Zerohedge

Key Events This Week: Things Finally Quiet Down After a whirlwind two weeks which saw both the latest FOMC decision and the April jobs report, not to mention the peak of earnings season when all of the top tech companies reported, the calendar takes a quieter turn after the deluge of macro events last week, and the focus shifts on whether markets can continue to find a more solid footing. The latter half of last week saw strong gains for most asset classes thanks to an FOMC meeting that avoided hawkish surprises coupled with a softer payrolls report on Friday that reignited hopes of a soft landing for the US economy. 10yr Treasury yields saw their largest weekly decline of the year so far (-15.5bps) while the S&P 500 posted its best 2-day run in 10 weeks (+2.18%). Looking forward, the health of the US economic cycle will remain in focus with today’s Senior Loan Officer Survey from the Fed. The SLOOS has seen a gradual improvement in the past few quarters after the sharp tightening following the regional banking stress last March. A key question is whether the rise in yields since the start of the year could derail the nascent improvement in bank credit conditions. Later in the week, the University of Michigan consumer survey will attract attention on Friday given the recent softening in US consumer confidence indicators. The main macro event in Europe will be the latest BoE decision on Thursday. Our UK economist expects this week’s meeting to set the stage for the first rate cut in June and foresees dovish shifts in the MPC’s modal CPI projections and its forward guidance. You can see the full preview here. We will also have the RBA decision on Tuesday (see our economists' preview here), while on Wednesday the Riksbank could deliver the first rate cut of the cycle there. Finally, we’ll have the accounts of April ECB meeting due on Friday. These are unlikely to deliver major surprises, with April's clear if conditional signal of a June rate cut having solidified in recent ECB commentary. But we will watch for any hints on the ECB reaction function beyond June, including on what sort of data might justify consecutive ECB cuts. The earnings season will begin to taper off this week, with almost 400 of S&P 500 members having already reported. Notable releases will include Walt Disney, Vertex, Uber and Airbnb in the US, Ferrari, Telefonica and Leonardo in Europe and Toyota and Nintendo in Japan. Day-by-day calendar of events Monday May 6 Data : China April Caixin services PMI, Italy April services PMI, Eurozone March PPI Central banks : Fed's SLOOS, Barkin and Williams speak, ECB's Villeroy, Nagel and Panetta speak Earnings : Vertex, Palantir, Williams Cos, Simon Property Group, Realty Income Tuesday May 7 Data : US March consumer credit, UK April construction PMI, new car registrations, China April foreign reserves, Germany March trade balance, factory orders, April construction PMI, France Q1 wages, private sector payrolls, March trade balance, current account balance, Eurozone March retail sales, Switzerland April unemployment rate Central banks : Fed's Kashakari speaks, ECB's De Cos speaks, RBA decision Earnings : Walt Disney, BP, Arista Networks, Duke Energy, McKesson, Occidental Petroleum, Kenvue, Nintendo, Ferrari, Electronic Arts, Rockwell Automation, Leonardo, Reddit, Lyft Auctions : US 3-yr Notes ($58bn) Wednesday May 8 Data : US March wholesale trade sales, Italy March retail sales, Germany March industrial production Central banks : Fed's Cook, Jefferson and Collins speak, ECB's Wunsch speaks , Riksbank decision Earnings : Toyota, Arm, Uber, Airbnb, Emerson Electric, Teva, Shopify, Vistra, Affirm, Siemens Energy, AB InBev Auctions : US 10-yr Notes ($42bn) Thursday May 9 Data : US initial jobless claims, UK RICS house price balance, China April trade balance, Japan March leading and coincident index, labor cash earnings Central banks : BoE decision, April DMP survey, Pill speaks, BoJ summary of opinions April MPM, ECB's Cipollone and Guindos speak, BoC's financial system review Earnings : Constellation Energy, Roblox, Telefonica, Enel, Warner Bros Discovery, Warner Music Group Auctions : US 30-yr Bonds ($25bn) Friday May 10 Data : US May University of Michigan survey, April monthly budget statement, UK Q1 GDP, March monthly GDP, trade balance, industrial production, index of services, construction output, China Q1 current account balance, Japan March trade balance, current account, household spending, April Economy Watchers survey, bank lending, Italy March industrial production, February industrial sales, Canada April jobs report, Norway, Denmark April CPI Central banks : Fed's Goolsbee, Barr and Bowman speak, ECB's account of the April meeting, Cipollone speaks, BoE's Pill speaks Earnings : Tokyo Electron * * * Finally, looking at just the US, Goldman notes that the key economic data release this week are the University of Michigan report on Friday. There are several speaking engagements by Fed officials this week, including remarks from Vice Chair Jefferson, Vice Chair for Supervision Barr, Governors Cook and Bowman, and Presidents Barkin, Williams, Kashkari, Collins, and Goolsbee. Monday, May 6 12:50 PM Richmond Fed President Barkin (FOMC voter) speaks: Richmond Fed President Thomas Barkin will deliver a speech on the economic outlook in Columbia, South Carolina. Audience and media Q&A are expected. On April 10, Barkin said “of course it’s conceivable that we’re going to get to a soft landing, the numbers in a big picture have been great… We need to be humble about how easy it is to get there.” 01:00 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will participate in a fireside chat conversation at the Milken Institute Global Conference. A Q&A is expected. On April 18, Williams said “I definitely don’t feel urgency to cut interest rates.” He went on to say, “I think interest rates will need to be lower at some point but the timing of that will be based on the economy.” 02:00 PM Senior Loan Officer Opinion Survey 2023Q4 Tuesday, May 7 There are no major economic data releases scheduled. 11:30 AM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a fireside chat at the Milken Institute Global Conference. A Q&A is expected. On April 4, Kashkari said “in March I jotted down 2 rate cuts this year. But if inflation continues moving sideways, that would make me question whether we need to do those rate cuts at all.” Wednesday, May 8 10:00 AM Wholesale inventories, March final (consensus -0.4%, last -0.4%) 11:00 AM Fed Vice Chair Jefferson speaks: Vice Chair Philip Jefferson will participate in a moderated discussion on careers in economics. On April 16, Jefferson said “my baseline outlook continues to be that inflation will decline further, with the policy rate held steady at its current level, and that the labor market will remain strong, with labor demand and supply continuing to rebalance.” He went on to say that “the outlook is still quite uncertain, and if incoming data suggests that inflation is more persistent than I currently expect it to be, it will be appropriate to hold in place the current restrictive stance of policy for longer.” 11:45 AM Boston Fed President Collins (FOMC non-voter) speaks: Boston Fed President Susan Collins will provide remarks to MIT students followed by a fireside discussion. Speech text and a Q&A are expected. On April 11, Collins said “I expect to see further evidence that inflation is durably, if unevenly, returning toward 2 percent, and that the economy is coming into better balance, with demand and supply more closely aligned amid a healthy labor market.” 01:30 PM Fed Governor Cook speaks: Fed Governor Lisa Cook will discuss the Fed’s latest semi-annual Financial Stability Report at an event hosted by Brookings. Remarks will be followed by a panel discussion. A Q&A is expected. On March 25, Cook said “the path of disinflation, as expected, has been bumpy and uneven, but a careful approach to further policy adjustments can ensure that inflation will return sustainably to 2% while striving to maintain the strong labor market.” Thursday, May 9 08:30 AM Initial jobless claims, week ended May 4 (GS 215k, consensus 212k, last 208k): Continuing jobless claims, week ended April 27 (consensus 1,785k, last 1,774k) Friday, May 10 09:00 AM Fed Governor Bowman speaks: Fed Governor Michelle Bowman will speak on financial stability risks at the Texas Bankers Association Annual Convention. Speech text and a moderated Q&A are expected. On May 3, Bowman said “with annualized 3-month core PCE inflation jumping to 4.4 percent in March, well above average inflation in the second half of last year, I expect inflation to remain elevated for some time,” but went on to say “my baseline outlook continues to be that inflation will decline further with the policy rate held steady, but I still see a number of upside inflation risks that affect my outlook.” 10:00 AM Dallas Fed President Logan (FOMC non-voter) speaks: Dallas Fed President Lorie Logan will speak in a moderated Q&A to the Louisiana Bankers Association Annual Conference in New Orleans. On April 5, Logan said “I’m increasingly concerned about upside risks to the inflation outlook. To be clear, the key risk is not that inflation might rise – though monetary policymakers must always remain on guard against that outcome – but rather that inflation will stall out and fail to follow the forecast path all the way back to 2 percent in the timely way.” 10:00 AM University of Michigan consumer sentiment, May preliminary (GS 76.2, consensus 76.8, last 77.2); University of Michigan 5-10-year inflation expectations, May preliminary (GS 3.1%, consensus 3.0%, last 3.0%): We expect the University of Michigan consumer sentiment index decreased to 76.2 in the preliminary May reading. We estimate the report's measure of long-term inflation expectations rose 0.1pp to 3.1%, reflecting higher gasoline prices and the higher-than-expected price data reported in 2024. The transition to web-based interviews could also exert upward pressure. 12:45 PM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will speak in a moderated Q&A at the Economic Club of Minnesota luncheon. On April 19, Goolsbee said “so far in 2024, that progress on inflation [we saw in 2023] has stalled. You never want to make too much of any one month’s data, especially inflation, which is a noisy series, but after three months of this, it can’t be dismissed." 01:30 PM Fed Vice Chair for Supervision Barr speaks: Fed Vice Chair for Supervision Michael Barr will give a commencement speech for American University School of Public Affairs Graduation. Source: DB, Goldman Tyler Durden Mon, 05/06/2024 - 10:55

Where Unsold EVs Go To Die: Belgium's Ports Drowning Under Glut Of Chinese Imports Ten years ago this week, we posted one of out most viral stories, highlighting the over-capacity in the auto industry:  "Where the World's Unsold Cars Go To Die," which highlighted the 'endgame' of automakers' 'channel stuffing' efforts to disguise the sudden lack of demand for all the exciting new models that they had forecast would boom to the moon... And now, as MishTalk's Mike Shedlock reports,  we are seeing similar pictures across Europe... "Some are parked here for a year, sometimes more." Le Monde reports Belgium’s ports drowning under glut of Chinese electric cars: ‘Some are parked here for a year, sometimes more’ Due to China’s overcapacity in production – as it aims to capture a quarter of the European electric vehicle market – the ports of Antwerp and Zeebrugge are inundated. You probably need to see it to appreciate the challenges the automobile industry faces in transitioning to electricity. You also need to come here to understand how the Chinese industry’s overcapacity has flooded the European market. That morning, as the sun unexpectedly lit up the maze of highways leading to this remote arm of the port of Antwerp, Belgium, a huge cargo ship from the Norwegian company Höegh Autoliners unloaded thousands of cars at one of the terminals of International Car Operators (ICO), a subsidiary of the Japanese group Nippon Yusen Kaisha. Alongside Swedish-Norwegian Wallenius Wilhelmsen, it is one of the main operators of the now merged port of Antwerp-Bruges, the world’s largest automotive terminal, through which the production of some 40 brands used to transit. But that was before the emergence of their Chinese competitors. Car Parks Quartz reports Cars are piling up at European ports at an alarming rate Imported vehicles are seriously piling up at European ports, turning them into “car parks.” Automakers are distributors are struggling with a slowdown in car sales as well as logistical bottlenecks that make it hard to alleviate the buildup of new, unsold vehicles. Some Chinese brand EVs had been sitting in European ports for up to 18 months, while some ports had asked importers to provide proof of onward transport, according to industry executives. One car logistics expert said many of the unloaded vehicles were simply staying in the ports until they were sold to distributors or end users. “It’s chaos,” said another person who had been briefed on the situation. This is another part of the escalating trade war between China and the rest of the world. China Produces 55 Percent of All Steel, Biden and Trump Eye Tariffs Yesterday, I commented China Produces 55 Percent of All Steel, Biden and Trump Eye Tariffs On April 22, I cautioned A Big Deflationary Push From China But Will Biden or Trump Allow That? China keeps returning to a well that has run dry, using exports as a means for growth. China is about to hit a brick wall, with global consequences. My #1 issue looking ahead to 2025 is a global trade war with serious repercussions. Tyler Durden Mon, 05/06/2024 - 10:40

Russia's Tactical Nuclear Weapons Exercises Are Meant To Deter A NATO Intervention In Ukraine Authored by Andrew Korybko via Substack, Sputnik reported on Monday that the Russian General Staff is preparing to carry out drills for practicing the use of tactical nuclear weapons, which follows Foreign Ministry spokeswoman Zakharova warning over the weekend that NATO’s “Steadfast Defender” drills are possible preparations for war with Russia. Italy’s La Repubblica also reported over the weekend that NATO might conventionally intervene in Ukraine if Russia crosses into there from Belarus or carries out “provocations” against fellow members. These developments follow GUR deputy chief Skibitsky telling The Economist last week that the front lines might soon collapse, which aligns with the Ukrainian Intelligence Committee’s worst-case scenario that they shared in late February. It’s also worth mentioning that Macron just reaffirmed his threat from that time to intervene in Ukraine (most likely around Odessa) in that event, that Poland is no longer ruling out doing the same, and the Ukrainian premier just said that he might request NATO troops. It's little wonder then that Russia interpreted these signals as preconditioning the Western public to accept that possibility, ergo why its General Staff is now preparing to carry out drills for practicing the use of tactical nuclear weapons. La Repubblica’s report claimed that a whopping 100,000 NATO troops could flood into Ukraine if the decision is made, with the only realistic way to stop them from going beyond the Dnieper and directly clashing with Russian troops is to use tactical nukes in self-defense. Everything is moving so fast that nobody can say with confidence exactly what will or won’t happen, but a reminder of each side’s interests as their policymakers conceive them to be can help obtain a better idea of how likely certain scenarios might be. Russia wants to demilitarize and denazify Ukraine while NATO wants to stop them, with neither being able to achieve their maximum goals in this respect. The game-changing variable, however, will be what each does if/when the front lines collapse. Russia will at least move to secure the full administrative borders of its four recently reunified regions, but it might go beyond that and potentially also open up more fronts in the north (whether from Belarus and/or around Sumy-Kharkov) in order to achieve as much of its aforesaid goals as possible. Should that happen, then NATO might panic depending on how far and fast Russia advances, thus serving to justify whatever pretext they concoct for commencing a conventional intervention in Ukraine. The NATO-Russian security dilemma, which frames the abovementioned sequence of events, would unprecedentedly worsen since Russia might then panic depending on how far and fast NATO advances. The bloc might just occupy everything west of the Dnieper, but it could also cross the river and place its forces in position to attack Russia’s. Any perceived move in that direction, let alone actual ones, could prompt Russia to preempt that with tactical nukes. If they’re dropped, then the whole world will change. The most effective way to defuse this apocalyptic security dilemma is for a neutral third party like India or the Pope to mediate between each side and discover their intentions to pass along to the other. If Russia doesn’t plan to march on Kiev once again and NATO doesn’t plan to cross the Dnieper, then neither might panic and overreact by inadvertently crossing the other’s red lines. A semi-orderly Ukrainian military withdrawal over the Dnieper to demilitarize the east as a buffer zone could then occur. That would be the best-case scenario for de-escalating these dangerous dynamics, though it of course can’t be taken for granted since nobody is presently mediating between them, and one or the other might lie to whoever does in order to deceive their opponents. Nevertheless, hopefully someone steps up to try before the front collapses and their noble efforts are sincerely welcomed by both sides, since the reluctance to do so could doom the world to destruction in the worst-case scenario. Tyler Durden Mon, 05/06/2024 - 10:00

Columbia Cancels 2024 Commencement Amid Security Concerns Columbia University announced Monday that it's canceling its two main 2024 commencement ceremonies on May 15, and will instead hold "smaller-scale, school-based celebrations," according to officials. Columbia University students participate in an ongoing pro-Palestinian encampment on their campus on April 26, 2024 in New York City. (Photo: Stephanie Keith/Getty Images) The move comes after weeks of pro-Palestinian protesters had to be forcibly removed and suspended after they refused to leave their encampment which sprouted on campus April 17, when around 50 tents were pitched by students demanding a ceasefire in Gaza. The students also insist that the university divest from companies they say could be profiting from war. Dozens of faculty members came out in support. NOW: Columbia University faculty link arms and form a wall in front of the entrance to the ‘Gaza Solidarity Encampment’ as hundreds of students encircle the both lawns Students remaining in the encampment were told they could face disciplinary action after 2PM pic.twitter.com/C1XRgHzs8b — katie smith (@probablyreadit) April 29, 2024 According to NBC News, the decision was made over security concerns, after administrators at Ivy League school met with student leaders following a NYPD raid on Hamilton Hall, after student protesters broke in, barricaded themselves inside, and wrecked the place. Taking over Hamilton Hall as done in 1968, Columbia students unfurl a banner that reads "Hind's Hall," in reference to Hind Rajab, a six-year-old girl killed by Israeli forces. Hundreds of students cheer as the banner is revealed, erupting into chants to "Free Palestine." pic.twitter.com/Oi8WgdZmqf — Prem Thakker (@prem_thakker) April 30, 2024 Destruction inside Hamilton Hall at Columbia University, after police cleared out protesters. They were all released and all charges dropped so nobody will be held accountable and the destruction will continue pic.twitter.com/UM5tM5gtsF — Rob (@_ROB_29) May 2, 2024 "Our students emphasized that these smaller-scale, school-based celebrations are most meaningful to them and their families," the university said Monday. "They are eager to cross the stage to applause and family pride and hear from their school’s invited guest speakers. As a result, we will focus our resources on those school ceremonies and on keeping them safe, respectful, and running smoothly." Now, students will be "honored individually alongside their peers" in the smaller ceremonies, called "Class Days." The "Class Days" and other school ceremonies which were originally scheduled at the South Lawn of Morningside campus have also been relocated to the Columbia Baker Athletics Complex. "These past few weeks have been incredibly difficult for our community. Just as we are focused on making our graduation experience truly special, we continue to solicit student feedback and are looking at the possibility of a festive event on May 15 to take the place of the large, formal ceremony," said school officials. "We are eager to all come together for our graduates and celebrate our fellow Columbians as they, and we, look ahead to the future." Now, on May 15, graduation ceremonies will take place at different times and different locations for the the journalism school, college of physicians and surgeons, Barnard College, and the school of arts. Other school-based ceremonies will occur throughout next week as well. The University Of Southern California was the first known major university to cancel a graduation ceremony over the nationwide demonstrations. So all that hard work for this, kids... and on the heels of the pandemic. Normal life eludes once again. Tyler Durden Mon, 05/06/2024 - 09:35

Berkshire's Growing Cash Pile Has A Hidden Message On Stocks Authored by Ven Ram, Bloomberg cross-asset strategist, US stocks are seeing no evil and certainly hearing none, but Berkshire Hathaway’s ever-growing cash pile should hold a tacit warning for those who are overexuberant. Berkshire’s war chest surged to a record $189 billion at the end of the first quarter, and Chair Warren Buffett told shareholders over the weekend that he expects the pile will rise to $200 billion soon: “We’d love to spend it, but we won’t spend it unless we think we’re doing something that has very little risk and can make us a lot of money.” Wall Street, of course, equates higher return with higher risk, but here is one of the best investors of all time decrying the very notion that one needs to do something egregiously risky to earn the additional dollar of return over and above what is available to passive investors who buy the entire market. Stocks rallied on Friday after the markets interpreted the April non-farm payrolls data as providing just the right backdrop for the Federal Reserve to cut rates eventually. Considering that since of the end of 2022 alone, the S&P 500 has surged about 33% and the Nasdaq almost 50%, one would think that all the good news out there and more is already reflected in their price tag. Over the long term, stocks can’t yield returns in excess of corporate earnings and economic growth, but investors have been in no mood to listen — and they may yet stay complacent in the short term. The S&P 500 now promises an earnings yield of less than 5%, well below the historical average. The Nasdaq 100 is, of course, trading even loftier, offering a prospective earnings yield of less than 4%. At the moment, investors are paying a lot for stocks on the premise of promise. That is what Buffett may characterize as too much risk. Tyler Durden Mon, 05/06/2024 - 09:05

Futures, Global Markets Rise On Rising Fed Cut Bets Global stocks and US equity futures jumped to start the new week, with the S&P 500 poised to extend last week’s rally as traders grew increasingly confident in the likelihood that the Fed will cut interest rates this year. As of 7:40am, S&P 500 and Nasdaq 100 futures added 0.3%, tracking gains in European and Asian markets although trading volumes were lower than average as UK and Japanese markets are shut for a holiday. Apple slid in pre-market trading after Berkshire Hathaway trimmed its stake for a second consecutive quarter. German 10-year yields fell and the yen weakened. Oil advanced after Saudi Arabia raised prices for customers in Asia. On today's calendar we get the latest Senior Loan Officer Opinion Survey (SLOOS) which will signal whether demand for tight credit remains dismal. In premarket trading, Apple dropped 1.2% after rising strongly over the past two sessions and as Berkshire Hathaway reported it had trimmed its stake in the company. Shares in cryptocurrency-linked companies rally as Bitcoin nears $65,000 level after adding around 10% in the last four sessions. Some of the biggest movers are Marathon Digital (MARA US) +5.6%, Riot Platforms (RIOT US) +4.1%. Steward Health Care filed voluntary petitions for relief under Chapter 11. Here are some other notable premarket movers: Luminar Technologies shares fall as much as 17% after the company confirmed it will cut about 20% of jobs and sub-lease parts or all of some facilities. Paramount rises 4.5% as it weighs Apollo and Sony’s $26 billion offer to buy the company. Perficient gains 55% after EQT agreed to buy the technology consultant in a deal valued at about $3 billion including debt. With a light US economic calendar this week, the market’s direction may come from central bank officials, as well as policy meetings in the UK, Australia and Sweden. European Central Bank Chief Economist Philip Lane said recent data have made him more certain that inflation is returning to the 2% goal, according to an interview with Spanish newspaper El Confidencial, raising the likelihood a first interest-rate cut in June. New York Fed President John Williams and the Richmond Fed’s Thomas Barkin are due to make remarks on Monday, followed by Neel Kashkari of Minneapolis on Tuesday. “This week is expected to be calmer on the economic front: few economic data releases and limited central bankers’ intervention,” wrote Credit Agricole strategists led by Jean-Francois Paren. But while this week may be boring, strategists are already starting to hone in on the importance of next week’s US inflation print for April. “The price reaction on the back of this release may be more important than the data itself given how influential price action has been on investor sentiment amid an uncertain macro set up,” Michael Wilson wrote in a note. Europe was broadly higher, tracking US equity futures, with the Stoxx 600 rising 0.6% and trading near session highs although volumes were low due a UK public holiday. Among individual stocks in Europe, PostNL NV shares declined after it reported weak volumes. Demant A/S also fell as it reported a miss in sales driven by soft retail. Atos SE jumped after it received four offers that will frame the discussions with its stakeholders around its restructuring. Here are the biggest movers Monday: Indra Sistemas shares jump as much as 11%, after the Spanish defense company beat estimates in the first quarter and forecast Ebit for the full year of above EU400 million Know IT gains as much as 6% after Handelsbanken raised its short-term recommendation for the Swedish IT consultancy to hold from sell, noting small green shoots in end markets Maurel & Prom rise as much as 10%, the most since October, after the French oil firm received a license for operations in the Urdaneta Oeste field in Lake Maracaibo in Venezuela Demant falls as much as 5.3%, the most since November, after the Danish hearing-aid group reported softer-than-expected 1Q sales, with retail a stand-out disappointment, Citi says Castellum falls as much as 3% after DNB cut its recommendation for the Swedish landlord to hold, noting “rather soft” 1Q earnings which showed that vacancy rates is a concern ING Bank Slaski falls as much as 4.3% after the bank reported first-quarter results below estimates. Citi attributed the earnings miss to low non-core revenue figures and higher net provisioning Earlier in the session, Asia stocks rose led by Chinese shares which led gains as mainland markets played catchup following a holiday break, although here too conditions were holiday-thinned with Japan and South Korea shut for holidays. The CSI 300 Index jumped as much as 1.8%, while stocks in Hong Kong took a breather following a nine-day winning streak. Hang Seng & Shanghai Comp were somewhat varied as Hong Kong stocks took a breather after the recent hot streak and as attention shifted to the mainland where stocks outperformed as they played catch up on their return from the Labour Day Golden Week holidays with property stocks boosted by recent support pledges, while participants also digested Caixin Services PMI data which matched estimates. ASX 200 was led higher by continued outperformance in the rate-sensitive sectors, while financials were also underpinned following Westpac's earnings, special dividend and buyback announcement. In FX, the Blooomberg Dollar index steadied as the Norwegian krone, British pound and Australian dollar led Group-of-10 gains; The prospect of central bank easing boosted risk sentiment sending global stocks higher. USD/JPY advanced as much as 0.6% to 154, paring some of last week’s more than 3% drop as short dollar positions by fast-money accounts were squeezed, according to an Asia-based FX trader. EUR/USD steadied around 1.0768, after composite PMI data for April came in above estimates and euro-area PPI for March fell 0.4% month-on-month in line with forecasts; ECB Chief Economist Philip Lane said recent data has made him more confident inflation will return to the 2% goal. In rates, Treasuries reopened with yields lower by around 2bps at 4.48% after being closed for Japan and UK holidays. Gains have support from bunds, rallying on comments from ECB Chief Economist Philip Lane. US yields lower by around 2bp to 3bp across the curve with German yields down 3bp to 5bp after ECB’s Lane said recent data has improved his confidence that inflation will return to the 2% goal. Treasury auction cycle begins Tuesday with $58b 3-year note sale, followed by $42b 10- and $25b 30-year new issues Wednesday and Thursday. In commodities, oil rebounded strongly after tumbling on Friday as hopes for a ceasefire in the Middle East once again died a miserable death. WTI traded 1.2% higher above $79 and Brent rose to $83.70. Gold was also significantly higher, trading about $2320. In crypto, Bitcoin is back on a firmer footing and now holds around $65k, while Ethereum hovers around $3.2k, both have erased last week's sharp losses. The next potential objective/resistance level for Bitcoin is at $67,200 and that represents a 61.8% correction of the 73,797-56,527 fall, via market contacts. Looking at today's calendar, the US economic data slate empty for the session, though Fed releases Senior Loan Officer opinion survey on bank lending practices at 2pm New York time. The calendar is light this week, leaving focus on Treasury refunding auctions and about a dozen Fed speakers scheduled. Fed members’ scheduled speeches include Barkin (12:50pm) and Williams (1pm). Ahead this week are Kashkari, Jefferson, Collins, Cook, Daly, Bowman, Logan, Goolsbee, Barr and Mester Market Snapshot S&P 500 futures up 0.2% to 5,165.25 STOXX Europe 600 up 0.3% to 506.89 MXAP up 0.3% to 178.04 MXAPJ up 0.7% to 551.80 Nikkei little changed at 38,236.07 Topix little changed at 2,728.53 Hang Seng Index up 0.6% to 18,578.30 Shanghai Composite up 1.2% to 3,140.72 Sensex little changed at 73,916.80 Australia S&P/ASX 200 up 0.7% to 7,682.37 Kospi down 0.3% to 2,676.63 German 10Y yield little changed at 2.46% Euro up 0.1% to $1.0775 Brent Futures up 0.9% to $83.74/bbl Gold spot up 0.8% to $2,319.71 US Dollar Index little changed at 105.03 Top Overnight News China’s May Day holiday saw aggregate spending rise 13.5% above pre-pandemic levels, although spending per capita lagged behind 2019 levels. RTRS China’s effective exchange rate is back to where it was in 2014 in real terms (given CNY weakness and the absence of domestic inflation) and this is turbocharging the country’s exports, creating trade friction with the US, EU, and other economies. WSJ The case for a ECB interest rate cut in June is getting stronger as services inflation is finally starting to ease, ECB Chief Economist Philip Lane told Spanish newspaper El Confidencial on Monday. The ECB has all but promised a rate cut on June 6, provided incoming data strengthen policymakers' belief that inflation will head back to its 2% target by the middle of next year. RTRS A US crackdown on banks financing trade in goods for Vladimir Putin’s invasion of Ukraine has made it much more difficult to move money in and out of Russia, according to senior western officials and Russian financiers. Moscow’s trade volumes with key partners such as Turkey and China have slumped in the first quarter of this year after the US targeted international banks helping Russia acquire critical products to aid its war effort. FT The Israeli military has told tens of thousands of Palestinians to leave the southern Gazan city of Rafah as Israel’s defense minister warned of an imminent military “operation” as talks to free Israeli hostages appeared to have stalled. At least 100,000 civilians in eastern Rafah, along the border with Israel, should move to what Israel calls a humanitarian zone on the Mediterranean, an Israel Defense Force spokesperson told reporters, in “a limited scope” operation as part of a “gradual plan”. FT Saudi Arabia and its allies in OPEC+ are likely to keep oil production unchanged for a further three months when ministers review output allocations on June 1. The tightening of petroleum supplies and depletion of inventories widely anticipated at the start of the year has failed to materialize so far. RTRS Maersk warned that ongoing Red Sea shipping disruptions will reduce industry capacity between the Far East and Europe by 15-20% in Q2. RTRS The final chief executive of Credit Suisse, Ulrich Körner, is set to leave UBS in the coming weeks, as the Swiss bank prepares to complete a crucial step in the integration of its former rival. FT Warren Buffett said Apple is “even better” than AmEx and Coca-Cola. The stock will remain Berkshire’s top holding despite selling a large chunk. The sale bolstered his firm’s cash pile to a record $189 billion. BBG A more detailed look at global markets courtesy of Newsquawk APAC stocks traded with a positive bias after a dovish jobs report from the US but with the upside limited amid holiday-thinned conditions with Japan and South Korea shut for holidays. ASX 200 was led higher by continued outperformance in the rate-sensitive sectors, while financials were also underpinned following Westpac's earnings, special dividend and buyback announcement. Hang Seng & Shanghai Comp were somewhat varied as Hong Kong stocks took a breather after the recent hot streak and as attention shifted to the mainland where stocks outperformed as they played catch up on their return from the Labour Day Golden Week holidays with property stocks boosted by recent support pledges, while participants also digested Caixin Services PMI data which matched estimates. Top Asian News PBoC Shanghai is reportedly to support the renewal of large-scale equipment. Chinese President Xi said the China-France relationship is a model of peaceful coexistence and win-win cooperation between countries with different systems, while he added they are ready to consolidate the traditional friendship, enhance political mutual trust, build strategic consensus, as well as deepen exchanges and cooperation with France, according to Xinhua. EU is lobbying China to exclude agriculture from a series of escalating commercial disputes and called for the ‘strategic sector’ to be protected from trade tensions in the renewable energy and electric vehicle industries, according to FT. A magnitude 6.1 earthquake was reported in Seram, Indonesia, according to GFZ. European bourses, Stoxx600 (+0.3%) are entirely in the green, albeit modestly so, taking impetus from a positive APAC session. EZ Final PMIs were generally revised higher, though ultimately sparked little reaction in the equities complex. European sectors are mostly firmer, though with the breadth of the market fairly narrow. Insurance takes the top spot, alongside Energy. The latter is benefitting from broader strength in the crude complex given the recent updates around Rafah. US Equity Futures (ES +0.2%, NQ +0.2%, RTY +0.5%) are entirely in the green, building on the strength seen on Friday. Apple (-1.1%) is lower pre-market after Berkshire Hathaway declared it had decreased its stake in the Co. in Q1 and in a breather from Friday's post-earnings strength. Top European News UK PM Sunak reportedly cancelled plans for a summer general election after local election defeats with the election anticipated to occur in Autumn, according to The Telegraph. UK PM Sunak was warned by Conservative MPs to show some vision and start digging his party out of a hole after a disastrous set of local election results, while it was also reported that the Labour Party comfortably won the London mayoral contest to give Sadiq Khan an unprecedented third term as London Mayor, according to FT. ArcelorMittal (MT NA) warned the UK government that one of its main divisions could be forced to exit the UK if an application to close and redevelop a commercial port in south-east England receives approval this week, according to FT. ECB's Lane said in an interview with El Confidencial that the April slowdown in services inflation marks significant progress and confidence on inflation is improving, while he added exaggerating the impact of the ECB and Fed divergence is not necessary and Fed decisions have limited impact on the euro area. Fitch affirmed Italy at BBB; Outlook Stable and affirmed Denmark at AAA; Outlook Stable on Friday. FX DXY is modestly softer and within a very tight 105.02-20 range, should selling pressure intensify, the 105.00 mark could be brought into focus. EUR is marginally firmer/flat vs the Dollar, though losing in the EUR/GBP cross. Price action today has been contained within a tight 1.0756-75 range, well within the prior session’s bounds. EZ final PMIs today were generally revised higher, albeit slightly, and provided little lasting move in the EUR. GBP is slightly firmer against the Dollar, despite UK equities/gilt markets closed on account of the region's bank holiday and with catalyst light. Currently trading just off session highs of 1.2584. JPY is by far the biggest underperformer vs the Dollar, going as high as 154.00, paring much of Friday’s USD/JPY losses, amid holiday-thinned conditions with Japan away. Antipodeans are both marginally firmer vs USD, though very much within a contained range as catalysts remain thin. Over in China, the Caixin PMI were in-line with expectations which helped to lift sentiment on the region's return from holiday. PBoC set USD/CNY mid-point at 7.0994 vs exp. 7.2127 (prev. 7.1063). S&P upgraded Turkey’s rating to 'B+'; Outlook Positive on Friday and cited economic rebalancing. Fixed Income Bunds are bid with specific drivers limited, though upside was trimmed by unusually large upward revisions to the French and then EZ Final PMIs though the internal commentary around German continues to point to stagnation/incremental growth. Current 130.98-131.62 parameters surpassed Friday's best by a handful of ticks with little of note thereafter until 132.00. USTs are a touch firmer, in-fitting with EGBs, but with magnitudes thin given the UK Bank Holiday and Japan's absence; docket ahead a touch busier with Fed's Barkin & Williams due after the latest Employment Trend numbers. Commodities Crude benchmarks are bid with geopols in focus. WTI and Brent have been grinding higher throughout the morning as the geopolitical narrative around Rafah continues to gradually escalate. Most recent developments have civilians being evacuated and the Israeli Finance Minister saying the army must enter Rafah today. Supported on geopols; XAU to a USD 2324/oz peak but one that leaves it over USD 20/oz shy of last week's best but with the USD 2339/oz 21-DMA the first point of resistance. Base metals are bid on China's return to the market with the metal following suit to APAC performance where the region was propped up by Friday's NFP-tailwinds and in-line Chinese PMIs. Saudi Arabia raised its oil prices for all grades to Asia for June with Arab Light OSP to Asia set at a premium of USD 2.90/bbl vs Oman/Dubai average and OSP to NW Europe set at a premium of USD 2.10/bbl vs ICE Brent, while it set the OSP to the US at a premium of USD 4.75/bbl vs ASCI. UAE’s Sharjah announced the discovery of a new gas field which is said to carry ‘promising quantities’, according to a statement cited by Reuters. Geopolitics: Middle East Israeli forces are now launching raids east of Rafah, via Sky News Israel military says not going to put a timeframe on the Rafah evacuation and will make "operation assessments" Israeli military says evacuating Rafah as part of a "limited scope" operation The Israeli army has ordered civilians in several parts of Rafah to leave the city as it begins an invasion of the southern city, via journalist Soylu Israeli Defence Minister, speaking with US Defence Secretary Austin, that action in Rafah is required due to Hamas' refusal of hostage-release proposals Senior Hamas Official says to Reuters that Israel's Rafah evacuation order is a "dangerous escalation that will have consequences"; Hamas may withdraw from truce talks due to Rafah operations. Israel’s military said the Kerem Shalom Crossing with Gaza is now closed to aid trucks after it came under fire with mortar shelling which killed 3 Israeli soldiers and wounded 12 others from the Givanti and Nahal brigades, while Hamas claimed responsibility for the mortar attack on Kerem Shalom and said it targeted an Israeli army base, according to Reuters. Israeli PM Netanyahu said they cannot accept Hamas’s demands for an end to the war and the withdrawal of forces from Gaza, while he noted that ending the Gaza war now would keep Hamas in power and Israel would not accept terms that amount to a capitulation with Israel to keep fighting until its war aims are achieved. It was separately reported that Israel’s Defence Minister said Hamas appears uninterested in a deal meaning strong military action in Gaza’s Rafah could happen very soon, according to Reuters. Israeli army is said to have started to evacuate civilians from parts of Rafah, according to Haaretz cited by Walla's Guy Elster. Subsequently, Bloomberg reported that the Israeli military asks some Rafah civilians to move out of the city, according to Bloomberg. Hamas’ leader said they are still keen on reaching a comprehensive agreement, while the group said the round of negotiations in Cairo has ended and the delegation will leave to consult with the group’s leadership, according to Reuters. It was separately reported that Hamas agrees that Israel can commit to ending the war in the second stage of the hostage deal not the first, according to Times of Israel via social media platform X. CIA chief Burns is to travel to Doha for an emergency meeting with Qatar’s PM as Gaza talks are said to be ‘near to collapse’, while Qatar and the US are to exert maximum pressure on Israel and Hamas to continue negotiations, according to an official briefed on talks cited by Reuters. It was separately reported that Burns will stay in Qatar on Monday and likely travel to Israel this week to meet with Israeli PM Netanyahu, according to an Axios reporter. US reportedly put a hold on an ammunition shipment to Israel last week, according to two Israeli officials cited by Axios. Iraqi armed factions announced they targeted an Israeli air base in Eilat with drones, according to Al Arabiya. Israeli Cabinet decided to close Qatari TV network Al Jazeera’s operations in Gaza, according to a statement cited by Reuters. It was later reported that Israel’s communications ministry said a police raid was conducted at an Al Jazeera premises in Jerusalem. Geopolitics: Russia said it took full control of Ocheretyne village in eastern Ukraine, according to the Defence Ministry, cited by Reuters. Russian Defence Ministry says preparations are beginning for the commencement of a missile exercises in the southern district, incl. aviation & navy forces US Event Calendar 14:00: Senior Loan Officer Opinion Survey on Bank Lending Practices Central Bank Speakers 12:50: Fed’s Barkin Speaks on Economic Outlook 13:00: Fed’s Williams Participates in Fireside Chat 14:00: Senior Loan Officer Opinion Survey on Bank Lending Practices DB's Peter Sidorov concludes the overnight wrap Filling in for Jim with the UK off for the May Day bank holiday. As the calendar takes a quieter turn after the deluge of macro events last week, the focus will be on whether markets can continue to find a more solid footing. The latter half of last week saw strong gains for most asset classes thanks to an FOMC meeting that avoided hawkish surprises coupled with a softer payrolls report on Friday that reignited hopes of a soft landing for the US economy. 10yr Treasury yields saw their largest weekly decline of the year so far (-15.5bps) while the S&P 500 posted its best 2-day run in 10 weeks (+2.18%). See the full recap at the end. Looking forward, the health of the US economic cycle will remain in focus with today’s Senior Loan Officer Survey from the Fed. The SLOOS has seen a gradual improvement in the past few quarters after the sharp tightening following the regional banking stress last March. A key question is whether the rise in yields since the start of the year could derail the nascent improvement in bank credit conditions. In their latest chartbook, Jim and Henry highlighted the delayed pass through of higher rates as one of their “What keeps us awake at night?” themes, while my own earlier note (see here) discussed how further improvement in the bank credit cycle may be unlikely without rate cuts materialising. Later in the week, the University of Michigan consumer survey will attract attention on Friday given the recent softening in US consumer confidence indicators. The main macro event in Europe will be the latest BoE decision on Thursday. Our UK economist expects this week’s meeting to set the stage for the first rate cut in June and foresees dovish shifts in the MPC’s modal CPI projections and its forward guidance. You can see the full preview here. We will also have the RBA decision on Tuesday (see our economists' preview here), while on Wednesday the Riksbank could deliver the first rate cut of the cycle there. Finally, we’ll have the accounts of April ECB meeting due on Friday. These are unlikely to deliver major surprises, with April's clear if conditional signal of a June rate cut having solidified in recent ECB commentary. But we will watch for any hints on the ECB reaction function beyond June, including on what sort of data might justify consecutive ECB cuts. The earnings season will begin to taper off this week, with almost 400 of S&P 500 members having already reported. Notable releases will include Walt Disney, Vertex, Uber and Airbnb in the US, Ferrari, Telefonica and Leonardo in Europe and Toyota and Nintendo in Japan. Asian equity markets are mostly trading higher this morning in holiday thinned trading, catching up to the strong end of last week for US equities. As I type, mainland Chinese stocks are leading gains in the region with the CSI (+1.3%) and the Shanghai Composite (+1.05%) both trading notably higher after returning from a long holiday break while the S&P/ASX 200 (+0.60%) is also edging higher and on pace for a third straight day of gains. Elsewhere, the Hang Seng (-0.05%) is swinging between gains and losses in early trade while markets in Japan and South Korea are closed for a public holiday. Outside of Asia, US stock futures are trading marginally higher (+0.08% for the S&P 500). In terms of early morning data, China’s Caixin Services PMI came in line with expectations at 52.5 in April (vs. 52.7 the previous month). The Composite PMI edged up from 52.7 to 52.8, its highest level since May 2023, so suggesting a reasonably positive performance of the Chinese economy. In the FX space, the yen is trading moderately down (-0.57%) against the dollar at 153.92 as I type. The yen had been on course to breach its 1990 lows early last week, but ended up seeing its strongest weekly gain against the dollar since late 2022 (+3.45%) amid suspected FX intervention.On this topic, we heard from US Treasury Secretary Janet Yellen over the weekend, who didn’t comment on whether Japan had intervened but added that “we would expect these interventions to be rare and consultation to take place”. Events in the Middle East have been in focus over the weekend. Hopes of a ceasefire in Gaza had risen on Friday following comments by Hamas officials that it was studying Israel’s latest proposals with a “positive spirit” but weekend talks ended inconclusively. Israel’s prime minister Netanyahu said on Sunday that it would not agree to Hamas demands to end the war in Gaza completely and Israel closed a crossing into Gaza after a rocket attack by Hamas. Oil prices have moved a little higher this morning with Brent futures (+0.31%) trading at $83.22/bbl, also on news that Saudi Arabia increased its monthly selling oil price to Asia. Geopolitics will remain in focus this week, not least with a visit by China’s President Xi Jinping to Europe that lasts until Friday. Recapping last week in detail, the US payrolls release on Friday came in softer than expected across an array of indicators. The headline payrolls result rose 175k month-on-month (vs 240k expected), the smallest monthly gain in the last six months. The unemployment rate also ticked up to 3.9% (vs 3.8% expected), while average hourly earnings (+0.2% month-on-month vs +0.3%) and hours worked (34.3 vs 34.4) were both a tenth below expectations. So on the whole, the payrolls print was soft landing positive, with our US economists noting that some ad hoc factors may have overstated the weakening. See their post-payroll labour market chart book here for more. Off the back of this, markets raised their expectations of rate cuts, with thenumber of Fed cuts priced in by the December meeting rising +11.4bps (and +4.8bps on Friday) to 45bps.The hope for additional Fed rate cuts was given further fuel on Friday after the April ISM services PMI came in at 49.4 (vs 52 expected), its lowest level since December 2022. On the other hand, the ISM services prices paid index rose to a three-month high of 59.2 (vs 55.0 expected), but this was largely driven by an increase in energy prices. This sent 2yr Treasury yields down -5.7bps on Friday, building on the earlier post-FOMC rally and down -17.8bps over the week. 10yr Treasuries also rallied, as yields fell -15.5bps to 4.51% (and -7.2bps on Friday) in their strongest week of the year so far. Lower yields saw the broad dollar index post its worst week in eight weeks (-0.86%). For Europe, it was a similar story, as investors become increasingly certain that the ECB would be cutting rates at their June meeting. By the end of Friday, markets were pricing in a 95% chance of a rate cut in June, up from 88% at the beginning of the week. That lent support to European fixed income, as 10yr German bund yields fell -8.0bps (and -4.6bps on Friday). 10yr gilts fell -10.2bps (and -6.4bps on Friday). With the payrolls print boosting soft landing hopes, equities enjoyed a strong end to the week, with the S&P 500 rising +1.26% on Friday and paring back earlier losses (+0.55% on the week). Markets were buoyed by the strong results from Apple, which gained +8.32% last week (and +5.98% on Friday). This saw the tech heavy NASDAQ outperform, rising +1.99% (and +1.43% last week). Overall, the rally was broad-based, as the Russell 2000 index of small caps rose +1.68% (and +0.97% on Friday), returning into positive territory year-to-date (+0.43%). It was a bit gloomier over in Europe, as the STOXX 600 fell -0.48%, although the index posted a small rally on Friday (+0.46%). Finally in commodities, a more positive geopolitical backdrop and an increase in US oil inventories saw oil prices retreat last week. Brent crude fell -7.31% to $82.96/bbl (-0.85% on Friday), and WTI crude -6.85% to $78.11/bbl (-1.06% on Friday), their lowest levels in seven weeks. Gold retreated for the second week in a row, falling -1.55% to $2302/oz (+0.09% on Friday). Tyler Durden Mon, 05/06/2024 - 08:11

Biden Wants The Wealthy To Pay Their "Fair Share", What Percentage Is That? By Mish Shedlock of MishTalk What percentage of all income tax collection should the top 1 percent pay? Top 10 percent? Summary of the Latest Federal Income Tax Data Inquiring minds may wish to peruse a Summary of the Latest Federal Income Tax Data, 2024 Update by the Tax Foundation. I downloaded their data and created all but one of the charts in this post. The Foundation calls it the 2024 update but the latest data is for 2021. The bottom half of taxpayers, or taxpayers making under $46,637, faced an average income tax rate of 3.3 percent. As household income increases, average income tax rates rise. For example, taxpayers with AGI between the 10th and 5th percentiles ($169,800 and $252,840) paid an average income tax rate of 14.3 percent—four times the rate paid by taxpayers in the bottom half. The top 1 percent of taxpayers (AGI of $682,577 and above) paid the highest average income tax rate of 25.93 percent—nearly eight times the rate faced by the bottom half of taxpayers. Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of tax credits such as the EITC. If the refundable portion were included, the tax share of the top income groups would be higher and the average tax rate of bottom income groups would be lower. The refundable portion is classified as a spending program by the Office of Management and Budget (OMB) and therefore is not included by the IRS in these figures. The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes. AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, and others. Average Income Taxes Paid 2024 The top 1 percent pay an average of $653,730 in Federal income taxes. The top 10 percent pay an average of $108,251 in Federal income taxes. The Tax Foundation reports the bottom 50 percent pay an average of $667 but that is overstated. Counting child tax credits, earned income, food stamps, and rent support, the bottom 50 percent pay negative taxes. They get much more back than they put in. Income Taxes Paid Millions 2024 The top 1 percent contribute over $1 trillion annually. That is nearly half of what the top 50 percent contribute. The bottom 50 percent allegedly contribute $51 billion except in practice as noted above they actually pay negative income tax. Average Tax Rate For all the whining about how little the top pay, on average that just isn’t true. Warren Buffet is fond of saying his secretary pays a higher tax rate than he does, but that is the exception (depending on how much he pays her). Bear in mind these are Federal Income taxes. There are also state income taxes, payroll taxes, capital gains, etc. Rising Fair Share That’s a bonus chart courtesy of the Tax Foundation. It shows that the share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to 45.8 percent in 2021. 2021 was heavily influenced by the pandemic which affected lower paid employees more. Given the bottom half gets money back, and collections and there are also state income taxes, payroll taxes, capital gains, etc. what percentage is fair share? Do we have a collection problem or a spending problem? Tyler Durden Mon, 05/06/2024 - 07:20

Trump Says Jack Smith Should Be "Arrested" After Documents Revelation By Jack Phillips of The Epoch Times Former President Donald Trump argued that special counsel Jack Smith’s classified documents case against him should be tossed after prosecutors wrote that they misled a judge about the order of items in an evidence box. In a post on Truth Social over the weekend, President Trump called for the arrest of Jack Smith and argued that the case should be thrown out based on the new court filing. It came after Mr. Smith’s team wrote that that the order of items within a box was “not the same” as they appear in digital photographs of materials after the FBI obtained those boxes from President Trump’s Mar-a-Lago home in August 2022. “Since the boxes were seized and stored, appropriate personnel have had access to the boxes for several reasons, including to comply with orders issued by this Court in the civil proceedings noted above, for investigative purposes, and to facilitate the defendants’ review of the boxes,” Mr. Smith’s team told U.S. District Judge Aileen Cannon last week. They added that there are “some boxes where the order of items within that box is not the same as in the associated scans.” His team also acknowledged in a footnote that federal prosecutors effectively misled the court after telling the judge that the evidence was exactly the same when it was seized. “The Government acknowledges that this is inconsistent with what Government counsel previously understood and represented to the Court,” the footnote said. Mr. Smith’s team provided multiple “possible explanations” as to why the documents were rearranged after seizing the boxes from Mar-a-Lago, according to the filing. “There are several possible explanations, including the above-described instances in which the boxes were accessed, as well as the size and shape of certain items in the boxes possibly leading to movement of items,” they wrote. “For example, the boxes contain items smaller than standard paper such as index cards, books, and stationary, which shift easily when the boxes are carried, especially because many of the boxes are not full.” But President Trump wrote that Mr. Smith’s filing is effectively an admission of what he has “been saying happened since the Illegal RAID on my home, Mar-a-Lago, in Palm Beach ... that he and his team committed blatant Evidence Tampering by mishandling the very Boxes they used as a pretext to bring this Fake Case.” He then called for the case to be immediately dropped. President Trump has pleaded not guilty to 40 charges connected to allegations that he illegally retained classified documents at his home after leaving in January 2021 and obstructed officials’ attempts to retrieve them. Two of his aides, Walt Nauta and Carlos de Oliveira, have also been charged in the case. Legal group Judicial Watch also suggested that Mr. Smith’s classified documents case against President Trump should be tossed after the admission. Judicial Watch head Tom Fitton wrote on X that prosecutors’ latest filing suggesting that there was “evidence tampering” involved is “yet more reason to throw out this sham prosecution.” He said that the filing also included an FBI “admission” that the agency was “completely screwing with the classified documents.” Continue reading at The Epoch Times Tyler Durden Mon, 05/06/2024 - 06:30

University Of California Now Discriminates Based On Parental Income, Education Authored by James Breslo via The Epoch Times, In 1996, Californians voted, 55 to 45 percent, to ban the use of affirmative action in admissions to state schools and in state employment. In 2020, Californians voted to maintain the ban by an even wider margin, 57 to 43 percent. Last year, the United States Supreme Court struck down college affirmative action policies on the grounds they violate the Fourteenth Amendment’s Equal Protection Clause. The clear message from the people and the Court is that admission should be based upon merit. But those running the University of California (UC) maintain their obsession with race and “diversity, equity, and inclusion” (DEI). They are undeterred in their mission to enforce equity via affirmative action. Rather than complying with the law and the will of the people, they search for loopholes to achieve the racial balancing they deem ideal for the shaping of society. The most recent example comes from its San Diego campus (UCSD) which implemented a rule that discriminates against students whose parents make more than a certain amount of money or who went to college. It just so happens that this rule greatly advantages black and Latino students. In a nice side benefit for the administrators, it hurts Asians, who are already overrepresented at the UCs (as well as most universities, as addressed in the Supreme Court case, Students for Fair Admissions v. Harvard, which specifically addressed discrimination against Asian students.) Beginning next year, certain “selective” majors (such as biology and most engineering degrees, including computer science) will have a special selection criteria at UCSD. “The selection criteria for entry to the major will consider academic achievement in the specified screening courses and will also be aligned with UC San Diego’s priorities of serving California residents, first-generation college students, and students from low-income families.” Thus, UCSD, without any direction from its constituents, has decided that it should prioritize students based on the status of their parents. Here is how it works. There is a new point system “that awards one point each for having a 3.0 GPA or higher in the major screening courses; California residency; Pell Grant eligibility [i.e. parental income]; and first-generation college status.” Thus, half of the criteria is based upon the student’s parents. And since the majority of UC students are from California, and a 3.0 GPA is pretty easy, it really means that the primary determiner will be the status of the children’s parents. The reason for the new policy is pretty obvious: It will advantage black and Latino students, and disadvantage white and Asian. It is unique, however, in that it is using old-school class warfare to achieve it. Many have noted that the left has typically substituted race for class as a means of implementing socialism in the United States. Due to the U.S.’s strong middle class and upward mobility, class warfare has not worked as a means of implementing socialism here. But with courts striking down admissions policies based upon race, the left is now going back to old-fashioned class conflict. Will it work, or is it also illegal to discriminate based upon parental income or education? If a court determines that the intent of the policy is to discriminate based upon race, then it will apply a “strict scrutiny” test to the policy. This is the standard the Supreme Court used in striking down affirmative action in the Harvard case. The UCSD policy, in fact, appears to be thinly disguised discrimination. It is well-known that the average income of black and Hispanic people is below that of white and Asian, as is the percentage with a college degree. Thus, a court should hold the policy to the same standard as the ones struck down in the Harvard case. Justice John Roberts wrote that the Equal Protection Clause applies “without regard to any difference of race, of color, or of nationality” and thus must apply to every person. As such, “Eliminating racial discrimination means eliminating all of it,” adding that “For ‘[t]he guarantee of equal protection cannot mean one thing when applied to one individual and something else when applied to a person of another color.’” It is interesting that the policy, for now, appears to only apply to currently enrolled students attempting to transfer into these majors, not upon admission. Perhaps recognizing that the policy will have a discriminatory effect and thus subject to challenge, UCSD limited it to leave open the argument that it is not denying anyone an education, simply the major of their choice. But this is unlikely to fly, considering that the two most important elements of a quality education is the school and the major. If you cannot get a degree in engineering, you cannot become an engineer, while a biology degree is the natural feeder to medical school. The UCSD policy is not the first time the UC has attacked students based upon their parent’s income. It used the same rationale to dump the SAT test. It argued that the test benefits children from wealthier families who can afford SAT prep courses. They now rely exclusively on high school grade point averages to determine scholarly merit. This allows them to easily create the racial balance they desire. They treat all high schools the same, whether it be the best private high school or the worst public school. We know that finishing in the top ten percent of your school is much easier to do at a public school than a private one, but that does not matter to UC. Achieving the desired racial makeup is more important to them than the merit of the individual. The UC faculty, through the “Academic Senate,” oversees the admissions process. It explained getting rid of the SAT test: “This decision, which is part of the ongoing effort by the university to advance educational opportunity and equity, was based on the view that these tests are biased because they systematically and unfairly reduce the likelihood that underrepresented and low-income high school students will be accepted to the university.” I have lots of stories from friends whose children could not get into a single one of the nine UC campuses across the state, but were accepted by the University of Michigan and University of Wisconsin, two of the best public universities in the country. That’s a nice consolation prize, except for the price, which is about five times more due to out-of-state tuition. It is really incredible and the height of arrogance that California’s preeminent public university continues to fight against the will of its people. The Academic Senate asserts that “as a state public institution, the UC is obliged to create a student body that is representative of the demographic profile of California.” UC has even placed a Vice Chancellor of Diversity, Equity & Inclusion, overseeing an entire department, at each campus to ensure this. That sounds nice, the only problem is Californians have twice voted against it, and the discrimination required to achieve it is unconstitutional. But when you are on a cultish mission to create your utopian vision, those are minor inconveniences. Tyler Durden Mon, 05/06/2024 - 05:30

Maryland Officials Release Timeline And Cost Estimate For Rebuilding Baltimore Bridge In the wake of a catastrophe that claimed the lives of six roadwork crew members and disrupted one of the nation’s busiest ports, Maryland has committed to a monumental task of rebuilding the Francis Scott Key Bridge. The project, set to be completed by the fall of 2028, is projected to cost between $1.7 billion and $1.9 billion, according to David Broughton, spokesperson for the Maryland Department of Transportation. Workers remove wreckage of the collapsed Francis Scott Key Bridge (AP/Matt Rourke) The announcement comes as state and federal agencies press forward with recovery efforts following the bridge's tragic collapse on March 26, which not only resulted in significant loss of life but also temporarily shut down the Port of Baltimore. The collapse occurred when a container ship, having lost power, struck one of the bridge’s main supports. Fifth body recovered Salvage operations achieved a somber milestone late Wednesday with the recovery of Miguel Angel Luna Gonzalez, 49, from Glen Burnie, Maryland, marking the last of five missing people identified after the accident. Gonzalez, along with the other victims, was working on the bridge when the disaster struck, AP reports. Salvage teams found one of the missing construction vehicles Wednesday and notified the Maryland State Police, officials said. State police investigators and Maryland Transportation Authority Police officers and the FBI responded to the scene and recovered the body inside a red truck. The state police underwater recovery team and crime scene unit also assisted. Governor Wes Moore expressed his condolences, reflecting the collective heartache: “We continue to pray for Miguel Angel Luna Gonzalez, his family, and all those who love him, acknowledging the anguish they have experienced since the Key Bridge collapsed. We pray for comfort, we pray for healing, and we pray for peace in knowing that their loved one has finally come home.” (Photo: AP/Matt Rourke) The detailed engineering plans for the new bridge are still under development, with state officials emphasizing both the urgency and the complexity of the design process. The new span not only promises to restore a critical infrastructural node but also aims to be a beacon of safety and innovation to prevent future tragedies. Meanwhile, the broker for the bridge’s insurance policy confirmed Thursday that a $350 million payout will be made to the state of Maryland in what is expected to be the first of many payouts related to the collapse. Chubb, the company that insured the bridge, is preparing to make the $350 million payment, according to WTW, the broker. Douglas Menelly, a spokesperson for WTW, on Thursday confirmed plans for the payout, which was first reported by The Wall Street Journal. Chubb did not immediately respond to a request for comment Thursday. The Maryland Transportation Authority said Thursday that the state’s treasurer filed a claim on the day of the bridge’s collapse “against our $350 million property policy and put on notice our $150 million liability policy first tier carrier on behalf of MDTA.” -AP The FBI, alongside Maryland State Police and the Maryland Transportation Authority Police, continues to investigate the circumstances surrounding the collapse, ensuring that the lessons learned from this tragic event will forge a safer path forward for all. Tyler Durden Mon, 05/06/2024 - 04:15