73.8 F
Chicago
Saturday, August 15, 2026
Home Blog Page 3703

Elon Musk Asks Of Jordan Neely Protesters: “Why Didn’t They Protest The Children Murdered At The Christian School?”

Elon Musk Asks Of Jordan Neely Protesters: “Why Didn’t They Protest The Children Murdered At The Christian School?”

Authored by Steve Watson via Summit News,

Twitter owner Elon Musk reacted Sunday to protesters disrupting the New York City Subway to protest the death of Jordan Neely, a man with long history of threatening and physically attacking people on the subway who was accidentally killed during an attempt by a former US Marine to subdue him during a confrontation.

The protesters caused mayhem Saturday night, jumping on the tracks and attempting to block trains, as well as blocking people from entering and exiting stations.

Musk labeled the protesters as “disingenuous,” adding “Why didn’t they protest when the children were murdered at the Christian school?” referring to the shooting in Nashville by a trans identifying person in March.

The clear insinuation by Musk is that there was less of a uproar about the Nashville shooting among these kind of protesters when it emerged exactly who was behind the shooting.

The incident quickly fell out of the news cycle when it failed to fit the established narrative.

Greenwald: Nashville Shooting Has Been Erased From Memory Due To Inconvenient Narrative

*  *  *

Brand new merch now available! Get it at https://www.pjwshop.com/

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support our sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.

Also, we urgently need your financial support here.

Tyler Durden
Mon, 05/08/2023 – 13:48

NY Fed Finds Inflation Expectations Mixed, As Spending Growth Outlook Tumbles To Two Year Low

NY Fed Finds Inflation Expectations Mixed, As Spending Growth Outlook Tumbles To Two Year Low

While we wait for today’s 2pm SLOOS release, where the latest C&I credit standards are expected to measure at a level tighter than the dot-com crisis (if still less extreme than during the financial crisis or the height of the pandemic… at least until a few more banks collapse), earlier today the NY Fed published the results of its April Survey of Consumer Expectations, which found that while inflation expectations at the one-year horizon decreased to 4.45% in April from the previous month’s 4.75%, longer-dated inflation expectations – at both the three- and five-year horizons –  rose to 2.89% (from 2.78%) and 2.62% (from 2.54%), respectively.

And while these are largely C-grade data points at best since they gyrate wildly month to month, here are the rest of the survey’s findings:

  • Median home price growth expectations rose to 2.52% from 1.84%, highest reading since July of last year; increase more pronounced among respondents in the Midwest and Northeast Census regions, report notes.

  • Median household spending growth expectations fell to 5.22% from 5.72%, lowest since Sept. 2021.

  • That may explain why respondents’ expectations for applying for a new credit is near the highest in the past decade, at 12.0%

  • And yet, one look at the next chart shows that credit demand is already the lowest since Oct 2020, as the number of respondents who “applied and were” approved for credit dropped to just 33.8%, the lowest since 2020.

  • Over the next year consumers expect gasoline prices to rise 5.09%; food prices to rise 5.77%; medical costs to rise 9.29%; the price of a college education to rise 7.79%; rent prices to rise 9.17%.

  • A smaller percentage of consumers, 10.60% vs 10.87% in prior month, expect to not be able to make minimum debt payment over the next three months

  • Finally, while the NY Fed surveys are traditionally wrong about most things, one place they are right this time is in their expectations for higher stock prices: with just 35.8% forecasting higher stock prices, or just off the lowest level in the past decade, few will be disappointed by what is coming.

Tyler Durden
Mon, 05/08/2023 – 13:25

BBC: Climate Change Too Important To Be Left To Personal Choice

BBC: Climate Change Too Important To Be Left To Personal Choice

Authored by Mark Jeftovic via BombThrower.com,

Everyone will have to ratchet down their standard of living by over 75%

A recent piece in BBC’s “Future World” series on its surface celebrates someone who choose to live an “ultra low carbon lifestyle”. They made a conscious and individual decision to bring their own personal carbon footprint down below 2 metric tonnes per year.

Throughout the developed world, per capita carbon output ranges from 4.46 (France) to Canada being the highest at 15.43.

Via GlobalEconomy.com

The article talks about the personal challenges around living an ultra-low carbon lifestyle. According to the piece, 2 tonnes/year is also about half the output of a single gas powered car in the US, so the first step for any Americans (or Canadians) wanting to do this, they would have to start by ditching their cars.

Other behaviours which move the needle would be: eating a plant based diet, buying green energy and forgoing one transatlantic round-trip per year.

In terms of what level of personal CO2 emissions gets the job done “for the climate”, estimates vary. While the 2 tonne number was somewhat arbitrary, there are other climate focused think tanks that feel the number has to be 1.4 tonnes of C02 per person by 2040 and 0.7 by 2050.

The Fallacy of per-capita output

Going back to Canada’s “excessive” carbon footprint – if we look at a metric that really means anything – total CO2 output – Canada is basically a rounding error to the world’s largest emitter, China.

At an average annual temperature at -4 to -5c celsius, Canada is also the coldest G7 nation. So perhaps we can forgive the Canucks for not wanting to freeze to death – even if it means emitting Co2 for heat. Also worth noting that far more humans are killed each year from being cold (17.7 million per year, on average) than from being too warm (2.2 million per year), roughly 8X.

Here’s the thing: everybody has to comply

While the overall timbre of the piece lauds the story’s protagonist (a communications officer at a climate non-profit) over her decision to make this lifestyle choice, sprinkled throughout are casual, back-handed references at where all this is going:

The ultra-low carbon lifestyle isn’t just for the eco-minded, it has to be for everybody. Or it isn’t going to work (“work” being defined as controlling the planet’s climate decades out).

“what do truly low-carbon lifestyles look like – and can they really be achieved by personal choice alone? the article laments.

Well if the answer is “no” then that means the ultra-low CO2 lifestyle has to be  for everybody. How we do that is a matter of “both individual and systems change”. By systems change is meant that

“with the right policies, infrastructure and technology in place to enable changes to our lifestyles and behaviour, we can reduce overall greenhouse gas emissions substantially by 2050…

In richer countries, this means moving towards a far lower carbon lifestyle for most people. But the changes to get there aren’t necessarily painful or even negative. For example, research has shown that good public services enable higher wellbeing at lower energy use.”

If you read between the lines we see the implications of this. It basically means that an ultra-low carbon lifestyle has to be brought about through systemic change, government policy and massively expanded public services – or said differently, increasing dependence on The State.

Private infrastructure – like cars – will have to become a thing of the past:

One major change would be to change how we move around. Akenji envisions a combination of public transport alongside micro-mobility systems (such as electric scooters and drones) which make it efficient and effective for people to reach it. Private cars, with their huge emissions and often empty seats, would largely be a thing of the past, he says, and car parks converted to green public spaces where people go to play, relax or do exercise.

The Climate Cult-ist ‘s Dilemma

We live in a world where many people believe many different things, but nowhere else do we find the kind of mandatory buy-in required as with the so-called climate crisis. Fortunately we’re hearing from an increasing number of scientists that there is no crisis, and whose voices are getting louder even in the face of corporate media “fact checking” and other headwinds of narrative control.

Climate crisis or not, I personally think decarbonization will happen anyway if for no other reason than that fossil fuel supplies are finite. With rational energy policies, including nuclear, natural gas and hybrid EVs (as opposed to full EV), we could significantly ratchet down CO2 emissions while still providing increased energy inputs to a world hungry for higher living standards.

Doomberg frequently quips that one’s standard of living can be measured by how much energy one can afford to waste. Somewhat glib perhaps, but he uses it to hammer home the point that energy is life (also his phrase, see this Tweet thread that goes deeper on why).

The reality is there is no viable path forward that makes reduced energy usage  and standard of living reductions a requirement, let alone mandatory. 

Doing so means telling the middle class to own nothing and eat bugs, while the elites parade through the city in lengthy motorcades on their way to the airport to wing it to Davos in their private jets. It means telling third-world nations to remain mired in poverty. And it means forcing the Chinese to stop building all those coal-fired plants and to keep the 600 million subjects there who are still living in extreme poverty, poor.

Via Forbes

Good luck with that.

The simple reality is that any desired policy or collective goal that requires 100% compliance from a population (let alone the entire world) will simply not occur. Even if 100% of the world’s population believed in anthropogenic global warming, you still wouldn’t achieve consensus on the forecasts, the models or how to implement a response.

For people who believe the climate emergency narrative (and make no mistake, it is a belief, like any other), the reality of this induces a type of eco-anxiety. Climate researchers and activists are sensitive to this dilemma and have created a word for it, “solastalgia”,

“the condition of feeling lonely, insecure and powerless because of the intense changes in one’s immediate environment, which can be caused by the acute impacts (e.g., floods and wildfires) of climate change, the chronic degradation of places caused by climate change (e.g., sea level rise) (Galway, Beery, Jones-Casey, & Tasala, 2019) or by human activity (e.g. mining, deforestation) (Albrecht et al., 2007Galway et al., 2019). Solastalgia is not nostalgia, because it is not a longing for a place from which one has moved, rather it is suffering from change and lack of control over it (Albrecht et al., 2007).”

If that weren’t bad enough, they also face cognitive dissonance over their own carbon footprints – not all, even many, of those involved in the fight for climate change are living ultra-low carbon lifestyles themselves, and that causes them eco-guilt. In this widely cited paper on the topic, 17 respondents were interviewed about their coping mechanisms around ‘the emerging “psychoterratic” syndromes such as eco-anxiety, eco-guilt, and eco-grief”, they were:

They reported feelings of helplessness, meaninglessness, that we’re all going to die, guilt over travel, guilt over their own carbon footprints, conflict with family over eco-awareness, the list goes on, but widely summed up as

Prophetic individual responsibility and Self-criticism, self- examination, self-blame… Prophetic individual responsibility included the participants’ sudden recognition of humanity’s or their own environmental impact, which was often described as an overwhelming burden. We called it prophetic because the participants reported that they had realized they knew more about the topic than other people, which made them feel responsible for enlightening others or evoked a desire to make others aware of the damage or impending disaster because otherwise there would be no change.

At their core, the anxieties faced by these people are indicative of the human condition itself: we all have unique insights into the world – and if we’re introspective and genuinely curious – we become attuned to system problems that we feel need addressing. All Bitcoiners understand the “Fix the Money / Fix the World” maxim. But the approach to orange-pilling people is markedly different from eco-sermonizing.

But beneath even that, we all face impermanence, uncertainty and even mortality. Part of our psychological process of individuation is to find meaning and purpose within it all. It’s called life. Only for most of us, while seeing that our emotional support structures incorporate  community, family and purpose, we realize that at our core we are, in our earthly incarnations – here alone, as individual souls. We must face the world as it is, and we each have a personal responsibility to grow into it under our own devices.

It is  mainly the eco-anxious, the collectivists and Marxists who believe it critical, even necessary that the entire world must conform to the same worldview “in order to save humanity”. It’s textbook messiah complex and narcissism (see Deconstructing Wokethink)

Weaponizing “eco-guilt” (a.k.a “Rigging the game”)

This eco-anxiety is so acute that many think it noble and just that the structure of society itself must be altered to fit the worldview. There are academic papers on using eco-guilt to motivate eco-friendly behaviours  (“eco-shaming”). In The Bitcoin Capitalist we’ve covered the UK’s “Nudge Units” which use social media influence operations to condition behaviors.

There is even one from Ross Mittiga, a professor of Political Theory at the Catholic University of Chile, and a democratic socialist (of course) who argues for the political legitimacy of authoritarianism to the point where political candidates must “pass a climate litmus test” before being permitted to run for office, and even overturning previous democratically driven policies if they are deemed harmful to the climate:

“Governments might also justifiably limit certain democratic institutions and processes to the extent these bear on the promulgation or implementation of environmental policy. This could involve imposing a climate litmus-test on those who seek public office, disqualifying anyone who has significant (relational or financial) ties to climate-harming industries or a history of climate denialism. More strongly, governments may establish institutions capable of overturning previous democratic decisions (expressed, for example, in popu- lar referenda or plebiscites) against the implementation of carbon taxes or other necessary climate policies.”

In the future it’ll be a lot more expensive to be free

This drumbeat for climate collectivism is going to get worse before it gets better. While it’s encouraging to see more reality being injected into the conversation – and eco-messiahs increasingly discrediting themselves through their lifestyles of conspicuous consumption – large swaths of the population are buying this story hook-line-and-sinker, and as Late Stage Globalism enters into its endgame, we expect policy makers to become more desperate and draconian.

CBDC’s will probably come out of the gate as personal carbon quota systems and mass adoption will be driven through UBI delivered on the rails of social credit systems and digital ID.

COVID was supposed to be a godsend for those seeking to create precedent for unlimited stimulus, quasi-UBI and prototypical social credit mechanisms through vaccine passports et al. Fortunately it was all too much, too soon and it appears as though the opposite may be happening.

Where another twenty years of operant conditioning and creeping totalitarianism may have provided the perfect setup for an enduring, technocratic authoritarianism, the widespread policy failures created a larger swath of population who is now wary and suspicious of the next “existential crisis”.

The 37 Trillion in new M2 money blowing out the currency system, the central banks forcing themselves into a corner on interest rates vs inflation, the new pandemic of “sudden and unexpected” excess mortality, and now various  Covid rockstars trying to distance themselves from their role in it all, it certainly looks as though the globalist elite of hyper-Liberalism have overplayed their hand.

That won’t preclude them from trying, however, and there are still many who think #CovidsNotOver, want to #BringBackMasks who will be all too eager to have their lives mediated and gamified via their smartphones and dramatically ratchet down their lifestyles in order to “save the climate”.

Let them.

But you don’t have to go along with it, but it will become more expensive to be free. Wealth taxes, windfall taxes, heavily regulated chokepoints between the rapidly deteriorating “fiat world” and the coming “anti-fiat” economy will require being a net producer, owning hard assets across multiple jurisdictions and networks, and garnering multiple income streams. The middle class is being demolished, and with calls to reduce living standards by over 75% (cutting personal emissions from an average if 8 tonnes per capita to 1.5 and then 0.7), it looks intentional.

“In the future, there will be only one occupation: managing one’s wealth. And most people are going to be unemployed”.

As I wrote in a recent issue of the premium letter:

The CBDCs will roll out, and intended or not, become full-fledged China-style social credit systems, from which “the smart money” flees into Bitcoin and other hard assets to preserve its wealth.

This leads to “The Great Bifurcation” scenario I’ve written about at length.

It’s where Neo-serfs who rely on The State for their economic survival live lives of quiet desperation and servitude, their carbon footprints metered, their behaviours monitored, nudged and shaped; their destinies largely out of their own hands. Life is something that just happens to them, punctuated by episodes of “gaming the algo” to score additional privileges or avoid punishment.

Marbled throughout this world would be enclaves, and networks of sovereign individuals and micro-states for whom life is a futuristic extrapolation of hyper-capitalism and mobility. This is the Sovereign Individual thesis meeting The Network State, writ large.

Become a sovereign individual in whatever manner suits you: own gold, stack sats, have a Plan B, work for yourself, not somebody else and for God’s sake, turn off the TV and stop subjecting yourself to the corporate media. Connect with like minded individuals and form both virtual and real communities and networks.

The defining tension of Late Stage Globalism will not be between “left” and “right” but between sovereign individuals and collectivists, decentralization vs centralization.

Join the Bombthrower mailing list and get a free copy of our investment thesis, or try The Bitcoin Capitalist: The monthly journal for today’s Sovereign Individual. Follow me on Nostr or Twitter.

Tyler Durden
Mon, 05/08/2023 – 13:05

SEC Pays Out Monster $279 Million Whistleblower Award

SEC Pays Out Monster $279 Million Whistleblower Award

We guess you can forget the old adage from your childhood that “no one likes a tattle-tale”. Because when you tattle to the tune of $279 million, you can buy as many new friends as you’d like.

This might be the case for the whistleblower who was bestowed a massive $279 million award from the SEC as a result of helping out with an investigation that led to “three different settlements or fines”, according to Bloomberg

Gurbir Grewal, the SEC’s enforcement chief, said this week: “The size of today’s award – the highest in our program’s history – not only incentivizes whistleblowers to come forward with accurate information about potential securities law violations, but also reflects the tremendous success of our whistleblower program.”

The award is more than twice the previous record of $114 million, which was awarded back in October 2020. 

The SEC said that information provided to the agency expanded “the scope of misconduct charged” in an investigation that was already ongoing. In keeping with policy, neither the names of the company nor the whistleblower were disclosed. 

Whistleblowers usually get between 10% and 30% of an amount collected in penalties by the agency, the report says. In sum, the SEC has paid out over $1 billion in awards since the program was started as part of the 2010 Dodd-Frank Act. 

Tyler Durden
Mon, 05/08/2023 – 12:45

Regional Banks Rebound, But…

Regional Banks Rebound, But…

Update: It appears some have read the actual Fed data after all as regional banks are now red…

Even PACW is fading fast now (from +33% to +2%)…

Having rallied early after suspending their dividend in a statement released at 10pm on Friday night.

*  *  *

Regional bank stocks were soaring in early trading this morning prompting several talking heads to proclaim the end of the banking crisis and restating ‘there is nothing to fear but fear (and short-sellers) alone’.

There’s just one thing about the rebound.

According to Friday’s Fed data, deposit outflows continue (non-seasonally-adjusted), especially for small banks…

Source: Bloomberg

BUT Small Bank lending also soared… especially in CRE loans

Source: Bloomberg

Which (theoretically) pushed implied US commercial bank residual “equity” (assets minus liabilities) to record highs

Source: Bloomberg

AND the drop in liabilities and rise in assets pushed ‘Small banks’ away from the red line of reserve constraints (on a seasonally-adjusted basis)

Source: Bloomberg

Which may help explain the squeeze higher in some regional bank names…

The question is – do you buy it?

Do you believe in the miracle of Fed ‘seasonals’?

If you do, then the banking crisis is over and buying may make sense.

If you don’t and this magical difference between SA and NSA is not an artifact of taxes (well past due now) or historical patterns (which it wasn’t in January), then fade these bounces in regional banks as this is far from over.

Finally, we know some stress in the banking sector remains as there are still banks who are paying above the top of Fed’s range for fed funds, i.e. 5.25%, to borrow reserves.

As Bloomberg’s Simon White notes, discount window (DW) usage has fallen, but this has simply been transferred to the new BTFP facility, which has better terms than the DW.

It is thus evident some smaller lenders continue to face fundamental problems.

And one more thing…

Tyler Durden
Mon, 05/08/2023 – 12:40

Turkey Angrily Rejects US Request To Give Ukraine S-400 Air Defense System

Turkey Angrily Rejects US Request To Give Ukraine S-400 Air Defense System

Turkey over the weekend announced that it has rejected a US request for Ankara to provide Ukraine with Russian-made S-400 missile defense systems, which it controversially acquired from Moscow in 2017, and which resulted in strained relations with the United States.

Foreign Minister Mevlut Cavusoglu revealed the request, and said it would be a violation of Turkey’s sovereignty, and strongly suggested the request was insulting in the first place. “They made proposals that directly affect our sovereignty, for example, give us control over it, give it to another place. Where is our independence and sovereignty?” Cavusoglu said.

Turkish Defense Ministry/AFP

“The U.S. has made various offers regarding the delivery of the Russian S-400s missile defense systems in Türkiye to third parties, Çavuşoğlu also said,” according to Turkish media sources. 

He stressed that Turkey’s answer is a firm ‘no’:

The minister said one of the proposals made to Türkiye was to send the S-400s to Ukraine. “They told us ‘Will you send to Ukraine?’ We said ‘no,’” he stated.

Not only was Turkey hit with limited US sanctions in 2020 as a result of getting the S-400 systems, but the Pentagon also kicked Turkish pilots out of the F-35 training program, and halted delivery of the advanced Lockheed-made fighters.

Addressing this, Cavusoglu emphasized his government is demanding the money back which was spent on training. 

“We are not saying ‘Let’s go back to the F-35 [program] right now.’ We are saying ‘Give us our money back.’ Because we produce our own national combat aircraft,” he said.

US-Turkey relations also took a downturn over a period of years due to the Kurdish situation along the northern Syrian border. US special forces have long been embedded with the Syrian YPG and “Syrian Democratic Forces” – but which Turkey views as terrorist organizations with PKK roots.

Tyler Durden
Mon, 05/08/2023 – 09:50

European Banks May Be Riskier Than US’… And More Regulation Won’t Solve It

European Banks May Be Riskier Than US’… And More Regulation Won’t Solve It

Authored by Daniel Lacalle,

Deposits at U.S. commercial banks have fallen to lowest figure in nearly two years, according to the Federal Reserve. This figure has fallen by $500 billion since the Silicon Valley Bank collapse. However, total banking credit has risen to a new record high of $17 trillion, according to the U.S. central bank. Fewer deposits, but more credit. What could go wrong?

The inevitable credit crunch is only postponed by a consensus view that the Fed will inject all the liquidity required and that rate cuts will come soon. It is an extremely dangerous bet. Bankers are deciding to take more risk expecting the Fed to return to a loose monetary policy soon and expecting higher net income margins due to rising rates despite the elevated risk of increasing non-performing loans.

The fact that the banking crisis has been mitigated does not mean that it is over. The banking system collapses are symptoms of a much larger problem: Years of negative real rates and expansionary monetary policy that have created numerous bubbles. The risk in the banks’ balance sheet is not just on diminishing deposits on the liability side, but a declining valuation of the profitable and investment part of the assets. Banks are so leveraged to the cycle and the expansion of monetary policy that they simply cannot offset the risk of a 20% loss on the asset side, a significant rise in non-performing loans or the write-off of the riskiest investments. The level of debt is so high that few banks can raise equity when things get worse.

Deposit flight is not happening because citizens are stupid. The largest depositors are businesses, small companies, etc. They simply cannot afford to lose their cash if a bank goes to liquidation. Once the Fed introduced the discretionary decision on which banks’ deposits are made whole and which are not, fear took over again.

Investors and businesses in America understand this.

However, in the U.S. eighty percent of the real economy is financed outside of the banking channel. Most of the financing comes from bonds, institutional leveraged loans, and private-direct middle market loans. In Europe, 80% of the real economy is financed with bank loans, according to the IMF.

You may remember in 2008 when European analysts repeated that the subprime crisis was a specific event that only affected the U.S. banks, and that the European financial system was stronger, more capitalized, and better regulated. Well, eight years later, the European banks were still recovering from the European crisis.

Why are European banks equally at risk, or more?

European banks have strengthened their balance sheet with a very risky and volatile instrument, contingent convertible hybrid bonds. These look incredibly attractive due to the high yield they have, but they can create a negative domino effect on the equity of the firm when things turn sour. Furthermore, European banks’ core capital is stronger than in 2009, but it can deteriorate rapidly in a declining market.

European banks lend massively to governments, public companies, and large conglomerates. The contagion effect of a rising concern about sovereign risk is immediate. Additionally, many of these large conglomerates are zombie firms that cannot cover their interest expenses with operating profit. In periods of monetary excess, these loans seem extremely attractive and negligible risk, but any decline in confidence in sovereigns can rapidly deteriorate the asset side of the financial system rapidly.

According to the ECB, euro area banks’ exposures to domestic sovereign debt securities have risen significantly since 2020 in nominal amount. The share of total assets invested in domestic sovereign debt securities has increased to 11.9% for Italian banks and 7.2% for Spanish banks, and close to 2% for French and German banks. However, this is only part of the picture. There is also a high exposure to state-owned or government-backed companies. One of the main reasons for this is that the Capital Requirements Directive (CRD), permits a 0% risk weight to be assigned to government bonds.

What does this mean? That the biggest risk for European banks is not deposit flight or investment in tech companies. It is the direct and uncovered connection to sovereign risk. This may seem irrelevant, but it changes fast and when it does it takes years to recover, as we saw in the 2011 crisis.

Another distinct feature of European banks is how fast the ratio of non-performing loans may deteriorate. When the economy weakens or stagnates, loans to small and medium enterprises and families become riskier and the lack of a diversified and alternative lending system like the U.S. has means that the credit crunch hurts the real economy in a deeper way. We can all remember how non-performing loans went quickly from a manageable 3% of total assets to up to 13% in some firms in two years between 2008 and 2011.

European banks’ assets are more exposed to sovereign risk and the worsening of solvency in small businesses, but also significantly exposed to large zombie industrial firms.

The latest lending survey of the ECB shows that credit standards are tightening across the board for enterprises, households, and real estate lending. When the real economy is 80% financed through bank loans and banks are heavily exposed to sovereign risk, the domino effect of a weaker economic environment on the financial system comes from all sides, the allegedly low-risk government link, and the higher risk small and medium sized businesses.

So far, analysts are saying -again- that the banking crisis has nothing to do with Europe because regulation is stronger, and capitalization is more robust.

The same things consensus repeated in 2008.

Depositors have withdrawn €214bn from eurozone banks over the past five months, with outflows hitting a record level in February, according to the FT and the ECB. It is not true that deposit flight is not an issue in Europe.

The biggest mistake European authorities and investors can make is to thing -again- that this time is different, and the banking crisis will not hit the euro area system. It is important to strengthen the core capital base, buy-back the convertible bonds that may wipe out the equity and put in place strong procedures to avoid a sovereign-to-real economy negative effect.

The combination of ignorance and arrogance led Europeans to believe they were immune to the 2008 crisis because they believed in the miraculous power of their bureaucratic and bloated regulation. No amount of regulation helps when the rules are all designed to allow rising exposure to almost-insolvent governments under the excuse that it requires zero capital and has no risk. Sovereign risk is the worst risk of all. European banks should not fall into the trap of thinking that tons of rules will eliminate the risk of a financial system crisis.

Tyler Durden
Mon, 05/08/2023 – 09:30

Trump, DeSantis Beat Biden In ABC/WaPo Poll As Joe’s Approval Hits Record Low

Trump, DeSantis Beat Biden In ABC/WaPo Poll As Joe’s Approval Hits Record Low

A new ABC News/Washington Post poll has thrown a big splash of cold water on President Biden’s nascent re-election bid — showing him losing in match-ups with either Donald Trump or Florida Governor Ron DeSantis.  

In two 2024 matchups, here’s how things stack up among Americans who say they would “definitely” or “probably” vote for a given candidate:

  • Trump 44% Biden 38%. Undecideds lean Trump 49-42. 

  • DeSantis 42%, Biden 37%. Undecideds lean DeSantis 48-41

That’s not all: Biden’s approval rating took a 6-point dive from its February level to reach an all-time low of just 36%. Against data going all the way back to Truman, that’s the worst score for any first-term president at this point in his term. Three predecessors who were in same ballpark — Ford (40%), Carter (37%) and Trump (39%) — failed to win second terms. 

Biden and DeSantis both top Biden — but given a choice of 6 best-known GOP prospects, Trump trounces DeSantis among GOP voters 51% to 25% (Getty Images via WESH)

The Biden administration’s over-the-top emphasis on race in all manner of political nominations and appointments hasn’t done a thing to improve his standing with blacks. In the most jarring of the new poll’s results, Biden’s approval rating among blacks has fallen a staggering 30% from his inauguration — plummeting from 82% to 52%.

Heading into 2024, watch for Biden to dangle an empty commitment to reparations over the heads of black voters, just as he hit younger Americans with a loan-forgiveness head-fake ahead of the 2022 midterms.  

A hefty 56% disapprove of what Biden’s done in office, and his perceived handling of the economy is a big reason why. In a 54%-to-36% rout, Trump is perceived as having done a better job with the economy. The economy ball-and-chain will only grow heavier for Biden as we move farther into the dark seas ahead.  

Biden’s age is clearly undermining public confidence. A full 68% of Americans think 80-year-old Biden is too old for a second term. He’s 80 today and would be 86 at the end of another term, assuming he lived to see it.  While Trump is only four years younger, only 44% of American’s think he’s too old.  

Biden was recently stumped when a child asked where he’d last traveled abroad — forgetting he’d been in Ireland just 13 days before (Win McNamee/Getty Images via Fox News)

It isn’t just age that worries Americans — it’s also Biden’s observed condition. Only 32% think he has the mental acuity to be an effective president. Trump’s score on having requisite sharpness has actually risen — to 54% today from 46% in 2020. On physical fitness, only 33% give Biden a thumbs-up. Trump almost doubles him up, with 64% saying he’s sufficiently fit. 

Even the Blue Team groans in anticipation of a Biden 2024 bid: Only 36% of Democrats want Biden nominated again, with 58% wanting someone else. 

There’s some bad news for Trump too, as 56% say he should face charges related to alleged illegal attempts to overturn the 2020 election results, and 54% think he should face criminal charges over handling of classified documents and his actions relative to the Jan. 6 riots. Forty-one percent think Biden is honest and trustworthy, compared to 33% for Trump. 

As much as these new results are likely to dampen Democrat confidence, those hoping for a Republican takeover of the White House should remember that many a midterm poll pointed to a red wave that never materialized.   

Tyler Durden
Mon, 05/08/2023 – 09:10

The Trouble With ‘The New Safety Trade’

The Trouble With ‘The New Safety Trade’

Authored by Jesse Felder via The Felder Report,

There has been a lot of talk in recent months about the narrowness of the rally in stocks so far this year. It’s no secret that the majority of the gains for the index have come from just a handful of stocks while many smaller names have performed much more poorly in comparison. To wit, together Microsoft and Apple’s share of the the S&P 500 Index just rose to a new record high while the Russell Microcap Index just fell to a new multi-year low.

Some have explained the phenomenon by noting that investors now see Big Tech as the “new safety trade.”

“People are looking for safety and comfort given the cross-currents in the market, and tech gives them plenty of ease,” as JPMorgan sales trader Jack Atherton tells the Financial Times.

That ease comes from the belief that Big Tech actually offers, in the words of Glenmede’s Jason Pride, “downside protection during more difficult times.”

Investors crowding into these names better be right because they are clearly making a major bet that these companies’ financial performance will not only hold up through the economic “cross-currents” to come, it will actually benefit from them. How else can you explain that they are willing to pay 65-times aggregate free cash flow (less stock based compensation) for the five largest stocks in the Nasdaq (as of last year)?

Over the past decade, their average valuation has been less than half the current level. So it would appear there is a very real risk that if the economy enters recession and these companies are not immune to its effects their collective valuation could revert to some degree or another, a process that could prove inordinately painful given the extreme valuations they trade at today. Even assuming the economy manages to avoid recession, allowing the Fed to maintain its current policy of “normalizing” the balance sheet, that reduction of liquidity alone could exert downward pressure on valuations.

Either way, the “new safety trade” appears to be priced for perfection – and by perfection I mean a return to ultra-low interest rates (supporting extreme valuations) along with a return to rapid top line growth while maintaining fat profit margins (supporting the figures those valuations are based on). Absent such a pristine outcome, investors may be disappointed to realize that Big Tech isn’t so safe after all.

Tyler Durden
Mon, 05/08/2023 – 08:50

Anheuser-Busch CEO Blames Bud Light Boycott On Social Media “Misinformation”

Anheuser-Busch CEO Blames Bud Light Boycott On Social Media “Misinformation”

The CEO of the “inclusive” AB InBev blamed “misinformation” on social media for stoking a nationwide boycott of Bud Light following the brewer’s move to promote the beer with  TikTok trans influencer Dylan Mulvaney.

People often talk about this topic in social media like noise… You have one fact and every person puts an opinion behind the fact. And then the opinions start to be replicated fast on each and every comment. By the time that 10 or 20 people put a comment out there, the reality is no longer what the fact is, but is more [about] what the comments were,” chief executive Michel Doukeris told the Financial Times

Instead of taking the blame for the company’s catastrophic attempt to virtue signal, even if it means alienating the vast majority of its clients, Doukeris instead blamed online “misinformation and confusion”, including reports that Mulvaney’s Bud Light can is “a production can and every can would be like the one that was in that post . . . We never intended to make it for general production and sale for the public.” Well, that’s just a brilliant way for InBev to also alienate the progressives after scrambling to distance itself from the entire fiasco.

He said others thought it was a Bud Light campaign while “it was not: it was one post. It was not an advertisement.” Narrator: it was.

Doukeris was furious about videos of billboards with images of the Bud Light can inserted “electronically” and “10mn people [were] watching it and commenting . . . That had nothing to do with Bud Light, it was just like pure social media creation.”

Last Thursday, Doukeris said in an earnings call that Bud Light’s decline in US sales for the first three weeks of April accounted for 1% of the brewer’s global volumes. He did not comment on potential full-year impacts, indicating it was “too early to have a full view.”

During the earnings call, Doukeris attributed the Bud Light controversy to “misinformation.”

He noted the boycott is having a negative impact on overall sales. 

The latest data from Bump Williams Consulting based on Nielsen IQ data show boycotts of Bud Light collapsed sales by 26% from a year ago for the week ending on April 22. 

Bud Light executives have been desperately scrambling to restore the brand’s image by accelerating the production of new ads, according to the Wall Street Journal. 

Meanwhile, sales of rival brands Coors Light and Miller Light each grew 21% during the same period ending April 22.

Bud Light is now facing boycotts from both ends of the political spectrum as LGBTQ bars are displeased with the brewer’s lack of support for Mulvaney. 

Tyler Durden
Mon, 05/08/2023 – 08:31