US Futures Coiled Tightly Ahead Of Key CPI Print

Equity futures were set to hold yesterday's gains ahead of today's CPI report, but will move violently either higher or lower after today's CPI number is released, which will either validate or reject Jerome Powell’s latest signals that interest rates will be higher for longer (our CPI preview is here). European and Asian stocks also gained, and the MSCI All Country World Index extended its longest run of gains since January. At 7:15am ET, futures contracts on the S&P 500 were little changed with small-caps catching a bid, while the MSCI All Country World Index extended its longest run of advances since January. Nasdaq 100 futures were also flat after the underlying index hit an all time high on Tuesday.  Bond yields are down 1-2bps across the curve with the USD seeing some weakness. Commodities are higher, led by Energy and Precious Metals. On the macro front, both CPI and Retail Sales at 8.30am ET (previews here and here).

Activity in the premarket is muted with even the meme names up "only" low single digits and Mag7 seeing small moves ex-TSLA which is +0.8%. Here are the most prominent pre-market movers:

• Arcutis Biotherapeutics shares soar 24% after the company reported first-quarter sales that exceeded expectations, citing growth in demand for its prescription medications for skin conditions.
• Dlocal shares slide 27% after the Uruguayan fintech reported net income for the first quarter that missed the average analyst estimate.
• Meme stocks extend their rally into a third day, leading a frenzy affecting other high-risk and heavily shorted companies. GameStop +11%, AMC Entertainment +10%
• New York Community Bancorp shares rise 5.9% after the lender agreed to sell about $5 billion in mortgage warehouse loans to JPMorgan. Analysts were positive on the sale, saying that it will boost capital and liquidity and is in keeping with management’s new strategy.
• Nextracker shares rise 14% after it provided a fiscal 2025 adj. Ebitda forecast that beat estimates. Given the backlog-driven nature of the business, the growing +$4 billion in backlog “should substantially de-risk 2025 outlooks,” according to analysts at KeyBanc.
• Nu Holdings shares gain 6.49% after the parent of Nubank reported record revenue and net income for the first quarter that beat the average analyst estimate. The Brazil-based digital bank has an “open-ended growth opportunity” with a large addressable market, according to KeyBanc analysts.

In other news, overnight China vowed to take “resolute measures” after the Biden administration’s move to increase US tariffs on a wide range of Chinese imports; Bloomberg also reported that China was preparing a soft nationalization of the real estate sector by buying unsold houses to prop up the property market. In other news, Boeing faces possible criminal prosecution after the Justice Department found it violated a deferred-prosecution agreement tied to two fatal crashes half a decade ago.

In the run-up to US consumer price index data, the S&P 500 advanced despite Jerome Powell’s signals that interest rates will be higher for longer and a mixed reading on producer inflation, amid speculation that today's CPI print will come in below estimates: core CPI, which excludes volatile food and energy costs, is seen slowing to 0.3% month-on-month, from 0.4%; the core CPI reading is expected to show the lowest annual increase yet this year, in which case the core PCE deflator, the Fed’s preferred inflation gauge, could also register its lowest reading in 2024. Into the data, Fed-dated OIS price in around 42bp of rate cuts for the year with the first 25bp fully priced in for the November policy meeting (see our preview here for why a lower than expected number seems likely).

“An in-line-with-consensus US core CPI read is discounted and in the price, but that may be enough to promote relief buyers and see the index push higher,” said Chris Weston, head of research at Pepperstone Group Ltd. “A core CPI read below 0.25% month-on-month and I certainly wouldn’t want to be short.”

A survey conducted by 22V Research showed 49% of investors expect the market reaction to the CPI report to be “risk-on” — while only 27% said “risk-off.”

“A downside surprise seems needed,” said Michael Leister, head of rates strategy at Commerzbank AG. “For one, break-evens have already corrected notably and thus should provide less support for the long-end from here. At the same time, the Fed will remain reluctant to give the all-clear considering the lack of disinflation progress.”

European stocks rallied, led by real estate, telecoms and utilities. The IBEX 35 outperformed while the CAC 40 was flat, lagging peers.  In individual stocks, Burberry Group Plc declined after reporting a slump in sales, dragging the consumer goods sector lower. ABN Amro Bank NV dropped more than 5% after unchanged guidance, while Finnish refiner Neste Oyj slumped on a downward revision on sales margins for its renewable products. Here are all the notable European movers:

• Merck KGaA shares climb as much as 4.6% after the Germany company reported adjusted Ebitda for the first quarter that beat analyst expectations and forecast a return to organic sales and earnings growth for 2024.
• LEG Immobilien shares rise as much as 3.3% after the German real estate firm’s first-quarter results show what analysts describe as a solid start to the year.
• Hunting shares surge as much as 23% after the oil field services provider said Ebitda will be at the top-end of its current guidance range thanks to a bumper order from the Kuwait Oil Co.
• Keller rises as much as 15% to a record high after the British ground-engineering specialist reported a better-than-expected start to the year and said its annual results will be “materially ahead” of the board’s initial expectations.
• InPost shares jump as much as 10% to hit their highest level since September 2021 following a 1Q earnings beat. That was aided by a 22% rise in parcel volumes and guidance for further volume growth in 2Q is seen positive by analysts, as it confirms that the Polish automated parcel locker operator is gaining further market share.
• Lundbeck shares gain as much as 7.7%, the most in more than 15 months, after the Danish pharmaceutical group reported better-than-expected results for the first quarter.
• SoftwareONE shares rally as much as 6.6% after the Swiss software provider posted solid margin expansion, offsetting slightly below-consensus Ebitda, according to Baader.
• Thyssenkrupp drops as much as 8.1%, the most since Feb. 14, after the steel producer reduced its expectations for a second time in three months amid lower steel prices and carbon dioxide trading losses.
• ABN Amro shares decline as much as 6.5% after the Dutch bank’s first-quarter results showed a capital ratio that missed analyst estimates, overshadowing more positive aspects of the earnings report.
• Burberry shares fall as much as 4.6% after the British luxury-goods maker’s adjusted pretax profit for the full year missed estimates amid a tough backdrop for high-end goods.
• Allianz slips as much as 2.2% despite reporting operating profit for the first quarter that beat estimates. Analysts note misses on accident year loss and solvency ratios, amid otherwise in-line results.
• Neste shares decline as much as 15% to the lowest level since 2018, after it posted a big downward revision of its renewable products sales margin guidance, which implies cuts to the Finnish refiner’s consensus and signals weaker market conditions, according to analysts.
• HelloFresh shares fall as much as 7.2% to a record intraday low Wednesday after JPMorgan downgraded the meal-kit company to neutral from overweight, saying its North America business is still “far from stabilizing.”

The euro-zone economy started the year on a stronger footing than anticipated, growing 0.3% in the three months through March following a shallow recession in the latter half of 2023, data Wednesday confirmed. Yet inflation is likely to backpedal more quickly than previously anticipated, with growth picking up next year, according to the European Commission. In contrast to the likely US path for interest rates, Bank of France Governor Francois Villeroy de Galhau said that the European Central Bank is very likely to start easing policy at its next policy meeting in June.

Earlier in the session, Asian stocks closed at the highest level since April 2022, as technology shares were lifted by key earnings reports and gains in US peers overnight. The MSCI Asia Pacific Index climbed as much as 0.6%, with Sony providing the biggest boost after announcing strong results and a buyback. Taiwan stocks led gains among regional equity gauges, with shares also rising in Australia. Markets were closed for holidays in Hong Kong and South Korea.

In FX, the dollar extended declines; Norwegian krone and yen outperformed as all G-10 FX rose. US equity futures were steady while

In rates, major global bonds rallied, led by gilts. US 10-year yields dropped to a five-week low of around 4.42% before US CPI data as treasuries were slightly richer across the curve, following wider gains in core European rates where German yields are lower by 4bp to 7bp, outperforming peers. Gains in Treasuries extend Tuesday’s rally as traders set up for Wednesday’s April CPI and retail sales reports. US yields richer by up to 2bp across belly of the curve which outperforms slightly, steepening 5s30s spread by almost 1bp on the day; 10-year yields around 4.42% with bunds and gilts outperforming by 5bp and 3.5bp in the sector.

In commodities,  oil held gains after an industry report showed shrinking US stockpiles, overshadowing a softer demand growth outlook by the International Energy Agency for the rest of the year.  WTI traded within Tuesday’s range, adding 0.5% to near $78.42.  Most base metals trade in the green. Copper futures in New York rallied to a record high after a short squeeze that’s prompted a scramble to divert metal in other regions to US shores. Spot gold was up roughly $15 to trade near $2,373/oz.

Looking at today's calendar, US economic data slate includes May Empire manufacturing, April CPI and retail sales (8:30am New York time), March business inventories and May NAHB housing market index (10am) and March TIC flows (4pm). Fed officials’ scheduled speeches include Barr (10am), Kashkari (12pm) and Bowman (3:20pm)

Market Snapshot

• S&P 500 futures little changed at 5,271.50
• STOXX Europe 600 up 0.4% to 523.60
• MXAP up 0.6% to 179.55
• MXAPJ up 0.6% to 562.20
• Nikkei little changed at 38,385.73
• Topix little changed at 2,730.88
• Hang Seng Index down 0.2% to 19,073.71
• Shanghai Composite down 0.8% to 3,119.90
• Sensex down 0.2% to 72,945.92
• Australia S&P/ASX 200 up 0.3% to 7,753.70
• Kospi up 0.1% to 2,730.34
• German 10Y yield little changed at 2.49%
• Euro up 0.1% to $1.0834
• Brent Futures up 0.6% to $82.87/bbl
• Gold spot up 0.5% to $2,369.50
• US Dollar Index down 0.19% to 104.82

Top Overnight News

• China is considering buying millions of unsold homes to support the property market, people familiar said. Local governments would be asked to purchase units from distressed developers at steep discounts using loans provided by state banks. The offshore yuan strengthened. BBG
• The IEA lowered its outlook for crude demand growth this year amid an economic slowdown and mild weather in Europe. Still, annual consumption remains on track to reach a record of more than 103 million barrels a day. The agency kept its estimates for 2025. BBG
• The ECB is very likely to start cutting interest rates at its next policy meeting in June, Bank of France Governor Francois Villeroy de Galhau said. Barring surprise shocks, the ECB remains committed to bringing inflation to its 2% goal by next year from 2.4% currently, he said in an interview on RTL radio on Wednesday. BBG
• The Biden administration is encouraging Arab states to participate in a peacekeeping force that would deploy in Gaza once the war ends, in the hope of filling a vacuum in the strip until a credible Palestinian security apparatus is established. FT
• The Biden administration notified Congress on Tuesday that it was moving forward with more than $1 billion in new weapons deals for Israel, U.S. and congressional officials said, a massive arms package less than a week after the White House paused a shipment of bombs over a planned Israeli assault on Rafah. WSJ
• CPI: We expect a 0.28% increase in April core CPI (vs. 0.3% consensus), corresponding to a year-over-year rate of 3.61% (vs. 3.6% consensus); We think an upward pressure from Car Insurance, a neutral impact from health insurance, and see rent inflation slowing, while OER should remain strong. SPX implied moving into the event is 95bps. GIR
• A top official at the Federal Reserve said it was too soon to say that progress bringing down inflation had stalled and said it was appropriate for the Fed to hold rates steady as it awaits evidence that price pressures are easing further. “It’s too early to really conclude that we stalled out or that inflation is going to reverse,” said Cleveland Fed President Loretta Mester in an interview Tuesday. “I kind of always suspected that we wouldn’t be able to make as quick progress as we got in the second half last year.” WSJ
• Washington is increasingly concerned about Russia’s momentum in Ukraine, although the Pentagon still hopes that once American weapons begin arriving (around July), many of Moscow’s recent gains can be reversed. NYT
• Brazil’s President Luiz Inacio Lula da Silva fired Petrobras CEO Jean Paul Prates following a dispute over dividend payments. The government is proposing Magda Chambriard to replace him.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly higher following the momentum from the US where the major indices ultimately gained and the Nasdaq posted a fresh record close with two-way price action seen following PPI data. ASX 200 was led by the mining, materials and healthcare sectors, while participants also digested the recent budget announcement with the government planning to boost spending next year ahead of an election. Nikkei 225 gained but was well off today's best levels with newsflow dominated by earnings releases including from Sony and Sharp, while the Japanese megabanks are also scheduled to announce their results today. Shanghai Comp was pressured after the recent US tariff announcement and with Stock Connect trade shut owing to the holiday closure in Hong Kong, although the real estate industry found solace from news that China is mulling purchases of unsold homes to ease the glut.

Top Asian News

• PBoC conducted CNY 125bln (CNY 125bln maturing) in 1-year MLF with the rate kept unchanged at 2.50%.
• China mulls government purchases of millions of unsold homes from distressed developers at steep discounts to ease the glut, while Beijing is seeking feedback on the preliminary proposal, according to Bloomberg sources.

European bourses, Stoxx600 (+0.2%) are mostly firmer, continuing the positive sentiment seen in APAC trade overnight. European sectors hold a strong positive tilt; Real Estate is the clear outperformer, lifted by post-earning gains in Leg Immobilien (+2.9%). Basic Resources is lifted by broader strength in underlying metals prices. Consumer Products & Services is weighed on by losses in the Luxury sector, namely Burberry (-3.1%). US Equity Futures (ES U/C, NQ U/C, RTY +0.3%) are modestly firmer, attempting to build on the prior session’s advances, though still mindful of the upcoming US CPI & Retail Sales.

Top European News

• CB's Rehn says if the confidence that inflation is approaching its target in a sustainable manner continues to strengthen, the restrictiveness of monpol can be reduced.
• European Commission Forecasts (Spring 2024): A gradual expansion amid high geopolitical risks.
• Riksbank Minutes: Floden said "Monetary policy will remain contractionary even after a policy rate cut to 3.75 per cent. If these developments continue, it will therefore be appropriate to continue to cut the rate by a few more steps".

FX

• DXY has continued its descent below the 105 mark and is approaching its 100DMA at 104.78 ahead of today's US CPI & Retail Sales.
• EUR/USD is on firmer footing vs. USD and now above the 1.08 mark, with its 100DMA at 1.0822. EZ-specific updates have been non-incremental for today's session.
• GBP is a touch firmer vs. peers with nothing in the way of UK-specific drivers. As such, the dollar side of the equation will likely prove more pivotal. A dovish CPI print could see GBP/USD test the May high at 1.2634.
• Antipodeans are both performing well vs. the USD with some support seen after reports that China is mulling purchases of unsold homes to ease the glut; has helped prop up metals prices. AUD/USD has printed a new high for the month at 0.6651.
• A two-way reaction for the SEK post-CPI. Initially, EUR/SEK moved lower from 11.6760 to 11.6520 with the focus likely on the hot ex-energy M/M. However, this swiftly retraced with EUR/SEK surpassing pre-release levels and going as high as 11.7035 given the slight uptick in the headline Y/Y was less than expected.

Fixed Income

• USTs are firmer by a handful of ticks at a fresh WTD peak of 109-07+, with the complex continuing to build on the post-PPI gains; data which whilst is hawkish at first-glance, contained some softer components relevant to the US PCE.
• Gilts are the modest outperformer as the complex continues to pick up from Wednesday's PPI-induced downside, alongside broader fixed benchmarks, and as the dovish commentary from Pill remains the main development for the Gilt market in recent sessions. Gilts holding above 98.0 at a fresh WTD peak of 98.18.
• Bund price action is in-fitting with peers, but less-so than Gilts. Bunds are holding just above the 131.00 mark and matching the 131.13 double-top from Monday & Tuesday; price action was little reactive to the dual-tranche 30yr Bund auction, which was strong.

Commodities

• Crude is in the green with magnitudes comparable to equity performance as the complex appears to be following the overall risk tone and perhaps taking some impetus from USD downside into CPI. Brent July currently holds around USD 82.80/bbl, whilst WTI hovers USD 76.50.
• Gas benchmarks outperform after commentary from the QatarEnergy and TotalEnergies CEO around significant gas demand and there being no chance of a LNG surplus currently.
• Precious metals are supported given the cooler-take from PPI for CPI/PCE and after Chair Powell's comments on the readings. XAU around USD 2372/oz, just shy of last week's USD 2378/oz peak.
• Base metals are entirely in the green with sentiment lifted amid reports of further Chinese support measures.
• IEA OMR: cuts 2024 oil demand growth forecast by 140k BPD to 1.1mln BPD, 2025 demand expected to grow by 1.2mln BPD (vs. prev. forecast of 1.1mln BPD). 2024 demand forecast lowered due to weak deliveries, notably in Europe, shifted Q1 OECD demand into contraction. World oil supply to rise by 580k BPD in 2024 to a record 102.7mln BPD. Oil market looks more balanced in 2024. Even in the event that OPEC+ voluntary production cuts were to remain, global oil supply could rise by 1.8mln BPD in 2025 compared to the 580k BPD rise in 2024.
• US Energy Inventory Data (bbls): Crude -3.1mln (exp. -0.5mln), Cushing -0.6mln, Gasoline -1.3mln (exp. +0.5mln), Distillate +0.3mln (exp. +0.8mln).
• Explosion was reported after a drone attack at Russia's Rostov fuel depot, according to Russian agencies.

Geopolitics: Middle East

• A Hezbollah commander was killed in an Israeli airstrike targeting a car in southern Lebanon's Tyre, according to two Lebanese security sources cited by Reuters.
• Iraqi armed factions targeted an Israeli military target in Eilat with drones, according to Sky News Arabia.
• US President Biden would veto the Israeli bill on the floor this week, according to Punchbowl citing the White House. It was separately reported that the US State Department moved USD 1bln weapons aid for Israel to a congressional review process, according to a senior official cited by Reuters.
• Israel's Defence Minister Galliant set to to give security briefing to press at 16:00 BST/11:00ET.

Geopolitics: Other

• Ukrainian officials are making a new push to get the Biden administration to lift its ban on using US-made weapons to strike inside Russia, according to POLITICO.
• France and Netherlands seek EU sanctions on global financial institutions that help Russia's military, according to a proposal seen by Reuters.
• Russian President Putin said Russia and China are promoting the prosperity of both nations through expanded equal and mutually beneficial cooperation, as well as noted that Russian-Chinese economic ties have great prospects. Furthermore, Putin said China clearly understands the roots of the Ukraine crisis and its global geopolitical impact, while he is open to a dialogue on Ukraine, but added that such negotiations must take into account the interests of all countries involved in the conflict, including theirs, according to Xinhua.
• North Korean leader Kim oversaw a tactical missile weapon system on Tuesday, according to KCNA.

US Event Calendar

• 08:30: April CPI MoM, est. 0.4%, prior 0.4%
• 08:30: April CPI YoY, est. 3.4%, prior 3.5%
• 08:30: April CPI Ex Food and Energy MoM, est. 0.3%, prior 0.4%
• 08:30: April CPI Ex Food and Energy YoY, est. 3.6%, prior 3.8%
• 08:30: April Retail Sales Advance MoM, est. 0.4%, prior 0.7%
• 08:30: April Retail Sales Ex Auto MoM, est. 0.2%, prior 1.1%
• 08:30: April Retail Sales Control Group, est. 0.1%, prior 1.1%
• 08:30: May Empire Manufacturing, est. -10.0, prior -14.3
• 10:00: March Business Inventories, est. -0.1%, prior 0.4%
• 10:00: May NAHB Housing Market Index, est. 50, prior 51
• 16:00: March Total Net TIC Flows, prior $51.6b

DB's Jim Reid concludes the overnight wrap

Markets had been on course to continue their quiet holding pattern ahead of today's CPI but a late positive burst powered the S&P 500 (+0.48%) to within a whisker of its all-time high and the NASDAQ (+0.75%) to a new peak, while the 10yr treasury yield (-4.7bps) fell to its lowest level since the last CPI print on April 10. There weren’t obvious drivers, but perhaps the absence of bad news was enough to inject some relief into markets. Y esterday’s PPI data didn't really move the needle much with a notable beat balanced by some notable down revisions and some of the details being neutral for core PCE. So the focus will now shift to April's CPI after 3 upside surprises in a row for core CPI. Don't forget US retail sales as well, released at the same time.

For now at least, the Fed continue to stick to their recent message with Chair Powell yesterday saying that “we’ll need to be patient and let restrictive policy do its work”. So there was little acknowledgement that rate cuts were happening anytime soon, but Powell also didn’t dial up the hawkishness either. That narrative was supported by the PPI print for April, which was a distinctly mixed bag. On the negative side, headline PPI came in at a monthly +0.5% (vs. +0.3% expected), and the measure excluding food, energy and trade was also up +0.4% (vs. +0.2% expected). But in more positive news, the previous month’s headline PPI was revised down three-tenths to show a -0.1% decline. And on top of that, the components that feed into the Fed’s target measure of PCE were more neutral. For instance, portfolio management services were up +3.9%, but domestic airfares came down -4.7%.

For today, our US economists are expecting headline CPI to come in at +0.37%, and core CPI to be at +0.29%. The last three core CPI prints each came in at +0.4%, so this would be a deceleration. But even if those forecasts are realised, the 3m annualised rate for core CPI would still be running at +4.1%, so not the sort of territory where the Fed would ordinarily be cutting rates. For the year-on-year numbers, those forecasts would push the headline CPI rate down to 3.4%, and the core CPI rate to 3.6%. Click here for our US economists’ full preview, along with how to sign up for their webinar immediately afterwards.

Ahead of that, markets turned more upbeat yesterday, with the S&P 500 (+0.48%) closing within two tenths of a percent of its all-time high on March 28. Tech stocks outperformed, with the Magnificent 7 (+1.01%) reaching a new all-time high, led by Tesla (+3.29%) and Nvidia (+1.06%). But the equity rally was broad-based, with the small-cap Russell 2000 up +1.14%. The advance of the S&P 500 was earlier held back by several defensive sectors, with energy stocks (-0.13%) one of the weaker performers as Brent crude oil prices (-1.18%) closed at a 2-month low of $82.38/bbl. Meanwhile in Europe, the STOXX 600 (+0.15%) just about made it up to an all-time high, as the index posted an 8th consecutive advance for the first time since 2021.

The other notable story in the equity space came from several meme stocks, with GameStop up +60.1% on the day, building on its +74.4% advance on Monday. It's now up to $48.75 having traded as low as $10 in late April. Similarly, AMC Entertainment was up +31.98%, whilst Blackberry gained +11.94%.

For sovereign bonds, there was a divergent performance yesterday, with Treasuries rallying whilst most of Europe sold off. Yields on 10yr Treasuries fell by -4.7bps to 4.44%. By contrast, yields on 10yr bunds (+3.8bps), OATs (+3.9bps) and BTPs (+2.6bps) all moved a bit higher on the day. Those moves came in spite of comments from the ECB’s Knot that “June will be a good opportunity to make a first move in removing restriction”, which helped to cement the view that the ECB are moving towards a rate cut at their next meeting. In the UK, gilts saw a relative outperformance, with the 10yr yield down -0.1bps, which came as the unemployment rate ticked up a tenth to 4.3% over the three months to March. Moreover, BoE chief economist Pill sounded open to a rate cut, saying that it was “not unreasonable to believe that through the summer we will begin to see enough confidence in the decline in persistence that bank rate will come under consideration”.

In other news yesterday, we had confirmation that the US were imposing fresh tariffs on $18bn of Chinese imports, including steel and aluminium, semiconductors, and EVs. In fact, the t ariff on EVs will go up from 25% to 100%. Some of the new tariffs will take effect this year, but others won’t happen until 2026. The move comes ahead of November’s presidential election, but both parties have taken a much tougher stance on China over recent years, and Biden has kept most of Trump’s previous tariffs in place. Indeed, Trump himself said at a rally on Saturday that “I will put a 200% tax on every car that comes in from those plants”. So the direction has been towards a more protectionist stance on trade from both parties. Our China economist has written about the potential impact on the domestic macro landscape here.

Asian equity markets are mixed this morning with the Nikkei (+0.18%) and the S&P/ASX 200 (+0.47%) trading higher while Chinese markets are lagging with the CSI (-0.27%) and the Shanghai Composite (-0.17%) both trading slightly lower after the new US tariffs announced yesterday on an array of Chinese imports. Elsewhere, stock markets in South Korea and Hong Kong are shut for a public holiday. US equity futures are slightly higher with Treasuries fairly flat.

In monetary policy action, the PBOC kept the one-year medium-term lending facility (MLF) unchanged at 2.50%. This came despite weaker money supply numbers than expected overnight although Bloomberg are running a story suggesting China are working on a plan to buy up unsold homes to shore up the property sector. Moving ahead, markets will move their focus to China’s industrial production and retail sales data due on Friday.

Looking at yesterday’s other data, the German ZEW survey improved in May, with the expectations component up to 47.1 (vs. 46.4 expected), whilst the current situation reading moved up to -72.3 (vs. -75.9 expected). For the current situation that’s a 9-month high, and for the expectations component, that’s a 2-year high, which was last surpassed in February 2022.

To the day ahead now, and data releases include the US CPI report for April, along with retail sales for April and the NAHB’s housing market index for May. From central banks, we’ll hear from the ECB’s Rehn, Muller, Villeroy and Makhloufi, along with the Fed’s Kashkari and Bowman.

Tyler Durden Wed, 05/15/2024 - 07:31

Fiscal Bazooka: China Considers Buying Millions Of Homes To Save Property Market

In April's politburo meeting, the Chinese government's newfound focus on an oversupplied housing market was setting the stage to usher in new rescue policies to stabilize the economy. Weeks later, Bloomberg reported that the government was considering a plan for local governments to purchase millions of unsold homes to clear the excess supply. 

According to sources familiar with government discussions, the State Council requests feedback from various provinces and government entities on the home-buying plan.

Here's more color on the plan via Bloomberg: 

Local state-owned enterprises would be asked to help purchase unsold homes from distressed developers at steep discounts using loans provided by state banks, according to two of the people. Many of the properties would then be converted into affordable housing.

Officials are still debating details of the plan and its feasibility, the people said, adding that it could take months to be finalized if China's leaders decide to go ahead. The housing ministry didn't respond to a request for comment.

In a note earlier, Goldman's Peter Sheren told clients that this news is nothing new and "has been speculated for 3-4 weeks." 

"This was one of the initial catalysts for the China Property Sector (GSXACNRE) to rally 21% in the past month," Sheren said. 

Housing prices in China have already fallen 25-30% from the peak and presented a dark cloud of economic uncertainty over China's financial system stability and continued risk for China's macroeconomic backdrop. If authorities do proceed with the plan, in a separate note, Goldman's Wang Yi believes "this new initiative might help to stabilize housing prices." 

Here's more commentary from Goldamn's Sheren this morning: 

"Wang Yi and team think if the coming measures focus on clearing "saleable inventory" (which includes both completed and uncompleted but unsold units, and that are less than 3 years of last year sales volume) or about 1/4 of the entire inventory backlog, property price stabilization might be achievable.

"Wang Yi estimates that there was Rmb30tn (US$4tn) in residential inventory by end-2023. If fully built-up, this will be about 10X what the market sold in 2023, or 1/4 of total housing stock as of end-2023. The required capital investment for completing such inventory could be 5X the construction CAPEX in 2023."

In terms of what's needed in this fiscal bazooka to bottom China's ailing residential housing market, Shujin Chen, head of China financial and property research at Jefferies Financial Group, estimated at least 2 trillion yuan ($277 billion). 

Bloomberg Economics pointed out that the property sector "is unlikely to stabilize until the gap between housing supply and demand closes." 

Government data shows that about 3.6 billion square feet of unsold housing inventory linger on the market, the highest level since 2016.

Meanwhile, Tianfeng Securities estimates the new plan could cost 7 trillion yuan to absorb the inventory in 18 months. 

One major problem local governments face in reducing the housing surplus is the need to increase debt levels. Banks would also face mounting pressure as rising bad loans and contracting margins have weakened their balance sheets.

From a market perspective, this is terrific news, as the CSI 300 Real Estate Index initially jumped 5% after the report. 

However, deep, alarming structural problems persist in the world's second-largest economy. 

Tyler Durden Wed, 05/15/2024 - 06:55

"They Left Us No Choice": Woman With Vaccine Injury In Clinical Trial Sues AstraZeneca

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A vial of AstraZeneca vaccine is seen at a mass COVID-19 vaccination clinic in Calgary, Alta., on April 22, 2021. (The Canadian Press/Jeff McIntosh)

An American woman who suffered an injury from AstraZeneca’s COVID-19 vaccine sued the company on May 13, alleging the company breached a contract by not paying for the medical care she requires to deal with the injury.

“They left us no choice,” Brianne Dressen, a preschool teacher in Utah, told The Epoch Times in an email.

Ms. Dressen has paid tens of thousands of dollars to drugs to treat the nervous system disorder and other issues she’s experiencing, according to the complaint, filed in federal court in her home state.

Ms. Dressen chose to participate in AstraZeneca’s clinical trial in 2020 because she wanted to help the company develop its COVID-19 vaccine. The consent form she signed stated in part that AstraZeneca would “cover the costs of research injuries” and “pay the costs of medical treatment.”

“With these reassurances should something go wrong, Bri signed the form, rolled up her sleeve, and let the drug company inject the experimental product into her arm. Her mind was at peace, as Bri believed she was doing the right thing for her country, her students, and her family,” the suit states.

Ms. Dressen soon started experiencing problems, including blurred vision, tinnitus, and vomiting. She later became extremely sensitive to light and suffered spikes in her heart rate.

Ms. Dressen went to see numerous doctors as she attempted to figure out what was wrong with her, and seek treatment.

In 2021, U.S. National Institutes of Health doctors diagnosed Ms. Dressen as having “post-vaccine neuropathy,” according to records reviewed by The Epoch Times.

Bills for the doctors’ visits and drugs they prescribed began piling up quickly. The immunoglobulin recommended by government doctors alone costs $9,909.82 a month.

Ms. Dressen and her husband, a chemist with the U.S. Army, kept AstraZeneca and Velocity, which ran the trial for the company, apprised of the accumulating costs, according to the suit.

The family messaged Velocity on Jan. 15, 2021, with the first set of payment records for treatment but received no response, according to the suit. “Checking on updates for this. . . . When may we expect payment?” Brian Dressen, Ms. Dressen’s husband, wrote several weeks later.

“I am sorry you have not heard anything as of yet. Hopefully I get an answers [sic] soon. I will reach out again today,” a Velocity official responded.

No funds came to the family, forcing them to refinance their home.

“I’d like to know when we can expect the first payment on Brianne Dressen’s medical bills? Two months since submitting...“ Mr. Dressen wrote on March 18, 2021. The Velocity official said that she was ”forwarding on” the payment records.

“Hey this is Brianne Dressen. Can you advocate a bit for us here help us get a timeline for payment? I am still not doing well, we have had to hire for after school childcare. We really need this money,“ Ms. Dressen wrote on March 24, 2021. The official said the following day she would be escalating the issue and did not understand ”why it is taking so long.”

The back-and-forth continued for months with no reimbursement paid to Ms. Dressen.

Brianne Dressen in New York on Jan. 6, 2023. (Jack Wang/The Epoch Times)

After a local television station reported on Ms. Dressen’s case on July 13, 2021, Velocity contacted the Dressens and said a payment of $590.20 was forthcoming.

The company issued the payment and said it was in touch with AstraZeneca regarding the approval of additional funds.

In December 2021, the official sent a statement for Ms. Dressen to sign that said in part that Ms. Dressen would accept $1,243 in exchange for dropping any additional claims to payment.

The Dressens declined the offer, describing it as insulting.

In March 2022, AstraZeneca representatives began directly contacting the Dressens, requesting billing and medical records.

One representative wrote on Aug. 12, 2022, that the company was waiting on medical records from providers to assess the claims. The representative said on Sept. 26, 2022, that all of the medical records had been received.

AstraZeneca and Velocity never contacted the Dressens again, according to the suit.

“I did everything they asked of me. I honored my obligations to them. They have not honored any. When they needed me, I was there, I cooperated. When I needed them, they were nowhere to be found,” Ms. Dressen said in a statement.

The suit acknowledges that COVID-19 vaccines are and were covered by the Public Readiness and Emergency Preparedness Act, which gives manufacturers immunity to liability in most cases. The suit accuses the companies of breach of contract and breach of duty. It asks for damages for medical expenses, emotional fallout, loss of income, and other expenses, as well as attorney fees and prejudgment interest.

Ms. Dressen is seeking a jury trial.

Velocity did not respond to a request for comment. AstraZeneca did not return an inquiry.

AstraZeneca’s vaccine was never cleared for use outside clinical trials in the United States.

The UK-based company announced earlier this month it is withdrawing the vaccine, citing limited demand. The announcement came several months after it acknowledged the shot can cause blood clots and low levels of platelets, a combination known as thrombosis with thrombocytopenia syndrome.

Johnson & Johnson’s shot, which was cleared in the United States and also causes the syndrome, was pulled from the market in 2023.

Tyler Durden Wed, 05/15/2024 - 06:30

Should You Believe Faulty U.S. Crime Stats Or Your Own Lying Eyes?

Authored by James Varney via RealClearInvestigations,

Americans can be forgiven for suffering from whiplash regarding law and order. 

In recent weeks the Biden administration and many news outlets, including USA Today and The Hill, have touted declines in violent crime statistics to argue that America is becoming a safer place. 

“Right now, with 2023 figures and early 2024, the trends are all pointing down, in a positive direction,” Jeff Asher, whose New Orleans-based AH Datalytics is developing his own “Real-Time Crime Index,” told RealClearInvestigations. 

Conservative outlets, including City Journal and the editorial page of the Wall Street Journal, assert that minor declines in headline grabbers like homicides fail to capture what is really happening in the U.S. 

From 2017 to 2019, the U.S. had an average of 16,641 homicides a year. In 2021 and 2022, however, the country saw considerably more bloodshed, with an average of more than 22,000 annual homicides. Even if the 2023 number drops slightly, it will still represent a large increase over the recent past, before the pandemic and racial upheaval set in motion in 2020.

Many criminologists say this illlustrates one of the problems with the official numbers that are at the center of public debate: They give a distorted impression of true levels of crime. They note that crime stats have become notoriously incomplete in recent years. In some years many big cities did not report their numbers to the FBI, and there are such wide discrepancies in these tallies that the picture they provide has more blur than clarity.

Declining arrest rates and slowing police response times to 911 calls also help explain why polls show Americans believe crime is rising. The experts say the numbers only give some sense of lawbreaking, while most Americans – the vast majority of whom are not crime victims in a given year – are influenced by their largely media-driven perception of whether society feels orderly. 

“There are social media videos of people walking into a CVS and walking out with a shopping cart full and there seems to be no consequences – that’s part of the problem,” said Jay Town, former U.S. Attorney for the Northern District of Alabama. “And then you have people arrested a dozen times and they’re out with no bail. There are no consequences, and thus there are more criminals in the street.”

Americans may fall back on such perceptions in part because the official reports are incomplete and rife with error. “I don’t think with any crime statistics we can ever be precise,” said Asher.

For decades, the traditional gold standard for criminologists was the FBI’s Uniform Crime Reports, annual compilations by the Bureau of stats provided to it by state and local law enforcement agencies. The FBI’s data, which currently show declines in several criminal categories, especially homicide, provide the basis for many of the stories arguing that, in terms of crime, the U.S. situation is improving.

But the FBI statistics aren't what they used to be, according to several criminologists who pointed to gaps in coverage and apparent errors. The problem began in 1988 when the bureau began to move toward a complex new system of reporting – the National Incident-Based Reporting System (NIBRS). It promised to provide more comprehensive detail and enable authorities to pinpoint high-crime areas, criminals, and victims more accurately.

But the transition proved to be a herculean task, so much so that the FBI allowed departments to delay their full adherence to the program even after the feds doled out $120 million to agencies to assist with compliance. Still, in 2020, 2021 and 2022, either all or some of the biggest police forces in the U.S. -- New York City, Chicago and Los Angeles -- did not provide data.

There have also been problems with the data that was submitted, including the news in 2022 of major problems with the St. Louis Police Department data, and more recent revelations that figures for sexual crimes provided by the New Orleans Police Department were wrong.

In Baltimore, the Police Department and various news reports put the total for 2022 homicides between 332 and 336, but the FBI’s dataset puts the number at 272. Baltimore police officials did not reply to RCI’s inquiries about the wide spread in the reported numbers, and if anyone in the city’s police department had brought the matter to the FBI’s attention.

The Baltimore department acknowledges its numbers may not be the same as those it submits to the FBI, but states on its website that “any comparisons are strictly prohibited.” 

Similarly, the police departments in Milwaukee and Nashville did not respond to questions about divergences between their stats on robberies and those from the federal bureau. Milwaukee police reported a 7 percent increase in robberies in 2023, but the FBI recorded a 13 percent decline. 

An FBI spokesperson told RCI, “It is the responsibility of each state UCR [Uniform Crime Reports] program or contributing law enforcement agency to submit accurate statistics and correct existing data that are in error.”

Criminologists cite other discrepancies in the official measurements they use to assess the situation. While FBI stats show declines in violent categories, the Department of Justice’s survey reports more people saying they have been victims of such crimes. The Centers for Disease Control figures for homicides, which have long moved in the same direction as the FBI’s, started exceeding the FBI’s in 2020 and the gap has widened since then.

“I wouldn’t say the FBI is cooking the books, but that the data they are putting out is half-baked,” said Sean Kennedy, the executive director of the Coalition for Law, Order and Security, which has pushed back against recent media reports that crime is falling noticeably in the U.S. 

“So it’s not a conspiracy but a rush job, and it’s giving people a false picture,” he told RCI. “They infer something is true, and then because it’s politically expedient they don’t bother correcting it.”

A Sharp Decline in Arrests

Some criminologists say there is another, hidden dynamic within the crime statistics that helps explain why most Americans think crime is on the rise – the dramatic decline in arrests. Scouring FBI data, John Lott, the founder of the Crime Prevention Research Center, found that arrests for reported violent crimes in major cities fell 20 percent in 2022, from 42.5 percent in 2019 – the year before the COVID pandemic and BLM protests in response to George Floyd’s death while in police custody. 

The percentage of murder and rapes cleared by arrests fell to 40.6 percent from 67.3 percent in those years; for rapes from 33.8 percent to 17.4 percent, and arrests for reported property crimes in major cities dropped to 4.5 percent in 2022 from 11.6 percent in 2019.

It is not clear how much of this decline is due to reductions in the size of many departments – New Orleans, for example, reportedly lost 20% of its force between 2020 and 2022.

“There are lots of issues here, and I’m in disbelief about some of them,” said Lott. “It’s mind-boggling to me – we already know many crimes have always been underreported and now it seems to be, ‘Why bother reporting a property crime’ to the police? The bottom line is our law enforcement system seems in some ways to be falling apart, especially in the big cities.”

Calling the Cops ... and Then Waiting  

The plummeting arrest rates contribute to the general sense of lawlessness, a feeling compounded by surging increases in response times to calls. Comparing data for 15 law enforcement agencies from 2019-2022, Asher found only one city – Cincinnati – that reduced its response time, and that by 0.7 minutes. In New Orleans, the average response time nearly doubled, from 50.8 to 145.8 minutes, while Nashville saw a rise from 44.2 minutes to 73.8 minutes and New York City a 33-minute increase.

Some cities are even worse.

“If it’s not a shooting or a stabbing we’re up to about two hours for responding to property calls,” Jared Wilson, president of the San Diego Police Officers Association, told RCI. “As a result, we’ve seen a significant problem with reporting of crime right now.”

Wilson said auto thefts better capture the state of crime and perceptions of it: As thefts of essential registered property, they tend to be reported. In San Diego, Wilson said, those have risen year-to-year, with a whopping 27% jump in 2021, all of which contribute to people’s perception of increased criminal activity.

Betsy Branter Smith, a retired cop and spokeswoman for the National Police Association, said such issues contribute to a deteriorating relationship between citizens and the police. That unraveling, along with increasing hostility between police departments and district attorneys in some big cities like Philadelphia and Los Angeles, has made some cops less pro-active on the job.

 “It’s not so much hostility’’ toward cops, but frustration and resignation,” she said. “It’s time-consuming to be a crime victim, and if prosecutors aren’t going to do anything, why report it?”

Smith said many police officers, in turn, are frustrated by bail reform and other efforts that put many alleged lawbreakers back on the streets quickly. Yes, she said , many officers have almost certainly become less pro-active. “We know it, we see it. It’s a sad state of affairs for law enforcement. Cops represent the government, basically, and we’re losing faith in the government we’re supposed to represent.”

Then there is media coverage. Although “if it bleeds, it leads” journalism is not new, the steady flow of stories in traditional and social media of mass shootings, smash-and-grab crime sprees, cops beaten on the streets of Manhattan and young women punched in the face for no apparent reason spawn a sense of disorder. So too do migrants pouring across the southern border, students taking over campus quads, squatters commandeering other people’s homes, the rise of homeless encampments and open-air drug use in several major cities. 

“There is this tension there - this reality of visible signs of lawlessness and disorder that generate a feeling of unease,” said Rafael Mangual, a fellow at the Manhattan Institute of Policy Research.

Asher agreed: “People are inundated by pictures of lawlessness and there’s no doubt that contributes to a lack of a full awareness among Americans about what might actually be happening.”

Tyler Durden Wed, 05/15/2024 - 05:45

Rail Union Warns German Train System Turning Into "Battleground" Thanks To Male Migrants

Authored by Paul Joseph Watson via Modernity.news,

The head of a German rail union warns that the country’s train system is turning into a “battleground” thanks to a wave of violence and intimidation being unleashed by male asylum seekers against female staff.

In an interview with Focus Online, Steffi Recknagel, the head of the Railway and Transport Union (EVG) in Thuringia, says that the average day is “sometimes life-threatening” for employees due to the sheer amount of abuse being dished out by migrants.

“I have an average of three employees sitting in my Erfurt office every week for legal advice. They were attacked, spat on, insulted, threatened or pushed,” said Recknagel, adding that female employees are being slapped, kicked, spat at and threatened with being stabbed by the ‘refugees’.

“The worst case was that a train attendant was threatened with a knife,” said Recknagel, adding that another was physically attacked from behind and “the air was knocked out of her.”

The union boss said that one stretch of the network was particularly bad, specifically the one frequented by Syrian, Afghan, and Turkish migrants from the local asylum center.

“I drive the Erfurt-Suhl route every day,” said Recknagel.

“And unfortunately, I have to say it like this: It is mostly young men from the initial reception center who misbehave completely on our trains. They always travel in groups and feel strong together.”

Instead of intervening when the migrants engage in violent or threatening behavior towards other passengers, train staff look the other way or even run and hide in locked compartments to avoid becoming the next victim.

“Our people are afraid, very afraid. We have employees who say: If these groups are on the train, then I won’t check tickets. Then, they say they’ll stay at the front with the train driver or lock themselves in their cabin until they get to a safe station and they get out,” said Recknagel.

She noted that nothing ever happens to the migrants who behave in such a manner, with the police largely powerless to step in.

A four page letter sent to Thuringia Prime Minister Bodo Ramelow (Left Party) complains that female workers have been subjected to “sexist insults and spit on in a disgusting manner,” which includes migrants flashing their genitals.

The letter notes that the chaos is almost entirely the responsibility of “people with a migration background,” including one incident where rival migrants fought a running battle, leaving an entire train compartment covered in blood.

“Our colleague had to continue the journey to the Suhl train station in fear of death and with a railcar that was heavily contaminated with human blood,” states the letter. “We don’t need to talk at this point about the psychological consequences for our still very young colleague and the passengers, given the scenes that could have come from a civil war zone!”

The letter goes on to vent fury about how Germans are being told to embrace “tolerance towards migrants” while being violently attacked by migrants.

“How can you expect citizens of this country to be open to the refugee policy that is being practiced when it happens — practically every day, and not just on public transport! — that we have to witness such violence, brutalization and absolute contempt for our laws and society?”

The Alternative for Germany (AfD), the country’s leading anti-mass migration party which the establishment is trying to ban, responded to the story by asserting, “The railway and transport union in Thuringia is sounding the alarm: Train attendants and railway employees are regularly attacked, spat on, insulted, threatened or beaten.”

As we recently highlighted, foreign migrant suspects are responsible for nearly 6 in 10 violent crimes in Germany according to new figures released by the federal government.

Despite comprising roughly 14.6 per cent of the population, foreign migrants were responsible for 58.5 per cent of all violent crimes.

*  *  *

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

Tyler Durden Wed, 05/15/2024 - 05:00

Emergency Blackouts Introduced Across Ukraine As Temperatures Dip

Following several weeks of stepped-up Russian aerial attacks which have pummeled Ukraine's energy and electrical grid, state power operator Ukrenergo on Tuesday announced that rolling emergency blackouts have gone into effect across the country.

It comes amid a drop in temperatures which has served to further strain the grid. "From 21:00 to 24:00 (1800-2100 GMT), Ukrenergo is forced to introduce controlled emergency shutdowns in all regions of Ukraine," it stated on Telegram.

"The reason for this is a significant shortage of electricity in the system as a result of Russian strikes and increased consumption due to a cold snap," Ukrenergo added. 

The Kiev region has for example seen the temperature drop into the 40s this week, and during the day has been in the 50s.

While likely there's been greater impact in harder hit parts of the war-ravaged country, especially in the east and south, the capital of Kiev saw at least 10% of households get disconnected Tuesday.

Reuters described that "Footage shared on social media from the western city of Lviv showed buildings in complete darkness in the city center and street lights switched off."

International report have further indicated blackouts hit Kharkiv and Donetsk and many other places, with predictions of increased disruptions throughout the late evening hours. Currently fighting is heaviest in these oblasts, and Russian forces are trying to establish a 10km deep buffer zone along the border in Kharkiv region.

The below video shows an area of Lviv in complete darkness as cars travel through the city center...

After massive attacks in Ukraine, there is a shortage of electricity power, outages are occurring and emergency schedules are being introduced
▪️In the video, the Lviv Center is without light, the traffic lights are not working.
▪️In Lviv, Sumy, Volyn and Ivano-Frankivsk… pic.twitter.com/vViHJzl868

— DeepState Illuminate (@TheDeep_State6) May 14, 2024

Authorities are scrambling to find any way possible to meet demand:

Ukraine plans record electricity imports from five European countries on Monday after reporting significant energy infrastructure damage from Russian strikes, the energy ministry said.

Imports are expected to rise to 19,484 megawatt hours (Mwh), beating the record of 18,649 Mwh at the end of March after the first wave of Russian attacks on Ukraine's energy sector.

Ukraine forces have been keeping up their cross-border mortar and drone attacks, especially targeting Russia's own energy depots and oil facilities. Putin has vowed to hit back, and Russian strikes on Ukrainian cities have increased over the last month.

Tyler Durden Wed, 05/15/2024 - 04:15

NATO's Newest Member Open To Hosting Nuclear Weapons

Via The Libertarian Institute

The Swedish Prime Minister has said his country would be willing to host nuclear weapons during a war. The North Atlantic Alliance has a nuclear sharing program that has US nuclear weapons deployed in five countries. The Polish leader recently said he hopes Warsaw can one day join the program. 

Swedish Prime Minister Ulf Kristersson said on Swedish public radio that Stockholm would be willing to do this only during wartime. "In a war situation it’s a completely different matter. It would depend entirely on what would happen," he explained "In the absolute worst-case scenario, the democratic countries in our part of the world must ultimately be able to defend themselves against countries that could threaten us with nuclear weapons."

Kristersson’s remarks came as Sweden hosted the leaders of Germany, Denmark, Finland, Norway, and Iceland to discuss deepening military ties.

"For decades, we have lived very peacefully and without very big threats to Europe. Personally, I think these times are over," Danish Prime Minister Mette Frederiksen said during the summit. "With all that we see from the Russian side, we are at the beginning of a new era. It would be wrong if we, as a government, said that you don’t have to deal with this in your everyday life."

Sweden is the newest member of NATO. When Stockholm first requested NATO membership, Russian President Vladimir Putin said Russia would not object to the move unless more weapons were deployed to Swedish territory. 

"We do not have such problems with Sweden and Finland, which, unfortunately, we have with Ukraine. We have no territorial issues… no disputes… we have nothing that could bother us from the point of view of Finland’s or Sweden’s membership in NATO." Putin continued, "Only they should plainly and clearly realize that there were no threats before, now, if military contingents and infrastructure are deployed there, we will have to respond in a mirror manner and create the same threats to the territories from which threats are created to us."

The alliance has three nuclear weapon states, and the US stores weapons in five additional countries, including Italy, Turkey, Germany, Belgium, and the Netherlands. President Andrzej Duda expressed his willingness to make Poland the sixth country to host nuclear weapons.

"I must admit that when asked about [hosting nuclear weapons], I declared our readiness. Recently, [Russia] has been relocating its nuclear weapons to Belarus," he said. "If our allies decide to deploy nuclear weapons as part of nuclear-sharing also on our territory to strengthen the security of NATO’s eastern flank, we are ready for it."

You will find more infographics at Statista

At the time, a Russian government spokesman said the Kremlin would respond if NATO moved forward with Duda’s proposal. "The military will, of course, analyze the situation if such plans are implemented, and in any case will do everything necessary, [will take] all the necessary retaliatory steps to guarantee our safety," Dmitry Peskov explained. 

Tyler Durden Wed, 05/15/2024 - 03:30

Where Wealth Is Concentrated In Africa

56 percent of Africa’s millionaires and over 90 percent of its billionaires lived in just five countries in 2023 - South Africa, Egypt, Nigeria, Kenya, and Morocco, according to The Africa Wealth Report 2024 published by Henley & Partners and New World Wealth. There were 135,200 people who owned wealth of 1 million U.S. dollars or more living in the continent that year, as well as 342 centi-millionaires worth $100 million or more and 21 billionaires.

As Statista's Anna Fleck shows in the following chart, South Africa had the highest number of so-called high net worth individuals (HNWIs) with 37,400 millionaires, 102 centi-millionaires and 5 billionaires. It was followed by Egypt with 15,600 millionaires, 52 centi-millionaires, and 7 billionaires, while Nigeria placed 3rd on the continent with 8,200 HNWIs. Rounding up the top ten were Kenya (7,200 millionaires), Morocco (6,800), Mauritius (5,100), Algeria (2,800), Ethiopia (2,700), Ghana (2,700), and Namibia (2,300).

You will find more infographics at Statista

Looking at the data in terms of cities, then South Africa’s Johannesburg comes first as the place with most HNWIs in Africa, with 12,300 millionaires, 25 centi-millionaires, and 2 billionaires, followed by Cape Town with 7,400 millionaires, 28 centi-millionaires, and 1 billionaire. Cairo in Egypt (7,200 millionaires), Nairobi in Kenya (4,400), and Lagos in Nigeria (4,200) also rank high on this basis.

According to Andrew Amoils, Head of Research at New World Wealth, another pattern in recent years is that a large number of high net worth individuals are moving abroad.

“According to our latest figures, approximately 18,700 high-net-worth individuals have left Africa over the past decade (2013 to 2023). There are currently 54 African born billionaires in the world, including one of the world’s richest, Elon Musk, but only 21 of them still live on the continent”, he said.

“Most of these individuals have relocated to the UK, the USA, Australia, and the UAE. Significant numbers have also moved to France, Switzerland, Monaco, Portugal, Canada, New Zealand, and Israel.”

Despite this, the report writers state that Mauritius, Namibia, Morocco, Zambia, Kenya, Uganda, and Rwanda are all expected to experience 80 percent millionaire growth, if not more, in the coming decade.

Tyler Durden Wed, 05/15/2024 - 02:45

Mass Starvation: Here's Why Most Of America Is Completely Unprepared

Authored by Brandon Smith via Alt-Market.us,

The concept of mass starvation has not been in the forefront of American society for a very long time. Even during the Great Depression the US was majority agrarian and most people knew how to live off the land. In fact, the US has never suffered a true national famine. There have been smaller regional instances of famine (such as during the Dust Bowl in the 1930s), but nothing coming remotely close to the kinds of famines we have seen in Asia, the Eastern Bloc, Africa or the Middle East in the past 100 years.

Even Western Europeans dealt with major famines during the World Wars (like the Dutch Famine) and that experience has left an imprint on their collective consciousness. Most Americans, on the other hand, don’t get it. Because we have lived in relative security and economic affluence for so long the idea of ever having to go without food seems “laughable” to many people. When the notion of economic collapse is brought up they jeer and call it “conspiracy theory.”

Compared to the Great Depression, the US population today is completely removed from agriculture and has no idea what living off the land means. These are not things that can be learned in a few months from books and YouTube videos; they require years of experience to master.

I will say that things have changed dramatically in the past two decades I have been writing for the liberty media. When I started back in 2006 the preparedness movement was incredibly small and often people were afraid to broach such topics in public forums.

In the past several years preparedness culture has EXPLODED in popularity. Millions of Americans are now dedicated survival experts with extensive preps and firearms training. Prepping and shooting is no longer the realm of tinfoil hat “crazies”, now it’s considered cool.

The credit crash of 2008-2009 certainly helped wake people up to the reality of economic instability in the US. Then the covid pandemic, the lockdowns and the attempts at medical tyranny really shocked Americans out of their stupor. Everything we “conspiracy theorists” have been warning about was suddenly confirmed in the span of a couple of years. Every time globalists and governments create a crisis they only inspire more preppers.

The greater problem in terms of famine is not that individual Americans are not aware of the threat; many of them are. The problem is that our infrastructure and logistical systems are designed to fail and there’s not much the average citizen can do about it.

The just-in-time freight system is perhaps one of the worst ever devised in terms of community redundancy. Any disruption no matter how minor could cut off supplies to a town or city for days or weeks. Then there’s the interdependency that comes with food being produced outside most states. If your state does not have a solid agricultural base then it will be reliant on outside food sources during a crisis. What guarantees are there that your region will be able to secure food from elsewhere?

Furthermore, most of the populace, even those that are preparing, have never experienced large scale starvation events before. It’s difficult to adapt mentally to a threat that one has never seen.

I suggest people who want to know what starvation feels like practice it from time to time. Try fasting for 24 hours, then try fasting for 48 hours. See how many days you can go without eating (just be sure to drink plenty of water). My maximum was seven days (after months of practice), and what I found was that after day three the hunger pangs actually stop altogether. You don’t go crazy, you don’t get violent; at most you might get tired, but you will also be surprised at how heightened your thinking becomes and how much energy you still have.

The human body can survive for three weeks or more without a single bite of food. My suspicion is that initial panic over potential hunger is the thing that causes the most violence during famines. People encounter starvation and lose their minds within the first three days. First-stage stomach pains and fogginess causes them to react without thinking and this leads to the widespread riots and other crisis events we are used to seeing in history during food shortages.

Fasting is a way to educate yourself on what it means to starve; it’s not as bad as it seems as long as you have some fat stores in your body. When you hit the point of muscle loss and organ deprivation, that’s when things change and the possibility of death arises. Having some familiarity with the feeling of true hunger will help you to avoid panic should the real thing ever occur in the future.

The greater problem is not what you can endure, though. Watching people you care about starve is much more difficult. This is not something you can practice for and it could be a far more powerful motivator when it comes to looting and crime during a crash.

The goal of course is to avoid famine altogether. Food storage is the foundation of any survival plan. Anyone who claims that jumping right into agriculture and hunting and wild edibles is the solution has never actually had to survive off the land in their lives. The reality is, finding enough food and growing enough food to live on is difficult for most people even in normal times.

During collapse, crops are often difficult to plant safely. They can be stolen or destroyed easily and require large communities of people to maintain and protect. Even smaller gardens can draw attention from undesirables and are hard to hide.

Hunting might be useful initially if you live in a rural area, but you won’t be the only person with the same idea and animals will move out of a region quickly if they are being hunted on a daily basis. You’ll have to go further and further out to find them and that’s risky during a crisis.

Wild edibles are nice in spring and summer when they are plentiful, but then again, if you’re hiking around expending more calories that you can get from these plants then the entire exercise is pointless. I tend to find that wild edibles proponents are the most delusional when it comes to the logistics of survival. Survivalists who think they’re going to run to the woods and live off of the random plants they find will probably die.

Growing food, hunting food and foraging food are all supplemental measures, especially in the first years of any crisis event. Without a primary emergency supply most people will not make it. Food storage has been a mainstay of civilization for thousands of years for a reason – It works. When larger secure communities are established then agriculture can return and self sustaining production makes food storage less important. Until then, what you have in your basement or your garage is the only thing that’s going to keep you alive.

Unfortunately, there are some people out there who think they don’t need to store supplies because they plan to take from other people. Firstly, anyone who makes this their Plan A is probably a psychopath and I have zero empathy for them. Secondly, such people won’t stay alive very long. With every violent encounter the risk of injury or death increases; looters and raiders will be whittled down rather quickly as they get picked off by people defending their resources.

It’s not like the movies, folks; marauders will disappear swiftly during a crash. After the first year I would be surprised if any of these individuals or groups still exist.

In the meantime, the initial stages of collapse are going to be a shock for many Americans. It could be a grid down event, an economic collapse, a supply chain collapse, etc., but the panic associated with hunger will be ever present. People who understand the nature of famine can avoid panic and organize for safety. They will survive and thrive. People who don’t understand famine will freak out in the first week without food and make detrimental mistakes.

Mental preparedness is just as important as physical preparedness. Keep that in mind as we move forward into uncertain times.

*  *  *

One survival food company, Prepper All-Naturals, has proactively dropped prices to allow Americans to stock up ahead of projected hikes in beef prices. Their 25-year shelf life steaks currently come at a 25% discount with promo code “invest25”.

Tyler Durden Tue, 05/14/2024 - 23:40

Samsung Tops Apple In Q1 Global Smartphone Shipments

While not quite a duopoly, Apple and Samsung have long been known to produce the most popular smartphones from a global perspective. Over the past years, however, Chinese tech companies have started catching up and, at times, even overtaking Apple's iPhone product lines.

In the following chart, based on data from the IDC Quarterly Mobile Phone Tracker,  Statista's Florian Zandt shows that between January and March 2024, roughly one out of five of the 289 million smartphones shipped were Samsung devices, while Apple commanded a market share of 17.3 percent. Xiaomi, however, wasn't far behind with a 14.1 percent share in the market translating to around 41 million smartphones shipped in the first quarter of the year.

You will find more infographics at Statista

Rounding out the four smartphone vendors with the highest amount of devices shipped is Transsion, which produced every tenth smartphone sold in the first three months of 2024. Although the Chinese company entered IDC's top 5 for the first time in the second quarter of 2023, it's been around since 2006. Its devices have become increasingly popular in emerging markets like the African continent.

Looking at smartphone vendor market share over time, Apple and Samsung have been on top for most of the first quarters since 2014. The notable exception is Huawei, which rose to prominence in the latter half of the 2010s and even managed to overtake Samsung for the best-selling smartphone brand worldwide in the second quarter of 2020 after already coming within 3.3 percentage points in the three months prior.

Huawei's rise was abruptly halted by the end of 2020, reportedly due to the increasing pressure of U.S. sanctions on the company. Its shoes were quickly filled by its Chinese competitors Xiaomi and Oppo, which had combined market shares ranging from 22 to 25 percent in the first quarters of 2021, 2022, 2023 and 2024.

Tyler Durden Tue, 05/14/2024 - 23:20

Over $13 Million Paid Out In Vaccine Injury Claims In Australia

Authored by Monica O'Shea via The Epoch Times (emphasis ours),

The Australian government has paid out $20.5 million (US$13.2 million) in COVID-19 vaccine injury claims to people who experienced harm from the jab.

(Karn Buppunhasamai/Shutterstock)

Services Australia data provided to The Epoch Times reveals 6.82 percent of claims have been compensated so far, that is 286 out of 4,191.

“As at 31 March 2024, the COVID-19 Vaccine Claims Scheme has received 4,191 claims and paid 286 claims to the value of around $20.5 million,” a spokesperson said.

“Services Australia expects to receive new claims until the COVID-19 Vaccine Claims Scheme’s end date of 30 September 2024.”

The updated figures up to the end of March, follow a submission to the government’s COVID-19 Inquiry, revealing it had paid $16.9 million worth of claims up to the end of November 2023.

The federal government is due to deliver a budget for 2024/2025 covering all government agencies in the evening on May 14.

How Does the Vaccine Claims Scheme Work?

Australia’s COVID-19 vaccine claims scheme allows individuals to claim losses above $1,000 in relation to “moderate to severe adverse reactions to COVID-19 vaccines.”

It covers vaccines approved by the Therapeutic Goods Administration (TGA) including the AstraZeneca, Pfizer, Moderna, and Novavax jabs.

Services Australia administers the scheme on behalf of the Department of Health and Aged Care (DHAC). In April, the Department updated the policy to include more claimable conditions, based on advice from the TGA.

In order to make a compensation claim, individuals must meet the definition of harm, be admitted to hospital as an inpatient, or have a waiver if seen in outpatient care.

Further, those who suffered harm need to have experienced losses or expenses of more than $1,000 due to the vaccine.

The conditions included range from anaphylactic reaction to erythema multiforme (major), myocarditis, pericarditis and thrombosis with thrombocytopenia syndrome.

Also included, are shoulder injuries from the vaccine, or other moderate to significant physical injuries that caused permanent impairment or need an extended period of medical treatment.

“In both cases, the injuries must have been sustained during the physical act of being given the vaccine. You must also have been admitted to hospital as an in-patient,” Services Australia explains.

“Presenting to an emergency department is not recognised as being admitted to hospital.”

Lockdown Lead to Surge in Demand for Government Services

Services Australia revealed it had processed 1.3 million JobSeeker claims in 55 days in 2020, an amount that equates to the claim volume normally processed within two and a half years.

“At the peak, more than 53,000 claims were completed in a single day. Within the same 55 day period, the Agency also received and monitored approximately 3.7 million phone calls, 1.9 million service centre walk-ins, and 250,000 social media interactions,” the department said (pdf).

During Victoria’s lockdown in 2021, demand for COVID-related claims also surged.

“In less than 4 months, between 1 July and 26 October 2021, Services Australia processed over 5.1 million COVID-related claims alone—more than the full-year total of 3.5 million claims across all social security and welfare payments in the year prior to COVID (2018-19).”

Not Enough Focus on Mental Health, Psychologists

Meanwhile, the Australian Association of Psychologists Incorporated (AAPi) has raised concerns that there was not enough focus on mental health support during the pandemic.

“Particularly during times of crisis, such as snap lockdowns, crisis support lines should have been prominently displayed along with the urging of people to reach out for support and the continuation of psychological treatment,” they said.

The Foundation for Alcohol Research and Education (FARE) also raised concerns that alcohol companies and retailers taking advantage of the situation.

“Alcohol companies invested significantly in digital marketing and in expanding their capacity to deliver alcohol, outpacing privacy and marketing regulation,” FARE said.

Tyler Durden Tue, 05/14/2024 - 23:00

Elections And Devaluations

Authored by Yves Smith via NakedCapitalism.com,

Yves here. It’s revealing that Serious Economist Jeffrey Frankel limits himself to third-world examples in his case studies below on post-election devaluations.

Perhaps it would be unseemly to look at, say, the US, UK, Japan, South Korea, or even Australia (admittedly the latter and Canada have their currency values substantially affected by commodity prices). Of course, Frankel might contend that any politically-related currency action in an advanced economy would not amount to a depreciation-level decline. After all, they have independent central banks.

As many, including your humble blogger, have noted, the US is running a very hot fiscal policy along side tight monetary policy. Hence America has persisted in having solid to very strong groaf figures, leading the Fed to persist in tight monetary policy. All of that has led the dollar to trade at very lofty levels.

One has to think the dollar will start to reverse near the election, say in October. But inflation has been very sticky, and it’s interest rates that are buoying the greenback, so it might stay comparatively strong even past the election. In addition, the US has, at least since the Clinton Administration, has had an explicit strong dollar policy. Weak currencies and financial centers do not co-exist happily. The Fed has historically not cared a whit about what moves in interest rates have done in terms of in and out flows to emerging economies, who are routinely whipsawed by hot money moves. One wonders if we will eventually see the Fed become more attentive to the value of the dollar.

Any readers who are currency-knowledgeable are encouraged to opine on which countries might look more attractive as King Dollar retreats from its current high.

By Jeffrey Frankel, Economist and Professor, Harvard Kennedy School. Originally published at VoxEU

An unprecedented number of voters will go to the polls globally in 2024. It has long been noted that incumbents tend to engage in expansive fiscal (and where possible monetary) policy in the run up to elections in order to buoy the economy and therefore their electoral prospects. This column extends this concept to look at exchange rates and finds that currencies frequently depreciate following an election as the incumbent’s efforts to overvalue the currency in the run up to the election are unwound and the new government comes to terms with depleted reserves and current account woes.

Lots of countries are voting, with 2024 an unprecedented year in terms of the number of people who will go to the polls.  Recent elections in a number of emerging market and developing economies (EMDEs) have demonstrated anew the proposition that major currency devaluations are more likely to come immediately after an election, rather than before one. Indeed, Nigeria, Turkey, Argentina, Egypt, and Indonesia are five countries that have experienced post-election devaluations within the last year.

The Election–Devaluation Cycle

Economists will recall a 50-year-old paper by Nobel Prize winning professor Bill Nordhaus as essentially initiating research on the political business cycle (PBC).  The PBC refers to governments’ general inclination towards fiscal and monetary expansion in the year leading up to an election, in hopes of the incumbent president, or at least the incumbent party, being re-elected.  The idea is that growth in output and employment will accelerate before the election, boosting the government’s popularity, whereas the major costs in terms of debt troubles and inflation will come after the election.

But the seminal 1975 paper by Nordhaus also included the prediction of a foreign exchange cycle particularly relevant for EMDEs.  That is the proposition that countries generally seek to prop up the value of their currencies before an election, spending down their foreign exchange reserves, if necessary, only to undergo a devaluation after the election.

Nordhaus wrote: “It is predicted that the concern with loss of reserves and balance of payments deficits will be greater in the beginning of electoral regimes, and less toward the end.…The basic difficulty in making intertemporal choices in democratic systems is that the implicit weighting function on consumption has positive weight during the electoral period and zero (or small) weights in the future.”

The devaluation may be undertaken deliberately by an incoming government, choosing to get the unpleasant step – with its unpopular exacerbation of inflation – out of the way while it can still blame it on its predecessors.  Or the devaluation may take the form of an overwhelming balance-of-payments crisis soon after the election.  Either way, a government has an incentive to hoard international reserves during the early part of its term in office, and to spend them more freely to defend the currency toward the end of its term.

A political leader is almost twice as likely to lose office in the six months following a major devaluation as otherwise, especially among presidential democracies (Frankel 2005).  Why are devaluations so unpopular that governments fear to undertake them before elections?  In the traditional textbook model, a devaluation stimulates the economy by improving the trade balance.  But devaluations are always inflationary in countries which import at least a portion of the basket of goods consumed.  Furthermore, devaluations in EMDEs often are contractionary for economic activity, particularly via the adverse balance sheet effects on those domestic borrowers who had incurred debts denominated in dollars.

The theory of the political devaluation cycle was developed in a series of papers by Ernesto Stein and co-authors.  One might think that voters would wise up to these cycles and vote against a leader who sneakily postponed a needed exchange rate adjustment.  But given a lack of information about the true nature of the politicians, voters may in fact be acting rationally.  Figure 1, from Stein and Streb (2005) shows that devaluations are far more common in the immediate aftermath of changes in government. (The sample covers 118 episodes of changes, excluding coups, among 26 countries in Latin America and the Caribbean between 1960 and 1994.)

Figure 1 Average devaluation pattern before and after elections

Source: Stein and Streb (2004).

Some Devaluations Over the Past Year

Many EMDEs have been under balance-of-payments pressure during the last two years.  One factor is that the US Federal Reserve raised interest rates sharply in 2022-23 and is now leaving them higher for longer than markets had been expecting.  Consequently, international investors find US treasury bills more attractive than EMDE loans and securities.

A good example of the political devaluation cycle is Nigeria.  Africa’s most populous country held a contentious presidential election on 25 February 2023.  The incumbent, who was term-limited, had long used foreign exchange intervention, capital controls, and multiple exchange rates to avoid devaluing the currency, the naira. The new Nigerian president, Bola Tinabu, was inaugurated on 29 May 2023. Two weeks later, on 14 June, the government devalued the naira by 49% (from 465 naira/$, to 760 naira/$, computed logarithmically). It soon turned out that this was not enough to restore equilibrium in the balance of payments.  At the end of January 2024, the government abandoned its effort to prop up the official value of the naira, devaluing another 45% (from 900 naira/$ to 1,418 naira/$, logarithmically).

A second example is Turkey’s election in May 2023. President Recep Tayyip Erdoğan had long pursued economic growth by obliging the central bank to keep interest rates low – a populist monetary policy that was widely ridiculed because of the president’s insistence that it would reduce soaring inflation – while simultaneously intervening to support the value of the lira.  The government guaranteed Turkish bank deposits against depreciation, an expensive and unsustainable way to prolong the currency overvaluation.  After the elections, the lira was immediately devalued, as the theory predicts.  The currency continued to depreciate during the remainder of the year.

Next, on 19 November 2023, Argentina elected a surprise candidate as president, Javier Milei.  Often described as a far-right libertarian, he comes from none of the established political parties. He campaigned on a platform of diminishing sharply the role of the government in the economy and abolishing the ability of the central bank to print money.  Milei was sworn in on December 10. Two days later, on 12 December he cut the official value of the peso by more than half (a 78% devaluation, computed logarithmically, from 367 pesos/$ to 800 pesos/$).  At the same time, he took a chain saw to government spending such as energy subsidies rapidly achieved a budget surplus, and initiated sweeping reforms.  Argentine inflation remains very high, but the central bank stopped losing foreign exchange reserves after the devaluation, again as predicted by the theory.

A fourth example is Egypt, where President Abdel Fattah al-Sisi just started a third term, on 2 April 2024. The economy has been in crisis for some time. Nevertheless, the government had ensured its overwhelming re-election on 10-12 December 2023 by postponing unpleasant economic measures, not to mention by preventing serious opponents from running.  The widely expected devaluation of the Egyptian pound, came on 6 March 2024 depreciating 45% (from 31 egyptian pounds/$ to 49 pounds/$, logarithmically).  It was part of an enhanced-access IMF programme, which also included the usual unpopular monetary and fiscal discipline.

Finally, in Indonesia the widely liked but term-limited President Jokowi is soon to be succeeded by the Defense Minister Prabowo Subianto, who is less widely liked but was backed by the incumbent in the 14 February election. The rupiah has been depreciating ever since the 20 March announcement of the outcome of the contentious presidential vote.  It fell almost to an all-time record low against the dollar on 16 April.

What next?

Of course, the association between elections and the exchange rate is not inevitable.  India is undergoing elections now and Mexico will in June.  But neither seems especially in need of major currency adjustment.

Venezuela is scheduled to hold a presidential election in July.  As with some other countries, the election is expected to be a sham because no major opposition candidates are allowed to run. The economy is in a shambles due to long-time mismanagement featuring hyperinflation in the recent past and a chronically overvalued bolivar.  But the same government that essentially outlaws political opposition also essentially outlaws buying foreign exchange.  So, equilibrium may not be restored to the foreign exchange market for some time.

To stave off devaluation, these countries do more than just spend their foreign exchange reserves.  They often use capital controls or multiple exchange rates, as opposed to allowing free financial markets.  That doesn’t invalidate the phenomenon of post-election devaluations; it just works to insulate the governments a bit longer from the need to adjust to the reality of macroeconomic fundamentals.  Unfortunately, many of these countries also fail to allow free and fair elections, which works to also insulate the government from the need to respond to the voters’ verdict.

Tyler Durden Tue, 05/14/2024 - 22:40

"The Russians Just Walked In": Ukraine Border Defense Funds Diverted To Fake Companies In Massive "Betrayal"

Authored by Thomas Stevenson via Human Events (emphasis ours),

Head of the Mezha Anti-Corruption Center, Martyna Bohuslavets, has written a report in Pravda asking "Where are the fortifications?" She reports that millions of dollars that were intended for the construction of fortifications in Ukraine were instead "transferred to Kharkiv OVA to front companies of avatars."

Bohuslavets said the Ukrainian Kharkiv Regional Military Administration (Kharkiv OVA) paid out funds to fictitious companies during the construction and fortification of the Kharkiv region. The report comes as Russian forces have broken into the northern region of Ukraine and the US continues funding the war.

According to Ukranian Pravda reports, the Russian military has begun to advance in the northern region of Ukraine where funding that was set for fortification was transferred to fake companies. The offensive from the Russian military launched on Monday with attacks on towns and villages, the Kyiv Post reports. A total of 7 billion hryvnias was spent there by Ukraine, according to the report.  

This comes as the BBC reports that a regional Ukrainian commander in Kharkiv has said that the first line of defense was missing in a massive "betrayal" in the northern region of the country.  Denys Yaroslavskyi, a commander in the region in charge of the Ukrainian Special Reconnaissance Unit, told the outlet, “There was no first line of defence. We saw it. The Russians just walked in. They just walked in, without any mined fields." 

He told the BBC that government officials claimed to have built up the mines as the first line of defense at a huge cost. He told reporters, “Either it was an act of negligence, or corruption. It wasn’t a failure. It was a betrayal." He then added, “When we were fighting back for this territory in 2022, we lost thousands of people. We risked our lives." 

"And now because someone didn’t build fortifications, we’re losing people again," he stated.  

In March, the Government Accountability Office (GAO) reported on the lack of oversight on the funds going to Ukraine during the war. GAO found in its report from March that the Defense Department is lacking in its ability to provide oversight on the resources being sent to Ukraine in the war.  

The GAO reported, "DOD does not have quality data to track delivery of defense articles to Ukraine. DOD guidance on PDA does not clearly define at what point in the delivery process defense articles should be recorded as delivered or provide clear instructions for how DOD service branches are to confirm delivery." 

It added that full documentation of the funding being sent to the military effort has been lacking.  

Ukraine has entered the "where is the money, Lebowski" phase https://t.co/llv6KOmUGb

— zerohedge (@zerohedge) May 14, 2024

Tyler Durden Tue, 05/14/2024 - 22:20

FDA Preparing For Possible Bird Flu Spread Among Humans: Commissioner

Authored by Zachary Stieber via The Epoch Times,

The U.S. Food and Drug Administration (FDA) is preparing for a scenario in which the highly pathogenic avian influenza starts spreading among humans, the agency’s commissioner said on May 8.

“This virus, like all viruses, is mutating. We need to continue to prepare for the possibility that it might jump to humans,” Dr. Robert Califf, the commissioner, told senators during a hearing in Washington.

The influenza, also known as the bird flu or H5N1, has recently started spreading among cattle and other species. One person in Texas has had a confirmed case this year.

Food and Drug Administration Commissioner Dr. Robert Califf in Washington in a file image. (Joe Raedle/Getty Images)

So far, genetic sequencing and other data indicate that influenza poses little risk to people, and there are no signs that the flu is transmitting from person-to-person, according to U.S. officials. But they are working on getting treatments, tests, and vaccines ready in case that changes.

“We’ve been busy getting prepared for if the virus does mutate in a way that jumps into humans on a larger level,” Dr. Califf told the Senate Appropriations Committee’s Agriculture Appropriations Subcommittee.

The patient in Texas primarily experienced one symptom: inflamed eyes. Neither the patient nor many of the cows that have been infected have suffered respiratory symptoms. H5N1 commonly infects the respiratory tracts of birds.

“The real worry is that it will jump to the human lungs, where, when that has happened in other parts of the world for brief outbreaks, the mortality rates have been 25 percent,” Dr. Califf said. The worry is based in part on how viruses typically mutate, such as in the case of COVID-19.

From 2003 to April 1, 2024, 889 cases of H5N1 have been confirmed across the globe, according to the World Health Organization (WHO). Of the patients, 52 percent have died.

WHO chief scientist Jeremy Farrar said recently that H5N1 has developed into a “global zoonotic animal pandemic” and that scientists are concerned that the virus could evolve to spread among humans.

Tedros Ghebreyesus, the director-general of the organization, said Wednesday that “the virus does not show signs of having adapted to spread among humans, but more surveillance is needed.”

Many experts consulted by the U.S. government are concerned about the jump of the influenza to cattle and other species and how cattle intermingle with pigs, chickens, and humans on farms, according to Dr. Califf. A May 3 study from U.S. and Danish researchers said testing of tissues from cattle indicated the animals could serve as a “mixing vessel” for avian influenza because receptors from chickens, ducks, and humans were expressed in the cows.

While the risk is still low, “if we institute the countermeasures now and reduce the spread of the virus now, then we’re much less likely to see a mutation that jumps to humans for which we’re ill-prepared,” Dr. Califf added.

Current U.S. rules mandate testing of some cattle before being moved to another state. The guidance includes advising workers on farms to wear protective equipment when dealing with animals that may be or are sick with the bird flu.

The FDA is focusing in part on ensuring the country’s milk supply is safe to drink. The agency and its partners have tested samples of milk from grocery stores. Although some samples tested positive, no live virus has been detected, meaning the milk supply is safe, according to the agency.

Test results from beef have also found beef is safe, according to the U.S. Department of Agriculture.

The agency has confirmed H5N1 infections in 36 herds across nine states, including Colorado, Kansas, and Michigan. Data from affected cows indicate H5N1 began circulating in cattle in late 2023, according to a preprint paper from the department.

About 70 farm workers are being monitored in Colorado, officials said in a briefing this week, but none have displayed symptoms as of yet.

Tyler Durden Tue, 05/14/2024 - 22:00

Why 1960 Alternate Electors Succeeded Where 2020 Ones Failed

Authored by Lawrence Wilson via The Epoch Times (emphasis ours),

A November election decades ago produced a clear winner in a hotly contested presidential race. Yet the popular vote immediately came under scrutiny in several states. In one, auditors discovered clear errors in tabulating vote totals. In others, credible evidence of election fraud was uncovered.

(Illustration by The Epoch Times, Shutterstock, Getty Images)

With a court challenge underway, electors from both parties met at a state capitol and conducted the electoral vote. Two certifications were forwarded to Washington, one declaring the Democratic candidate to be the victor, the other naming the Republican.

The Republican vice president—also a candidate in the race—convened a joint session of Congress on Jan. 6. Without fanfare, he moved to accept the Democratic slate of electors and set the Republican electors aside.

So ended the presidential election of 1960.

The state in question was Hawaii. The vice president was Richard Nixon, who ran against Democrat John F. Kennedy, and would have won if as few as 11,000 votes spread over five battleground states had gone the other way.

Sixty years later, history nearly repeated itself as Republican electors from seven states sent alternative electoral certifications to Washington amid allegations of election fraud.

This time the alternate slates were rejected. On Jan. 6, 2021, in a joint session presided over by Republican Vice President Mike Pence, also a candidate in the race, Congress certified Democratic candidate Joe Biden the winner over President Donald Trump.

Many Americans have no memory of the 1960 election, and few are likely aware of the striking similarities between it and the 2020 election. The Hawaii election provided the rationale for the alternate elector plan promoted by some associates of President Trump following the 2020 election.

Since last year, criminal prosecutions have been levied against Republicans who took part in the plan in Michigan, Georgia, Nevada, New Mexico, and Arizona. President Trump is facing related charges in a Washington federal court.

The two elections have much in common, yet the cases exhibit key differences that spelled success for the alternate electors in 1960 and defeat in 2020.

Recount in Progress

The first tally of votes in Hawaii during the 1960 election showed Kennedy had won by 92 votes. After a second tabulation of the totals—not a recount of the ballots themselves—Nixon led by 141 votes.

Democrats petitioned a state circuit court for a recount. But Republican Lt. Gov. James Kealoha, who was acting governor at the time, had no legal authority to reopen the ballots or invalidate the results. So he certified Nixon as the winner.

Supporters of Democratic presidential candidate John F. Kennedy and reporters await the results of the second round of the presidential election, in Hyannis Port, Mass., on Nov. 8, 1960. (-/AFP via Getty Images)

After an initial audit, a judge ordered a full recount of the state’s ballots on Dec. 13, 1960, just six days before the electoral vote.

That court order was crucial to the success of Hawaii’s dual elector plan because it placed the outcome of the popular vote in legal limbo. While a winner had been certified, a state court had taken action that might lead to a different result.

Lawsuits were also filed to challenge aspects of the 2020 election. One was pending in Georgia, and one remained under appeal in Michigan, though the Michigan Supreme Court refused to halt certification of the popular vote on Dec. 9, 2020.

However, there was no court order in any state and no action by a state legislature to mandate a recount or to delay the certification of the election.

State-Certified Electors

In 1960 the ongoing recount created a dilemma for Hawaii’s acting governor. If only the Republican electors voted, Nixon would carry Hawaii even if Kennedy was later found to have won the most votes.

Yet federal law establishes the date for the electoral vote as “the first Monday after the second Wednesday in December” following the election. If there were no vote on Dec. 19, 1960, the brand-new state of Hawaii would miss out on its first presidential election.

So with the recount in progress, both sets of Hawaii electors met at Iolani Palace, the seat of the Hawaiian government. They voted for their respective candidates one minute apart. Kealoha signed two certificates of ascertainment and sent them to Washington.

A certificate of ascertainment states the elector candidates pledged to a presidential candidate and the total number of votes received. The electors for the candidate who received the most votes are “elected” as presidential electors from their state.

A separate document, the electoral ballot, states the outcome of the electoral vote for that state.

The certificate of ascertainment is a second important difference between the 1960 and 2020 cases.

To be sure, some of the 2020 electors knew about the Hawaii case and used it as a rationale for their efforts. The Pennsylvania Republican Party issued a press release stating as much.

“Today’s move by the Republican Party electors is fashioned after the 1960 Presidential election, in which President Nixon was declared the winner in Hawaii,” the Dec. 14, 2020, release stated.

Michigan Lt. Gov. Garlin Gilchrist opens the state's electoral college session at the state Capitol in Lansing on Dec. 14, 2020. (Carlos Osorio-Pool/Getty Images)

“While Democrat legal challenges were pending, Democratic presidential electors met to cast a conditional vote for John F. Kennedy to preserve their intent in the event of future favorable legal outcomes.”

In 2020, Republican electors in Pennsylvania and New Mexico added conditional language to their vote certifications, saying they were filed “on the understanding that it might later be determined that we are the duly elected and qualified Electors for President and Vice President of the United States of America” from their respective states.

Read the rest here...

Tyler Durden Tue, 05/14/2024 - 21:40

Target To Limit LGBT Pride Products To Online And 'Select Stores' After Last Summer's Controversy

Authored by Bill Pan via The Epoch Times (emphasis ours),

Target has announced that its LGBT-themed merchandise will only be sold online and at select stores this June, a decision made after last year’s Pride Month marketing campaign divided customers and dragged down sales.

A sign is posted in front of a Target store that is slated for closure in Oakland, Calif., on Sept. 29, 2023. (Justin Sullivan/Getty Images)

In a statement on its website, Target said that instead of prominently displaying its Pride Month collection in all its stores, it will be “offering a collection of products including adult apparel, home, food, and beverage items, curated based on consumer feedback.”

“The collection will be available on Target.com and in select stores, based on historical sales performance,” the company added, noting that it will also join Pride Month events in “our hometown of Minneapolis and around the country” over the summer.

A spokesperson for the retailer didn’t specify the number of brick-and-mortar stores where Pride Month merchandise will be sold, although a report by Bloomberg indicated that about half would do so.

“Target is committed to supporting the LGBTQIA+ community during Pride Month and year-round,” Target told The Epoch Times in an emailed statement. “Most importantly, we want to create a welcoming and supportive environment for our LGBTQIA+ team members, which reflects our culture of care for the over 400,000 people who work at Target.”

Last summer, Target came under heavy criticism on social media following the release of its LGBT-themed collection, which featured a range of clothing, including what was dubbed a “tuck-friendly” female-style swimsuit designed to help men who identify as transgender conceal their genitalia. Some products were also labeled as being able to “thoughtfully fit on multiple body types and gender expressions.”

Shoppers who disagreed with Target’s promotion of what they saw as “woke” transgender ideology posted videos and images on social media showing rainbow-colored onesies for infants as well as swimsuits that offer “extra crotch coverage” that many viewers mistakenly believed were aimed at children. The swimwear in question was available in adult sizes extra-small through extra-large and were not in the kid’s section.

Other products that received backlash from conservative shoppers included apparel and accessory items for adults with pro-LGBT messages, such as “We Belong Everywhere,” “Too Queer for Here,” and “Cure Transphobia” from British designer Erik Carnell, who identifies as a gay transgender man. The designer’s brand Abprallen also includes clothing sporting Satanist imagery, although the designs in question weren’t available for sale in Target.

Since the controversy and ensuing backlash, the retailer announced it would remove some of the Pride merchandise from its shelves. Some rural Target stores in more socially conservative Southern states were also forced to move the items away from front-of-store displays due to customer backlash.

“Given these volatile circumstances, we are making adjustments to our plans, including removing items that have been at the center of the most significant confrontational behavior,” the company said at the time, alleging violent threats that were “impacting our team members’ sense of safety and well-being” on the job.

But the backlash didn’t stop there. Target’s reaction to conservative outrage by scaling back its LGBT merchandise and displays then prompted complaints from progressive advocacy groups, who questioned the company’s stated support of their cause.

“The LGBTQ+ community has celebrated Pride with Target for the past decade. Target needs to stand with us and double-down on their commitment to us,” Kelley Robinson, president of the Human Rights Campaign, wrote on X.

The backlash coming from customers on both sides appears to have taken a toll on the brand. In August 2023, Target’s own earnings report unveiled its first quarterly sales decline in six years, with net sales down 4.9 percent from the same quarter the previous year.

In a full-year earnings report released this March, Target reported a total 2023 revenue fall of 1.6 percent to $107.4 billion, down from $109.1 billion a year earlier. Comparable sales for the 2023 fiscal year also declined nearly 4 percent, although operating income rose 48 percent to $5.7 billion.

While the company partly blamed the dip in sales on the post-COVID shift in consumer trends, it also said it would be reevaluating how it celebrates Pride Month in the future.

“As we navigate an ever-changing operating and social environment, we’re committed to staying close to our guests and their expectations,” Target chief executive Brian Cornell said in last August’s corporate earning call, defending the decision to adjust the chain’s Pride Month assortment in the face of negative customer reaction.

“Specific to Pride and Heritage months, we’re focused on building assortments that are celebratory and joyous with wide-ranging relevance, being mindful of timing, placement and presentation,” he told investors.

“Our goal is to ensure we continue to celebrate moments that are special to our guests while acknowledging that, every day, for millions of people, they want Target to serve as a refuge in their daily lives.”

Tyler Durden Tue, 05/14/2024 - 21:00

"We Need To Deal With The Debt" - Goldman CEO Warns Interest Costs On America's Ballooning Borrowings Means "Issues Down The Road"

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Goldman Sachs CEO David M. Solomon is the latest business leader to sound the alarm on the Biden administration’s deficit spending, which comes as the cost of making interest payments on America’s ballooning government debt has exceeded spending in both the critical sectors of defense and Medicare.

“I think the level of debt in the United States [and] the level of spending is something that we need a sharper focus on and more dialogue around than what we’ve seen,” the investment banking chief told Bloomberg Television on Monday, adding that if something isn’t done to rein it the spending, it could create problems.

U.S. President Joe Biden, flanked by Secretary of State Antony Blinken (L) and Treasury Secretary Janet Yellen (R), hosts a meeting inside the Cabinet Room at the White House in Washington on Oct. 20, 2023. (Tom Brenner/Pool/Getty Images)

His remarks come as the cost of servicing America’s ballooning government debt reached $514 billion for the first seven months of the current fiscal year, becoming the second largest line item in the budget, and surpassing both the bills for national defense and Medicare spending.

The latest monthly statement from the U.S. Treasury—released on May 8—shows that the $514 billion spent on net interest so far this fiscal year has surpassed spending on both national defense ($498 billion) and Medicare ($465 billion).

Interest spending—now the fastest growing part of the budget—is currently greater than all the money spent on education ($128 billion), transportation ($70 billion), and veterans ($183 billion) combined.

The nonpartisan Committee for a Responsible Federal Budget (CRFB) predicts that, by 2051, spending on interest will be the largest line item in the budget. Currently, only Social Security spending ($837 billion) is greater than what’s being forked over to service the nation’s growing debt.

“Rising debt will continue to put upward pressure on interest rates. Without reforms to reduce the debt and interest, interest costs will keep rising, crowd out spending on other priorities, and burden future generations,” CRFB said in a statement.

It comes as a number of economists, business leaders, and lawmakers have issued warnings about out-of-control deficit spending that adds to the debt load.

House Speaker Mike Johnson (R-La.) said in October—the first month of the 2024 fiscal year—that it was already well past time to establish a bipartisan commission to tackle the federal government’s $34.6 trillion debt.

“The consequences if we don’t act now are unbearable,” he said at the time. Despite his calls for such a commission, the project remains stuck in limbo.

Many Democrats and left-leaning groups oppose the commission because they fear it would recommend cuts to Social Security, while some Republicans have expressed reluctance out of concern it would be a backdoor way to raise taxes.

No Longer a Pandemic

In his remarks to Bloomberg Television on Monday, Mr. Solomon said that some of the U.S. government’s massive debt-fueled spending in recent years may have been justified to prevent the economy from crashing during the COVID-19 lockdowns. However, he decried the fact that even though the pandemic is no longer a factor, the spending spree continues.

“The spending levels … are continuing at a pace that I think is raising our debt level and creating issues for us down the road,” he warned.

President Joe Biden in March unveiled a sweeping $7.3 trillion budget blueprint, which includes raising the corporate income tax rate to 28 percent from 21 percent, and forcing those with wealth of $100 million to pay at least 25 percent of their income in taxes.

The blueprint was panned by Mr. Johnson, who said it reflected an “insatiable appetite for reckless spending.”

Deficit spending in the United States hit $1.7 trillion in 2023, or 6.3 percent of gross domestic product (GDP), according to a recent report from the Congressional Budget Office (CBO). The agency estimated that deficit spending would grow to 8.5 percent of GDP by 2054.

At the same time, CBO projected that America’s debt-to-GDP ratio, which in the 1980s was around 35 percent of GDP, will grow to 166 percent by 2054, while warning that this would pose “significant risks” to America’s fiscal and economic outlook.

Mr. Solomon said that America’s deficit spending is an issue that “deserves a lot of attention.”

“Hopefully, there will be a lot more discussion as we move through the election and into the next administration,” he said, adding that, “we need to deal with the debt and the deficits.”

‘Dollar Will Be Worth Nothing’

Tesla CEO Elon Musk recently sounded the alarm on massive government spending, warning that unless steps are taken to slow down the growth of the U.S. national debt, the dollar will become worthless.

“We need to do something about our national debt or the dollar will be worth nothing,” Mr. Musk said in a post on X.

The billionaire tech mogul was reacting to a post about Gen. H.R. McMaster’s warning that the world is on the cusp of World War III while calling for a doubling in defense spending to prepare for potential threats.

Mr. Musk has repeatedly advocated for a negotiated end to the conflict in Ukraine to put a halt to the loss of life.

Like Mr. Musk, billionaire investor Warren Buffett has also warned about the “important” consequences of deficit spending. However, the Berkshire Hathaway founder predicted that, when push comes to shove, the government would opt to raise taxes rather than reduce spending.

“I think higher taxes are likely,” Mr. Buffett said on May 4 at Berkshire Hathaway’s annual shareholder meeting in Omaha.

“They may decide that some day, they don’t want the fiscal deficit to be this large because that has some important consequences. So they may not want to decrease spending and they may decide they’ll take a larger percentage of what we own, and we’ll pay it,” he said.

Warren Buffett (C), CEO of Berkshire Hathaway, speaks to the press as he arrives at the 2019 annual shareholders meeting in Omaha, Nebraska, May 4, 2019. (Johannes Eisele/AFP via Getty Images)

Analysts at the University of Pennsylvania estimate that when the debt-to-GDP ratio hits around 200 percent, it will hit the point of no return—when no amount of future tax increases or spending cuts could prevent the government from defaulting on its debt.

JPMorgan CEO Jamie Dimon has predicted that America’s debt-to-GDP ratio would “hockey stick” upward at some point, meaning rise sharply and become unsustainable after a period of relatively gradual increase.

“It is a cliff. We see the cliff. It’s about 10 years out. We’re going 60 miles an hour,” Mr. Dimon said, speaking on a panel at the Bipartisan Policy Center in Washington at the end of January 2024.

The International Monetary Fund (IMF) has also sounded the alarm on the Biden administration’s fiscal stance, warning that its massive deficit spending and ballooning public debt threaten to stoke inflation and—potentially—even spark financial chaos.

Tyler Durden Tue, 05/14/2024 - 20:20

OpenAI 'Exploring' How To Responsibly Generate AI Porn

OpenAI, maker of ChatGPT, has recently disclosed plans that could revolutionize its technology’s applications, signaling a potential shift in its traditionally stringent content policies. According to draft documentation released last week, the company is exploring how to 'responsibly' introduce not-safe-for-work (NSFW) content through its platforms. The new policy is highlighted in a commentary note within the extensive Model Spec document, sparking a complex discussion about the future of AI in generating sensitive content, Wired reports.

Unstable Diffusion is a NSFW AI image generator with minimal content restrictions. Unstable Diffusion

"We’re exploring whether we can responsibly provide the ability to generate NSFW content in age-appropriate contexts through the API and ChatGPT," the note reads. "We look forward to better understanding user and societal expectations of model behavior in this area."

Current usage policies prohibit the generation of sexually explicit or even suggestive materials. However, the document suggests a nuanced consideration: the possibility of allowing NSFW content in age-appropriate contexts. This potential pivot is not about promoting explicit content indiscriminately but rather understanding societal and user expectations to guide model behavior responsibly.

OpenAI is considering how its technology could responsibly generate a range of different content that might be considered NSFW, including slurs and erotica. But the company is particular about how sexually explicit material is described.

In a statement to WIRED, company spokesperson Niko Felix said "we do not have any intention for our models to generate AI porn." However, NPR reported that OpenAI's Joanne Jang, who helped write the Model Spec, conceded that users would ultimately make up their own minds if its technology produced adult content, saying "Depends on your definition of porn." -Wired

The concern extends beyond the direct implications of NSFW content. Danielle Keats Citron, a law professor at the University of Virginia, has emphasized the broader societal repercussions, noting that intimate privacy violations can severely impact targeted individuals’ lives, restricting their opportunities and personal safety.

Of course, there are already a lot of NSFW AI content generators using things like Stable Diffusion, many of which border on (or worse) virtual child exploitation that we're sure this guy would defend.

"Intimate privacy violations, including deepfake sex videos and other nonconsensual synthesized intimate images, are rampant and deeply damaging," she said. "We now have clear empirical support showing that such abuse costs targeted individuals crucial opportunities, including to work, speak, and be physically safe." According to Citron, OpenAI's potential embrace of NSFW content is "alarming."

OpenAI’s announcement addresses an ongoing debate about the balance between technological innovation and ethical responsibility - particularly when it comes to setting precedents for how AI technologies might handle sensitive content in the future. The engagement with various stakeholders, as OpenAI spokesperson Grace McGuire told the outlet, noting that the Model Spec was an attempt to "bring more transparency about the development process and get a cross section of perspectives and feedback from the public, policymakers, and other stakeholders."

Earlier this year, OpenAI’s chief technology officer, Mira Murati, told The Wall Street Journal that she was “not sure” if the company would in future allow depictions of nudity to be made with the company’s video generation tool Sora.

AI-generated pornography has quickly become one of the biggest and most troubling applications of the type of generative AI technology OpenAI has pioneered. So-called deepfake porn—explicit images or videos made with AI tools that depict real people without their consent—has become a common tool of harassment against women and girls. In March, WIRED reported on what appear to be the first US minors arrested for distributing AI-generated nudes without consent, after Florida police charged two teenage boys for making images depicting fellow middle school students. -Wired

While OpenAI's usage policies prohibit impersonation without permission, the decisions made by OpenAI could have far-reaching effects. Of course, they also realize that if they don't compete in this space, someone else's AI will simply dominate, leaving OpenAI as the gimp.

Tyler Durden Tue, 05/14/2024 - 20:00

Citadel's Ken Griffin Tells Qatar Audience: American Campus Chaos Is "Anarchy"

On day one of the 2024 Qatar Economic Forum in Doha, Citadel's Ken Griffin covered a wide range of hot-button issues. He criticized the Biden administration's latest wave of Chinese tariffs, the ongoing campus crisis terrorizing American colleges and universities, global geopolitical tensions, and former President Trump's potential comeback. 

Griffin started the conversation by discussing soaring geopolitical risks from Eastern Europe to the Middle East to China. He warned, "We are living in a different world than what we fantasized just a few years ago."

"There are more tail risks that are harder to manage. That goes with this rise in geopolitical complexity," Griffin said. As we must note, the surge in conflicts is a direct symptom of a world fracturing into a multi-polar state. 

Bloomberg provided a live blog of the event via the 'Top Live Blogs' function on the Terminal. BBG journos noted that Griffin criticized the Biden administration for new tariffs, announced Tuesday, but well telegraphed for the last several days, on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment. He called the move a continuation of 'incoherent economic policy,' adding a Trump administration would restore America's image abroad. 

On the subject of the continued education crisis at American universities and colleges, of shady non-governmental organizations facilitating pro-Palestinian protests, he said:

"What's happening on campuses is not free speech, it's anarchy."

He added:

"Universities should be trying to encourage a constructive debate between students of different backgrounds."

Separately, in a Financial Times interview on Saturday, Griffin, who is one of Harvard's most prominent donors, said the Ivy League school needs to embrace "Western values" and pointed out the chaos is a byproduct of a "cultural revolution."

Back in Doha, Griffin also commented on the geopolitical shitstorm in Eastern Europe between Russia and Ukraine, the Middle East between Israel and Hamas, and worsening Sino-US relations. 

"There are just larger tails that didn't exist seven or eight or 10 years ago," he said, adding that the only way to mitigate risk is to construct portfolios with protection, capitalizing off tail risk events. 

The billionaire, who founded the $63 billion hedge fund Citadel, then commented on Trump's potential return to the White House, calling him a person who can't be pushed. 

"He will exude a level of strength that will help stabilize the world in these trying times," the billionaire said. Bloomberg pointed out that he had yet to donate to the presidential campaign. 

*   *   * 

Watch here for the whole discussion: 

Tyler Durden Tue, 05/14/2024 - 19:40

House Oversight Cmte Probing Biden Voter Mobilization Order

Authored by Ben Weingarten via RealClearPolitics,

The House Oversight Committee is probing a controversial Biden administration executive order tasking the federal government with mobilizing voting groups it says are underrepresented.

In a letter obtained by RealClearPolitics, Chairman James Comer (R-Ky.) has requested that Office of Management and Budget Director Shalanda Young produce a slew of documents and information concerning the development and implementation of Biden’s sweeping “Executive Order on Promoting Accessing to Voting” no later than May 28, and a staff-level briefing by May 20.

The demand by the chairman of the House Oversight Committee signals an escalation in Republican lawmakers’ efforts to combat an effort they say may be unlawful, if not unconstitutional.

The administration characterizes its efforts as a remedy to “discriminatory policies and other obstacles … disproportionally affect[ing]” black, non-English-speaking, handicapped, and other minority voters. EO 14019 calls on all federal agencies to develop and execute corrective plans to “promote voter registration and voter participation.”

It instructs officials government-wide to consider “soliciting and facilitating approved, nonpartisan third-party organizations … to provide voter registration services on agency premises.”

Seeing the order as potentially enabling “the executive branch to circumvent the legislative process,” Comer is asking Young to clarify the “constitutional or statutory authority the President relied on,” as well as all “White House and OMB documents and communications” pertaining to the drafting of it.

In past oversight letters, including ones delivered in June 2022 by then-ranking Republicans on various committees, including Comer, members have also raised concerns that officials could violate the Hatch Act prohibiting their engagement in political activities in carrying out the order.

Senate Republicans have also questioned whether the act violates the Antideficiency Act, which precludes federal agencies from using funds “for a purpose that Congress did not explicitly authorize” – namely “voter mobilization.”

“Overreach by the federal government often leads to confusion and inconsistencies,” Comer also stated. He cites a recent letter from Mississippi Secretary of State Michael Watson to Attorney General Merrick Garland to illustrate this issue.

The order mandates that relevant agencies seek to ensure “access to voter registration for eligible individuals in federal custody.”

To satisfy that charge, the Magnolia State official notes that the U.S. Marshals Service is modifying contracts and/or intergovernmental agreements with jails “to provide voter registration materials and facilitate voting by mail,” and likewise that the Justice Department is working to “facilitate voter registration and mail voting for individuals in the custody of the Bureau of Prisons.”

He says these efforts create “numerous opportunities for ineligible prisoners to be registered to vote in Mississippi.” Illegal aliens, Secretary Watson warns, may be among those receiving information on how to register to vote.

The Biden administration issued EO 14019 in March 2021. Despite a raft of oversight requests from House Republicans of agencies within their respective committee jurisdictions, those agencies have largely withheld the strategic plans they were tasked with crafting and implementing, and information regarding the putatively non-partisan groups with which they have coordinated.

The White House has rebuffed RealClearInvestigations in its efforts to solicit details about an order that Republicans characterize as little more than a taxpayer-funded Democrat get-out-the-vote effort.

As RCI has previously reported, the Biden administration has sought to drive voter registration through agencies as diverse as the Departments of Labor, Housing and Urban Development via job training centers, public housing authorities, and child nutrition programs. U.S. Citizenship and Immigration Services has issued guidance calling for the agency to register voters at naturalization ceremonies.

The Department of Education has blessed the use of “federal work-study funds to pay students for “supporting broad-based get-out-the-vote activities, voter registration,” and other activities.

In January, over two dozen Pennsylvania legislators filed a federal lawsuit challenging the executive order. The Foundation for Government Accountability (FGA) – which has litigated with the Biden administration to pry loose documents concerning the order – submitted an amicus brief supportive of the suit, asserting that the agencies’ efforts have one thing in common: “They provide government welfare benefits and other services to groups of voters the vast majority of which have historically voted Democrat.”

Republicans’ concerns over the order extend to the involvement of the third-party groups with which agencies were to consider coordinating. The order itself was built on a blueprint from progressive think-tank Democrats. In a since-deleted but still archived analysis, the outfit estimates that if fully implemented, the order could generate 3.5 million new or updated voter registrations annually – a significant figure given that recent presidential elections have been determined by thousands of votes across a few states.

Dems as well as the American Civil Liberties Union have reportedly worked to implement the directive. Documents obtained by the Heritage Foundation’s Oversight Project and released earlier this month show that at a July 2021 listening session convened by the Biden administration, left-leaning activist groups encouraged some of the practices federal agencies would ultimately implement to carry out the directive, for example in targeting prospective voters in prisons and at naturalization ceremonies.

“Every participant whose party affiliation or political donation history could be identified by the Oversight Project was identified as a Democrat except for one Green Party member,” the report noted.

While the participants suggested efforts to target constituencies including criminals, immigrants, low-income families including those in public housing, and Native Americans, the Oversight Project observed that “There is no corresponding evidence of efforts [to] increase voter access and education in likely Republican constituencies.”

As RCI has also recently reported, Democrats have made purportedly non-partisan voter registration targeting groups that vote disproportionately Democrat a linchpin of their plans to prevail in recent election cycles.

“If the Biden Administration wants to use taxpayer-funded buildings to allow ‘nonpartisan third-party organizations’ to engage in voter registration,” Comer writes, “then the American people deserve to know who these organizations are.”

The Oversight Committee’s pursuit of information regarding the order comes in the wake of the House Small Business Committee’s recent escalation of its own probe of the order.

It recently subpoenaed two members of the Small Business Administration who refused to sit for transcribed interviews regarding an unprecedented partnership the agency inked with the Michigan Department of State. Under the relevant memorandum of understanding, among other things, state officials may conduct in-person voter registration at administration small business outreach events.

Fox News reported that the Small Business Committee found that nearly all – “22 out of 25 such outreach events have taken place in counties with the highest population of Democratic National Committee target demographics.”

In March, a federal judge dismissed the Pennsylvania legislators’ case challenging the executive order on grounds of standing.

In late April, the legislators took their case to the Supreme Court, filing a petition for writ of certiorari and motioning for expedited consideration of their request in hopes the nation’s highest court will rule favorably on the matter of standing prior to the 2024 election.

Ben Weingarten is a fellow of the Claremont Institute, senior contributor at The Federalist, and 2019 recipient of The Fund for American Studies' Robert Novak Journalism Fellowship, under which he is currently working on a book on U.S.-China policy.

Tyler Durden Tue, 05/14/2024 - 19:20