A prominent pro-Israel super PAC is gunning for Republican Congressman Thomas Massie, in retribution for his many recent votes against bills that advance Israel’s agenda in Washington. The group may have had some high-placed encouragement: Massie says House Speaker Mike Johnson recently threatened to sic the Israel lobby on Republicans who didn’t toe the pro-Israel line. 

The vaguely-named United Democracy Project — the independent campaign-spending arm of the mighty American Israel Public Affairs Committee (AIPAC) — announced that it’s pouring $300,000 into advertisements on Fox television affiliates in Massie’s home state of Kentucky. “We are trying to shine a light on the radical anti-Israel record of Tom Massie,” spokesman Patrick Dorton told the Louisville Courier Journal. “We want every single voter in the state of Kentucky to know about his anti-Israel actions.”

With its statewide attack, AIPAC likely intends to influence the 2026 election as well: McClatchyDC reports that Massie is considered to be one of three favorites for the 2026 Republican nomination to replace retiring Senate Majority Leader Mitch McConnell. 

Clearly crafted to appeal to the religious right, the 30-second ad says “Israel, the Holy Land under attack by Iran, Hamas, Hezbollah…and Congressman Tom Massie,” and points to 15 Massie votes in April against measures favored by Israel’s advocates inside the United States. The ad concludes by saying, “Everyone who cares about the Holy Land needs to know: Tom Massie is hostile to Israel.”  

https://t.co/hEJYFaBcPp pic.twitter.com/yoIdIg0pEX

— United Democracy Project (@UnitedDemocProj) May 9, 2024

Rather than having “attacked the Holy Land,” Massie has simply tried to defend the US Treasury from being plundered for the benefit of a foreign country that’s among the world’s richest.

When Speaker Mike Johnson announced he would advance a bill to give another $14.3 billion to Israel, Massie — knowing he would face the wrath and perhaps the dollars of the Israel lobby — tweeted that he would vote “no.” His rationale: “Israel has a lower debt-to-GDP ratio than the United States. This spending package has no offsets, so it will increase our debt by $14.3 billion plus interest.”

Massie also tried to defend the First Amendment, as one of only 19 representatives voting against the Antisemitism Awareness Act. Still pending in the Senate, it characterizes various statements about Israel as being antisemitic, subjecting colleges and universities to civil rights enforcement action if someone says the wrong thing. “Policing speech, religion and assembly is not the role of the federal government. In fact, it’s expressly prohibited by the U.S. Constitution,” said Massie. 

Kentucky’s Republican primary will be held on Tuesday, May 21. Massie, a star of the libertarian movement, is being opposed by two GOP challengers, Eric Deters and Michael McGinnis. 

Via his campaign’s X account, Massie said the pro-Israel super PAC was targeting him “because I am often the lone Republican for freedom of speech, against foreign aid, and opposed to wars in the Middle East.” He added that he was “urgently requesting” like-minded Americans to help him thwart the attack by donating to his campaign.   

Massie told the Courier Journal there’s reason to think Johnson may have encouraged the AIPAC to give Massie’s primary challengers some indirect help:

“This week in our GOP conference meeting, as members groused about blowback from the latest anti-antisemitism resolution, Speaker Johnson pledged to call his contacts at Jewish/Israel groups if [dissident GOP representatives] mustered opposition…

This, and the timing of the ad announcement, does raise the question of whether the ads were suggested by or sanctioned by Speaker Johnson.”

In addition to now being creatively accused of attacking the Holy Land, Massie has endured baseless accusations of antisemitism, including this gem from the editor of Commentary magazine: 

Of course you’re a no, you disingenuous piece of anti-Semitic filth. https://t.co/pI4FM6hdm5

— John Podhoretz (@jpodhoretz) February 4, 2024

Massie has previously suggested that AIPAC’s role in US politics amounts to “foreign interference in our elections.” Critics called that sentiment an antisemitic “trope.” Undeterred, Massie last week posted a poll asking if AIPAC should be forced to register as an agent of Israel under the Foreign Agents Registration Act (FARA).  

Foreign interest lobbying group AIPAC is running $300,000 of ads as part of a pressure campaign to influence my votes in Congress.

The Foreign Agents Registration Act requires agents of foreign principals to register & disclose certain information. Should AIPAC register w/FARA?

— Thomas Massie (@RepThomasMassie) May 10, 2024

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

According to new reports from the Social Security and Medicare trustees, Social Security and a Medicare fund that pays for hospital expenses will both begin running deficits in 2035 and 2036. Disappointingly, but not surprisingly, Congress was too preoccupied spending billions more on military aid for foreign countries and banning TikTok to pay attention to the looming bankruptcy of the two largest federal entitlement programs.

Many in Congress no doubt believe they can ignore the impending bankruptcy of Social Security and Medicare because they can count on the Federal Reserve to do the “dirty work” of cutting real benefits and raising taxes.

This result can be produced via the hidden, and regressive, “inflation tax.”

The Federal Reserve makes the debt-financed welfare-warfare state possible by monetizing the federal debt.

This is one reason why, even though interest on the debt is now the third largest item in the federal budget behind Social Security and Medicare and ahead of military spending, there are so few in Congress serious about cutting welfare or warfare. Those few who seek real spending cuts in welfare are smeared as “heartless” while those seeking real cuts in warfare are smeared as “anti-American” by the uniparty.

The government’s excessive spending and debt is leading to what some economists call “fiscal dominance.” Fiscal dominance occurs when a central bank must prioritize monetizing ever higher levels of government debt, giving Congress de facto control over monetary policy.

The Federal Reserve’s purchase of federal debt will result in price inflation. It will also encourage more government spending by reinforcing the uniparty delusion that, as former Vice President Dick Cheney said, “deficits don’t matter.” The Federal Reserve’s inflationary policies artificially lower the interest rates, which are the price of money. The artificially low interest rates distort the signals sent to investors and entrepreneurs, leading to malinvestment. This creates bubbles resulting in illusionary prosperity. Eventually, economic reality will catch up with the Fed-created illusions and the bubbles will burst, causing an economic downturn.

The next economic crisis will likely either be caused by or result in a rejection of the dollar’s world reserve currency status. Congress will be forced to make drastic cuts in spending while the Fed will be enabled to monetize the debt. This will result in massive public unrest potentially resulting in violence, the rise of authoritarian movements on the left and right, and increasing authoritarianism.

The only way to avoid this fate is for a critical mass of Americans to demand Congress immediately begin rolling back the welfare-warfare state, starting with our bloated military budget. The savings from this can be used to help protect those currently reliant on government welfare and entitlement programs as those programs are phased out and the job of providing aid is returned to private charities, churches, and local communities. Congress should also rein in the Federal Reserve by passing the Audit the Fed bill, legalizing alternative currencies, and forbidding the Fed from purchasing government debt.

Since the 2008 meltdown, Federal Reserve apologists have spent a lot of time saying that Audit the Fed puts Congress in charge of monetary policy while ignoring the fact that a real threat to the central bank’s autotomy is the growth in federal spending and debt. The goal, though, should be to abolish the Federal Reserve, not protect it. Those who truly want a monetary system free from political interference should join the movement to restore government’s constitutional limits and separate money and state.  

Devo Seereeram, a Consulting Geotechnical Engineer and the owner of Devo Engineering has deemed the anomaly that has emerged in Central Florida to be a “sand volcano”. 

The issue surfaced at a 300-million-gallon wastewater reservoir located west of State Road 429 in Apopka, near Golden Gem Road. This facility holds water intended for irrigating Apopka, Altamonte Springs, and nearby regions. It stores excess rainwater for use during dry periods, according to FOX 35.

But mother earth has responded that the facility may not be located at the best possible location, Seereeram said: “This is ‘Mother Nature’ telling us we can’t do certain things, and we are going to respect that and respond and modify.”

Speaking about the facility, Seereeram continued: “It’s one of the most important facilities we can be built in Central Florida. From an environmental standpoint, there’s absolutely no way we can keep putting treated wastewater into our streams, directly into the streams anymore.”

FOX 35 reported that the construction team excavated too deeply and excessively thinned the land while building the storage area. This overburdened the ground, leading to a collapse similar to snow breaking through a roof.

A sinkhole formed, and the combined air and water pressure ruptured a protective tarp, releasing 130 million gallons of water back into the upper Floridan aquifer and forming a sand volcano.

Devo Engineering has previously addressed similar issues and is planning to reinforce and fill in parts of the land, reducing storage capacity but preventing further sand volcanoes. The engineers are now racing against time to complete the repairs before Central Florida’s rainy season begins, the report says.

Seereeram concluded: “Here we have a situation where we have, fortunately, discovered it early. But it gave us enough time. So it was not a catastrophic release of water like a dam failure.”

What’s the over/under on how long it takes Democrats to blame this obviously man-made anomaly on climate change, before using it to try and pass trillions of dollars in new spending?

Authored by Steve Watson via Modernity.news,

Leftist outlet The Huffington Post is upset that Donald Trump has suggested that the death penalty should be extended to drug kingpins and child sex traffickers.

In an article headlined “There’s A GOP Plan For An Execution Spree If Trump Wins The White House,” the outlet points to remarks Trump made two years ago.

The Huffington Post is freaking out that #DonaldTrump allies are planning to expand the #deathpenalty to include sexual abuse of children – There’s A #GOP Plan For An Execution #Spree If Trump Wins The White House – https://t.co/07ovo9g9Sv

— Jeff Hertzog (@_jeffhertzog) May 11, 2024

He stated that while it “sounds horrible” to advocate for the death penalty, countries that don’t have a “drug problem” are “those that institute a very quick trial, death penalty sentence” for traffickers.

“You execute a drug dealer, and you’ll save 500 lives, because they kill on average 500 people,” Trump asserted at the time.

The article cites former Trump DOJ official Gene Hamilton, noting that he previously advocated pursuing the death penalty for violent criminals, particularly those convicted of sexual abuse of children. 

Hamilton wrote that the DOJ “should also pursue the death penalty for applicable crimes—particularly heinous crimes involving violence and sexual abuse of children—until Congress says otherwise through legislation.”

By referring to past court decisions, the piece subtly argues that the death penalty for child rape “would violate constitutional protections against cruel and unusual punishment.”

It also negatively points to efforts in states such as Florida to expand the death penalty to such horrific crimes, before pointing out that Joe Biden has previously opposed execution entirely, but is currently remaining silent.

The article then points to multiple bills in the House and Senate that seek to abolish the death penalty for any crime.

Why is the left apparently triggered by the suggestion to extend the death penalty to make it an option for convicted violent child rapists?

*  *  *

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

China has lots of economic problems (even if the market has been surprisingly generous in the past 4 months and allowed Chinese stocks to surge despite any actual economic rebound or recovery), but this is a new one.

It is hardly a secret that for much of the past 15 years, and certainly in the aftermath of the Lehman collapse, it was China’s unstoppable credit creation that lifted the world out of a deflationary shock time and again, and indeed it is a fact that as long as we can remember, China’s broadest credit aggregate, Total Social Financing, was always positive, come rain, blizzard, or shina.

But in a stunning reversal, the latest credit data published over the weekend by the PBOC revealed that for the first time since late 2005 – nearly 20 years ago – China’s Total Social Financing turned negative!

The drop was thanks to a combination of weak loan demand and slow pace of bond issuance, but whatever the reason, there is a bigger problem: China can’t grow the economy without injecting billions (or trillions) of credit into it. Yet, without credit demand – at any interest rate or price – all the money that China does inject will go into various asset bubbles, which means we are back at square one.

Here are the details:

• New CNY loans: RMB 730bn in April (RMB loans to the real economy: RMB 331bn) vs. Bloomberg consensus: RMB 914bn
• Outstanding CNY loan growth: 9.6% yoy in April (+8.0% mom sa ann); March: 9.6% yoy (+8.7% mom sa ann).
• Total social financing (TSF flow, reported): RMB -199bn in April, vs. Bloomberg consensus: RMB 941bn.
• TSF stock growth: 8.3% yoy in April, vs. 8.7% in March. The implied month-on-month growth of TSF stock: 3.5% in April (seasonally adjusted annualized rate), vs. 8.2% in March.
• M2: 7.2% yoy in April (-1.6% mom sa ann estimated by GS) vs. Bloomberg consensus: 8.3% yoy, GS forecast: 8.0% yoy. March: 8.3% yoy (+6.4% mom sa ann).

According to Goldman, it wasn’t just the negative print in TSF that conveyed weak credit demand: so did the composition of RMB loan data which showed household loans contracted in April, and corporate loans expanded mainly due to a surge in bill financing. As the bank further adds, the broad weakness in money and credit data likely reflects

1. the focus of policymakers on optimizing the structure and effectiveness of loan extension;
2. more stringent measures to tackle “idle money circulation” in the financial system (e.g., corporates’ borrowing for redeposits).
3. deposit outflows from banks to financial markets (particularly the bond market).

Now a closer look at the narrative behnid the numbers:

1. Total social financing (TSF) flows turned negative in April, the first time since October 2005, significantly below market expectations. The disappointing TSF data was driven by weak loan demand and slow pace of bond issuance. Bill financing surged as banks tried to fill in unused loan quota, which reduced the amount of undiscounted bankers’ acceptance bills. Shadow banking credit (undiscounted bankers’ acceptance bills, trust loans, entrusted loans) declined by RMB 246bn vs. an expansion of RMB 223bn in March. Bond net issuance fell sharply in April compared with March: Government bond net issuance moderated to RMB 159bn vs. RMB 478bn in March, while corporate bond net issuance was negative in April after seasonal adjustment (RMB -88bn vs. RMB 260bn in March). In year-over-year terms, TSF stock growth slowed to 8.3% from 8.7% in March. The sequential growth of TSF stock moderated to 3.5% mom sa annualized in April from 8.2% in March. For
2. New CNY loans missed market expectations notably as well in April, and the sequential growth of RMB loans slowed to 8.0% mom sa annualized from 8.7% in March. That said, year-over-year growth of RMB loans was flat at 9.6% in April. The composition of new loans showed weak credit demand as household loans contracted and bill financing grew much faster than medium-to-long term corporate loans. After Goldman’s seasonal adjustment, household loans contracted by -0.4% month-over-month annualized in April, vs +5.6% in March. Bill financing rose 70.4% month-over-month annualized in April (vs. -3.2% in March), while corporate medium-to-long term loans growth accelerated modestly to 11.8% month-over-month annualized in April (vs. 9.5% in March). The sizeable gap between “total new loans” (which was RMB 730bn in April) and the “new RMB loan under TSF” (which was RMB 331bn in April) was mainly due to the RMB 261bn expansion of loans to non-bank financial institutions.
3. M2 growth slowed materially to 7.2% yoy in April (vs. 8.3% in March). On a sequential basis, M2 declined by 1.6% month-over-month annualized, vs +6.4% in March. Year-over-year growth of M1 turned negative in April, the first time since January 2022. The Financial News, a media outlet affiliated with PBOC, reported that the slowdown of M2 growth was driven by three factors: 1) deposit outflows from banks to non-bank financial institutions for higher returns of wealth management products, thanks to falling bond yields and lower deposit rates (more on this shortly); 2) more stringent measures to address “idle money circulation” (e.g., corporates’ borrowing for redeposits); 3) lower incentives for local governments to boost deposit/loan growth due to changes in accounting methods of value-added in financial sectors (in an effort by the central government to improve the GDP measurement).
4. 4. April’s credit and money data consistently pointed to weak credit demand. Recent policy communications suggest that the PBOC continued to focus on enhancing monetary policy transmission and improving the efficiency of loan usage. Looking ahead, the growth of new CNY loans and M2 may gradually slow down further, as the PBOC highlighted weakening relationship between economic growth and credit expansion. Taken together with soft year-to-date growth of TSF stock, we revise down our TSF stock growth forecast to 9.5% for 2024 (vs. 10.0% previously). In light of upcoming acceleration of government bond issuance, we continue to expect two more RRR cuts and one policy rate cut through the remainder of this year.

Looking ahead, Goldman expects government bond issuance to pick up in late Q2, and the PBOC to facilitate the government bond issuance by increasing interbank liquidity. We continue to forecast one 25bp RRR cut in Q2.

While economists are trying to goal seek this latest disappointment out of China, the market has already priced it in, and overnight Chinese government bonds gained, as the poor credit data fueled expectation of more monetary policy easing and allowed traders to shrug off debt supply concerns. The offshore yuan touched its weakest level in over a week.
Bonds. And with credit demand plunging 10Y yields are dumping just fast; here are some more from Bloomberg:

• China plans to start selling the first batch of its 1 trillion yuan ($138 billion) of ultra-long special central government bonds on Friday.
• Weakness in credit print “adds to the possibility of another RRR cut” coming before end-2Q, likely coinciding with the special bond issuance and a step-up of local government bond issuance for the remainder of 2Q,” Becky Liu, head of China macro strategy at Stanchard Chartered Bank said

10-year bond yields fell to 2.29% versus previous close at 2.34% on Saturday; the domestic interbank bond market was open on May 11 due to holiday adjustment

Finally, China’s credit in April shrank for the first time as government bond sales slowed, while loan expansion was worse than expected in a sign of weak demand.

Bottom line: the yuan is dumping, credit is not only stalling but outright contracting, and while stocks are modestly higher as traders hope thay finally bottom-ticked the rebound, the collapsing Chinese yields signal that much more deflation is coming unless Beijing can arrest it. In either case, China is now facing a toxic cocktail of two equally bad choices: i) devalue the currency in hopes of kickstarting exports (since nothing else works), or ii) do nothing and watch as the economy spontaneously collapses in on itself and leads to a global economic shockwave that forces all developed central banks to quickly turn on the money printer.

Authored by James Howard Kunstler via Kunstler.com,

Monster Mash-Up

“My take is that the US is incredibly unstable right now, and could go in almost any imaginable direction between now and the election, as well as some unimaginable ones.”

– John Michael Greer

Did you notice that it took just a little bit of internal chaos to alert the Party of Chaos that maybe chaos wasn’t the greatest thing to be the party of? Something went awry the past two weeks when thousands of creamy coeds on every campus across America donned the keffiyeh and, in effect, demanded submission to history’s most notorious misogynist cult. It struck a most cacophonous chord among progressives, like Kumbaya as orchestrated by Karlheinz Stockhausen. To awaken from Wokery, you see, is a brutal shock to the brain.

And so, over the weekend every big dog in the Democratic Party’s doghouse came out barking against the current direction of the Democratic Party — that is, over an electoral cliff, lemming-style. Bill Clinton lamented at the Milken Conference that:

“the political rewards of grievance politics and name-calling and being negative have been so immense that nobody could give’em up. That’s what this whole shebang has come down to now.”

James Carville had a veritable nervous breakdown on X:

“It’s going the wrong way, it’s not working. Everything we’re throwing is spaghetti at a wall, and none of it is sticking, me included.”

Fareed Zakaria over on CNN confessed that:

“None of this is playing out the way I thought it would.”

Gee, really?

None of them could bring themselves to actually name the doddering donkey in the room, “Joe Biden.”

Nor did they dare call out the stage manager behind the old Joe-from-Scranton show, Barack Obama, not exactly coasting into his fourth term, as expected.

They’re all surprised the way things are turning out. And, of course, “JB” himself did not come out of his Rehoboth Beach hidey-hole after declaring no more bullets and missiles for you, Israel, which landed amongst the Party’s donor class like a tear-gas bomb.

Hillary Clinton popped up on the Morning Joe show wearing royal purple to remind the audience that Donald Trump is another Hitler, threatening “the sanctity of the Constitution” and adding “maybe this will be our last election.”

If she’s putting herself up as possible last-minute replacement for the ever more ghostly “Joe Biden,” she was not so crass as to say so. The party will have to come pleading to her on its knees, hoping she can once again muster the legions of indignant women to oppose the wicked Golden Golem of Greatness — who was, that very day, on display in a Manhattan courtroom having to endure the jibes of the paradigmatic wronged woman, porn-star Stormy Daniels.

What else have they got, really? Gavin Newsom?

If Mr. Trump is Hitler, then think of Mr. Newsom as Godzilla with hair gel. Imagine what he could do to the whole USA after trashing California, as he has managed to do. Sorry to tell you, but in an election contest between Hitler and Godzilla, Hitler would probably win. It’s a rock-paper-scissors deal. Any other ringers they might throw in? The only name that ever comes up is Illinois governor JB Pritzker, who actually looks a bit like King Kong, and has certainly done a Kong-job on Chicago. And, by the way, that’s where the Democrats’ convention will happen in August. Wouldn’t it be something to see King Kong versus Godzilla there?

All of which is to say that something beyond desperation has set in amongst the Democrats, an emotion so dire that Elizabeth Kubler Ross couldn’t find a word for it on her transect of grief. They don’t know what to do at this point. They have only a few months to figure it out and there is more at stake than a mere turnover in administrative duties. The shadow of the gibbet looms in their nightmares. Their lawfare schtick was one thing, a kind of fun-and-games compared to what’s coming at them: the actual law, trials for more serious crimes than mere book-keeping errors and mis-pricing real estate valuations. Think: sedition, treason, bribery and tack on conspiracy to commit all the above.

Meanwhile, Mr. Trump provided a further shock to the awakening Woke with a Saturday evening fan meetup down-the-shore in Wildwood, New Jersey. Somewhere between eighty to a hundred-thousand voters showed up in what is said to be among the bluest states in the country. Bruce Springsteen must have been weeping into his avocado toast over in Red Bank. Then, across the Sunday morning news digests there was talk about “a landslide win,” and even more amazed chatter about RINOs and Never-Trumpers returning to the folds of the Golden Golem’s heavenly garment, as though Mr. Trump had virtually Jeezified himself through a year of tribulation.

Will the Democrats just go through the motions the next six months, awaiting execution? Naw. One way or another, they are going to jam Hillary into this psychodrama.

Stay tuned for a couple of medical emergencies.

First, Kamala Harris will resign on account of a sudden “health problem” that prevents her from attending to her duties. Cancer will be implied but not spelled out. “Joe Biden” will appoint HRC of the Purple Pantsuit as veep.

Three weeks later, “JB” will submit his resignation for medical reasons, and nobody will need to ask why.

Voila! The first woman president, she-whose-turn-has-finally-come, flies triumphantly out of the Democratic Convention in her hometown, Chicago, like Rodan the Flying Reptile emerging from the mythic volcano, cawing her battle-cry across the land. The Golden Golem answers with a roar. The great re-match is on!

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

The return of ‘Roaring Kitty’ sent GME soaring higher (up 110% at its highs)…

Source: Bloomberg

…and prompted squeezes/panic-covering across the ‘most shorted’ names and ‘retail favorites (memes)’ soared…

Source: Bloomberg

As John Flood noted from Goldman’s trading desk: “GS Most Short Rolling basket in focus having a top 5 move over the past 5 Years (3.3std).”

Source: Bloomberg

Volume/activity has been abysmal recently and today was no better with overall activity levels -7% vs the trailing two weeks average.

• HF buy skew sticks out @ +16.6% unsurprisingly, that’s 97th %-ile & the highest level in 6wks.  Covering most acute in Info Tech with a buy skew @ +20% and short ratio of only 34%.  HCare, Consumer, REITs & Comms Svcs all net to buy; Macro Products & Energy (likely PR hedges) net for sale

• LOs are 15% better for sale with just Cons Disc and Fins as small to buy.  The most concentrated selling is in Macro Products & Info Tech, with modest supply across HCare, Indust, Comms Svcs & Energy

Most notably, the weakest sleeves of the market are surging higher – Most Short Basket up +3 sigmas // YOLO basket up +3 sigmas // China Internet basket up +2 sigmas

GameStop “stonks” surged up to 119% after a cryptic post on X from Keith Gill, aka ‘Roaring Kitty’, his first since June 2021. Some investors interpreted it to mean that Gill is coming back into action (BBG).

S&P is unchanged but NOT all is calm underneath the surface. HF community under pressure on this Manic Monday. We are seeing a considerable amount of covering by the fast money community in both single stocks and macro products during the first 3 hours of trading.

Keep an eye on the following thematics as it feels like this could get worse before it gets better…

‘HF VIP Longs vs Most Short’ was down 7% – the biggest drop since June 2021 (today’s move is a 4SD over last 1 year of trading)

Source: Bloomberg

Mega Cap Tech vs Non Profitable Tech down 4% (today’s move is a 3SD over last year of trading)

Long Momentum down 4% (today’s move is a 4 SD over last year of trading)

In context, today saw half of all indicative hedge fund gains year-to-date have been cut in half…

Source: Bloomberg

Here we go again: explosion in most shorted names means worst day for hedge funds since Dec 2023. Gross unwinds, margin calls, stay puft marshmallow man all to follow pic.twitter.com/yxl8220Nau

— zerohedge (@zerohedge) May 13, 2024

The jump in inflation expectations (and household debt stress) from The New York Fed’s survey did provide some selling pressure on the day however – as well as Chevron’s decline (driven by reports that influential proxy giant ISS recommended Hess investors abstain from voting on the proposed $53 billion acquisition).

By the close, the S&P was unchanged, The Dow was the laggard (down around 0.2%), while Small Caps outperformed and Nasdaq held on to some gains (both well off the day’s highs)…

Treasuries were bid today (but traded in a narrow range), ending the day down only 1bp…

Source: Bloomberg

The dollar ended the day flat, recovering overnight losses…

Source: Bloomberg

Bitcoin ripped back up to $63,000 today, erasing Friday’s plunge losses…

Source: Bloomberg

Gold gave back more than half of last week’s gains today, back below $2340…

Source: Bloomberg

Oil bounced back off $78 (WTI) – around its 100DMA – recovering most of Friday’s losses…

Source: Bloomberg

Finally, this trend is not Powell’s (or Biden’s) friend…

Source: Bloomberg

‘Growth’ data continues to surprise to the downside, and ‘inflation’ data surprise to the upside. What do we call that Jay? Clue: it rhymes with blag-station.

The NATO country with the second largest military in the alliance has just admitted to aiding and abetting a US-designated terror organization.

Turkish President Recep Tayyip Erdogan in surprisingly frank statements acknowledged that Turkey is currently treating over 1,000 Hamas members in various hospitals across the country. In the remarks he stressed that Turkey does not consider them terrorists, but as part of a “resistance movement” against Israel.

Also surprising is that such an admission, which is sure to anger other Western allies, came as Greek Prime Minister Kyriakos Mitsotakis was on an official visit with Erdogan in the capital city of Ankara.

“Hamas is a resistance organization whose lands have been occupied since 1947, and it has protected its lands after the occupation,” Erdoğan said, clashing with Greece’s view of the militant organization currently fighting Israel.

“I do not see Hamas as a terrorist organization. On the contrary, I see Hamas as people struggling to protect their own land and their own people,” Erdogan added.

According to more from the exchange:

Speaking at a press conference after talks with Greek Prime Minister Kyriakos Mitsotakis in Ankara, Erdogan also said he was saddened by the Greek view that deems Hamas a terrorist organization.

Greece and Turkey cannot agree on all issues related to the war in Gaza but they can agree that violence must end and a long-term ceasefire is needed, Mitsotakis said.

“Let’s agree to disagree,” Mitsotakis said, responding to Erdogan.

Erdogan at one point told his Greek counterpart that terrorist organizations “should have no place in the region’s future” and that there is “growing unity” on this, but that Turkey differs on the definition when it comes to Hamas.

But, Erdogan explained, “we are in agreement that a ground operation in Rafah would be unacceptable.”

Since the Gaza War started in the wake of the Oct.7 Hamas terror attack, Erdogan has been a constant critic of both Israel and Prime Minister Netanyahu personally. 

Erdogan corrects Greek PM Mitsotakis, says “Hamas isn’t a terror group, it is an insurgent group that is trying to protect its territories that have been occupied since 1947” pic.twitter.com/U0mrRdjEcG

— Ragıp Soylu (@ragipsoylu) May 13, 2024

Turkey has also cut trade with Israel over what it called the “worsening humanitarian tragedy” currently unfolding. Israel has in turn accused Erdogan of being a “dictator”. 

As for treating hardline jihadists in hospitals, this also happened during the war in Syria, but in that case even Israel at one point had been giving medical aid to anti-Assad militants on its soil, most of which were linked to al-Qaeda.

Authored by Mike Shedlock via MishTalk.com,

Voters seem angry about inflation despite economists telling us how great things are. A few pictures explain.

Why Biden Is Losing on the Economy

The Wall Street Journal comments on Why Biden Is Losing on the Economy

Democrats and the press keep telling Americans that they don’t know how good they have it. The U.S. economy is great, Bidenomics is the reason, and don’t worry, be happy. Yet the voters, those numbskulls, keep telling pollsters they don’t feel the boom and they don’t approve of President Biden’s economic performance.

If our friends on the left want to stop berating voters and admit reality, they might look at the chart nearby from Dan Clifton of Strategas Research Partners. It compares the average annual consumer-price inflation rate across the first term of the last eight presidencies. As you can see, Mr. Biden’s average inflation rate of 5.5% is second only to Jimmy Carter’s average rate of 10.3%, and Mr. Carter wasn’t re-elected.

The President keeps telling voters that inflation has fallen on his watch to 3.5% from that peak, but voters remember how low inflation was for some 40 years before Mr. Biden took office and went on his historic spending spree. Americans can also see that prices aren’t falling back to where they were when Mr. Trump was President. They know their average real earnings have declined since Mr. Biden took office.

Voters aren’t stupid, and this is why they don’t like Mr. Biden’s economic record.

It’s not the hand that Biden was dealt that mattered. It’s how he played the hand he was dealt.

1. The biggest fiscal stimulus in the world, totally unwarranted
2. Student debt cancellation
3. Absurd energy policy
4. Rent moratoriums
5 The IRA

All massively inflationary

— Mike “Mish” Shedlock (@MishGEA) May 11, 2024

The Journal explains what I have been talking about for months.

But the article misses a big point. Neither the Fed nor economists in general view housing prices as inflation. The economic illiterates do not count asset prices in general as inflation.

Home Prices Hit New Record High, Don’t Worry

The Case-Shiller national home price index hit a new high in February. That’s the latest data. Economists don’t count this as inflation.

Case-Shiller national and 10-city indexes via St. Louis Fed, OER, CPI, and Rent from the BLS

On May 2, I commented Home Prices Hit New Record High, Don’t Worry, It’s Not Inflation

Not Inflation?!

Economists, including the Fed, consider homes a capital expense, not a consumer expense.

As a result, they all ignore economic bubbles and blatantly obvious inflation on grounds it’s not consumer inflation. This has gotten the Fed into trouble at least three times. The first was the dot-com bubble, then the Great Recession housing bubble and now.

It’s really pathetic when you make the same major mistake over and over and over. It’s a result of groupthink.

Inflation Since January 1, 2020

• CPI: 20.3%

• OER (Owners’ Equivalent Rent): 22.1%

• Rent: 22.5%

• Case-Shiller National Home Prices: 47.2%

Allegedly, the latter has nothing to do with inflation. And adding insult to injury for those seeking to buy a home, mortgage rates have sky rocketed.

Mortgage News Daily Average Mortgage Rates

Image courtesy of Mortgage News Daily, anecdotes by Mish

On January 1, 2020 the mortgage rate was 3.76. Now it’s 7.16% with home prices up 47.2%.

But hey, let’s claim that this has nothing to do with inflation.

Trapped In Your House?

A New York Fed survey shows 1-year and 3-year look ahead moving expectations are at record lows.

Data download from the New York Fed, chart by Mish

On May 6, I commented Trapped In Your House? Moving Expectations Hit Record Low

The above post started some interesting discussion on Twitter. One person noted that expectations had been declining anyway.

OK but two things. From 2014 to 2022 expectations fell from 20.8 percent to 16.4 percent. A decline of 4.4 percentage points in 8 years. In the next two years, expectations fell another three percentage points,

Trapped offers a reasonable explanation for the acceleration.

Second, those are “expectations” not actual results. Unfortunately, we will not have 2024 data for two more years.

According to data from the U.S. Census Bureau, moving rates for Americans declined from 12.8% in 2021 to 12.6% in 2022. Thus, more people thought they would move than actually did.

I suggest 2023 and 2024 will be lower for obvious reasons. But if for some reason it’s higher it will be more renters moving around, not homeowners.

We do not have the precise data that proves homeowners are trapped, but we do have strong enough data to suggest that is the case.

Young Voters Bail on Biden

On March 7, I commented Polls Show Biden is Losing Black, Hispanic, and Young Voters to Trump

Q: Why is Biden losing black voters and young voters?

A:Those are the groups most likely to rent. In general, those are the groups most impacted by inflation whether you count home prices or not.

People Who Rent Will Decide the 2024 Presidential Election

Immigration won’t decide the election. Polls have not yet captured what will. This may come as a surprise, but the top issue housing. More explicitly, it’s shelter costs.

On April 30, I commented People Who Rent Will Decide the 2024 Presidential Election

The economy is a very broad category that encompasses inflation, jobs, unemployment, wages, rent, and housing.

Other polls split the economy in various pieces, such as inflation and jobs. Not a single poll mentioned housing specifically.

Q: What is it that young voters really have on their minds?
A: Rent – Unaffordable Housing

I said people who rent will decide the election. One might also say young voters and blacks will decide the election. It’s really the same issue, but none of the polls framed it the way I just did.

Trump would be wise to pick a candidate who appeals to young voters and also women for the abortion issue. Trump might win even if he doesn’t.

This was a discussion among several friends of mine recently.

One friend accurately noted that VP candidates don’t swing many voters. Yep, that’s true, but even half a percentage point could swing the election. It would behoove Trump to choose wisely.

Update (1155ET):

pic.twitter.com/XAQ8v5dMlH

— Roaring Kitty (@TheRoaringKitty) May 13, 2024

*   *   *

Update (1000ET): GME is now up 110% on the day, back to its highest since August 2022…

*   *   *

“My god it’s him, he’s really back. To give a hedgefund bitch a heart attack. To make a million apes insomniac. It’s the guy… who’s not a cat ;-),” wrote one user on Reddit’s GameStop message board on Sunday evening following an X post from ‘Roaring Kitty.’ 

Roaring Kitty, also known as Keith Gill, led an army of ‘meme-traders’ against hedge funds shorting GameStop (Melvin Capital) in 2021. He returned to X last night, posting a meme that suggested he’s back after going silent on X since June 2021.

The X post has gone viral. It has been viewed more than 8.5 million times, with 14k retweets and 51k likes.

pic.twitter.com/YgjVqtgcNS

— Roaring Kitty (@TheRoaringKitty) May 13, 2024

X users are beyond ecstatic for his return:

pic.twitter.com/4DbjCcfjz1

— TaraBull (@TaraBull808) May 13, 2024

pic.twitter.com/fzSgGQTRDi

— Inverse Cramer (Not Jim Cramer) (@CramerTracker) May 13, 2024

I NEVER SOLD 💎🙌 pic.twitter.com/sX3tO9OEkZ

— greg (@greg16676935420) May 13, 2024

In markets, GameStop shares jumped 38% in premarket trading in New York to the $24 handle. 

Just a matter of time… 

Today’s squeeze has anyone shorting the stock panicking. They are also left in disbelief that one tweet from a meme trader can spark so much volatility. This adds to the 57% monthly gains already recorded as of Friday’s close. 

Roaring Kitty’s return comes as the short percentage of GameStop shares outstanding has surged, doubling from 25 million in late 2021 to 60 million as of days ago, equal to about 24% of the float short. 

After meme stocks and other profitless companies have been dormant since 2022 collapse, primarily because of tightening financial conditions surrounding Fed Powell’s rate hiking cycle. The one big question we ask: Are the meme stocks back? 

It’s unlikely, given that rates are in higher for longer mode. However, a cutting cycle will open up some sort of revival.