It’s not as if the trade we defined as the “Big Short 3.0″ needed help to plumb fresh record lows (as it has been doing virtually every day in the past month, see “New “Big Short” Hits Record Low As Focus Turns To $400 Billion CRE Debt Maturity Wall“), but it’s getting it anyway courtesy of an unexpected source.

While it is common knowledge by now that lower-tier and suburban office markets as entering the nine circles of hell…

… for reasons most recently and succinctly summarized by Chris Whalen…

Problem with #CRE goes like this. Occupancy falls, SQFT rental price falls, rent roll falls, then bldg value falls.reserves consumed. Lender seeks more equity to restore 50% LTV. Equity does numbas, walks away…. @blackstone

— Richard Christopher Whalen (@rcwhalen) March 31, 2023

… and visually by the IMF in this report from 2021…

… many were left with the opinion that the world’s top office market remains largely unscathed.

Unfortunately, that opinion was wrong: according to the latest report from brokerage Jones Lang LaSalle, which tracks about 470 million square feet (44 million square meters) of New York City offices, found a mere 4.6 million square feet of office space was leased in the first quarter. That means that Manhattan’s office-vacancy rate was at a record high as new developments add even more space to the struggling market. Specifically, 16.1% of space was empty as of the first quarter, with leasing is at its lowest levels since the second quarter of 2021. Other real estate companies found si   similar results: Colliers recorded a 16.9% vacancy rate in the fourth quarter and a 17.3% rate in the first quarter of 2021.

“You’re having this anemic leasing activity, more space is being added in the form of newly constructed or newly renovated space, but also sublease space continues to pile up,” said Andrew Lim, director of research at JLL.

According to the report, while the market was already struggling with excess supply, it was flooded with more than 1.5 million square feet of office space in the first quarter with the completion of 660 Fifth Ave.’s redevelopment.

Not all of that space will stay empty as landlord Brookfield Properties has signed leases with finance firms including Macquarie Group. The building – formerly known as the iconic 666 Fifth Ave – and the former home of hedge fund giant Millennium Partners until its recent move to 399 Park, has gained traction after undergoing $400 million in renovations that include a new lobby, elevators and facade.

There was some good news on the office front: one of the biggest leases to come to fruition in the first quarter was Citadel’s master lease of 350 Park Avenue. Ken Griffin’s firm is leasing 585,000 square feet from Vornado Realty Trust at the property for 10 years, where the initial annual rent will be $36 million.

Still, the increase in available space ramps up the pressure on landlords that own older buildings across the city. With the rise in remote work, tenants are more inclined to move to newer developments or towers that have been recently renovated, especially with the recent deluge of office space availability courtesy of the Hudson Yards project.

“We have to reinvent our office space,” New York Mayor Eric Adams said in an interview with Bloomberg Thursday, adding that empty spaces should be converted to housing. “We have a housing crisis. We already have structures that are built.”

The silver lining is that despite the record number of vacant offices, average rents remained flat at $76.96 a square foot, buoyed by growing rates at top-quality buildings, especially newly built ones. That helped balance out falling rents at older spaces and offices up for sublease.

It’s not just New York: other key office markets are suffering similar malaise.

According to Commercial Observer, KBS sold the Union Bank Plaza tower in Downtown Los Angeles for a big discount to the Schreiber-run Waterbridge Capital after several rounds of descending bids (Joel Schreiber made a name as the first investor in WeWork and made several attempts to sell the former Broadway Trade Center downtown before filing for bankruptcy and succumbing to a foreclosure sale.) 

The 40-story, 701,888-square-foot office building sold for between $105 million and $110 million, according to sources familiar with the deal. KBS REIT acquired the same building from Hines for $208 million in 2010, records show, and also completed a $20 million renovation. In total, the loss on the sale was north of 50%.

Throughout the L.A. region, office activity has cooled significantly since the pandemic, especially in the central business district, and investor and lender appetite for office assets has collapse with the rise of hybrid work and rising interest rates. As reported previously, Brookfield, the largest office landlord in L.A., defaulted on $754 million in loans tied to two Downtown L.A. office towers, and other skyscrapers, including the PacMutual Building and the 62-story Aon Center, are hitting the market at major discounts.

To make matters worse and put more pressure on a potential sale, L.A.’s Measure ULA goes into effect April 1, which will increase transfer taxes by 5.5 percent on transactions over $10 million.

“Executing on large-scale office assets in today’s environment requires an ability to address the entire capital stack and think outside the box. Even with a high-quality asset, these are not easy deals to close,” Mark Schuessler, an executive vice president with Colliers, said in a statement.

Authored by John Murawski via RealClear Wire,

The fight over academic freedom on campus increasingly comes down to a fight over three letters – DEI – which goes a long way to explaining the fissures now tearing higher education apart.  

For progressives committed to social justice advocacy, academic freedom must shield the prevailing academic consensus on race and gender from outside political pressure. Nowhere is that academic consensus better represented in the modern university than in the campus Diversity, Equity, and Inclusion (DEI) bureaucracy, which exists to advocate for students and faculty who identify as brown or queer, often by monitoring the campus culture for “whiteness” and “cisheteropatriarchy” —  the social dominance of white, heterosexual men.   

Conservative reformers also see themselves as defending academic freedom by challenging the progressive campus orthodoxy that’s enforced by DEI functionaries in the name of social justice. Critics of DEI say that these are overzealous bureaucrats who stifle the academic freedom of anyone who dares to dissent from their monocausal, moralistic metanarratives about race and gender.   

These critics note numerous studies that show the climate of fear and self-censorship on campus today is worse than it was during the Cold War McCarthyism of the 1950s. The free speech advocacy group Foundation for Individual Rights and Expression (FIRE), for example, reported in February that about half of faculty reported being worried “about losing their jobs or reputation because someone misunderstands something they have said or done, takes it out of context, or posts something from their past online.”   

Conservatives link the rise of campus illiberalism and censoriousness to the expansion of DEI offices during the last decade, which they say politicizes the campus through a DEI apparatus that exerts its administrative power through bias hotlines, sensitivity workshops, and speech codes.  They condemn DEI statements in admissions, hiring and promotions decisions as de facto “political litmus tests”; these diversity statements “have become a mainstay of application processes for faculty jobs,” according to the Chronicle of Higher Education.   

“We cannot live up to our mission as a university unless we attend to inequity, both past and present,” said Mimi Chapman, the faculty chair at the University of North Carolina, at a recent board of trustees meeting.  

Today, half of faculty support the practice of requiring job applicants to commit to DEI advocacy in their teaching and research, according to FIRE. And progressive faculty are not troubled about political homogeneity, as long as it aligns with their politics: 57% of liberal faculty say that advancing race and gender diversity is more important than promoting political viewpoint diversity.  One such professor is Stacy Hawkins, vice dean and professor of law at Rutgers Law School, who wrote an opinion piece last month for The Chronicle of Higher Education, “Sometimes Diversity Trumps Academic Freedom.” Hawkins contends that conservative opposition to CRT is not a legitimate exercise of academic freedom because “the opposition to CRT is designed to silence, further marginalize, and diminish the value of minority voices and experiences.”   

“Some people’s right to express themselves cannot come at the expense of other people’s right to dignity, safety, and equal participation in the academic community,” Hawkins wrote. “Rather than willingly cede DEI wholesale to academic freedom, perhaps it is time to reshape our understanding of academic freedom.”  

High school seniors across the political spectrum are so aware of the ideological divides on campus that one in four has ruled out attending a higher education institution because of its political climate, according to a survey reported in The Chronicle of Higher Education.   

The U.S. campus has been transformed in recent years by the explosion of diversity offices and diversity jobs, said Ilya Shapiro, the director of Constitutional Studies at the conservative Manhattan Institute, who is working on a book about the ideological capture of the nation’s law schools through the bureaucratization of DEI initiatives.   

Shapiro is among those who say that university administrators are more politically radical than the professoriate, and that their ideological commitment corrupts the core mission of higher education. Based on his research, between 1987 and 2012, the nation’s universities added more than a 500,000 administrators, so that around 2010, universities started employing more administrators than full-time instructors, and in some elite institutions the administrators now even outnumber the students. Most administrators are not DEI bureaucrats, but DEI is now the fastest-growing segment of the educational bureaucracy, Shapiro found, so that the average college has more people devoted to DEI – exceeding 45 per campus – than the number of professors teaching history.   

“In any bureaucracy, bureaucrats are incentivized to justify their positions, grow their authority, increase their budgets,” Shapiro said. “So in the DEI space, they have to search for dragons to destroy – cases of racism, sexism, transphobia – all of these -isms and -phobias.”  

The National Association of Diversity Officers in Higher Education’s 35-page antiracism guide confirms this picture, stating that “Higher education systems are a complex web of practices, policies, and procedures steeped in White normativity.”   

The organization’s brochure encourages “using critical race theory as a framework for making sense of racism in curricula, instruction, and assessment in education.” And the DEI trade group warns: “DEI cost-cutting sends a powerful message that BIPOC [black, indigenous and people of color] students, faculty, and staff are expendable.”  

The explosion of DEI employment opportunities and growing budgets is leading to a proliferation of DEI certifications, DEI minors, and even DEI majors at the university level. One example is the DEI major launched in 2021 by Bentley University in Waltham, Mass., to train chief diversity officers and chief inclusion officers for in-demand careers in a growing field.   

Bentley’s course catalog is imbued with activist jargon and revolutionary rhetoric. In an introductory course, “Students will understand and critically analyze issues of oppression, power and privilege as they intersect with themselves as well as others.” In a course about race relations, “Students will leave this class with a heightened awareness of the racism in all of your own everyday lives and how to resolve it.” A course about the legal system “examines law as both an instrument of institutionalized oppression and a tool for liberation.”   

Bentley also offers a course linking the monstrosities of slavery to capitalism, a claim also made by the self-described “antiracist” advocate Ibram X. Kendi in his 2019 book, “How To Be an Antiracist,” and “The 1619 Project” published in 2019 by The New York Times and reissued as a book last year. All of these claims and arguments have been advanced by critical race theorists for decades, “centering” racism, oppression, and violence as the defining features of the United States.   

“A long history of scholarship in sociology ties U.S. slavery to the development of capitalism and modern business and finance,” the course description states. “This course is designed to give students a framework for appreciating the centrality of the relationship between slavery and capitalism in the U.S., and translating that into new ways of understanding how tacit racism, hidden and unacknowledged, is structured into business and society today.”  

At the same time, grant funding from federal agencies is increasingly contingent on diversity and equity commitments. For instance, starting in FY2023, U.S. Department of Energy grant applications require applicants to describe how they’ll incorporate diversity and equity into their research projects, and those strategies will be evaluated as part of the merit review process.   

DEI is also becoming part of the accreditation process required by the U.S. Department of Education for universities to qualify for federal funding, including federal student loans and other forms of financial aid, such as Pell grants. Medical schools are now required to provide faculty training in DEI and cultural competency, according to a 2022 City Journal article, pressuring the schools to expand their DEI bureaucracies. And regional accreditors that certify undergraduate colleges and universities now endorse or mandate DEI training and DEI offices, according to a Heritage Foundation report issued in February.   

However, universities are not limited to a single accreditor and can apply to multiple accrediting agencies if they run into conflicts.   

Belle Wheelan, president of the Southern Association of Colleges and Schools Commission on Colleges, which currently accredits the universities in Florida that Gov. DeSantis is seeking to reform, said in an interview with RealClearInvestigations that of the seven regional accrediting agencies, her organization is the only one that doesn’t require DEI to earn accreditation. But she said SACS is moving forward with adopting a DEI mandate that would be effective in January 2024. She said that SACS allows universities to define “diversity,” so that it does not have to be based on race and gender and can be defined as “viewpoint diversity.” Wheelan noted that SACS has issued accreditations to three private conservative Christian colleges: Patrick Henry College, Liberty University and Bob Jones University.   

DEI practitioners say their jobs focus on making universities more representative and more welcoming to first-generation students, disabled students, and returning military veterans, not just advocating for people who identify as brown and queer.   

Yoleidy Rosario-Hernandez, who headed the Office of Outreach and Inclusive Excellence at New College of Florida, granted an interview to The Washington Post after getting fired from her $135,000-a-year job by the newly constituted board of trustees. Rosario-Hernandez, who identifies as BIPOC and transgender and uses ze/zir pronouns, described the conservative critique of DEI mandates as coming from a position of “white supremacy.”  

Rosario-Hernandez categorically rejected the conservative accusation that DEI divides people into two groups – the “oppressors” and the “oppressed.”   

Instead, DEI promotes reconciliation between two groups – “people who are harmed” and “people who have harmed them.”  

Authored by Alan Dershowitz via New York Sun,

The protection of secrecy is as applicable to President Trump as it is to anyone else…

It is likely that a serious felony has been committed right under District Attorney Alvin Bragg’s nose and he is not investigating it. Under New York law, it is a felony to leak confidential grand jury information, such as whether the jurors voted to indict. The protection of secrecy is as applicable to President Trump as it is to anyone else. 

We know that the information was disclosed while the indictment itself remains sealed and before any official announcement was made or charges brought. It is unlikely that the leak came from the Trump team, which seemed genuinely surprised.

The most likely, though uncertain, scenario is that a person in Mr. Bragg’s office or a grand juror unlawfully leaked the sealed information. That would be a class E felony, subject to imprisonment.

It is possible of course that an investigation is underway, but it seems more likely that Mr. Bragg is too busy making up a crime against the man he promised in his campaign to get than investigating a real crime that took place on his watch.

In my new book, “Get Trump,” I predicted that partisan prosecutors would try to get Trump regardless of the lack of evidence or law. That prediction has come true. Since the indictment itself has not been leaked — at least not yet — we don’t know its specifics. We do know, based on leaks, that it involves multiple counts, almost certainly involving the payment of hush money to a porn actress.

Under Mr. Bragg’s likely theory, Mr. Trump should have disclosed in his public corporate records that he paid the hush money to avoid his adulterous affair from becoming public. But no one in history has ever publicly disclosed the reason he paid money for a non-disclosure agreement.

Why would Mr. Trump pay the money in the first place if he had to publicly disclose the embarrassing reason? Furthermore, no one in history has ever been indicted for listing “legal expenses” for setting a potentially embarrassing payment of hush money.

Thus, even the misdemeanor allegation involving false entries is unprecedented and represents selective prosecution. It is also almost certainly barred by the two-year statute of limitations. In order to elevate this bookkeeping case into a felony, Mr. Bragg must also prove beyond a reasonable doubt that the reason Trump made the false entry — if he himself did it — was solely as a campaign contribution to help him win his election.

If Mr. Trump was motivated in part by his desire to protect his wife, children, and business interests from harmful disclosures, that would not constitute the crime of making an undisclosed campaign contribution. So this too is a stretch.

It is a fundamental tenet of American law that criminal law should not be stretched to fit targeted defendants. Criminal statutes must be clear and unambiguous. If there is any doubt, the age-old concept of “lenity” requires that these doubts be resolved in favor of the defendant.

Thomas Jefferson once quipped that for a criminal statute to be valid, it must be so clear that a reasonable person could understand it if he read it “while running.” A nice image!

I intend to read the text of the indictment, while sitting, with 60 years of experience behind me. I doubt I will find that it meets the constitutional criteria for “fair warning,” although I maintain an open mind until I have studied it carefully.

The important point is that when a district attorney ran for office as a Democrat pledging to get Mr. Trump, who is a candidate for president against the incumbent Democrat, that district attorney must have an airtight case.

A weak, questionable, unprecedented, and novel stitching together of two inapplicable statutes, will not, and should not, satisfy the American public that this is not a partisan targeting of a political opponent.

By Eric Peters, CIO of One River Asset Management

“Powerful AI systems should be developed only once we are confident that their effects will be positive, and their risks will be manageable,” read the open letter [here], signed by countless luminaries from the technology industry and various other fields.

Emad Mostaque, CEO of Stability AI, a leader in the generative AI space inked it. Many less prominent researchers did too.

“We call on all AI labs to immediately pause for at least 6 months the training of AI systems more powerful than GPT-4.”

Elon Musk was a signatory, and of course, he’s building an AI driving system which is remarkable but has a long way to go.

Based on my personal experience, it has achieved rough parity with a drunk sixteen-year-old.

Or, in economic policy terms, Tesla’s AI has reached singularity with the government’s team responsible for stress testing regional banks.  Naturally, it surpassed the Fed’s inflation forecasting team many months ago.

And without reliable inflation estimates, it’s no wonder that our central bank’s interest rate forecasts are such a poor indicator of future policy rates. Financial markets are consistently superior to any group of forecasters, even the mob at the Fed who not only have the economy’s most comprehensive data sets, but who can also directly manipulate markets to make their forecasts come true.

Such teams of experts are no match for free markets, which are humanity’s first glimpse of a true AI. The collective wisdom of the crowd is a clear superhuman intelligence. That is not to say markets are infallible. But they are infinitely adaptable, resilient, and evolve to exploit our vulnerabilities, fears, secrets. At scale, such systems, move money from weak hands to the strong.

And so long as humans are the key decision makers in our economic and political systems, markets will outsmart the best AI systems that our computer scientists develop. But as in all battles for survival, superiority, strong hands will figure out how to harness AI to strengthen our advantage as we trade, invest.

Authored by Frank Fang via The Epoch Times (emphasis ours),

Kentucky Gov. Andy Beshear, a Democrat, has signed into law a measure that requires the state’s public pension funds to make investment decisions on financial risks and returns, rather than environmental, social, and governance (ESG) factors.

Beshear signed House Bill 236 into law on March 24, mandating the state’s fiduciaries to solely consider factors that have a “direct and material connection to the financial risk or financial return of an investment,” according to the language of the bill.

It bans actions on “nonpecuniary interests,” including “environmental, social, political, or ideological interest” without a connection to the financial performance of an asset.

State Treasurer Allison Ball, a Republican, touted the new law, saying “Kentucky now has the strongest anti-ESG legislation in the nation,” Just the News reported on March 28.

“For many years, pension investments were about maximizing returns,” Ball added. “Recently, however, there has been a destructive shift in investment methodology to use the savings of Americans as financial muscle to push ideological causes through the ESG movement.

“Kentucky has said no to this shift by passing HB 236, which clarifies that pension fiduciaries must base investment decisions solely on financial metrics, not politics.”

The state’s House passed the legislation 77–17 on March 2 and the state’s Senate passed it on March 13 after a 32–5 vote. Republicans hold supermajorities in both chambers of the state legislature.

Heritage Action for America, a grassroots conservative advocacy group, issued a statement on March 24 applauding the Kentucky General Assembly and Ball for “their efforts to protect citizens from the harms of the radical ESG movement.”

“With the ESG movement infiltrating businesses and threatening Americans’ finances, it’s now more important than ever to ensure that asset managers are following through with their fiduciary responsibilities,” said Jessica Anderson, the group’s executive director. “As the first bill of its kind to be enacted, HB 236 will require asset managers to prioritize the investment returns and financial interests of Kentuckians.”

Anderson added, “This is a historic victory for Kentucky and will be an example for other states to follow as they look to protect their state industries, investments, and workers.”

“We look forward to even more states across the country adopting this approach and taking additional steps to rid our states of woke finance.”

Ball was in Washington on March 9, taking part in a bill-signing ceremony held by House Speaker Kevin McCarthy (R-Calif.). That day, McCarthy signed a resolution introduced by Rep. Andy Barr (R-Ky.) to block a Labor Department rule that allows pension fund managers to consider ESG factors in investment decisions.

“I’m here to support what is happening as a Kentucky and as the state treasurer of Kentucky,” Ball said at the ceremony. “I have been fighting to make sure our pension systems are strong and people can retire, so I’ve been pushing back against the ESG movement.”

“We don’t need to push ideological agendas. We don’t need to push anything that is progressive,” she added. “We need to focus on getting good returns so people can retire at the end of their work life.”

However, President Joe Biden vetoed the resolution on March 20, saying the measure would “put at risk the retirement savings of individuals across the country.”

The House failed to override Biden’s veto after a 219–200 vote on March 23, falling short of the two-thirds majority threshold needed.

After Biden’s veto, Ball took to Twitter to express her disappointment.

“He believes political agendas are more important than returns. In reality, ESG funds have underperformed the broader market over the past 5 years. Retirements are about returns, not politics,” she wrote.

Ball, who has been the state treasurer since 2016, is currently running to be Kentucky’s next state auditor. Meanwhile, Beshear is running for re-election as the governor of Kentucky.

The manliest beer in America for hardworking, blue-collar folks seems to have found a new spokesperson this weekend during the March Madness Final Four basketball games: trans-TikTok star Dylan Mulvaney.

We’re not entirely sure if it’s an April Fool’s joke or if Bud Light, owned by Belgian company AB InBev, sponsored Mulvaney, but it sure appears so. Here’s what the trans-TikToker said:

“Verified Happy March Madness!! Just found out this had to do with sports and not just saying it’s a crazy month! In celebration of this sports thing @budlight is giving you the chance to win $15,000! Share a video with #EasyCarryContest for a chance to win!! Good luck! #budlightpartner. “

Dylan Mulvaney has become the new brand ambassador for Bud Light. 🍺

The beer brand even made a special edition Dylan Mulvaney Can 🥤celebrating his 365 days of girlhood.

(This is not April Fools, it’s actually real)

🍺🍻🍺😒🍻🍺🍻 #dylanmulvaney #trans #transgender pic.twitter.com/xuu87WxrvZ

— Oli London (@OliLondonTV) April 1, 2023

Bud Light also appears to have created a special edition Dylan Mulvaney Can to celebrate his 365 days of girlhood. 

Add Bud Light to the list of corporations going ultra-‘woke.’ 

… and just like that, those on Twitter have already called for boycotts of the beer. 

#BoycottBudweiser pic.twitter.com/cm2yLVlDuB

— placekicker (@placekicker17) April 2, 2023

Hey @BudLight – You can keep your piss water no matter what but now I will never buy another can of@Budweiser ever again since you chose to sponsor Dylan Mulvaney!

I’m calling on all Americans to boycott Budweiser and all of their products!

— Ray ‘Cutter’ Spaulding (@CryptidsAuthor) April 2, 2023

Time to boycott Budweiser it’s the only language they will understand #BoycottBudweiser @budweiserusa https://t.co/ngpJTQ9SC3

— Itsallnuts (@Itsallnuts2) April 2, 2023

Hey @budweiserusa.

Your products will never be welcome in my home again.#BoycottBudweiser

You make shitty beer and even worse virtue signals. pic.twitter.com/XxwSJKlStf

— CptnTightPantz (Freedom/Liberty) (@CptnTightPantz) April 2, 2023

Perhaps now it will be “Miller Time” for boycotters. 

Authored by Samantha Flom via The Epoch Times (emphasis ours),

Nearly half of a government team investigating the potential health effects of a toxic train derailment in East Palestine, Ohio, fell ill while conducting their research, according to the Centers for Disease Control and Prevention (CDC).

In a March 31 statement provided to The Epoch Times, CDC spokesperson Belsie Gonzalez advised that the illnesses occurred on March 6, when seven members of a 15-person team of CDC and Agency for Toxic Substances and Disease Registry (ATSDR) staff reported symptoms such as sore throat, headache, coughing, and nausea.

Their symptoms, Gonzalez noted, were consistent with those reported by some East Palestine residents and first responders, whom the team was surveying to assess the potential health effects of their exposure to the chemicals released by the Feb. 3 derailment.

Sore Throats, Headaches, Nausea

“Following protocol, team members reported the symptoms to federal safety officers,” she said.

“Symptoms resolved for most team members later the same afternoon, and everyone resumed work on survey data collection within 24 hours. Impacted team members have not reported ongoing health effects.”

Gonzalez added that the survey collection process, which started mid-February, will end on March 31.

“Once completed, CDC/ATSDR staff will analyze the data and provide it to state health officials in Ohio and Pennsylvania,” she said. “FEMA and EPA teams remain on the ground to support response efforts.”

News of the government employees’ illnesses followed the Department of Justice’s (DOJ) filing of a lawsuit on March 31 against Norfolk Southern, seeking to hold the railroad company accountable for “unlawfully polluting the nation’s waterways” through the toxic derailment.

“When a Norfolk Southern train derailed last month in East Palestine, Ohio, it released toxins into the air, soil, and water, endangering the health and safety of people in surrounding communities,” Attorney General Merrick Garland said in a statement.

‘Pursuing Justice’

“With this complaint, the Justice Department and the EPA are acting to pursue justice for the residents of East Palestine and ensure that Norfolk Southern carries the financial burden for the harm it has caused and continues to inflict on the community.”

Read more here…

Via The Cradle,

Israeli warplanes launched yet another attack on Syria early on Sunday, striking a number of targets in the central Syrian city of Homs from Lebanese airspace, Syrian state-news outlet SANA reported.

The strikes resulted in the wounding of five Syrian Arab Army (SAA) soldiers and the infliction of some material damages. “At around 00:35 a.m. on Sunday, the Israeli enemy carried out an aerial act of aggression from the direction of northeastern Beirut, targeting some sites in the city of Homs and its countryside… Our air defenses intercepted the missiles and shot some of them down, and the aggression resulted in the injury of five army personnel and some material damages,” a Syrian military source was quoted as saying by SANA.

According to Persian media, an Iranian advisor who had been injured during Friday’s Israeli attack on Damascus died after succumbing to his injuries.

“Meqdad Mehghani was wounded during the Zionist attack on Friday dawn and was martyred,” Iran’s Mehr news agency reported on Sunday.

This is Israel’s sixth attack on Syria since the devastating February 6 earthquake struck the country, and the ninth Israeli attack on Syria since the beginning of the new year. This is also the third Israeli attack on Syria in just four days.

In the early hours of March 30, Syrian air defense systems were activated to counter missile attacks on Damascus. The following day, early on Friday March 31, Israel struck the Syrian capital once again, killing Iranian military advisor and officer Milad Heydari. Iran’s Islamic Revolutionary Guard Corps (IRGC) has vowed a retaliation.

Israel’s airstrikes on Syria are illegal under international law, but happen very frequently under the pretext of targeting Iranian and Hezbollah targets. More often than not, however, the strikes target the SAA.

Israel bombed Syria again. This time in Homs. The UN is in hibernation. pic.twitter.com/wiwiB9bSiA

— Kevork Almassian🇸🇾🇦🇲 (@KevorkAlmassian) April 1, 2023

In a statement condemning Friday’s “barbaric” attack on Damascus, the Syrian Defense Ministry claimed that Israel’s constant airstrikes against Syria are carried out in coordination with extremist militants. Over the years, Israel has played a deep role in the Syrian conflict, and has provided direct support to extremist groups fighting against Syria.

By Peter Tchir of Academy Securities

Fortune Favored the Bold

With stocks up over 3% last week, fortune clearly favored the bold. The commodity complex did well across the board, with WTI leading the way, up almost 10%! I could have titled this report, Being Cautious Didn’t Pay the Bills Last Week, but that doesn’t do justice to strength that we saw at the end of last week and for the entire quarter for some of the riskier segments of capital markets. ARKK is up 29% on the year and Matt Damon’s Bitcoin is up over 70% since the start of the year and 40% since early March when banking fears first hit markets. By no means have we been cautious this entire quarter, but we did enter last week advising caution and have to decide whether that is where we still want to hang our hat.

While I truly hope that I don’t have to endure a new series of Matt Damon and “Fortune Favors the Bold” commercials, I have to give a hat-tip to those who said to buy bitcoin because banks weren’t safe. I never believed that and still don’t (as a depositor), but it has played well in social media and doesn’t seem as far-fetched today as it did in February.

The MOVE Index (a measure of treasury market implied volatility) plummeted from a high of almost 200 on March 15th to 135 (128 is the 1 year average) as a semblance of normalcy returned to the treasury market. You could get up and grab a cup of coffee and not have the 2-year move 20 bps while you were briefly off the desk,

The strength in equities was likely given a boost as we had month-end and quarter-end buying, coinciding nicely with weekly and a slew of daily option expirations.

Banks

While it is time to Move Beyond Banks (where we highlight shipments, inventory and delinquencies as well as the upcoming earnings seasons) we need to start with banks.

Even after a 3% positive week for stocks none of the issues in I Know What You Did Last Winter have been resolved.

The one issue that I am watching most carefully how companies, banks and individuals respond to the divergence in short-term rates (anything from SOFR at 4.82% to T-Bills around 4.5% to bank deposits still averaging below 1%, to Bitcoin and stable coins at 0%).

This is not an “’urgent” issue, but neither is it glacier-like in its pace, which may explain why KRE (SPDR Regional Banking ETF) barely rallied in an otherwise risk-on week. If having to compete on deposit rates becomes an issue (and it might not), it would be a drag on banks, big, small and medium.

It is impressive that the broad market shrugged off ongoing risk concerns at middle size banks (based on KRE movement), but the risks mentioned last week, affecting much more than just small and midsize banks remain in the background and I suspect have a reasonable chance of being brought to the foreground again.

Inflation

I am not worried about a return to inflation fears. The PCE deflator came in below expectations (0.3%) and last month was revised down (0.5% instead of 0.6%). Yes, we went from Chair Powell discussing disinflation risks at eh first FOMC meeting of the year, to more concerns, but I remain in the camp that most of the inflationary pressures have subsided. That the Fed has already gone too far. Inflation data should help the bond market.

Jobs

The most consistent economic data of any type has been the jobs data. While other data has hinted at slowdowns, but then at rebounds, etc., the jobs data has been quite steady.

Lost in the shuffle in March, largely because of the focus on Silicon Valley Bank (which kicked off the entire banking fears), we seem to have forgotten that wage pressures looked like they were declining in the February data.

Last month, rather than our instant reaction to NFP we had to publish NFP, Debt Ceiling & Bank FUD because even on the day they were published, the jobs data was taking a back seat.

Total jobs (I’m looking for disappointment) and wage pressures (I expect continued improvement) will move markets and the two pieces of data combined will determine market direction and there is a wide range of possible outcomes (I’m in the camp that jobs will be small enough that it will ignite recession fears, but could easily see a “goldilocks” type of print), which is a range so wide, not to be of much use to anyone. Fortunately, we will have more clarity well before Friday as JOLTs and ADP come out.

The Fed

The Fed is almost done hiking (they shouldn’t have hiked last month given my view on inflation (already coming down) and concerns about lag effects of previous hike s(they clearly pushed some things/entities to the breaking point)).

I expect the Fed will have to continue to message that they will not cut rates anytime soon (I would have agreed with that message earlier in the year, but as they continue to hike, they seem to be creating conditions that could cause them to reverse course against their messaging).

Stocks as a “Long Duration” Asset Redux?

I can see where risky assets are getting a bid. The investment thesis that stocks are a long duration asset and will do incredibly well as the Fed finishes their hiking cycle is simple, has recent history on its side, which makes it compelling. Who doesn’t want to see some of these companies return to their former glory?

I just don’t think conditions are right for that sort of spike:

• Rates at 4% is far different than rates at 0%.

• Gobs and gobs of free money are not getting paid to citizens or companies unlike during COVID.

• While the Fed balance sheet grew again (as they had to lend money to banks), the large scale asset purchases, constantly sucking investible assets out of the market, has been replaced by a plan to slowly reduce the balance sheet.

• Growth had taken on a life of its own. The “bigger and better” the growth story, the better. Markets might be a little more jaded this time around.

Bottom Line

Small positive bias for bonds. The data should continue to support the bond market, though jobs remain a wildcard on that front.

Neutral to slightly bearish credit spreads. Credit spreads do tend to be tied to bank cost of funds and at the moment, I see that trending higher. Similarly, we could see some heavy issuance as companies ramp up bond sales while rates are low, spreads are decent and the Debt Ceiling and summer are fast approaching.

From slightly cautious to medium bear on equities. I could either decide I was wrong to be somewhat cautious on equities last week and get on the “breaking to new levels” bandwagon. That view has much to support it. Or, I can fade the move as discussed Thursday on Bloomberg TV, and I want to be more conservative (growing a short position) in equities here as the short squeeze (VIX spiking was an indication that real hedges had got put on, rather than just investors popping in and out of 0DTE options (which don’t count in VIX calculations) and quarter-end buying stretched what good news there was for stocks.

So what wild and crazy thing that no one was expecting will happen in Q2 2023? If you told me I would use Banks and Crisis in a sentence in Q1 on January 1st, I probably would have laughed, and yet, that’s where we got to.

Good luck and if you missed last week’s Around the World, I highly recommend catching up on it, as the geopolitical issues and risks are not going away.

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

So, the Democrats and their Davos benefactors have finally done it. They have finally found something they can indict President Donald Trump on. Apparently 34 somethings, which makes for great headlines.

The usual suspects have been thrown their chum — both TDS patients and MAGAtards. The social media war is now in full swing. And, frankly, it couldn’t be more tiresome.

A few get why this is so inane but most are focused (or being focused) on the wrong thing, as always.

Jonathan Turley has a good rundown of the questionable legality of this case. But, again, while he’s not wrong to focus on that and the shady politics, he also misses the larger implications of this indictment.

This is a case so legally tenuous that even the Federal Government, famous for being able to convict a ham sandwich, wouldn’t touch it with a 10-foot pole.

Because indicting Trump for any of these petty things is nothing less than the end of politics and a declaration of civil war.

Davos through the Democrats have been running a culture war for decades to stamp out the past. It is quite Leninist. Turley and others have focused on it’s ‘just not done’ to indict a President, especially something as irrelevant as paying hush money to Stormy Daniels.

But, ‘just not done’ is exactly the thing being indicted here, not Trump. Trump is just the fulcrum on which all of this rests.

This is just the politics of envy taken to its ultimate conclusion. Racism, sexism, ageism, transphobia, LGBTQT+BBQ Sauce rights are all the same political position. They are all about tearing down the old institutional order.

It’s been going on for generations, invading male spaces like Augusta National, forcing female reporters in locker rooms, endlessly arguing the wage gap between men and women.

Of course, these same people can no longer even define the women whose rights they fight for.

Is the latest term ‘people who menstruate,’ or is that just so last week?

I thought I was supposed to still wear my mask in my electric car to fight for the rights of Ukrainian men to get pregnant while fighting for freedumb from Putler!

So forgive me if I’m a little confused.

This is a perspective that reduces society to whatever we did before was wrong. Progress in the minds of religious puritan Progressives is a never-ending battle against sin. Yesterday is forever evil while Tomorrow holds the promise of heaven on earth.

In the South we just call these people Yankees and go back to eating our barbeque and playing with our kids.

That sin is stratification as a result of rewarding merit. But what is merit to people who view all profit as exploitation?

You can answer that however you wish, but by their actions it’s clear they believe merit is stealing.

This is why “you didn’t build that,” you “basket of deplorables.’ Anything you have earned can and should be taken from you for wrongthink.

And that’s what’s at the heart of this Trump indictment. Trump is the distillation of everything they need to tear down to validate their envy. He’s white, male, politically connected, a little corrupt, very cheesy and the antithesis of what middle-class bicoastal midwits believe they should be.

Successful.

They hate Trump not because he’s successful but because our society allowed for him to become successful.

To the progressive midwit, any society that allows a man like Donald Trump to rise like he did needs to be destroyed.

Is it really any different than the teenager who rebels to become an atheist because s/h/ze finally asked how can a god allow such evil in the world to exist if he has the power to stop it?

Did I mention these people have the epistemology of weevils?

Again, in the South we say, “Some people just need killin’” Well, to the puritan mind, “Some societies just need killin’.”

That’s why Trump’s indictment signals the end of politics as we believed it operated. The key word there was ‘believed.’ We are dealing with people who see those that disagree with them as irredeemable.

You voted for Trump? Twice? Burn in hell you fascist!

It’s the only time most of these people want guns to exist.

Civilization rests on the fantasy that there is a shared acceptance of the rules on which it operates. Americans are both immensely cynical and naïve about politics in this sense. We all know politicians are lying when their lips are moving but we also believe in the myth that the American system of justice will get the right answer often enough to keep the lights on.

Today that’s a very big assumption.

The End of Clausewitz

Carl von Clausewitz is very famous for saying that war is politics by other means. He’s so famous for it that he’s become a part of speech, Clausewitzian. It’s a short-hand for this idea.

I’ve come to the conclusion that the greatest writers are ones who achieve this, dare I say it, merit badge. So, today this indictment of Trump is at once, Phildickian, Kafkaesque, Clausewitzian and Hitlerian.

Phildickian because it feels like we live in some alternate America.

Kafkaesque because Trump is being indicted for a crime we can barely define.

Hitlerian because its clearly tyrannical to shut down political opponents

And Clausewitzian because the indictment isn’t about politics but a much broader war.

Davos is at war with humanity through undermining the institutions of civilization itself. They will not be stopped in their quest to secure global control over humanity. They have stoked an animus against Trump in the minds of people like Nancy Pelosi that can only end in fire and violence.

They know that the 2024 election is where all their dreams come together. They need another Davosian quisling in the White House to counter what’s happening with the Federal Reserve’s hawkish policy.

Davos has control over the political and monetary policies of Europe. It lost political control over the UK and got it back and will reverse Brexit. That’s brought the Bank of England back in line. However, it is very clear at this point they do not control the Fed.

So, they have political control until January 2025 in the US, but do not have monetary control over the Fed until 2026, when Powell’s second term is done. This is the window for US patriots to win this civil war before it even begins in earnest.

Powell’s tight monetary policy will be the Democrats’ main talking point for 2024.

“The GOP and the Fed are the reason you are broke. They cost you your job, the dream of a new house.” We need more free money to help the poor.

If you think you’re sick of Elizabeth Warren now, just wait.

I have to hand it to these guys, they’ve turned the libertarians into their biggest water carriers by turning “End the Fed” into a strategic asset on the battlefield. With neither monetary nor political control over the US, there can be no 21st century version of V-E Day. It’s bad enough that the Global South has rebelled.

Davos knows this is it for them. 2024 in the US or bust. George Soros said as much at Munich this year. This is why Trump needs to be indicted even though the case is legally illiterate.

Look, the conservative commentators who think that indicting Trump will only improve his chances of winning the election are wrong. It doesn’t matter that he can run for office from jail.

Do you think a GOP run by Cocaine Mitch McConnell will have the balls to defy their Uniparty paymasters and nominate Donald Trump from prison?

Trump will not be allowed to run.

Because of all the words spilled about this so far only Martin Armstrong has come close to the truth of what the real strategy is.

Bragg will most likely seek a Gag Order in addition to a denial of bail, which no matter how ruthless the judge, will probably realize he cannot deny bail to a former President. Still, they will most likely put a Gag Order on Trump, and that way they can throw him in jail even indefinitely as they did to me using Civil Contempt of Court which is not a crime. If they charge him with Criminal Contempt, then he gets a trial by jury. Under Civil Contempt, you have ZERO rights and no right to a trial.

If this was coming from anyone other than Martin Armstrong I would dismiss it out of hand. Maybe Marty is being paranoid. I hope he is.

In your heart of hearts do you really think that? I don’t. Because this is being driven by people who everyday maneuver the world into a potential nuclear exchange with Russia over its right to exist as a country.

Tell me, after everything you’ve seen them do over COVID-19, they wouldn’t relish the opportunity to put a gag order on Trump.

It’s the only thing still animating most of these walking dead in D.C. for fuck’s sake.

Armstrong continues:

They kept me in prison on Civil Contempt from 2000 to 2007. I was released ONLY because I got to the Supreme Court and they ordered the government to explain how I could be held for 7 years without anything on statute 28 USC 1826 which had a maximum of 18 months. To avoid having to answer, they suddenly released me.

So forget the payment to a Porn Star

They can now gag trump, restrict his movements, and harass him to PREVENT him from running in 2024. They will listen to every word he says and are just going to wait to be able to throw him in prison on Civil Contempt indefinitely with ZERO Constitutional Rights. Welcome to the REAL America. They call it a “protective order” to protect the Government and Bragg as you are stripped of ALL your First Amendment rights.

Now, for Trump, if Bragg tried to pull this, his case would be fast-tracked publicly up to the Supreme Court. And then it gets interesting. Do you think Trump would be exonerated with this court? Under these circumstances? The current pressure?

Or do you expect them to do what they did with the election, refuse to hear the case because of ‘a lack of standing’ like they did over the 2020 election, when they clearly had the authority to hear the cases.

Last I checked John Roberts was still in charge up there.

Eighteen months ago I was thankful for all of Davos’ insane over-reactions, pathetic narratives, and unsustainable lies. While I don’t believe Davos is redeemable I still hold out hope that there are enough of in the right positions who are to just say no when the times comes.

With each loss on the battlefield of public opinion and in the policy room Davos has doubled down rather than backed down. Theirs is the Way of the Psychopath not the Warrior.

Their Eurodollar system is dying on the SOFR vine.

So, don’t discount this indictment to Trump. To them this is still their best path to victory.

The fear of a second Trump term is real, not because Trump is so great but because they can’t control him and he’s got a chip on his shoulder the size of Florida’s budget surplus.

Marty is right. They will play this all the way out. They have no other choice if they want to win this war they’ve started to validate their view of themselves as gods among mere men.

Regardless of the outcome of Trump’s ‘legal troubles,’ the real victory will be having destroyed what’s left of what was truly beautiful, a government (in theory) subservient to the people.

This is what we have to focus on preserving as their acolytes burn the libraries and erase the memory of our sins they can’t bear to face like adults.

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