troops were no longer welcome in the countries, and that they would instead be welcoming protection and training from Russia’s Wagner Group.

The Wagner Group was originally a mercenary company run by the Russian oligarch Yevgeny Prigozhin. In July 2023, Russia hosted a summit in Saint Petersburg, at which Putin announced he would write off $23 billion in debt owed by various African countries. The conference was one of Yevgeny Prigozhin’s last appearances in public after his failed June 2023 coup and before his accidental August 2023 plane crash. Wagner in Africa has been renamed as the Africa Corps, rumored to be directly managed by Russian military intelligence. Russia began offering “regime survival packages” to countries in Africa, in exchange for access to mineral resources. Russia threatens to cut off privileged French access to Nigeran uranium reserves, which are responsible for the production of 12 percent of France’s electricity.

The US also has a direct stake in the form of two Africa Command bases in Niger, one of which completed construction in 2019 as an intelligence center and a launchpad for Reaper drones. The Agadez and Niamey bases are critical to surveillance across Central Africa. Besides an unknown number of intelligence agents, there are one thousand US troops in the country, and the new Niger government has insisted that they are not welcome. US Undersecretary of State for Africa Molly Phee visited Niger twice in March, but so far, the Nigerien government has shown no sign of budging.

After September 11, 2001, the neoconservatives schemed to dominate the entire Middle East and North Africa. Instead, imperial arrogance and outright perfidy may well have put the country on the path to losing it all.

Tyler Durden Wed, 05/22/2024 - 02:00

Election 2024: A Political Renaissance For America Or The Path To Totalitarianism

Authored by James E. Fanell and Bradley A. Thayer via American Greatness,

It has been decades in the making, but the country is now on the precipice between its traditional ideology of political liberalism and a path that will lead, far sooner than Americans might think, to totalitarianism. The historical bulwarks of Americanism and the American political system—government of the people, freedom, and liberty—have been deliberately eroded. A citizenry steeped in republican virtue, cognizant of the political ideas and principles that made America a lasting and strong constitutional republic, and knowledgeable about the duties and obligations of American citizenship have been under daily assault for years from the foreign ideology of communism. That odious ideology has operated under synonyms such as “progressivism,” “multiculturalism,” or DEI to make its poison more palatable to American audiences.

The media—the so-called “Fourth Estate”—has been another layer of protection that has been peeled away. Today, they are activists advancing the left’s agenda in all but name. Great newspapers that were lively to read and informative are no longer. One reads them now the same way Soviet citizens used to read Pravda—only by knowing the lies that are printed and surmising what is left out of the story can one come close to knowing the truth. Compare the front page of the New York Times from fifty, forty, or thirty years ago to one today, and the change is telling and sad to see. Rather than a robust culture of free speech, censorship is pervasive by the legacy and social media, Big Tech, and by a ubiquitous and devilish culture of self-censorship.

American universities were once the envy of the world, as lively academies of intellectual debate and devoted to the pursuit of knowledge are now factories of indoctrination. Their law, medical, engineering, and business schools have also been transformed into political instruments that advance the “Party Line.” Unbelievably, thought control in K-12 is even worse. Popular culture fell a long time ago, and most of it is simply a contemporary version of Soviet entertainment where the heroic worker and peasant defeat the evil capitalist and priest. Worse still is the promotion of degeneracy and decadence with gender reassignment led by a teacher’s union that more resembles a Clockwork Orange ensemble than as the protectors of the most vulnerable in our society—our children.

As alarming as these developments are, what is worse is the permanent weaponization of government against political opponents. The raids, indictments, trials, and gag orders for a former president and leading 2024 candidate demonstrate that the Constitutional rights of the most prominent political figure in American politics in this century can have his rights violated, so too can all Americans. The lawfare employed against President Trump has been specifically designed by the left to consume his time and other resources away from his campaign for President in this critically important election year.

Of course, it is not only Trump. The imprisonment of former Trump official Peter Navarro and perhaps of Trump advisor Steve Bannon is an attempt to decapitate the Make America Great Again Movement through their imprisonment and to send a message to others about what will happen to anyone who opposes the state. The persecution of Trump’s legal advisor, John Eastman, is a similar tactic. The result is that law firms will be reluctant to accept the movement’s legal challenges. These actions are the first strike in the left’s campaign of “lawfare” to disarm Trump and to deter any Republican challenge to the parameters of the election and its aftermath. It is also political muscle flexing in an attempt to intimidate anyone who would assist Trump’s campaign and an effort to demoralize his base. After the British executed Admiral John Byng in 1757, Voltaire wrote it was “to encourage the others,” and so it is today.

The irony of the many steps taken by the left to advance a totalitarian agenda is that it is they who falsely proclaim that it is Trump and the MAGA movement that are the fascists. It is the left that is actually implementing such vile and anti-American practices against their political enemies and the American people. Recently, former 2016 presidential candidate Hillary Rodham Clinton was once again on the Sunday news shows talking about how Donald Trump would arrest his political enemies, while in reality it is only the Democratic Party and the Biden administration that have put Peter Navarro in prison, may imprison Bannon, and indicted the former President 92 times.

This cannot stand if America is to survive as a constitutional republic. If it does, then the country is on the path to totalitarianism. Totalitarianism does not just show up one day, springing forth fully formed like Athena from the head of Zeus. But it does come quickly, more so than most Americans realize, as the ideology, laws, norms, and culture are eroded by the new revolutionary regime. When they seized power in 1917, the Bolsheviks did not know how far they could push the Russian people, but that was not for lack of intent or for a lack trying. Their ambition was to remake everything—culture, politics, economics, the arts, science, diplomacy, education, values, and thought. Every year, they tightened their grip until they crushed the people in the horrors of Stalinism. It took only twenty years from the time the Bolsheviks came to power to the show trials of mature Stalinism.

Nothing is decided and there will be many ups and downs, twists and turns, and surprises between now and Election Day. The election of 2024 is critical and as important as any in its history. Assuming the election’s fidelity—that this assumption must be made is an indication of how close the country is flirting with totalitarianism—it will provide Americans with the clearest choice in our history since the Civil War. When that choice is understood to be one between the continuation of the American Republic or to enter the hell of totalitarianism, the election will spark a renaissance of America’s traditional political ideology, institutions, values and culture. This election provides the opportunity to drive a stake through the heart of totalitarianism “with an American face,” as Americans, having seen into the abyss, will reject the totalitarian path. A re-birth of the understanding of the value of American citizenship—that spirit of 1776—and of our inalienable and universal freedoms can come from the 2024 election.

To ensure that positive outcome will require not only support for President Trump but also extraordinary vigilance by the American people through the election and its aftermath.

Tyler Durden Tue, 05/21/2024 - 23:40

Where It's Most & Least Common To Be LGBT+

Around seven percent of adults identify as LGBT+, according to a survey conducted online in 43 countries between April 2023 and March 2024 by Statista Consumer Insights.

But, as Statista's Anna Fleck shows in the following chart, there’s notable variation between countries.

You will find more infographics at Statista

The Philippines, the United States and Israel had the highest share of people identifying as LGBT+, at 11 percent each, while Thailand and Canada came in a close joint second place with 10 percent of adults, followed by Sweden, Brazil and Australia, each with 9 percent. When looking at sexual orientation in the U.S., 3 percent of respondents identified as gay, 6 percent as bisexual and one percent pansexual.

At the lower end of the spectrum comes South Korea and Romania with 3 percent of adults identifying as LGBT+ in each. There was also considerable variation across age groups. In the U.S. for example, 20 percent of Gen Zers self-identified as a part of the LGBT+ community versus 11 percent of Millennials, 6 percent of Gen Xers and only 5 percent among Baby Boomers.

Tyler Durden Tue, 05/21/2024 - 23:20

The Audacity Of Merrick Garland: Julie Kelly

Authored by Julie Kelly via The Florida Capital Star (emphasis ours),

FBI agents last week arrested a man from Maine for his involvement in the events of January 6. According to a Department of Justice press release, Lincoln Deming spent about 30 minutes inside the building after entering through an open door with Capitol Police standing by. Deming faces numerous charges including civil disorder and the dreaded “parading” in the Capitol misdemeanor.

The DOJ bragged in the press release about the government’s scalp count for its unprecedented prosecution of Jan 6 protesters. “More than 1,424 individuals have been charged in nearly all 50 states for crimes related to the breach of the U.S. Capitol,” Matthew Graves, the Joe Biden-appointed U.S. Attorney for the District of Columbia, boasted. The investigation into the four-hour disturbance, Graves warned, is “ongoing.”

Indeed. The DOJ, astonishingly, is on pace to arrest one J6 protester a day this year; Graves has stated his intention to bring the total caseload to at least 2,000 defendants before the statute of limitations expires.

If DOJ Didn’t Have Double Standards, It Would Have No Standards at All…Oh Wait

At the same time, the DOJ refuses to bring federal charges against pro-Palestinian demonstrators who in many instances engaged in similar if not worse conduct inside Congressional buildings over the past six months.

Graves’ spokeswoman recently confirmed to me via email that all cases stemming from arrests of pro-Palestinian protesters are being handled by the local D.C. prosecutor.

In other words, no federal obstruction of an official proceeding indictments against those who repeatedly interrupted Senate and House hearings to protest against the Israel-Gaza war. No federal “parading” charges for demonstrators who unlawfully occupied government buildings in Washington on multiple occasions. Even demonstrators who assaulted Capitol police outside the DNC headquarters last November do not face federal charges — a shocking double-standard since hundreds of J6ers have been federally charged with assault on police, even for minor confrontations, often resulting in lengthy prison sentences and pretrial detention in several cases.

Which makes recent comments by Attorney General Merrick Garland all the more outrageous — and demonstrably false. Before two House committees voted Thursday to advance contempt of Congress against Garland for defying a congressional subpoena demanding the audio recording of Biden’s interview with Special Counsel Robert Hur last year, Garland mustered his most sanctimonious self to explain how House Republicans, not him, threaten the legitimacy of the DOJ — a “fundamental institution of our democracy,” Garland claimed. (Garland advised Biden to invoke executive privilege to prevent producing the tapes to Congress; Biden only too happily accepted his counsel.)

Garland audaciously claimed politics plays no role in determining what investigations his department pursues.

Without political influence?

If the country had a real news media instead of boot-lickers who ask Garland about his hurt feelings when people criticize the DOJ, at least one reporter would have confronted Garland about the ongoing prosecution of J6ers while letting Hamasurrectionists off the hook.

A reporter would have asked Garland how many times the DOJ seeks pretrial detention for political protesters accused of assaulting police, as the DOJ has done in dozens of J6 cases.

A reporter would have asked Garland how often the FBI conducts armed raids of Americans accused of nonviolent offenses, as the FBI has done in hundreds of J6 cases and continues to do.

A reporter would have asked Garland about the possibility the Supreme Court will reverse how his DOJ has applied a post-Enron statute against 350 or so J6ers, turning many otherwise nonviolent protesters into convicted felons.

A reporter also would have asked Garland about two recent D.C. appellate court decisions that overturned excessive sentencing requests made by the DOJ.

A reporter would have asked Garland why he authorized an armed FBI raid of Mar-a-Lago to search for classified documents but didn’t do the same for Joe Biden or Mike Pence.

A reporter would have asked Garland why he should not be held in contempt of Congress for defying a House subpoena while his prosecutors indicted both Steve Bannon and Peter Navarro — who is currently doing time in a Miami prison — for contempt after they defied subpoenas by the January 6 Select Committee.

A reporter would have asked Garland why his office just boasted about imprisoning several individuals including two women in their 70s for protesting outside a D.C. abortion clinic in 2020 while nearly all federal charges against 2020 BLM rioters have been dropped.

You get the drift.

The fascinating backdrop here is that the Biden regime and news media warn a second Trump presidency will result in a crusade of retribution and retaliation against his sworn enemies — including DOJ and FBI officials.

Given Garland’s performance as attorney general, one can only hope that’s true.

Part of Garland’s letter to Biden

Julie Kelly is an independent journalist covering the weaponization of the U.S. Government against her citizens, Follow Kelly on Twitter / X.

Tyler Durden Tue, 05/21/2024 - 23:00

San Francisco Remains The Top Startup City On The World

A richly connected network of founders, venture capital firms, and tech talent are some of the key ingredients driving a startup ecosystem.

As engines of growth, these tech clusters are evolving on a global scale. While the world’s leading startup cities are concentrated in America, several ecosystems, such as Beijing and Seoul, are growing in prominence as countries focus on technological advancement to spur innovation.

This graphic, via Visual Capitalist's Dororthy Neufeld, shows the best startup cities worldwide, based on data from Pitchbook.

The Global Startup Ecosystem Rankings

To determine the rankings, each city was analyzed based on the scale and maturity of their startup ecosystem over a six-year period ending in the second quarter of 2023.

Among the inputs analyzed and used to calculate the overall development score were fundraising activity, venture capital deals, and exit value:

San Francisco dominates the pack, with $427.6 billion in capital raised over the six-year period.

Despite a challenging funding environment, nearly 20,000 deals closed, highlighting its outsized role in launching tech startups. Both OpenAI and rival Anthropic are headquartered in the city, thanks to its broad pool of tech talent and venture capital firms. Overall, 11,812 startups were based in the San Francisco Bay Area in 2023, equal to about 20% of startups in America.

Falling next in line is New York City, which raised $179.9 billion over the same time period. Crypto firm Gemini and machine learning company, Hugging Face, are two examples of startups based in the city.

As the top-ranking hub outside of America, Beijing is home to TikTok’s parent company, ByteDance, which is one of the most valuable private companies in the world.

In recent years, much of the startup funding in China is being driven by government-backed funds. In particular, these funds are focusing heavily on “hard tech” such as semiconductor-makers and electric vehicle companies that align with the government’s strategic long-term goals.

Another leading tech hub, Singapore, has the highest venture capital funding per capita worldwide. In 2023, this was equal to an impressive $1,060 in venture funding per person. By comparison, venture funding was $345 per person in the U.S., the second-highest globally.

Tyler Durden Tue, 05/21/2024 - 22:40

Joe Biden's Problem Is In the Pews

Authored by Salena Zito & Brad Todd via RealClearPolitics,

To locate Joe Biden’s electoral problem, you need only to look on Sunday morning. Polling shows the mass-attending Catholic president trails Donald Trump by 10 points among those who attend religious services a few times a year or more. The score is reversed with voters who report they seldom or never attend church, with Biden leading by 10.

It’s the starkest divide in the electorate – and one that political journalists rarely mention, perhaps because, as a profession, journalists are more removed from religion than the average American.

Trump’s advantage with white evangelical Protestants is widely understood, but he also leads Biden by healthy margins among less politically conservative Christians. These findings in the recent Marquette Law School’s national poll of registered voters showed Biden trailing Trump by 18 percentage points with other members of his own Catholic faith, and behind Trump by 16 among adherents of mainline protestant denominations, which would include groups like Methodists, Presbyterians, and Episcopalians.

Those numbers are in the same range as the 24-point lead Trump posts among self-described “born-again” evangelicals. The same poll shows the race is reversed with non-Christian voters, with whom Biden holds a commanding 33-point advantage.

The irony of this schism proves a dynamic that is larger than these two men. Biden would tell you his Catholicism is integral to his own self-identity. Trump, meanwhile, was a high-living playboy who said he’d never asked God for forgiveness for anything, situating himself well outside the theology and lifestyle of most Christians.

In 2018, we wrote a book examining the realignment that brought Trump to power and identified what we called “King Cyrus Christians” as an important archetype in Trump’s coalition. These voters, mostly Catholic or evangelical Protestants, adopted Trump’s candidacy pragmatically, seeing in him a warrior who would battle their common political enemies. And with control of the Supreme Court in the balance in that 2016 election, they forged an alliance of necessity.

Survey research conducted for our book found these King Cyrus Christians (so named in a nod to the pagan Persian king who had delivered ancient Jews back to Israel and rebuilt their temple in Jerusalem) were not initially Trump’s most enthusiastic backers. Instead, the shock troops of first-wave Trumpism were the most secular and least traditional Republicans – and many were not Republican at all.

But over time, religious Republicans have gotten more comfortable with Trump, owing to his kept promise to deliver a conservative Supreme Court that not only reversed decades of erosion in religious liberty but also overturned the Roe v. Wade abortion precedent. Politics is about coalitions, and the arrangement between Trump and conservative Christians indisputably has delivered benefits for both sides.

Trump’s 2016 nomination was powered by secular Republicans, but his 2024 re-nomination showed no such schism. If anything, it was the reverse. Polling in the two GOP contests most dominated by religious voters, the Iowa Caucus and the South Carolina primary, showed him doing modestly better among evangelical than non-evangelical Republicans.

The religious divide that matters going forward in American politics is not about Trump, and it’s not about white evangelical Protestants. The question is whether Democrats can keep a place in their party for other religiously devout voters.

Democrats’ best electoral group – the so-called “nones,” those with no religious affiliation – is growing, particularly among younger generations. But as the party becomes dominated by those who actively reject religion, its platform becomes less appealing to those who don’t, as many Jewish Democrats are discovering as left-wing radicals show an ugly antisemitic side and opposition to America’s alliance with the Jewish state of Israel.

While “nones” are rising overall, they aren’t distributed proportionately around the country, clustering disproportionately on the coasts. If Democrats drive out the religious voters in their ranks, they will struggle to compete in a geographic footprint large enough to enable them to control Congress or win in the electoral college.

Hispanic voters, another growing slice of the electorate, are moving quickly away from Democrats. Florida offers the perfect case study for that drift, as voters of Puerto Rican, Cuban, and Columbian descent have helped transform what was recently America’s quintessential swing state into a Republican fortress. Nervous Democratic strategists are on guard for the same dynamic playing out next in Nevada and Arizona.

Pew Research data shows Hispanics are about half as likely as whites to say they do not believe in God, while African Americans, long the bulwark of the Democratic Party, are five times less likely than whites to express disbelief. Blacks also attend church more than whites do, report reading the Bible more than whites, and say they pray more than whites, according to respected church researchers at Barna Group.

While Democrats can still count on topping 90% with blacks in most elections, the three trends driving realignment – religiosity, education density, and the blue-collar/white-collar divide – will put that loyalty to the test in coming years, and maybe sooner than pundits expect.

A Democratic Party platform that is growing ever more hostile to traditional religious mores on social policy, on Israel, and on issues surrounding religious liberty may find it difficult to keep enough blacks, Hispanics, and Jews on board to win enough states to govern.

Political realignment works like the tectonic plates in the earth’s crust. The masses of land, or of voters, tend to keep moving, even if that movement is only noticed when it results in an earthquake. Smart political geologists will be watching how believers vote in this election.

Salena Zito is a reporter for the Washington Examiner, Wall Street Journal contributor, and co-author of “The Great Revolt: Inside the Populist Coalition Reshaping American Politics.”

Tyler Durden Tue, 05/21/2024 - 22:20

The Great 'McFlation': Bidenomics' Failure Revealed In One Chart

The primary appeal of fast-food burgers (even though the food is horrible for your health) is cheap and fast. In recent weeks, McDonald's indirectly admitted that three years of 'McFlation' was crushing burger demand among working-poor consumers, and there was an urgent need within the burger chain to reintroduce the $5 meal deal. 

X users have been disgusted with $18 Big Mac meals at some of the burger chain's restaurants nationwide.

This was at a rest stop, but these McDonald's prices are nuts right??? pic.twitter.com/0qq8Ima3ZA

— Sam Learner (@sam_learner) July 18, 2023

Some were even reminded of the good old days when the same meal cost $5—right before the GFC and right before the Federal Reserve embarked on a decade of zero-bound interest rates and trillions of dollars in money printing that fueled financial asset bubbles. 

These prices at McDonald’s sure looks like the dollar is in crash mode $18 for a Big Mac meal this use to be $5 in 2008 pic.twitter.com/5rpcrNtaul

— Golden Coast (Cassandra) (@GregCrennan) February 20, 2024

Fast forward to today, the persistent inflation storm is being driven by the US Treasury spending like it's in a depression (or spending an absurd $1 trillion every 100 days).

Bidenomics' stealth stimulus has resulted in massive economic miscalculation by the federal government and the Federal Reserve. It's not just ZeroHedge saying this, but Duquesne Family Office Chairman & CEO Stan Druckenmiller recently gave Bidenomics an "F." 

Real wages for most consumers have been terrible under Biden's first term. But not under Trump's... 

As the election cycle heats up, X user End Wokeness has reminded everyone about elevated food inflation impacting menu prices at McDonald's, Taco Bell, and Chick-fil-A. The data compared year-end 2019 menu prices at the three restaurants with current prices. The results are startling: Some menu items are up triple digits in several or so years. 

Food inflation has been problematic for Biden's campaign team to navigate. They've already given up on 'Bidenomics.' 

More recently, Biden's team has used popular buzzwords 'greedflation' and 'shrinkflation' to convince voters why Big Macs in certain states and towns now cost $18. This is a significant pivot from blaming 'Putin Price Hikes' for every economic mishap. 

It's difficult to believe Biden's greedflation story because government data shows that retail prices for ground beef and chicken have surged and remained elevated. Also, major commodity indexes tracked by Bloomberg and the United Nations have yet to come back down to Earth. All of this indicates companies had to push up prices to protect margins. 

The current issue is that inflation is being driven by reaccelerating commodity prices, while the US government is spending as if it's in a depression.

Meanwhile, clueless Democrats who ignore out-of-control government spending as the root cause of inflation are demanding price controls on food, similar to what communists or socialists do in third-world countries. The only problem with that is that price controls can trigger shortages or surpluses, longer lines, lower quality products, and, of course, misallocation of products.

Tyler Durden Tue, 05/21/2024 - 22:00

Aluminum Jumps To 23-Month High Amid Ongoing Aussie Production Issues

From coffee to cocoa, orange juice to gold, and silver to copper, commodity prices are spiking across the board (we outlined this on Monday). The latest surge occurred Tuesday when aluminum tagged 23-month highs due to ongoing production issues emerging from Australia. The broad-based commodity rally signals the inflation storm central bankers are battling is not over. 

Rio Tinto, one of the largest aluminum producers, declared force majeure on third-party contracts for exporting alumina from its refineries in Queensland, Australia. This is due to a broken natural gas pipeline operated by Queensland Gas Pipeline. 

A spokesperson for the company told Dow Jones that NatGas supplies will return to capacity at a much later date than previously anticipated: 

"The pipeline operator's current estimate [is] for a return to normal levels in the second half of 2024. 

"Until then, Yarwun and QAL [Queensland Alumina Limited] will continue to operate at lower capacities."

On the London Metal Exchange, aluminum contracts settled up 3.6% at $2,725.50 a metric ton, the highest level since early summer 2022. 

Colin Hamilton, managing director for commodities research at BMO Capital Markets, told Bloomberg that today's price action in aluminum markets suggests mounting fears about "dwindling aluminum output" — a situation he views as "unlikely."

Hamilton noted that industrial metal could be "part of the digital and electrical revolution we know is coming ... is going to benefit." We call this "The Next AI Trade."

One base metal that has been on everyone's radars is copper. Comex prices have squeezed to record highs and continue on Tuesday. 

Since February, industrial metals tracked by Bloomberg have soared 30%. 

Precious metals tracked by Bloomberg have also broken out. 

Commodities as a whole, tracked by Bloomberg, have soared. 

Bloomberg's Cameron Crise pointed out that the number of commodities in the Bloomberg Commodity Index that are up by at least 25% over the three month period have risen to seven. 

Crise continues:

Currently, there are seven: cocoa, copper, nickel, orange juice, silver, tin, and zinc. Clearly industrial metals are a theme in that list, which itself raises the question of how valid some of the global growth concerns might be. Anyhow, the current total of seven is the highest since the middle of 2022; coincidentally (or not), the industrial metals subindex total return is also the highest since the same point in time.

He added:

Obviously, over long periods of time the link between the series above and inflation isn't necessarily that great; the highest-ever reading came in 2009 with the correction of the GFC downside overshoot in commodity prices. Still, the relatively broad-based rise in industrial metals is noteworthy and raises another question about just how benign the inflation outlook might be moving forwards.

The hot commodity market is posing new challenges for Fed chair Jerome Powell and his friends in the White House... 

Tyler Durden Tue, 05/21/2024 - 20:40

Republican Iran Hawks Celebrate Raisi's Death

Authored by Dave DeCamp via AntiWar.com,

Some Republicans in Congress are celebrating the death of Iranian President Ebrahim Raisi, who was killed in a helicopter crash along with Foreign Minister Hossein Amirabdollahian and seven others in Iran’s mountainous East Azerbaijan province.

When the news first broke that Raisi was missing, Sen. Rick Scott (R-FL) wrote on X: "If Raisi is dead, the world is now a safer & better place. That evil man was a tyrant & terrorist. He was not loved or respected & he will be missed by no one. If he’s gone, I truly hope the Iranian people have the chance to take their country back from murderous dictators."

After Raisi’s death was confirmed, the State Department offered condolences to Iran, which outraged Scott. "What a disgrace. Since when does the United States issue a statement of condolence for a terrorist?! It should read: The world is a better place with Raisi dead," he said.

Rep. Mike Waltz (R-FL) made similar comments in response to the news about Raisi. "Good riddance. Raisi was a murderous human rights abuser before and during his Presidency," he wrote on X. "But look for the Iranian regime to blame Israel and the US for an assassination as another excuse to support terrorism."

Sen. Marco Rubio (R-FL) released a statement where he called Raisi one of Iran’s "bloodiest hard-liners."

So far, Iranian authorities have not offered much detail about the crash, but said it was caused by a "technical failure." Raisi was traveling in a US-made Bell 212 helicopter.

According to The Washington Post, the average age of Iran’s Bell 212 helicopters is 35 years old, and they are difficult for the Islamic Republic to maintain due to US sanctions.

State Department spokesman Matt Miller said that the US would not apologize to Iran for imposing aircraft-related sanctions.

"We are not gonna apologize for our sanctions regime at all. The Iranian government has used its aircraft to transport equipment to support terrorism. So we will continue to fully enforce our sanctions regime, including our sanctions regime on aircraft for use by the Iranian government," he told Rudaw.

Sen. Markwayne Mullin (R-OK) calls for direct strikes on Iran, because "the only thing Iranians understand is strength." Which is exactly the same tired folk logic that anti-Russia hawks always use -- the only language that meddlesome subspecies understands is cruise missiles pic.twitter.com/hla1NIuX4Y

— Michael Tracey (@mtracey) January 29, 2024

Iranian Supreme Leader Ayatollah Ali Khamenei has confirmed that Vice President Mohammad Mokhber is now Iran’s acting president and said, per the Iranian constitution, he has 50 days to arrange for new elections.

Tyler Durden Tue, 05/21/2024 - 20:20

Microplastics Found In Human Testicles

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

Microplastics have been identified in human and canine testicles, lengthening the list of where the insidious particles have been found.

Not testicles. (iStock/Getty Images Plus)

A new study published in Toxicological Sciences revealed the incredible prevalence of microplastics worldwide and their ability to penetrate nearly every part of the body.

Microplastics form when plastic is exposed to sunlight or other ultraviolet radiation and slowly degrades in landfills, the ocean, or other places. They are so small (measured in micro- or nanometers, or a billionth of a meter) that they can also be blown around by the wind and carried into waterways.

Human Samples Had Triple the Microplastics

A team of researchers at the University of New Mexico (UNM) examined testicular tissue samples from humans and dogs and found these microscopic pieces of plastic were present in every sample. The human samples were supplied by the New Mexico Office of the Medical Investigator, which collects tissues during autopsies, and the canine samples came from the City of Albuquerque animal shelters and private veterinary clinics that spay and neuter animals.

The researchers didn’t expect to find microplastics in the reproductive system—at least, not to this degree.

“When I first received the results for dogs I was surprised,” Dr. Xiaozhong “John” Yu, a professor at the UNM College of Nursing and lead researcher, said in a press release. “I was even more surprised when I received the results for humans.”

The research team found nearly three times the amount of microplastics in the human samples compared to the canine samples. There were 122.63 micrograms of microplastics per gram of tissue in the canine samples and 329.44 micrograms per gram in the human.

The team found 12 types of microplastics in 47 canine samples and 23 human samples. The most prevalent polymer, or plastic, in both types of tissue was polyethylene (PE), which is used to make plastic bags and bottles. The next most common polymer in dogs was PVC, which is often used in different kinds of plumbing.

Dr. Yu and his team believe that the level of microplastics could correlate with reproductive issues. The team determined the sperm count in the canine samples and found that the higher the level of PVC in the tissue, the lower the sperm count was. However, the correlation was not found with the concentration of PE in tissue.

“The plastic makes a difference—what type of plastic might be correlated with potential function,” Dr. Yu said. “PVC can release a lot of chemicals that interfere with spermatogenesis and it contains chemicals that cause endocrine disruption.”

Why Dogs?

The study compared dogs and humans because the two often share an environment, as well as some biological characteristics.

“Compared to rats and other animals, dogs are closer to humans,” Dr. Yu said.

He noted that dogs and humans produce sperm in very similar ways and that the sperm concentration is also comparable between the two species.

“We believe dogs and humans share common environmental factors that contribute to their decline,” he said.

One of those environmental factors is microplastics, which are found worldwide, including on the top of Mt. Everest.

“The impact on the younger generation might be more concerning,” Dr. Yu said, pointing to men 35 years old and younger. “We have a lot of unknowns. We need to really look at what the potential long-term effect [sic]. Are microplastics one of the factors contributing to this decline?”

Dr. Yu added that, while he doesn’t want to scare anyone, he thinks it is important to make people aware that their choices have consequences.

“We want to scientifically provide the data and make people aware there are a lot of microplastics. We can make our own choices to better avoid exposures, change our lifestyle and change our behavior,” he said.

Tyler Durden Tue, 05/21/2024 - 19:40