Authored by David Harsanyi via PJMedia.com,

Robert F. Kennedy Jr. can be an unhinged leftist and crackpot, but he also happens to be correct about President Joe Biden’s attacks on constitutional order, particularly free expression.

Speaking to an incredulous Erin Burnett on CNN this week, Kennedy argued that Biden was a bigger threat to “democracy” than Donald Trump, a position that clashes with the media’s entire 2024 campaign messaging.

In a more decent world, we’d be debating which presidential candidate was better at upholding the constitutional order, rather than which one was worse. That is not our fate. And yet, the unique thing about the 2024 presidential contest is that voters are given a chance to compare existing presidential records.

Kennedy contends that Biden “is the first candidate in history, the first president in history that has used the federal agencies to censor political speech or censor his opponent.” One suspects Eugene Debs might quibble with this characterization, though not since the Committee on Public Information has there been a White House that has shown such disdain for free expression and debate.

Biden is the first president to openly and secretly pressure major communication companies to take direction and work in conjunction with state agencies to censor debate.

The same left-wingers who do not believe in any limiting principles while regulating economic life will lecture us about how so-called platforms are free to work with anyone they please, including the White House.

OK, but tech companies also spend tens of millions each year in Washington rent-seeking and lobbying for favorable regulations. They are highly susceptible to state intimidation. When Biden deputizes massive communication companies to act as censors, he’s merely taking a shortcut in the suppression of speech that undercuts, at the very minimum, the spirit and purpose of the First Amendment.

One might even call this brand of state-corporate relationship “semi-fascist.”

RFK is right that the Biden administration engaged in censorship through agencies, but it wasn’t exactly a secret. Recall Jen Psaki informing us that the White House was “flagging problematic posts for Facebook that spread disinformation.” Biden claimed that allowing unfettered speech on Facebook during COVID was “killing people.” Just contemplate the media’s reaction if Trump’s White House had been keeping lists of “problematic” posts.

Remember, as well, White House Communications Director Kate Bedingfield warning that social media companies “should be held accountable” for the ideas of those who use their websites. Was she talking about the ideas that spurred the 2020 Black Lives Matter riots, the most expensive in history? Was she talking about those who spread conspiracy theories about Russian collusion? Probably not. Though Trump never did anything to inhibit the spread of criticism or conspiracy theories.

The practical problem with allowing the state to dictate speech is that it will surely abuse the power by tagging inconvenient positions as “disinformation,” as it did with the Hunter Biden laptop story and as it did when pressuring Facebook to ban stories on the Chinese origins of COVID. Even if this were not the case, the state has no business guiding, engaging in or suggesting any limits on free expression — even when it comes to real misinformation or disinformation. The president swore an oath to the Constitution, not the consensus of “experts.”

But look at me naively prattling on about neutral principles. There is no uproar when Biden creates a Ministry of Truth to combat alleged disinformation because the media are uninterested in neutrality of free expression. Partisan legionnaires like Philip Bump note that “Misinformation-spouting RFK Jr. muses that Biden is a threat to democracy,” as if these assertions are somehow in conflict. Most of the attacks on RFK’s comments by “experts and historians” do nothing to dispel the contention that the president works to censor Americans.

One gets the sense, in fact, that just like Ketanji Brown Jackson, most Democrats believe the state dictating speech (as long as it’s run by the Left) is both necessary and good for “democracy.”

The biggest threat to “democracy” — if by democracy we still mean the Constitution — is when the powerful ignore limits of the state with impunity.

From that perspective, Biden has been a cancer on “democracy.”

The Left rationalizes and often justifies his authoritarianism by noting the existence of Trump. Even if the former president were as bad as Democrats claim, there is a slew of institutions ready to stop him. Biden? Those institutions cheer on his abuses. And that alone makes him more dangerous. 

*  *  *

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“So, Musk may not be too wide of the mark after all”: Politico. Something which could hardly be imagined a year ago or even six months ago has happened this week: a Politico op-ed voices agreement with Elon Musk on Ukraine.

Of course, the Wednesday piece still takes customary shots at the “wayward” billionaire and owner of X: 

Wayward entrepreneur Elon Musk’s latest pronouncements regarding the war in Ukraine set teeth on edge, as he warned that even though Moscow has “no chance” of conquering all of Ukraine, “the longer the war goes on, the more territory Russia will gain until they hit the Dnipro, which is tough to overcome.”

“However, if the war lasts long enough, Odesa will fall too,” he cautioned.

Statements like these, and Musk’s supposedly ‘alternative’ view of the crisis in general, have long invoked the wrath of mainstream media pundits. Yet publications like Politico now sing a different tune, but only after President Zelensky himself has signaled just how dire the battlefield situation actually is for his forces. 

Politico has previously featured headlines like ‘Elon Musk Is Transmitting a Message for Putin’. Musk in his recent Odesa commentary did no such thing, but merely urged the Ukrainians to find a way forward towards peace at the negotiating table before it’s too late.

Again, lines such as the below coming out of the heart of the media establishment would have been impossible to come across a year ago… from Politico: 

With a history of urging Ukraine to agree to territorial concessions — and his opposition to the $60 billion U.S. military aid package snarled on Capitol Hill amid partisan wrangling — Musk isn’t Ukraine’s favorite commentator, to say the least. And his remarks received predictable pushback.

But the billionaire entrepreneur’s forecast isn’t actually all that different from the dire warnings Ukrainian President Volodymyr Zelenskyy made in the last few days. According to Zelenskyy, unless the stalled multibillion-dollar package is approved soon, his forces will have to “go back, retreat, step by step, in small steps.” He also warned that some major cities could be at risk of falling.

But we should point out that Musk has been a realist from the start, more in line with analysts such as John Mearsheimer, voicing positions which have proven right time and again, despite contradicting the bandwagon mainstream consensus at every turn.

And here’s the kicker in the conclusion, from the Politico op-ed…

“We don’t only have a military crisis — we have a political one,” one of the officers said. While Ukraine shies away from a big draft, “Russia is now gathering resources and will be ready to launch a big attack around August, and maybe sooner.”

So, Musk may not be too wide of the mark after all.

Of course, it’s more convenient at this moment to make such admissions. To review, not only has last summer’s Ukrainian counteroffensive been universally acknowledged as a failure, but more grim developments for Kiev have emerged just this week, seen in some of the following fresh headlines:

• Zelensky Signs Law Lowering Conscription Age to 25
• Ukraine loses 80,000 soldiers since January, Kremlin claims
• Ukraine losing so many troops can’t retrieve bodies, soldier says

Elon Musk says “the longer the war goes on, the more territory Russia will gain.”

“Ukraine tragically wasted the lives of soldiers by attacking a larger army with deep defenses, minefields and more powerful artillery, while lacking armor and lacking air superiority! Any fool… pic.twitter.com/gz3JIF4WH2

— BRICS News (@BRICSinfo) March 31, 2024

Yet still, Washington is pressing forward (or rather throwing more Ukrainian troops to needless, tragic slaughter by promising things it can’t deliver), with US top diplomat Antony Blinken on Thursday saying from Brussels…

“Ukraine will become a member of NATO. Our purpose at the summit is to help build a bridge to that membership” — in reference to NATO’s annual meeting set for July. Sadly, things are set to get bloodier and more unpredictable, raising the spectre of a WW3 scenario, before they get better.

Authored by Mike Maharrey via Money Metals,

If a formula spits out a number you don’t like, just change the formula so you get a better number!

That’s exactly what the Bureau of Labor Statistics did to the Consumer Price Index formula in the 1990s. Because the CPI kept indicating price inflation was too high, the BLS tweaked the formula to spit out a lower inflation number.

Now the International Swaps and Derivatives Association (ISDA) is trying to talk the Federal Reserve into changing the formula for the supplementary leverage ratio (SLR) to make bank balance sheets look better.

This proposal sends some alarming messages about the stability of the banking system and confidence in U.S. government debt.

What Is the SLR and Why Do They Want to Change It?

The SLR is calculated by dividing the bank’s tier 1 capital (capital held in a bank’s reserves and used to fund business activities for the bank’s clients) by all assets on the bank’s balance sheet, including U.S. Treasuries and deposits at Federal Reserve Banks.

Banks use the SLR to calculate the amount of equity capital they must hold relative to their total leverage exposure. Regulations imposed after the 2008 financial crisis require category I, II, and III banks to maintain an SLR of 3 percent. “Globally Systemically Important Banks” are required to keep an extra 2 percent SLR buffer.

During the pandemic, the Fed temporarily altered SLR requirements, allowing banks to exclude Treasuries and reserves from the formula’s denominator. This made it easier to maintain the required SLR ratio.

As a Federal Reserve note explained, the banking system “exhibited considerable strains” during the reign of COVID-19. As the pandemic unfolded and governments began shutting down economies, banks quickly liquidated risky assets and increased their cash holdings. This resulted in a “sharp increase in bank deposits.”

According to the Fed note, “The associated rise in the overall balance sheets had the potential of causing their tier 1 capital levels to fall below the amount required by the SLR, which could have resulted in banks limiting their provision of financial services.”

To provide some relief, the central bank made temporary changes to the SLR formula effective April 1, 2020. The emergency rule allowing banks to exclude U.S. Treasuries from the calculation expired a year later.

In a letter addressed to the Federal Reserve, along with the FDIC, and the Office of the Comptroller of Currency, the ISDA urged these government agencies to make that “temporary, emergency” rule change permanent.

“To facilitate participation by banks in U.S. Treasury markets—including clearing U.S. Treasury security transactions for clients—the Agencies should revise the SLR to permanently exclude on-balance sheet U.S. Treasuries from total leverage exposure, consistent with the scope of the temporary exclusion for U.S. Treasuries that the Agencies implemented in 2020.”

The proposed rule change would allow banks to exclude both “on-balance sheet U.S. Treasuries that a bank holds in inventory or as part of its liquidity portfolio, as well as U.S. Treasuries the bank has received in a repo-style transaction to the extent the bank records the U.S. Treasuries on its balance sheet.”

This raises a question: does this indicate that the banking system is under “considerable strain?”

What Would a Change to the SLR Mean in Practice?

According to the ISDA, the change would “promote the stability of the U.S. Treasury market.” The organization also said it would more broadly “help support market liquidity in the context of projected increases in the size of the U.S. Treasury market and the importance of bank participation in the market.”

From a practical standpoint, it would incentivize banks to buy and hold more U.S. Treasuries by allowing them to hold them on their balance sheet without impacting their SLR. This would be good news for the U.S. Treasury Department, given that is selling billions of dollars in Treasuries every month to cover the massive government budget deficits.

The impact would be similar to quantitative easing.

In effect, the proposed change in the SLR would boost demand for Treasuries, driving prices higher and interest rates lower than they otherwise would be. Given the impact of Treasury yields on the broader bond market, it would also likely push other borrowing costs lower.

It would also enable banks to lend more money than they otherwise could under the current SLR scheme. This is a form of money creation and would have an inflationary effect.

European Investment Bank senior policy analyst Antonio Carlos Fernandes called this proposal “alarming.”

In an article published by Medium, Fernandes identifies several reasons banks would love to adjust the SLR requirements to exclude U.S. Treasuries.

1. Treasuries are generally considered “risk-free” assets because they are backed by the “full faith and credit” of the U.S. government. The proposal to exclude them from the leverage ratio requirement implies banks perceive them as more risky. This could “potentially undermine confidence in U.S. government debt.” 
2. The SLR is intended to backstop risk-based capital requirements and to ensure banks don’t become overleveraged, even with “safe” assets. The carveout for Treasuries would weaken these protections.
3. The formula change would incentivize banks to load up on U.S. Treasuries. Fernandes called this a “concentration of risk” that would “heighten the interconnectedness between the banking system and government debt, posing systemic risks.”
4. The request to exclude Treasuries from the SLR could signal “broader anxiety” about the U.S. fiscal situation and government debt levels. Given the spending problem in Washington D.C., this anxiety is certainly justified.

Fernandes summed up the situation this way:

“Any perception that banks require special exemptions for holding U.S. government debt could shake global confidence in Treasuries as a safe haven asset and could impact the status of the U.S. dollar.”

Trouble in the Banking System?

This proposal also casts doubt on the notion that the banking system is “sound and resilient.”

A year ago, rising interest rates precipitated a banking crisis kicked off by the collapse of Silicon Valley Bank. The Fed managed to paper over the problem with a bailout program.  

Through the Bank Term Funding Program (BTFP), banks, savings associations, credit unions, and other eligible depository institutions were able to take out short-term loans (up to one year) using U.S. Treasuries, agency debt, mortgage-backed securities, and other qualifying assets as collateral.

Instead of valuing these collateral assets at their market value, banks were able to borrow against them “at par” (Face value). It would be like the bank extending you a second mortgage based on the original value of your house after a flood caused significant damage. Normal people would never get this kind of sweetheart deal.

The BTFP was set up to address a specific problem that took down Silicon Valley Bank and two other financial institutions.

SVB went under because it tried to sell its undervalued bonds to raise cash. The plan was to sell the longer-term, lower-interest-rate bonds and reinvest the money into shorter-duration bonds with a higher yield. Instead, the sale dented the bank’s balance sheet with a $1.8 billion loss driving worried depositors to pull funds out of the bank.

The BTFP gave banks facing similar problems an alternative. They could quickly raise capital against their bond portfolios without realizing big losses in an outright sale. It gave banks a way out, or at least the opportunity to kick the can down the road for a year.

The BTFP shut down in March.

Fernandes said the timing of this ISDA proposal should raise some questions about the global banking system.

“With the conclusion of the BTFP, are banks signaling a potential banking crisis on the horizon? Or perhaps, even more significantly, are they indicating concerns about an impending international financial crisis, given the central role that U.S. Treasuries play in the global financial markets?” 

Money Metals President Stefan Gleason said these are just “more games” to try to make banks look safer than they really are, “even though they have a lot of exposure to U.S. bonds.” 

“Especially after they’ve experienced big value declines and an erosion in bank equity, causing their measured leverage to increase.”

Gleason is right. When you dig beneath all of the technical, regulatory mumbo-jumbo, this is just another example of the powers that be moving the goalposts to keep the game tilted in their favor.

As we wrote in our preview, while big data hinted at a weaker than expected March jobs print, the relentless influx of immigrants would lead to a hotter than expected payrolls number.

Payrolls preview: big data hints at weaker number but relentless surge in immigration will likely push it hot https://t.co/D5cf9duMIM pic.twitter.com/o7KOiEaAyp

— zerohedge (@zerohedge) April 5, 2024

Sure enough, the illegals won again when moments ago the BLS reported that in March, the US added a whopping 303K jobs, tied for the highest since Jan 2023!

The number was not only hotter than last month’s (downward, of course) revised number of 270K (was 275K) but was above the highest Wall Street estimate of 290K (from Jobdig, Inc) and as shown below this was the latest multiple-sigma beat to expectations, this month coming in at 4x.

The March number, which will be revised substantially lower next month, follows two downward revisions, follows a 5,000 downward revision to the February number from +275,000 to +270,000, and a 27,000 upward revision to January from +229,000 to +256,000.

What is perhaps more notable is that after several months of declines in the Household survey, in March the number of people actually employed finally rebounded rising by 498K, to 161.466 million from 160.968 million. Still, as shown below, the data series has a lot of catching up to do.

Turning our attention to the unemployment rate, it unexpectedly dipped again, dropping to 3.8%, from 3.9%, in line with estimates, as the number of unemployed workers dipped modestly from 6.458 million to 6.429 million while the number of employed workers rose by almost half a million workers; the unemployment rate for Blacks (6.4 percent) increased in March to the highest level in almost two years, while the rates for Asians (2.5 percent) and Hispanics (4.5 percent) decreased. The jobless rates for adult men (3.3 percent), adult women (3.6 percent), teenagers (12.6 percent), and Whites (3.4 percent) showed little or no change over the month.

In contrast, the participation rate rose from 62.5% to 62.7%, above the 62.6% expected, as the overall civilian labor force increased slightly less than the number of employed people.

The silver lining to today’s jobs report is that despite the hot print, the average hourly earnings came in as expected, rising 0.3% MoM, up from last month’s upward revised 0.2% sequential increase (revised from 0.1%), On an annual basis, the hourly earnings rose 4.1%, as expected, and down from 4.3%. This was the lowest print in almost three years: the last time wages rose by this much was the summer of 2021.

Taking a closer look at wages, In March, average hourly earnings for all employees on private nonfarm payrolls increased by 12 cents, or 0.3 percent, to $34.69. Over the past 12 months, average hourly earnings have increased by 4.1 percent. In March, average hourly earnings of private-sector production and nonsupervisory employees edged up by 7 cents, or 0.2 percent, to $29.79.

One reason why average hourly earnings did not increase is that in March, the average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.4 hours. In manufacturing, the average workweek was unchanged at 40.0 hours, and overtime edged down by 0.1 hour to 2.9 hours in March. The average workweek for production and nonsupervisory employees on private nonfarm payrolls also edged up by 0.1 hour to 33.9 hours.

* * *

According to the BLS, the number of people not in the labor force who want a job came in little changed at 5.4 million.

“These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job.”

Also according to the report, the number of people employed part time for economic reasons, at 4.3 million. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs.

Finally, the BLS reports that among those not in the labor force who wanted a job, the number of people marginally attached to the labor force, at 1.6 million, was little changed in March. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was little changed at 337,000 in March.

* * *

Taking a closer look at the composition of jobs by industry we find the following:

• Health care added 72,000 jobs in March, above the average monthly gain of 60,000 over the prior 12 months. In March, job growth continued in ambulatory health care services (+28,000), hospitals (+27,000), and nursing and residential care facilities (+18,000).
• In March, employment in government increased by 71,000, higher than the average monthly gain of 54,000 over the prior 12 months. Over the month, employment increased in local government (+49,000) and federal government (+9,000).
• Construction added 39,000 jobs in March, about double the average monthly gain of 19,000 over the prior 12 months. Over the month, employment increased in nonresidential specialty trade contractors (+16,000).
• Employment in leisure and hospitality trended up in March (+49,000) and has returned to its  pre-pandemic February 2020 level. Over the prior 12 months, job growth in the industry had averaged 37,000 per month.
• Employment in the other services industry continued its upward trend in March (+16,000). The industry had added an average of 8,000 jobs per month over the prior 12 months. Employment  in other services remains below its February 2020 level by 40,000, or 0.7 percent.
• Employment in social assistance continued to trend up in March (+9,000), below the average monthly gain of 22,000 over the prior 12 months.
• In March, employment was little changed in retail trade (+18,000). A job gain in general merchandise retailers (+20,000) was partially offset by job losses in building material and garden equipment and supplies dealers (-10,000) and in automotive parts, accessories, and tire retailers (-3,000).
• Employment showed little or no change over the month in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services.

A visual breakdown shows that the bulk of jobs was in Education/Health and Government jobs, which accounted for more than half of all March jobs.

And a closer look at the best performing job category under Biden: government. In March, this added 71K, the second most since the start of 2023.

In sum: health care added 72,000 jobs; government roles increased by 71,000; other notable gains were construction, adding 39,000, and leisure and hospitality, adding 49,000.

Finally, for those wondering if the jobs were all part-time, the answer is a resounding yes: in March, full-time jobs dropped by 6,000 as Part-time jobs soared by 691,000.

What was Wall Street’s reaction? Here are some hot takes, starting with Bloomberg’s Enda Curran who writes that since it’s an election year, these numbers will be trumpeted by the White House as evidence of their stewardship. The downside however is that they lean against calls for a rate cut, “something of a double-edged political sword.”

Echoing this, Torsten Slok, Apollo’s resident in house permabear who will never relax until you have sold all your assets to, well, Apollo writes that the number confirms the Fed will not cut rates this year:

“The source of this strength is easy financial conditions. The stock market is up +$10trn over the past five months, which is a significant wealth gain for household balance sheets. Credit spreads are tighter for IG, HY, and loans. Big rebound in IG issuance and HY issuance in January, February, and March. IPO activity is coming back and M&A activity is coming back. These factors will all support consumer spending, capex spending, and hiring over the coming quarters… We are sticking to our view that the Fed will not cut interest rates this year.”

Here is Seema Shah, chief global strategist, Principal Asset Management:

“At first sight, the jobs report leans against three cuts. Yet the average hourly earnings figures are in line with expectations and, as Powell has made quite clear in recent speeches, a strong labor market is not a concern if price pressures are moderating… Next week’s CPI report is the one that is pivotal for rate expectations. But today’s report should reassure markets that, if the Fed does not cut in June, it’s because the economy is still strong and earnings should remain in an upswing.”

Priya Misra, portfolio manager at JP Morgan Investment Management, says:  

“If service inflation shows signs of picking up in the CPI and PCE reports later this month, Fed ‘patience’ might run thin. The market reaction makes sense to me – higher rates and weaker risk sentiment. I think risk assets are paying attention to rates now. Risk assets ignored the rates move until this week since Jan and Feb could be glossed over as noise. But if the economy is staying too hot, the market should question Fed cuts and the specter of Fed hikes comes back to the market.”

Ed Al-Hussainy, rates strategist at Columbia Threadneedle Investment, says:

“The key question is whether the combination of higher demand growth, momentum in employment, and the easing of financial conditions since last October start to show up in inflation. We’ll get another look at that in CPI/PPI data next week.”

Ali Jaffery, an economist at CIBC Capital Markets, sees immigration playing a role in today’s numbers:

“This has raised the sustainable level of job gains from 100K before the pandemic to about 180K. Today’s data is likely more evidence of that trend and supports the Fed’s view that the increase in labor supply is driving growth in the job market and the economy more broadly. Overall, the March employment report leans against an earlier cut by the Fed.”

Bryce Doty of Sit Investment Associates:

“Incredibly strong jobs data puts the bond market in panic mode over Fed cuts being delayed.”

But…

“I keep scratching my head wondering why so many people are deciding to get jobs now when millions of job openings have been available for at least a couple of years. It’s not as though the economy suddenly produced these jobs. So people joining the workforce now must need the jobs. As a result, I’m cautious about how strong the jobs data really is for the economy. We expect a quarter point cut in the third quarter and a half point cut in the fourth quarter.”

We close again with Bloomberg’s Enda Curran who writes that “at face value, these job numbers hardly lend themselves to a near-term rate cut.“

Bottom line: strong report, until you look under the surface. For now, however, it will serve the White House to pitch Bidenomics as some miraculous economic panacea, while the market will try to soothe itself that the number was good, but not hot enough to prevent Powell from cutting rates in June.

Authored by Mark Cudmore via Bloomberg,

This Friday is going to be a session for active short-term traders, and it will likely be unpleasant for investors.

Something broke in markets on Thursday. There are a few things that worry me about the latest bout of risk aversion. This is in context that I’ve been an unrelenting stocks bull since the December Fed meeting…

But now I’m uneasy…

The Thursday selloff confused people.

Initially, many blamed the comments from Fed’s Kashkari about there potentially being no US rate cuts this year.

However, a quick look at a few charts shows that (a) yields fell rather than climbed, so his hawkish lines did not impact, and (b) equities started selling off before his headlines.

It’s never a good sign when people struggle to identify why stocks have a relatively large swoon.

If an asset is weak without an obvious catalyst, it suggests that it can really get destroyed if a genuine risk materializes.

For good order, the weakness in E-minis coincided with the oil price rise that in turn followed the Netanyahu headlines.

We have key US data this morning at a time of vulnerability for the market in terms of the Fed narrative.

We’ve run a long way on the idea of the Fed being dovish despite a strong US economy.

We’re getting closer to the point where we must acknowledge that either the Fed won’t be easing soon, OR the economy is in more trouble than we thought.

It means that we’re in the unusual-in-recent-times setup where a big surprise in either direction could hurt stocks today.

(For clarity and consistency, I would only see this as a multi-week consolidation/retrenchment and not some long-term bearish turning point).

Middle East tensions have escalated substantially just before the weekend, further supporting the idea of taking some risk off the table.

And, let’s face it, the 5-month E-minis chart below just looks horribly negative. If you’ve ridden the rally until here, this chart is your siren call to take some profits.

And if you’ve been desperate to fight these bubblicious markets, you have now been given the green light.

I remain structurally bullish for the year ahead and yet if I was back in a trading seat, I’d probably want to be tactically underweight into the weekend.

It’s that kind of contradiction that will make this Friday an unpleasant markets session for all but the most nimble of traders.

Good luck.

Authored by Simon White, Bloomberg macro strategist,

The widening gap between household employment and payrolls is causing concern the weaker message from the household survey is the more accurate. However, the reality probably lies somewhere in between, and the jobs market is not yet weak enough to justify significantly lower yields.

Jobs day has come round again and focus will be on the mounting difference between the number of jobs recorded by the household survey and the establishment survey, i.e. payrolls. The household data is looking increasingly weak, prompting speculation we are on the precipice of a jobs market that’s about to crack.

But there are reasons to think the household survey may be stronger than the data currently suggest, and also that payrolls may be weaker. Overall, that would mean the “true” state of the jobs market is somewhere in between the two surveys, i.e. this is a slowing jobs market, but not one that is going to trigger an imminent recession, nor corner the Federal Reserve into making near-term rate cuts.

1) The household survey may not be properly accounting for increased immigration. A recent Brookings paper posits that the survey may be using too a low an estimate for the civilian population. That would bias employment growth lower, and unemployment rates (both national and state) too high if the estimate of the size the workforce is too low.

2) The BLS adjusts the household data to take account of the differences between the two surveys (orange line in the chart above). This series is also showing weakness, leading to speculation that even payrolls data is inherently soft. But the very jobs taken out of the payrolls survey to make the adjustment (agriculture, the unincorporated self-employed, unpaid family workers in family-owned businesses) are among those that are predisposed to having a bias towards immigrants.

3) On the other hand, payrolls – as it tracks jobs rather than employees as with the household survey – is doing more double counting. The number of multiple job holders is at a 30-year high. Payrolls could thus fall more quickly than household employment when the labor-market decisively turns.

4) The birth-death adjustment for payrolls, to account for new and closed businesses, is making an unusually large contribution to the data, adding 2.8 million jobs since March 2022. That has happened at the same time as survey response rates have dropped notably since the pandemic. It’s conceivable the adjustment is flattering payrolls, and it will eventually be revised away.

Today’s data will shed some light (and probably some heat too), but we would need to see a decisive weakening in both surveys to justify a significant turn lower in yields.

China’s BYD made waves for outselling Tesla in Q4 2023, prompting many to believe that the once dominant EV king would fall further behind in 2024.

However, as Visual Capitalist’s Marcus Lu details below, figures for Q1 2024 are now out, and they reveal a dramatic 43% decline in BYD sales from the previous quarter. Meanwhile, Tesla reported a slightly less painful 20% drop in sales.

To see how this battle is playing out, we visualized the global BEV sales of both companies over the past several years.

Exact figures can be found in the table below.

The steep drops reported in Q1 2024 are the latest sign that consumer appetite for fully electric vehicles has slowed, prompting both companies to escalate their ongoing price war. In February 2024, BYD responded to Tesla’s repeated price cuts with its own round of discounts.

BYD Offers a Significantly Lower Entry Point

As shown in the above graphic, starting prices for some of BYD’s electric cars are incredibly low.

In China, the BYD Seagull now starts at 69,800 yuan ($9,700), while the Yuan Plus (BYD’s Model Y competitor) starts at 119,800 yuan ($16,000). On the other hand, Tesla’s cheapest model (RWD Model 3) costs 245,900 yuan ($34,000). It’s interesting to note that the cheapest Model 3 in the U.S. costs $38,990, according to reporting from CNN.

Learn More About Tesla

If you like seeing data visualizations on the world’s largest EV maker, check out this graphic that breaks down Tesla’s sales by model since 2016.

Via The Cradle

The Danish government fired Chief of Defense Flemming Lentfer on Wednesday after it was revealed that the top military official failed to report flaws in the HDMS Iver Huitfeldt frigate’s air defense and weapons systems that emerged during an attack last month by the Yemeni armed forces in the Red Sea.

“I have lost trust in the chief of defense,” Troels Lund Poulsen, Denmark’s Deputy Prime Minister and Minister of Defense, told reporters on Wednesday night. Poulsen reportedly learned about the failure from the Danish military outlet Olfi.

“We are facing a historic and necessary strengthening of Denmark’s defense forces. This places great demands on our organization and on the military advice at a political level,” the Danish official added.

On March 9, the Iver Huitfeldt’s air defense systems failed for 30 minutes while engaging Yemeni attacks launched by Houthis in support of Gaza, according to a leaked document written by the ship’s commanding officer and reviewed by Olfi. The document also reported issues with the ship’s ammunition system, which caused half of its rounds to detonate before they hit their target.

“Our clear understanding is that the issue has been known for years without the necessary sense of urgency to resolve the problem,” the frigate’s commanding officer reported.

The Iver Huitfeldt eventually fended off the attack, shooting down four drones over the Red Sea in what – at the time – was presented as a success story.

Lentfer’s firing is the latest in a string of recent public embarrassments from NATO member states, particularly in the Red Sea, where a months-long campaign of US and UK airstrikes inside Yemen has failed to deter attacks against Israeli-linked vessels.

“We favor a diplomatic solution; we know that there is no military solution,” US Special Envoy for Yemen Timothy Lenderking said on Wednesday from Oman, candidly acknowledging the failure of what US military commanders called Washington’s largest naval battle since WWII.

Other recent mishaps for NATO include Germany’s use of obsolete communications systems and unsecured lines to discuss providing Ukraine with cruise missiles and Britain’s failure twice in a row to test its nuclear missiles after having two of its flagship aircraft carriers break down ahead of drills in Norway.

By Tsvetana Paraskova of OilPrice.com

Due to the sanctions, Russia cannot access spare parts from Western engineering companies that have provided refinery equipment in the past, leaving Russian refiners struggling to repair damaged units, multiple industry sources in Russia have told Reuters.

Western firms including America’s UOP and Swiss ABB have supplied parts and equipment to major Russian refineries in the past. After the invasion of Ukraine, they no longer fulfill new orders from Russia, leaving local engineers scrambling to find spare parts and equipment.  

One example of such difficulty is Lukoil’s Norsi refinery in Nizhny Novgorod on the Volga River. A turbine malfunctioned there in early January and Russian engineers have struggled to have the equipment replaced since then, according to Reuters sources.  

This has left the refinery with a reduced capacity to produce gasoline.

The malfunction at the refinery compounded last month after a fire broke out at the facility following a drone attack.

Since all major Russian refineries use at least some part of Western technology, they could struggle to repair equipment and units that broke down or have been damaged by Ukrainian drone attacks, which have intensified in recent weeks and have taken an estimated 14% of Russia’s refining capacity offline.

Russia claims it can repair all damaged units within two months.

On Wednesday, Russia’s Energy Minister Nikolai Shulginov said that all damaged refineries in the country would be restarted by the beginning of June.

“Repairs are underway at the refineries. We plan to re-launch a number of refineries after repairs in April-May, possibly before the beginning of June,” Russian news agency Interfax quoted Shulginov as saying.

“All facilities that were damaged will be re-commissioned,” the minister added. 

Authored by Thomas Brooke via ReMix News,

Botswana has offered to send 20,000 elephants to Berlin, telling Germany’s left-wing government it should try living with the mammals before pushing trophy hunting bans on African countries.

Calls by Germany’s Federal Environment Minister Steffi Lemke for bans on trophy hunting have been met with stiff opposition in Botswana’s capital of Gaborone, with political leaders insisting that hunting, when done sustainably, helps to protect crops and villages from being destroyed and boosts tourism to developing countries.

Speaking to the Bild newspaper, Botswanan President Mokgweetsi Masisi said his country was suffering from an elephant plague after recent conservation efforts, and the Botswanan people are dependent on some of the animals being culled through controlled and “sustainable” hunting.

“We are paying the price for preserving these animals for the world,” Masisi told the German tabloid, explaining it was very easy for left-wing politicians like Lemke of the Green party “to sit in Berlin and have an opinion about our affairs in Botswana.”

He explained that his government had already offloaded 8,000 of the animals to nearby Angola due to their exploding population, and threatened to send 20,000 elephants to Berlin so German politicians can “live together with the animals in the way you are trying to tell us to.”

“We would like to make such an offer to the Federal Republic of Germany. We don’t take no for an answer. 20,000 wild elephants for Germany. This is not a joke,” Masisi warned.

There are now over 130,000 wild elephants living across Botswana, and the government has reserved 40 percent of the country’s landscape for protected wildlife — a move that comes at a considerable economic price.

This type of deportation of these wild animals has happened before. For example, the Namibian government transported around 150 wild elephants to Cuba by plane in 2013 and flew 22 to the United Arab Emirates in 2022.

Maxi Louis of the Nature Reserve and Conservancy Association (NACSO) in Namibia told Bild: “We have not yet transported 20,000 elephants, but we are very confident that a country like Germany in particular can carry out this elephant transport successfully.”

“The best place to hand over the elephants to Ms. Lemke is on open farmland outside of Berlin, where there are grain crops. The elephants will then have something to eat,” she added in jest.

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