"Gross Abuse Of Power" - Two SEC Lawyers Resign After Judge's Rebuke In Anti-Crypto Case

Score one for 'the law'...

In mid-March, a federal judge in Utah took the extremely unusual step of sanctioning the SEC, saying that the regulator abused its authority in a case against crypto platform Digital Licensing Inc., known as DEBT Box.

The SEC’s conduct “constitutes a gross abuse of the power entrusted to it by Congress and substantially undermined the integrity of these proceedings and the judicial process,” Robert Shelby, a federal district court judge in Salt Lake City, said in an 80-page legal filing on Monday.

He also ordered the agency to pay DEBT Box’s attorney’s fees and other costs related to the restraining order that the regulator had sought against the crypto platform.

The SEC sued DEBT Box in July 2023, accusing the crypto platform of defrauding investors of at least $49 million. The same month, Shelby froze the company’s assets and put the company into receivership at the SEC’s request.

However, the freeze was later reversed after the court found that the SEC may have made “materially false and misleading representations” in the process.

A month later, and Bloomberg reports, according to people familiar with the matter, that two SEC lawyers - Michael Welsh and Joseph Watkins - stepped down this month after an SEC official told them that they would be terminated if they stayed.

The pair were lead attorneys on a case against DEBT Box.

The judge had faulted arguments from Welsh, the SEC’s lead trial attorney on the matter, and evidence provided by Watkins and his team.

Watkins was the agency’s lead investigative attorney on the case.

In one instance, Welsh told the judge that Draper, Utah-based DEBT Box was closing bank accounts and transferring assets overseas.

The court found that this wasn’t happening.

An SEC investigator later said that a miscommunication led to the error, and Welsh apologized to the court.

SEC enforcement chief Gurbir Grewal apologized to the court for his department’s conduct.

Gurbir Grewal

He said that he had appointed new attorneys to the case and mandated training for the agency’s enforcement staff.

Last week, attorneys for DEBT Box and other parties filed motions requesting that the SEC pay more than $1.5 million in fees and other costs incurred in the case.

Tyler Durden Mon, 04/22/2024 - 14:45

Governments Could Stop Inflation If They Wanted... They Will Not

Authored by Daniel Lacalle,

Inflation is no coincidence. It is a policy. Governments, along with their so-called experts, attempt to persuade you that inflation stems from anything other than the consistent, albeit slower, rise in aggregate prices year after year. Issuing more currency than the private sector demands, thus eroding its purchasing power and creating a constant annual transfer of wealth from real wages and deposit savings to the government.

Oil prices are not a cause of inflation but a consequence. Prices increase as more units of the currency used to denominate the commodity shift to relatively scarce assets. Therefore, oil prices do not cause inflation; they are one of the signals of currency debasement. Furthermore, if oil prices caused inflation, we would go from inflation to deflation quickly, not from elevated inflation to slower price increases.

The same goes for all the causes that governments and their agents try to use as an excuse for inflation. Most are just manifestations, not causes of inflation. Even if the global economy were dominated by three evil and stupid oligopolistic businesses, they would not be able to increase aggregate prices and maintain an annual increase if the quantity of currency in the system were to remain equal. Why? Two things would happen. First, those three monopolistic evil corporations would see their working capital soar because citizens would not have enough units of currency to pay for all they produce. Two, the rest of the prices would decline as there would be a significantly lower number of units of currency to purchase other goods and services.

Even a group of quasi-monopolistic corporations cannot make all prices rise in unison and consolidate the annual level, only to continue rising. However, the monopolistic issuer of the currency, the government, can make all prices rise while at the same time diminishing the purchasing power of the units of state debt that they issue.

It is surprising to see how some so-called experts say that a few large corporations make all prices rise but deny that the state that monopolizes the creation of money is the cause of inflation.

The only real cause of inflation is government spending. While banks can generate money -credit- through lending, they rely on projects and investments to support these loans. Banks cannot create money to bail themselves out. No financial entity would go bankrupt then. In fact, banks’ largest asset imbalance comes from lending at rates below the cost of risk and having government loans and bonds as “no-risk” investments, two things that are imposed by regulation, law, and central bank planning. Meanwhile, the state does issue more currency to disguise its fiscal imbalances and bail itself out, using regulation, legislation, and coercion to impose the use of its own form of money.

Monopolies cannot create inflation unless they are able to force consumers to use their products without any decline in demand. We also must understand that destructive and inefficient monopolies can only exist if the state imposes them. In any other situation, those monopolies disappear due to competition, technology, and cheaper imports from other nations. So, which is the only monopoly that can force consumers to use their product regardless of the real demand for it? Government fiat money.

The government is the largest economic agent and therefore the most important driver of aggregate demand, as well as the issuer of currency. The government can end inflation anytime by eliminating the unnecessary spending that causes the deficit, which is the same as money printing. Taxing the private sector to cut inflation is like starving the children to make the fat parent lose weight.

If Senator Warren and President Biden were right and corporations were to blame for inflation, competition, cheaper imports, and a decline in demand, they would have taken care of their unjustified prices. Only the government can cause and perpetuate inflation, using the central bank as its financial arm and regulation as the imposition of the state’s IOU (currency) as the “lowest-risk asset” in banks’ assets. The government creates the currency and imposes it, and when its purchasing power declines, it blames the economic agents that are forced to use its form of money.

MMT defenders and neo-Keynesians say that the government can issue all the currency that they need and that their limit is not fiscal (deficit and debt) but inflation. It makes no sense because inflation is the manifestation of an unsustainable fiscal problem, reflected in the vanishing confidence in the currency issuer. It is, literally, like a giant corporation issuing debt endlessly and thinking nothing matters. It is a subterfuge to implement the constant increase in size of government in the economy, knowing that once it controls a large part, it is virtually impossible to stop the state.

Stephanie Kelton and others say the government should spend all it wants and, if inflation rises, tax the excessive money away. This is funny. So, the government increases size on the way in, spending and diluting the purchasing power of the private sector’s earnings and savings, and then taxes the private sector, thus increasing the size of government on the way out. Furthermore, there is no government that would recognize that inflation comes from spending too much, so the destruction of the private sector continues and the diminishing confidence in the currency extends, as history has proven numerous times.

Governments cannot tax away the inflation they have created by bloating spending. They can only weaken the private productive sector further and worsen the economic situation and the inflation outlook.

There is no such thing as perennial monetary sovereignty. Like any form of debt, currency demand disappears with the government’s solvency and the economic weakness of the private sector consumed by taxes. Once the government destroys confidence in the currency as a reserve of value, the private sector will find some other way to make transactions outside of the imposition of a state-issued currency.

When governments present themselves as the solution to inflation with large spending programs and subsidies, they are printing money, like putting out a fire with gasoline.

Biden says the government has a plan to cut inflation, but all they have done is perpetuate it, making citizens poorer and the productive sector weaker.

If Biden wants to cut inflation, all he must do is eliminate the deficit by cutting expenditures. The reason why governments should never oversee monetary policy and be allowed to monetize all deficits is because no administration will cut its size to defend citizens’ wages because nationalization by inflation and taxes is the goal of interventionism: to create a dependent and hostage economy.

Tyler Durden Mon, 04/22/2024 - 14:25

Trump Urges Supporters To "Peacefully Protest" As Day 1 'Opening Arguments' In Hush-Money Case Concludes Early

Day one of former President Donald Trump’s so-called “hush-money” trial concluded early on Monday after Judge Juan Merchan said that an alternate juror can visit a dentist appointment (despite previously telling Trump he would have attend every day without fail - missing his son's graduation - or face jail).

Judge Merchan had previously planned to adjourn the trial at 2 p.m. ET due to the Passover holiday. But he said Monday that it would adjourn at 12:30 p.m.

He previously said he would end at 2 p.m. on Tuesday for the holiday.

Jack Phillips reports, via The Epoch Times, that the early adjournment came after prosecutors and defense lawyers make their respective cases for why the former president should be convicted or acquitted. In the case, President Trump is accused of falsifying business payments during the 2016 campaign by allegedly paying a former lawyer, Michael Cohen, to bury negative stories.

At issue were claims from an adult film performer, Stormy Daniels, whose real name is Stephanie Clifford, that she was engaged in a relationship with the former president. President Trump has denied her claims and has pled not guilty.

‘Use Your Common Sense’

An attorney for the former president spoke to the jury, asking them to “use your common sense” when they assess the case.

“We’re New Yorkers. It’s why we’re here,” Todd Blanche said.

“There will be a very swift not guilty verdict” if they decide based on the evidence involved, he said.

“You told all of us, you told the court, you told me, you will put aside whatever views you have of President Trump,” Mr. Blanche told the jury as he wrapped up his arguments.

“The 34 counts, ladies and gentlemen, are really just pieces of paper,” Mr. Blanche said of the indictment. “None of this was a crime.”

Mr. Blanche was critical of Ms. Clifford, saying that she has earned income and fame from her allegations about an alleged affair that occurred in 2006.

“She also wrote a book. She was paid for a documentary,” Mr. Blanche says of Ms. Clifford, adding that courts have sided with President Trump’s legal disputes with Ms. Clifford.

As for Mr. Cohen, Mr. Blanche accused him of profiting off his criticism of President Trump.

“His entire financial livelihood depends on President Trump’s destruction,” he said of Mr. Cohen.

“You cannot make a serious decision about President Trump relying on the words of Michael Cohen.”

“He has a goal, an obsession with getting President Trump,” Mr. Blanche said of Mr. Cohen, who is expected to be a witness. “I submit to you that he cannot be trusted.”

But prosecutors claimed on April 22 that the case wasn’t just about the payments to Mr. Cohen. They argued that it constituted election fraud.

‘Orchestrated a Criminal Scheme’

Prosecutor Matthew Colangelo, in a bid to reframe the narrative, said that President Trump, Mr. Cohen, and former National Enquirer boss David Pecker “formed a conspiracy ... to influence the presidential election.”

“The defendant, Donald Trump, orchestrated a criminal scheme to corrupt the 2016 presidential election,” he alleged.

“Then he covered up that criminal conspiracy by lying in his New York business records over and over and over again.”

Calling it “election fraud,” he provided several instances when the three allegedly conspired to block negative press about President Trump from becoming public before the 2016 contest.

The plan was  allegedly hatched at Trump Tower shortly after the then-presidential candidate had announced his candidacy in what Mr. Colangelo is referring to as the “Trump Tower conspiracy.”

During that meeting, prosecutors say, Mr. Pecker agreed to “help the defendant’s campaign by working as the eyes and the ears of the campaign.”

Mr. Colangelo, senior counsel to the district attorney, told jurors that although the payments to Mr. Cohen, then Trump’s personal lawyer, were labeled as legal fees pursuant to a retainer agreement, there was no retainer and there were no legal services.

“The defendant was paying him back for an illegal payment to Stormy Daniels on the eve of the election. The defendant falsified those business records because he wanted to conceal his and others’ criminal conduct,” he said.

'Peacefully Protest'

In a Truth Social post before he left for the courthouse on Monday morning, President Trump wrote that he wonders why pro-Palestinian demonstrators are allowed to “roam the Cities, scream, shout, sit, block traffic, enter buildings, not get permits, and basically do whatever they want” while pro-Trump backers are “rudely and systematically shut down and ushered off to far away ‘holding areas,’ essentially denying them their Constitutional Rights.”

“America Loving Protesters should be allowed to protest at the front steps of Courthouses, all over the Country,” the former president wrote on social media, making reference to demonstrators who have appeared in front of the Manhattan courthouse where his trial is being held.

Those protests are “allowed for those who are destroying our Country on the Radical Left, a two tiered system of justice,” he added. “Free Speech and Assembly has been ‘CHILLED’ for USA SUPPORTERS.”

Later, he urged his supporters to “GO OUT AND PEACEFULLY PROTEST. RALLY BEHIND MAGA. SAVE OUR COUNTRY!”

When entering the courthouse on Monday, President Trump again criticized the case during a brief interview with reporters.

“I’m here instead of being able to be in Pennsylvania and Georgia and lots of other places campaigning and it’s very unfair,” he said.

A small group of anti-Trump protesters was seen outside the courthouse ahead of opening statements, chanting, “No one is above the law,” while members of the media and public lined up to get inside, according to reporters on the scene. It’s unclear if any pro-Trump demonstrators heeded the former president’s call on social media.

Tyler Durden Mon, 04/22/2024 - 13:20

Why A Powerful Silver Bull Market May Be Ahead

By Jesse Colombo of BullionStar

Since early-March, precious metals have launched one of their sharpest rallies in decades. Gold surged by 16% and silver by 26%, which are significant moves for safe-haven assets — especially considering that it played out over such a short time period. During this rally, gold has received the lion’s share of the attention because it has been hitting all-time highs, while silver has yet to exceed its 2021 high of $30.13 — let alone its all-time high of $49.81 that was reached all the way back in 2011. Though silver has been languishing for the past several years, there are numerous reasons why it may be on the verge of one of its most powerful bull markets in history.

Silver Demand is Growing Rapidly

Though silver is most known for its use in jewelry, silverware, coinage, and bullion products, the largest source of silver demand is actually industrial in nature. Thanks to its unique physical, chemical, and electrical properties, silver is used in electronics, solar panels, automobiles, photography, medicine, the chemical industry, and much more.

Sources of silver demand. Source: GFMS Definitive, Metals Focus, The Silver Institute, UBS

The growing number of uses for silver combined with ongoing global economic growth is causing a substantial increase in industrial demand for silver. According to the latest report from the Silver Institute, industrial demand for silver grew by a solid 11% to a record of 654.4 million ounces in 2023, which came on the heels of a record year in 2022. Silver used for photovoltaic (PV) applications skyrocketed by 64%, which caused electrical & electronics demand to increase by 20% in turn. As the push for so-called “green" energy continues, photovoltaic silver demand should keep growing at a rapid rate. The Silver Institute predicts a 9% increase in industrial demand for silver in 2024.

The steady increase of industrial demand over the past decade is driving overall silver demand higher:

There is a Structural Silver Deficit

Since 2021, there has been a deficit of silver due to demand exceeding supply — a condition that has helped to boost prices and should continue to do so for the foreseeable future. Strong demand combined with tepid supply increases led to a deficit of 184.3 million ounces in 2023 and are expected to lead to an even worse deficit of 215.3 million troy ounces in 2024.

The chart below shows how the silver deficit has grown significantly over the past few years:

While silver demand has grown at a healthy clip over the past four years, the overall supply of silver has been flat for more than a decade:

Global mine production of silver has actually been declining for the past decade:

(Read our recent report about the structural silver deficit and why it is likely to persist and even intensify.)

Above-Ground Supplies Are Dwindling

The silver deficit of the past few years is causing the above-ground supply of silver to dwindle at a rapid rate:

The total London Bullion Market Association (LBMA) silver inventory decreased by 30% from its peak in 2021:

The total COMEX silver inventory (a measure of U.S. silver inventories) fell by 27% since 2021:

The total silver inventory on China’s Shanghai Gold Exchange fell by an incredible 73%:

The total silver inventory on China’s other main silver trading venue, the Shanghai Futures Exchange (SHFE), also fell precipitously:

The Technical Picture

For the past year, silver had been chopping up and down aimlessly until its sudden surge that came practically out of nowhere:

A look at the five-year chart shows that there is a major resistance zone overhead from $28 to $30, which is what silver struggled to surpass during the last bull run in 2020 and 2021. If silver can close above that zone in a convincing manner with heavy volume, that would signal that another bull run is likely imminent.

The long-term silver chart going back to the year 2000 shows something very interesting: a triangle pattern has been forming for over a decade as uptrend lines and downtrend lines converge together. Patterns like this often result in very powerful moves when the asset finally breaks out from it. Amazingly, silver has recently broken out from its long-term triangle, which means that a powerful bull market is likely ahead that could take silver to its prior 2011 highs of approximately $50 and even higher after that!

Silver has been rising in sympathy with gold after it broke above its critical $2,000 to $2,100 resistance zone that acted as a price ceiling from 2020 until recently. Gold’s breakout signifies that a new bull market has begun, which should help bring silver along for the ride. (There are many parallels between gold’s resistance zone and silver’s current $28 to $30 resistance zone, and silver should really shine once it finally breaks through.)

Mainstream Investors & Journalists Missed Silver’s Rally

What is also worth noting is how gold and silver’s surprising recent rally has received very little mainstream attention by a press that is much more enamored with hot AI stocks as well as Bitcoin and other cryptocurrencies that have recently benefited from the U.S. government’s approval of a number of Bitcoin exchange-traded funds (ETFs), which has resulted in tremendous inflows from institutional investors and retail investors alike.

As the chart below shows, investors have pulled a significant amount of funds from silver ETFs in order to re-invest in Bitcoin ETFs, which is ironic considering its timing shortly before silver’s liftoff (and is confirmation of contrarian investing principles). The continuation of silver’s bull market will likely lead to funds flowing back into silver ETFs, providing additional fuel for the rally.

Silver is Inexpensive by Historical Standards

Precious metals analysts keep an eye on the gold-to-silver price ratio to get a sense of whether silver is undervalued or overvalued relative to gold. Silver is approximately 17.5 times more common than gold in earth’s crust, which is one of the reasons why silver has been cheaper than gold throughout history. During the Roman empire, the gold-to-silver price ratio was set at 12 to 1 by government decree. In much of Europe throughout the Middle Ages and the Renaissance, the gold-to-silver  price ratio was set at similar levels. In 1792, the newly formed U.S. government set the ratio at 15:1.

When the gold-to-silver ratio differs greatly from its long-term historical average, there are reasons to believe that something is amiss and that the ratio will eventually revert back to its historical average. In recent decades, the gold-to-silver price ratio has ranged from approximately 50 to 100, which is much higher than its historical average.

The current gold-to-silver ratio is a lofty 84.3, which means that silver is extremely undervalued relative to gold based on historical standards. If the ratio were to revert to its average since 1915 of 52.8 (without any price increase in gold), that would result in silver being priced at a respectable $45 an ounce. If the ratio were to revert to 15:1, as it was in the U.S. in 1792, that would result in silver trading at $158.87 an ounce — an incredible 464% increase from the current price! For this reason, many investors expect silver to perform even better than gold during the coming precious metals bull market and revaluation that they expect to occur when our unsustainable global paper money system collapses (as I discussed in a recent piece). Any price increases in gold would amplify price increases in silver, if the gold-to-silver ratio reverts.

Adjusting silver’s price for inflation also shows that the precious metal is quite cheap by historical standards. At the peak of the Hunt brothers-induced silver spike in 1980, silver hit an inflation-adjusted price of $143.54. At the peak of the quantitative easing-driven bull market in 2011, silver hit an inflation-adjusted price of $67.50. At the time of writing, silver is trading at a mere $28.30, which means that it has much further to run if it is going to catch up with prior inflation-adjusted prices.

Another way to determine whether silver is undervalued or overvalued is to compare it to various money supply measures. The chart below shows the ratio of silver’s price to the United States M2 money supply, which is helpful for seeing if silver is keeping up with money supply growth, outpacing it, or lagging it. The M2 money supply is a measure of all notes and coins that are in circulation, checking accounts, travelers’ checks, savings deposits, time deposits under $100,000, and shares in retail money market mutual funds.

If silver’s price greatly outpaces money supply growth, there is a heightened chance of a strong correction. If silver’s price lags money supply growth, however, there is a good chance that silver will soon experience of period of strength. Since the mid-2010s, silver has slightly lagged M2 money supply growth, which could set it up for a period of strength due to the other factors discussed in this piece.

Silver is Rising Despite the Strong Dollar & Interest Rates

What is particularly impressive about the recent rally in silver and gold is the fact that it occurred even while the U.S. dollar was strengthening against other major currencies. Precious metals and the U.S. dollar have a long-established inverse relationship, which means that strength in the dollar typically causes weakness in precious metals, while dollar weakness typically causes precious metals prices to rise.

The chart below compares silver (the top chart) to the U.S. Dollar Index (the bottom chart) and shows how action in the dollar often causes an opposite trend in silver. Silver’s surge in the face of the strengthening dollar is a sign of strength and staying power. (I need to clarify, however, that the U.S. dollar’s exchange rate is strengthening against other fiat currencies; this does not mean that the dollar is getting stronger in terms of purchasing power or against sound money like gold and silver. All fiat currencies are being debased as a function

On a similar note, silver and gold are also rallying even though global interest rates have been rising at the same time due to inflation proving to be stubborn, and even at risk of increasing again. Rising interest rates are typically bearish for precious metals because they don’t pay any yield, but silver and gold appear to be unfazed this time, which is an additional sign of strength and staying power. of time but they still fluctuate against each other in the global foreign exchange market.)

How Inflation is Contributing to Silver’s Recent Rise

Another important factor driving the recent precious metals rally is stubbornly high inflation that is not easing as quickly as economists and investors had expected and may actually be worsening instead. Gold and silver are inflation hedges and are very sensitive to changing inflation expectations. U.S. year-over-year inflation — as measured by Consumer Price Index (CPI) — increased at a 3.5% rate in March, which immediately caused traders to scale back their expectations for Federal Funds Rate cuts this year. March’s inflation rate represents an acceleration from February’s 3.2% increase.

The sharp increase in commodities prices over the past few months is further confirmation that inflation may be accelerating:

Crude oil has rallied over the past few weeks:

U.S. wholesale gasoline prices have increased by an alarming 30% in the past two months and are one of the most psychologically important and visible indicators of inflation in the minds of consumers:

China’s Economic Crisis is Helping Precious Metals

Though most non-Chinese are unaware, China is experiencing a serious economic crisis as well as a property and stock market crash after at least two decades of almost non-stop boom times. Unfortunately, that economic boom was actually an unsustainable bubble that was enabled by

and reckless speculation, and the chickens are now coming home to roost. China’s imploding property and stock market bubbles have resulted in at least hundreds of billions of dollars worth of losses — including

alone from the country’s property tycoons.

As Chinese investors lost faith in the property and stock market, they have shifted their attention to gold, which has earned a stellar reputation in China over thousands of years. When modern financial markets and investments sour, Chinese people seek refuge in gold bullion, which is tried-and-true. Chinese investors have clamored into the gold market with such intensity that they have pushed the price of locally-traded gold to a premium against the international price of gold.

In addition, Chinese investors recently piled into a domestic gold stock fund causing its premium to surge 30% until trading was halted to calm the frenzy and protect investors. Around the same time, the Shanghai Gold Exchange raised silver margin requirement from 10% to 12% after silver futures spiked. Though everyday Chinese investors tend to focus more on gold rather than silver, their heavy buying has helped to buoy the price of gold, which has boosted silver in turn. China’s massive economic bubble formed over decades and its collapse is only in the early stages — a fact that should propel precious metals prices higher for years to come.

Precious Metals Are Benefiting From Political Uncertainty

On top of their roles as inflation hedges, gold and silver are also hedges against economic and political uncertainty, and there is a great amount of political uncertainty this year as more than 60 countries — including the United States, Mexico, India and Indonesia — are set to hold national elections. In the United States, President Joe Biden and former President Donald Trump are expected to go head-to-head again as they did in 2020.

Economic issues, including inflation, have soared to the top of the list of concerns for Americans who are growing increasingly frustrated with so-called “Bidenomics" as the cost of living continues to rise at an uncomfortable pace while middle class life becomes further out of reach for a large portion of the population. The Biden administration’s heavy spending and willingness to rack up the national debt have exacerbated the country’s inflation problem, which is why it is catching flak from Americans on both sides of the aisle. In theory, a Biden win should prove beneficial for precious metals prices.

Geopolitical Risks Are Helping Gold & Silver

In addition to the other factors mentioned so far, precious metals are also benefiting from mounting geopolitical risks related to the Israel-Hamas war and the Russia-Ukraine war. The Israel-Hamas war has now been going on for six months and is heating up, unfortunately. On April 13th 2024, Iran fired hundreds of drones, cruise missiles, and ballistic missiles at Israel, which is Iran’s first direct attack on Israel since the conflict started and the first ever attack on Israel directly from Iranian soil (in the past, Iranian proxies were used to attack Israel). Though 99% of Iran’s drones and missiles were intercepted by Israel’s sophisticated Iron Dome air defense system, the attack sent a powerful message and represents a new phase of the war that is playing out across the Middle East.

The April 13th attack was retaliation after Israel struck numerous Iran-backed targets in Syria. Israel now vows to retaliate against Iran for its April 13th attack, which would further perpetuate the tit for tat cycle. As geopolitical analyst Max Abrahms said, “Iran and Israel are now at war. A real, direct war." Economist and best-selling author James Rickards is now warning about the rising risk of a nuclear war and saying that gold’s rally “is just getting started" due to that risk.

2024 Iranian strikes in Israel. Mehr News Agency.

The Russia-Ukraine war has also taken a turn for the worse recently after Russia shot down 53 Ukrainian drones and the Kremlin warned that Russia and NATO are now in “direct confrontation.” Ukraine took credit for destroying at least six Russian fighter jets, damaging eight more, and killing or injuring 20 service personnel. The BBC has estimated that over 50,000 Russian military personnel have been killed so far in the war against Ukraine, while Ukrainian President Volodymyr Zelensky claimed that 31,000 Ukrainian military personnel have been killed — a figure that is likely understated.

The Potential For a #SilverSqueeze

In early-2021, investors and traders affiliated with the r/WallStreetBets (WSB) subreddit began promoting a theory, movement, and hashtag called #SilverSqueeze with the intention of piling into physical silver en masse in order to create a short squeeze that forces big banks and other institutions to buy back their short positions (i.e., bets against the price of silver) that are used to suppress the price of silver. If successfully pulled off, the theory went, the price of silver would skyrocket to all-time highs, which would simultaneously generate significant profits for #SilverSqueeze participants while punishing the institutions that were suppressing the price of silver.

In 2021, BullionStar agreed with and supported the #SilverSqueeze movement and still does — even though it may have been ahead of its time. We still believe that a #SilverSqueeze is likely to occur in the not-too-distant future when the manipulating institutions finally lose control of the physical silver market. We have also written extensively (here, here and here) about the manipulation and suppression of the physical gold and silver markets.

The proliferation of “paper" silver products (ETFs, futures, and other derivatives) dwarfs the supply of actual physical silver by a multiple of at least 100 to 1. The sheer volume of outstanding paper silver has had the effect of absorbing demand that would normally have flowed into and benefited the physical silver market. Furthermore, the glut of ersatz silver has suppressed the price of physical silver and has prevented true and fair price discovery.

In the coming #SilverSqueeze, we believe that investors will be forced to reckon with the fact that there is just a fraction of the physical silver in existence that they believed, which will lead to a scramble for physical silver while paper silver products sink in value. Silver’s recent breakout, if it can be sustained, has a strong potential of evolving into a #SilverSqueeze as the bull market gains momentum.

Tyler Durden Mon, 04/22/2024 - 13:00

Tesla Shares Slide As Price-Cuts In US, China, & Germany Spark Worsening EV Price-War 

Tesla shares tumbled nearly 6% on Monday morning, on pace for the seventh straight down session, as the EV-maker once again slashed vehicle prices across major markets—China, Germany, and the US—amid the worsening EV price war. 

In China, Tesla dropped Model 3, Y, S, and X vehicle prices by 14,000 yuan, or $1,933, according to Bloomberg. US prices for Model Y, S, and X vehicles were reduced by $2,000. The Model 3 saw no reduction in price in the US. 

A base-level Model Y in China now starts at around 250,000 Yuan, or $35,000. In the US, base models of Tesla Y, S, and X begin at $43,000, $73,000, and $78,000, respectively. 

Following the price cuts, Evercore's Chris McNally told clients that Tesla's China business "may now be breakeven or even negative" based on earnings before interest and taxes. This isn't good for the company operating in the world's largest EV market. 

The continued and worsening EV price war led Chinese electric vehicle manufacturer Li Auto to cut prices by 6% to 7% across its vehicle lineup. The L7 sport utility vehicle now starts at around 301,800 yuan. 

On Sunday, Musk wrote on X, ​​"Tesla prices must change frequently in order to match production with demand." 

Other cars change prices constantly and often by wide margins via dealer markups and manufacturer/dealer incentives. Only a fool thinks the “MSRP” is the real price.

Tesla prices must change frequently in order to match production with demand.

— Elon Musk (@elonmusk) April 21, 2024

Wall Street soured on the latest round of price cuts, with shares down a little more than 4% around lunchtime.

"The volatility of prices has, however, impacted the appetite of professional buyers such as leasing and rental companies – Sixt and Hertz have elected to reduce their Tesla fleets due, in part, to uncertain used pricing," HSBC analyst Pushkar Tendolkar told clients. 

The stock has plunged 43% this year, making it one of the worst performers in the S&P500.

Last week, The Wall Street Journal reported that Tesla was preparing to cut 10% of its global workforce, approximately 14,000 employees. Then, on Monday, Bloomberg reported that the company's newly formed marketing team was laid off. 

Tesla also slashed the price of its Full Self-Driving software from $12,000 to $8,000 in the US. This followed the most recent halving of the FSD subscription from $200 to $100 per month. 

Source: @Tslachan

On Tuesday, Tesla is expected to report first-quarter earnings. LSEG data shows that the world's most valuable automaker is likely to post its first revenue drop and lowest gross margin in nearly four years. This comes after the company reported a slide in vehicle deliveries for the first quarter earlier this month. 

Tyler Durden Mon, 04/22/2024 - 12:40

Kick Back, Watch It Crumble

Submitted by QTR's Fringe Finance

The title to this post comes from one of my favorite NOFX songs, Dinosaurs Will Die.

While I’m sure the band in absolutely no way agrees with most, if not all, of my political leanings, the critiques they raise about the music industry in the song could serve just as well as many of the questions I want to ask of legacy mainstream media and politicians from both sides of the aisle in our government.

Leading those questions, for me, is this one: Doesn’t it elicit a hopeless feeling sometimes that we always have to learn the hard way in this country?

Few things are surer than taxes and death, but one of them is that our powers that be will make up any excuses necessary, scapegoat anything possible, and generally exercise every single possible wrong decision before reluctantly realizing that a consequential, uncomfortable yet important, proactive adult decision needs to be made and/or communicated to the American public.

Nobody ever wants to fess up to doing something wrong and nobody has a tolerance for even an ounce of discomfort, even when it accompanies an obvious decision that is in the best interest of our nation.

There have been too many examples in recent memory to name, but one of the latest bouts of us acting like a scared 6 year old with an aversion to reality was the farce of the Fed and Biden administration constantly telling the nation that inflation was transitory, when that has turned out to be the polar opposite of the truth.

Janet Yellen, unable to ascertain a clue in the real world, looking for one in the virtual world.

Zooming out from the inflation farce, monetary policy in general is another example of our inability to digest even subatomic amounts of bad news. We would rather pile on larger and larger tranches of quantitative easing, flying blind and ignorant of the potential consequences of our novel virus of a monetary policy experiment, than deal with the reality—or even the thought—of a recession.

Captain O’Connell said it best in Armed and Dangerous:

“The world is a sh*thole, full of sh*tty little scumbags, who are scared sh*tless.”

Yes, we have chickenshit cowards, whose fragility won’t physically allow their bodies to utter the truth, on both sides of the political aisle. It is a toxic brew of being spineless and an incessant need to be reelected.

Donald Trump lied to us over and over about Covid, saying we had 15 cases that were going to zero. Ben Bernanke told us that subprime housing was contained in the very moments leading up to the 2008 financial crisis. Joe Biden is blaming today’s inflation, very obviously the result of the massive money printing that took place during Covid, on Vladimir Putin, Donald Trump, corporate greed and pretty much any person or inanimate object his feeble brain can conceptualize. Elected leaders support violent protests until they show up on their front lawn. They have no problem telling us that we need to stay home and isolate while they go out to expensive dinners and make trips to the salon. One presidential candidate rails on the other for corruption while engaging in the very same practices they decry.

Out of the hundreds of representatives in Congress, I could probably count the people of integrity from both sides of the aisle using one hand — to say we have lost our way would be a vast understatement. While I thought Bob Moriarty did a great job outlining the end of the empire on my last podcast with him, this weekend provided us an even clearer example of just how profoundly lost we have become.

It’s already bad enough that the nation is in such a precarious debt-to-GDP situation that more than 90% of countries in history that have followed the same fiscal path have wound up defaulting. And it’s similarly disturbing that, despite these obvious realities and the Federal Reserve being stuck between a rock and a hard place, we have thrown our hands up in the air and decided to YOLO the economy by spending as much as humanly possible before the inevitable default.

Honestly, I’m not trying to be hyperbolic, but monetarily and fiscally there seems to be no other way to describe our government’s actions other than willingly and excitedly driving the country full speed ahead towards the death of the dollar.

As if this situation wasn’t insulting enough, over the weekend the United States House of Representatives approved more foreign aid, totaling nearly $100 billion and including $60 billion to Ukraine, without similarly funding to secure our own nation’s southern border.

Putting aside the very real argument that we simply don’t have the money to spend—I’ve given up on trying to reason with anybody about that argument — how could we then still put foreign nations' security above our own? This weekend was a glaring example of how truly futile an exercise it is to hope for reason and common sense in Congress.

Passing this foreign aid not only shows that our leaders can’t “read the room”, it goes to show they simply don’t know the difference between being nice to other nations versus extending so much help that it becomes counterintuitive to our own country. Not only that, prioritizing the security of other nations over our own is, at its core, a slap in the face to U.S. taxpayers on both sides of the aisle. And after the bill passed overwhelmingly in the House this weekend, representatives tarred and feathered those still-red-from-being-slapped faces by waving Ukrainian flags on the House floor.

Look, playing Devil’s advocate, I know what politicians are thinking (if you can call it that): we are in the midst of defending democracy and Western values by supporting Ukraine and Israel.

They are thinking we have always had an excess of room to spend, and it has never led to meaningful consequences for the country, so why not shovel another $100 billion of taxpayer cash that will be spent without an audit overseas?

They’re thinking the border crisis will be an election issue and that both sides will secretly be happy that an agreement hasn’t been reached so that it can play out as a key issue leading up to November. In addition to thinking these things, they’re thinking generally that they are doing the right thing.

It’s the same type of naïve logic that people reason to themselves when helping out a friend or family member who is an addict. They continue to lend them the 20 bucks a day that they ask for, hoping that eventually they will find a long-term solution to their addiction while staving off short-term withdrawals by buying more drugs, booze or lottery tickets.

They do it so the person stops asking for the day and many times they do it because they think it’s the right thing to do. And, as is almost always the case, it isn’t, and the “helper”, who has actually become an “enabler”, winds up as one of the key figures in an intervention where they have to eventually threaten to withhold all of the “help” they’ve been giving and try to put the addict to a decision to break out of the devastating grip of the addiction pattern they’re in.

I’m not trying to liken Ukraine or Israel to addicts—I can see the benefit to helping both nations and certainly I can see the benefit of trying to defend Western values on a global scale. But it’s when it comes at the expense of our nation that it becomes the wrong decision. And right now, we simply don’t have the resources to offer help and—most alarmingly—we are a nation that needs to help itself first.

I don’t know what it’s going to take for us to reach the point where we realize we need an intervention, but sadly our history of cowardice approaching uncomfortable problems and making tough decisions leads me to believe it’ll come only at a point after it is far too late.

Looking back from that point, it’ll be so obvious how we failed to do the right thing for our country at these crucial moments. We will deal with the consequences then because we will be forced to. Eventually, no matter how catastrophic the issue, we will figure out a path to rebuild—not unlike other nations and empires that have fallen or defaulted—and we will carry on. This I’ve come to accept.

But don’t be surprised if the shame and humiliation of slapping the US taxpayer in the face like we’ve done this weekend isn’t quite as easy to process, get over and rebuild from.

My only hope is that our misguided decision-making at some point serves as a learning experience for future generations. But for us now, sadly, the die has already been cast, and my prediction is the coming years and decades will be bumpy ones.

QTR’s Disclaimer: I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. Contributor posts and aggregated posts have not been fact checked and are the opinions of their authors. They are either submitted to QTR, reprinted under a Creative Commons license or with the permission of the author. This is not a recommendation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. None of this is a solicitation to buy or sell securities. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it twice because it’s that important.

Tyler Durden Mon, 04/22/2024 - 12:25

Is­rael's Mil­i­tary In­tel­li­gence Chief Resigns Over Oct.7 Failures

Israel’s top military intelligence official has announced his resignation in a shock development for the country while it's still at war, citing his failure to anticipate the Oct.7 Hamas terror attack. Maj. Gen. Aharon Haliva, chief of the Israel Defense Forces Military Intelligence Directorate, is expected to vacate the position as soon as his replacement is appointed. 

This makes Haliva the first senior officer to resign over Oct.7, and comes as large Israeli protests have persisted in reaction to the Netanyahu government's failure to achieve the safe return of the remaining hostages being held by Hamas.

Maj. Gen. Aharon Haliva, chief of IDF Military Intelligence Directorate

A military announcement confirmed the resignation has been approved by Defense Minister Yoav Gallant. According to a statement in Israeli media, "Alongside Haliva, other top defense officials have said they bear responsibility for the deadly invasion carried out by Hamas on October 7, including the head of the Shin Bet security agency and the IDF chief of staff."

As for these additional officials, "None of them has announced plans to resign as of yet, though many are expected to do so once the security situation stabilizes," Times of Israel reports.

There's been widespread questioning as to how Hamas and other Palestinian militants were able to breach Israel's southern borders with ease on Oct.7 - even overrunning IDF border outposts, amid the deadly attack on the Nova music festival. Israel has some of the most sophisticated and advance surveillance systems in the world.

Over 1,160 people were killed, mostly civilians, and more than 240 Israelis and foreigners were taken hostage, but many of the captives have since died. The security failures of Oct.7 are still under investigation and are likely to be scrutinized for years to come.

But Al Jazeera observes that Gen. Haliva's resignation from the top military intelligence post is also political and relates to PM Netanyahu's handling of the crisis and ongoing war in Gaza:

Akiva Eldar, an Israeli author and former columnist with Haaretz newspaper, says Major-General Halavi quit likely because Netanyahu isn’t going to end the war on Gaza anytime soon.

Eldar added another reason is that the prime minister “is not interested in bringing the captives back to Israel”.

“Netanyahu is the highest authority and he never took responsibility [for the Hamas attack] so Haliva wanted to send a personal message to tell him, ‘If I can do it, you can do it,’” he said.

As for the Israeli military's own internal investigation into Oct.7 security and intel failures, it is expected to look the way back to 2018 in terms of scope.

The following areas will focus of a deep investigation: "The main subjects being investigated by the General Staff are: the development of the IDF’s perception of Gaza, with an emphasis on the border, starting in 2018; the IDF’s intelligence assessments of Hamas from 2018 until the outbreak of the war; the intelligence and decision-making process on the eve of October 7, as well as the days leading up to it; and the command and control, formations, and orders given during battles between October 7 and 10, when troops restored control over all communities and army bases in southern Israel that had been invaded by Hamas," according to Times of Israel.

Tyler Durden Mon, 04/22/2024 - 12:05

"Reality Check" - JP Morgan Warns Of Delay To Global Energy Transition

Authored by Irina Slav via OilPrice.com,

Inflation, interest rates, and wars may well delay the energy transition by quite a long time, JP Morgan has warned in a call for “a reality check” on its shift from hydrocarbons to alternatives.

“While the target to net zero is still some time away, we have to face up to the reality that the variables have changed,” the bank’s head of global energy strategy, Christyan Malek, told the Financial Times.

Malek was the lead author of a new report by JP Morgan focusing on energy.

The report noted higher interest rates, inflation, and the wars in Ukraine and the Middle East were all factors acting as setbacks for the transition.

The report—and Malek’s FT interview—coincided with another report, by Reuters, quoting Rystad Energy analysts as warning about the negative effects of higher interest rates on wind and solar energy developers.

"Owing to the capital-intensive (Capex) nature of renewable energy...they are inherently more susceptible to high-interest rates," Rystad Energy’s head of renewables and power, Vegard Wiik Vollset, said.

Wood Mackenzie has also warned that higher rates are having a negative effect on the economics of wind and solar, as a 2% rate increase can push the levelized cost of electricity for these two sources as much as 20% higher.

“Interest rates are much higher,” JP Morgan’s Malek also said, speaking to the Financial Times.

“Government debt is significantly greater and the geopolitical landscape is structurally different. The $3tn to $4tn it will cost each year come in a different macro environment.”

Because of these challenges, Malek forecasts that governments will dial down the push to transition from oil and gas to wind and solar as their financial resources dwindle.

The FT noted as an example the Scottish parliament’s recent decision to abandon a 75% emission reduction target by 2030 admitting it could not be achieved.

Tyler Durden Mon, 04/22/2024 - 11:45

 

 

@TBPInvictus here:

Back in December 2022, I hypothesized that Elon Musk’s antics and his newfound desire to own the Libs were going to destroy Tesla’s appeal to many of his most important buyers. 

The latest data confirms those sentiments were on point.

I looked at 2020 voting data and TSLA registrations in counties throughout the state of New York, and theorized as follows:

Watching Musk’s ongoing antics, it has become very clear to me that his actions are not only destroying Twitter, but the collateral damage is taking Tesla down with it – a veritable twofer of ineptitude and rake-stepping. […]

My thesis is that in Musk’s newfound desire to own the Libs, he’s alienating the very people who have overwhelmingly been buyers of his EVs.

Consider who the typical Tesla buyer has been over the decade before he began to own the Libs: You would describe them as people who do not think global warming is a hoax; they are early adopters, willing to pay more for an EV versus an ICE car. As good as Tesla’s supercharging network is, it’s nowhere near the infrastructure buildout of gasoline vehicles, it can still be inconvenient on 300+ mile trips; although to be fair, ICE infrastructure has had a century head start. These folks want to leave a better world to their kids; they are realists about the dangers presented by climate change, and they think individuals can make a difference via their personal choices. Oh, and they believe in science.

It is not that this group is exclusively Democrats, but draw a Venn diagram with the folks I described above and Dems, and the overlap is significant.

Now comes the Wall St. Journal with the headline: Elon Musk Lost Democrats on Tesla When He Needed Them Most

The proportion of Democrats buying Tesla vehicles fell by more than 60%, according to car buyers surveyed in October and November by researcher Strategic Vision. 

I’m not one who’s typically inclined to take a victory lap, but this one feels like it was so obvious to see coming by bringing together data from very disparate sources and nailed the eventual outcome.

If your politics puts you on the opposite side of the NYT/Paul Krugman, how do you reconcile that now Murdoch’s WSJ has come to accept this relaity as well…?

 

BR adds: What makes this so perplexing is what an unforced error this has been. Musk moved the entire auto industry towards electric, he had amassed enormous goodwill and had a built-in customer base that was very loyal. All he had to do was not screw it up, which — apparently — was a bridge too far.

At its peak, TSLA was worth $1.29 trillion; today, it is $448.9 billion:

That is a 65% decrease in market cap + price:

 

Of course, there is much more competition today, and Tesla’s designs are getting old, and looking a little stale. Their huge decade-long software advantage is now probably somewhere in the 2 -4 year range.

At least it will make for a fascinating HBS case study in the future…

 

 

Source:
Elon Musk Lost Democrats on Tesla When He Needed Them Most
Tim Higgins
WSJ, April 20, 2024

How to Destroy a Brand, Musk Style
Paul Krugman
NYT, Dec. 30, 2022

 

The post Alienating Tesla Buyers by the Cybertruck-load appeared first on The Big Picture.

US Poised To Send 60 Additional 'Military Advisers' To Ukraine

Authored by Dave DeCamp via AntiWar.com,

The US is considering increasing its small military presence in Ukraine by sending up to 60 additional military advisers, POLITICO reported on Saturday, the same day the House approved $61 billion in spending for the proxy war.

Four unnamed US officials told POLITICO that the additional troops would "support logistics and oversight efforts for the weapons the US is sending Ukraine."

Joint Multinational Training Group-Ukraine, just prior to the Feb. 2022 Russian invasion.

Pentagon spokesman Brig. Gen. Pat Ryder said the potential deployment would augment US personnel based at the US Embassy in Kyiv.

"Throughout this conflict, the DOD has reviewed and adjusted our presence in-country as security conditions have evolved. Currently, we are considering sending several additional advisers to augment the Office of Defense Cooperation (ODC) at the Embassy," Ryder said.

Back in October 2022, the Pentagon announced that ODC and defense attaché personnel were back in Ukraine after being absent for the first few months of Russia’s invasion.

The Pentagon said at the time that the personnel were conducting "onsite" inspections of US-provided weapons.

Ryder said the ODC "performs a variety of advisory and support missions (non-combat), and while it is staffed exclusively by DOD personnel, it is embedded within the US Embassy, under Chief of Mission authority like the rest of the Embassy."

Ryder said the advisers would serve in a non-combat role, but the deployment would still mark an escalation of US involvement in the war and reflect the US’s long-term plans for the conflict. The US has sought to emphasize that they will not participate in battles.

Besides the ODC and defense attaché, the US also has a small number of special operations forces in Ukraine. The Discord leaks revealed last year that as of March 2023, 14 US special operations troops were in Ukraine. 

Tyler Durden Mon, 04/22/2024 - 11:05

Hedge Fund CIO: "That's Why I See Us Headed Into A 1970s-Style Inflation"

By Eric Peters, CIO of One River Asset Management

“I tried to jump into the Potomac when I was young and my mother nearly killed me,” said the CIO.

“Now you could drink from our rivers if you had to, which is great, but the cleanup has meant everything is more expensive.”

The Environmental Protection Agency was founded in 1970 by Nixon to protect human health and the environment. We’re all better for it.

“Across an economy, we make both public and private investments. In the 1970s, we made big public investments.”

The returns accrue to society, but rarely to capital owners, and often at the expense of them.

“I would argue that the investments we made back then were good, but the tradeoffs we made included upward inflationary pressure and lower real rates of returns on private investments.”

The S&P 500 peaked in Nov 1968 and swung in a wild range through the 1970s, ending the decade unchanged in nominal terms.

In real terms, it lost roughly 50% of its value during that period.

From 1980 to present, the S&P 500 is roughly 42x higher in nominal terms and 10x higher in real terms (none of these returns include dividends). It’s been a great run for capital owners since 1980.

“The government will most likely continue to borrow and print to subsidize societal preferences for renewable energy and reliable supply chains,” he said.

“It is near-term uneconomic in that windmills and solar plants don’t cover their costs to private investors without federal subsidies. But they satisfy our collective preferences. They help insure us against risks we see geopolitically and environmentally,” he said.

“That’s why I see us headed into a 1970s-style inflation. Three, four, five percent inflation is probably where we’ll settle in.”

Anything above five percent tends to see equity multiple compression.

“It’s probably good for investors who measure their returns in nominal terms, but real returns will be lower looking forward, and inflation will continue to be tough for everyday people.”

Tyler Durden Mon, 04/22/2024 - 10:05

Head Of Climate Research At Hedge Fund Andurand Expresses Skepticism Over Carbon-Credit Boom

The head of climate research at commodities hedge fund firm Andurand Capital Management says now is not the time to bet on a bull market for carbon credits. There is growing pessimism in the voluntary carbon markets amid turmoil within the world's top arbiter of corporate climate targets for allowing controversial carbon credits to offset Scope 3 emissions. 

"I don't think you're going to find people stampeding to buy credits to offset their Scope 3 emissions," Andurand's Mark Lewis told Bloomberg in an interview. Scope 3 is emissions not owned or controlled by the reporting organization but released in the supply chain owned by other companies, such as transportation and leased assets. These types of emissions can account for nearly 90% of total emissions, depending on the industry. 

The Science Based Targets initiative (SBTi), a globally recognized certifier of corporate emissions goals, made an announcement on April 9. This decision, which allowed the use of offsets for Scope 3 emissions, sent shockwaves through the carbon markets. Wind farm companies can now sell carbon offset credits to other companies to offset their pollution, without necessarily reducing their own emissions. 

Lewis noted that too many risks remain for companies to dramatically increase their reliance on carbon credits. 

Luiz Amaral, the chief executive of SBTi, has taken a nuanced stance on Scope 3 emissions, stating that "not all Scope 3 emissions are created equal." He emphasized the need for "difficult" discussions to determine the most effective course of action, acknowledging the complexity of the issue. 

Lewis at Andurand explained any relaxation of rules guiding the use of carbon credits, such as those outlined by SBTi, is "clearly bullish for the voluntary market — at the margin — because clearly it means there are potentially more buyers now than there were before."

But here's the caveat: "I don't think there's a stampede out of the door today to rush into the market," he said.

Furthermore, several multinationals, including Shell, Europe's largest oil company, and the world's number four iron ore producer, Fortescue Metals Group, along with other companies, have quietly shelved or at least reduced carbon offset plans amid mounting concerns carbon offsets are prone to 'greenwashing' and most credits don't actually benefit the climate. 

A few years ago, Elon Musk posted on X, "ESG is a scam. It has been weaponized by phony social justice warriors." 

Last year, we noted, "Carbon Credits Are The Biggest Scam Since Indulgences... How You Can Avoid Being Fleeced." 

Tyler Durden Mon, 04/22/2024 - 08:45

How You Know The Joker Is Running Things...

Via The Publica Team,

Sheetz Convenience Stores Accused Of Discriminating Against Minority Job Seekers By Refusing To Consider Applicants With Criminal Record

A popular US convenience store chain has been hit with a civil rights lawsuit accusing it of discriminating against minority job seekers because it requires applicants to have no criminal record.

On April 18, the US Equal Employment Opportunity Commission (EEOC) announced that it had filed a lawsuit against Sheetz Inc., accusing the 24/7 convenience store chain of having discriminatory hiring practices that targeted minority applicants.

According to the lawsuit, Sheetz has maintained a longstanding practice of screening all job applicants for records of criminal conviction and then denying them employment based on those records.

As a result, the EEOC is accusing Sheetz of “disproportionately screening out Black, Native American/Alaska Native and multiracial applicants.”

This is despite the fact that the lawsuit does not allege that Sheetz’s hiring practices were motivated by race.

According to the EEOC press release, Sheetz’s hiring practices violate Title VII of the Civil Rights Act of 1964, which prohibits workplace discrimination on the basis of race, sex, religion and national origin. The EEOC filed suit in U.S. District Court for the District of Maryland, Northern Division, after first attempting to reach a pre-litigation settlement through its conciliation process.

“Federal law mandates that employment practices causing a disparate impact because of race or other protected classifications must be shown by the employer to be necessary to ensure the safe and efficient performance of the particular jobs at issue,” said EEOC Regional Attorney Debra M. Lawrence.

“Even when such necessity is proven, the practice remains unlawful if there is an alternative practice available that is comparably effective in achieving the employer’s goals but causes less discriminatory effect.”

The EEOC began its probe into Sheetz after two job applicants filed civil rights complaints alleging employment discrimination.

The agency then found that Black job applicants were deemed to have failed the company’s criminal history screening and were denied employment at a rate of 14.5%, while multiracial job seekers were turned away 13.5% of the time and Native Americans were denied at a rate of 13%.

By contrast, fewer than 8% of white applicants were refused employment because of a failed criminal background check, the EEOC’s lawsuit states.

Sheetz is a chain of gas stations and convenience stores primarily located in the Mid-Atlantic region of the United States, particularly in Pennsylvania, West Virginia, Ohio, Maryland, Virginia, and North Carolina.

The franchise is most well-known for its customizable food options similar to WaWa, with a number of made-to-order dishes, frozen desserts, and milkshakes available.

We give Elon Musk the last word...

You know The Joker is running things when the law-abiding are being prosecuted by the government for not hiring criminals!

[Insert Sheetz pun]

— Elon Musk (@elonmusk) April 22, 2024

Tyler Durden Mon, 04/22/2024 - 08:25

Futures Rebound As Geopolitical Fears Fade, Fed Enters Blackout Period

US equity futures rose, putting the S&P on pace for its first gain after 6 straight days of losses, as focus shifted from Middle East tensions to a raft of company earnings this week, including four of the Mag7 tech megacaps which got hammered last week. At 7:40am, S&P emini futures gained about 0.5% after the index recorded its worst week since March 2023; Nasdaq futures were 0.6% higher while Europe was green across the board. Demand for havens eased as traders took comfort from the absence of further escalation from Iran following Israel’s retaliatory strike. A Bloomberg dollar index was steady as geopolitical tensions eased and the Fed entered a blackout period before its May 1 policy decision, while the yield on 10-year US Treasury yields rose three basis points. Oil reversed an earlier slide while gold dropped around 1.4% as demand for haven assets fades.

In premarket trading, Nvidia rebounded almost 3% after the artificial intelligence favorite shed nearly $212 billion of its market capitalization in Friday’s broad tech selloff. Salesforce rose 3.6% after Bloomberg reported that takeover talks with Informatica have cooled. Retail wireless provider Verizon advanced after an earnings beat. On the downside, Tesla, which is set to report earnings on Tuesday, dropped 3% as the automaker’s decision over the weekend to slash prices across its range in China risks sparking another round in the nation’s bruising electric-vehicle price war. Here are some other notable premarket movers:

• Crypto-linked companies rise as Bitcoin’s quadrennial halving completed late on April 19. Bitcoin advocates expect the halving to be a positive catalyst, with the cryptocurrency on the rise for three consecutive days, and currently at $66,044.35. Coinbase (COIN) +2%, Riot Platforms (RIOT) +5%, Marathon Digital (MARA) +4%
• Informatica (INFA) slips 6% after Salesforce’s takeover talks with the data-management company were said to have cooled, with the parties struggling to agree to terms. Meanwhile, Salesforce (CRM) rises 3%.
• Verizon Communications (VZ) rises 2% after beating analysts’ estimates for profit while boosting wireless service revenue.

Even though a military base in Syria belonging to a US-led coalition came under rocket-fire late on Sunday, in the first attacks against US bases in the Middle East since early February, the lack of further escalation between Isreal and Iran eased fears about military conflict in the Middle East accelerating.

“We are seeing a relief rally underway this morning as geopolitical risks subside,” said Kyle Rodda, a senior market analyst at Capital.com in Melbourne. “The move basically squares the ledger now and allows the markets to go back to focus on macroeconomic and corporate fundamentals."

Robust earnings from corporate America are expected to pull the S&P 500 Index out of its latest morass, despite rising concerns about a significant jump in bond yields, according to Bloomberg’s latest Markets Live Pulse survey. Nearly two-thirds of 409 respondents said they expect earnings to give the US equity benchmark a boost. That’s the highest vote of confidence for corporate profits since the poll began asking the question in October 2022.

Profits for the seven biggest growth companies in the S&P 500 — Apple, Microsoft, Alphabet, Amazon.com Inc., Nvidia Corp., Meta and Tesla — are on course to surge 38% in the first quarter, according to Bloomberg Intelligence. When excluding them, the rest of the benchmark index’s profits are anticipated to shrink by 3.9%.

Traders are also recalibrating their positions after a solid run of US data forced the Fed to reset the clock on its first interest rate cut. Data prints later in the week are likely to help finesse policy bets, with both US growth and the Fed’s preferred measure of inflation due.

In Europe, the Stoxx Europe 600 gained about 0.4%, recovering some of last week’s slide as retail and personal care sectors leading gains, while automobiles & parts as well as utilities shares are the biggest laggards. Prosus NV shares jumped as much as 5% as Tencent, in which it is a major shareholder, rallied after nailing down an earlier-than-anticipated debut of one of the year’s most eagerly-awaited mobile games. Among other individual movers, Galp Energia SGPS SA surged as much as 19% after the Portuguese oil company provided an update on a commercial oil find off the coast of Namibia. Sandoz Group AG climbed more than 4% to a record after the Swiss pharma company confirmed the European Commission’s approval of its Pyzchiva psoriasis drug. Here are the biggest movers Monday:

• Galp Energia’s shares jumped as much as 21% after the Portuguese oil company said a well test “potentially” indicates Mopane could be an important commercial find in Namibia
• Embracer shares soar as much as 18%, the most since February 2020, after CEO Lars Wingefors unveiled a plan for the Swedish gaming group to split into three listed companies to unlock potential
• Telefonica shares gain as much as 1.6% after JPMorgan resumes coverage with a neutral rating, ending a long-standing underweight call
• Royal Unibrew shares rise as much as 4.1%, adding to last week’s jump, with trading volume almost quadruple the 20-day average for this time of day
• Sandoz shares soar as much as 4.4% and hit a record after the Swiss pharma company confirms the European Commission’s approval of Pyzchiva, a biosimilar value driver for the company, according to Vontobel
• Alstom shares gain as much as 6.7% as analysts cheer the sale of the Signaling North America businesss as a “key step” in debt reduction
• Tyman gains as much as 30% to 385p after Quanex bid at about 400p/share, in a deal seen as attractive by Jefferies
• Dr. Martens shares advance as much as 8.7%, the biggest intraday gain since January 25, after the Mail on Sunday reported that the bootmaker had attracted  takeover interest
• RWE shares slide as much as 1.4% after New York ended contract negotiations with three offshore wind developers, including one co-developed by a RWE unit, because the companies couldn’t reach agreements on terms
• Mobico Group shares fall as much as 6.8% after the bus and rail company’s earnings came in lower than hoped, despite having reset expectations less than a month ago

Earlier in the session, Asian stocks rose, with gains in Hong Kong on Beijing’s latest market support measures helping offset declines in tech hardware shares. The MSCI Asia Pacific Index climbed as much as 1.1%, with Tencent and Alibaba among the biggest boosts. Hong Kong’s benchmark Hang Seng Index jumped 1.8%, with notable gains also seen in Japan, Australia and South Korea. Chinese regulators announced five measures to optimize stock connects and bolster Hong Kong’s position as a financial hub. That helped improve sentiment along with the absence of further escalation in the conflict between Israel and Iran. Meanwhile, chip and AI shares declined after Nvidia’s biggest drop in four years drove US stocks lower Friday.

In FX, the Bloomberg Dollar Spot Index is flat while the antipodean currencies top the G-10 FX pile, rising 0.3% versus the greenback respectively. The Australian and New Zealand dollars climbed as fast-money funds continued short-covering that began in London on Friday, according to Asia-based FX traders. There could be temporary relief on the horizon from the recent volatility in currencies as there has already been “a considerable scaling back of Fed rate cut expectations,” according to Paul Mackel, global head of FX strategy at HSBC Holdings Plc. “It is hard to think Friday’s US PCE data will change this picture much,” he wrote in a note to clients.

In rates, Treasuries are slightly cheaper across the curve, following similar losses across European rates as demand for haven assets fades in the absence of major escalation in Middle East conflict. Meanwhile, investors are looking ahead to a heavy slate of Treasury and corporate new-issue supply this week. US long-end yields are higher by as much as 3.5bp on the day, with 2s10s and 5s30s spreads steeper by 2.4bp and 1.2bp as front-end outperforms; 10-year around 4.66% is 4bp cheaper on the day with bunds lagging by additional 1bp in the sector.

A hefty slate of Treasuries auctions will be a major test of whether yields have peaked for the year.  Higher-than-expected interest rates amid persistent inflation are perceived as the biggest threat to financial stability among market participants and observers, the Fed said in its semiannual Financial Stability Report published Friday.

In commodities, Brent fell 0.6% to trade near $86.70 while spot gold falls 1.8% to around $2,342/oz. Treasuries dip as investors look ahead to a hefty slate of auctions. US 10-year yields rise 3bps to 4.65%. The Bloomberg Dollar Spot Index is flat while the antipodean currencies top the G-10 FX pile, rising 0.3% versus the greenback respectively. Bitcoin rises 2%.

Bitcoin climbs higher post-halving and now holds just above USD 66k; Ethereum also firmer and back at 3.2k.

Looking at today's calendar, US economic data slate includes March Chicago Fed national activity index at 8:30am; ahead this week are April preliminary PMIs, March new home sales and durable goods orders, first estimate of 1Q GDP, and March personal income and spending (with PCE deflator). Fed members have entered quiet period ahead of May 1 policy announcement.

Market Snapshot

• S&P 500 futures up 0.6% to 5,032.50
• STOXX Europe 600 up 0.2% to 500.52
• MXAP up 1.0% to 169.02
• MXAPJ up 0.8% to 518.96
• Nikkei up 1.0% to 37,438.61
• Topix up 1.4% to 2,662.46
• Hang Seng Index up 1.8% to 16,511.69
• Shanghai Composite down 0.7% to 3,044.60
• Sensex up 0.5% to 73,490.15
• Australia S&P/ASX 200 up 1.1% to 7,649.16
• Kospi up 1.4% to 2,629.44
• German 10Y yield little changed at 2.52%
• Euro little changed at $1.0653
• Brent Futures down 1.5% to $85.99/bbl
• Gold spot down 1.4% to $2,359.10
• US Dollar Index little changed at 106.13

Top Overnight News

• Blinken will travel to China on Apr 24-26 and plans to warn Beijing the US will take punitive steps unless weapons-related shipments to Russia are halted. FT
• China’s state fund Central Huijin purchased ~$41B worth of stocks in Q1 as part of a government-coordinated campaign to bolster the country’s equities market. RTRS
• SNB increases the minimum reserve requirement for banks from 2.5% to 4%, a move aimed at reducing the amount of money the central bank has to pay out to lenders. BBG
• Israel had planned a much larger counterstrike against Iran last week, but dialed back the mission in part because of pressure from the US and other allies. NYT
• Iran continues to significantly downplay the Israeli strike from Thurs night/Fri morning, the latest sign of Tehran’s desire to deescalate tensions in the region. WaPo
• Paris apartment rental demand for the upcoming Olympics has been sluggish, disappointing owners hoping for a large boost around the games. FT
• TSLA slashed prices on vehicles and FSD (full self-driving) software over the weekend as the company aims to bolster sales amid myriad pressures. BBG
• The UAW scored a major win when workers at VW’s Tennessee factory voted to join the union (this is the first time a southern plant outside of GM/Ford/Chrysler has been organized), and the group is hoping for similar success at a Mercedes plant next month. NYT
• Trump’s national lead over Biden head-to-head cut to two points in a new NBC poll, down from 5 points in Jan, and Biden actually pulls ahead by 2 points if Kennedy is included (as RFK Jr captures more from Trump than Biden). NBC News

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly positive following the lack of any major geopolitical escalations over the weekend. ASX 200 was underpinned amid gains in nearly all sectors and with the advances initially led by outperformance mining stocks as copper prices approached closer to the USD 10,000/ton level and with firm gains in South32 following its quarterly output update.Nikkei 225 gained but is well off intraday highs after the index briefly wiped out all its earlier spoils before recovering again with price action choppy after last Friday's comments from BoJ Governor Ueda who suggested a hike is very likely if underlying inflation increases.Hang Seng and Shanghai Comp. were mixed in which the latter outperformed with strength in biopharma, tech and consumer stocks front-running the gains in the index. Conversely, the mainland lagged amid US-China frictions after the US House passed a bill that could lead to a total TikTok ban, while China's benchmark Loan Prime Rates were maintained at their current levels, as expected.

 

Top Asian News

• US Secretary of State Blinken will visit China on April 24th-26th to meet officials in Shanghai and Beijing, while Blinken will be joined by top State Department official for Asia Kritenbrink, top narcotics official Robinson and cyberspace and digital policy ambassador Fick. Furthermore, a US official said Blinken will express US intent to have China curtail its support for Russia’s defence industrial base and it was also stated that the US is prepared to take steps against firms acting against US interests, according to Reuters.
• BoJ Governor Ueda said the BoJ will reduce JGB purchases at an unspecified time in the future but the extent of the reduction remains undetermined, while he reiterated to expect accommodative financial conditions to continue for the time being and that they need to take time to consider what to do with their ETF holdings. Ueda said the weighted average of medium and long-term inflation expectations indicates a rising trend but remains slightly below 2% and noted that raising interest rates is very likely if underlying inflation increases. Furthermore, he said the BoJ will proceed cautiously and is watching wages and will see the effect of possible wage increases on prices, especially service prices, while he added that they may change the short-term policy rate depending on the incoming data.
• Earthquake has been felt in the Taiwanese capital of Taipei, according to witnesses cited by Reuters; reports suggest it could be a 4.2 magnitude earthquake.

European bourses are mixed, Stoxx 600 (+0.2%), having initially opened with a clear positive bias. In catalyst-thin trade, equities have ebbed lower, and off best levels, though generally hold a positive bias. European sectors are mostly positive; Retail is found at the top of the pile after Jefferies upgraded several Cos from within the sector. Autos are the clear underperformer, after Tesla (-3.2% pre-market) cut prices for some of its models, as such, European peers are suffering. US Equity Futures (ES +0.4%, NQ +0.5%, RTY +0.6%) are entirely in the green, with the NQ and ES attempting to pare back some of the hefty losses seen in the prior session. Elsewhere, UBS downgraded Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), Meta (META), Microsoft (MSFT) and Nvidia (NVDA) to Neutral from Overweight

Top European News

• UK government rejected an EU proposal to negotiate a post-Brexit deal to relax travel and allow young adults to move across the Channel more easily, according to Bloomberg.
• UK Chancellor Hunt is reportedly considering lowering stamp duty in his final autumn statement before the general election, according to The Times; the threshold at which homebuyers pay stamp duty from GBP 250l to GBP 300k.
• S&P affirmed Greece at BBB-/A-3; Outlook revised to Positive on ongoing debt stock reduction.
• ECB governors reportedly fear that publishing rate forecasts, or Fed-style "dot plot", would invite pressure from governments to gauge if the ECB was serving its domestic agenda, according to Reuters sources. A few governors are open to discussing the proposal at the next review due to start next year.
• The Swiss National Bank is raising the minimum reserve requirement for domestic banks from 2.5% to 4%, and to this end is amending the National Bank Ordinance as of 1 July 2024; will not affect the current monetary policy stance.

FX

• Mixed performance for the USD; softer vs. risk-sensitive peers but faring better vs. traditional havens. DXY has been able to hold above the 106 mark and stick within Friday's 105.84-106.34 parameters.
• EUR is flat vs. the USD with the pair pivoting around the 1.0650 mark and respecting Friday's 1.0610-1.0677 range.
• JPY is steady vs. the USD with comments from BoJ Governor Ueda overnight unable to help the Yen gain ground against the Dollar. As such, USD/JPY continues to eye the multi-year peak at 154.78.
• Antipodeans are both firmer vs. the USD amid the more favourable risk environment. AUD/USD has gained a firmer footing above the 0.64 mark, advancing to a high of 0.6455 after printing a YTD low at 0.6362 on Friday.
• SNB’s Jordan said it is very important that monetary policy remains geared towards price stability rather than being used to finance debt, otherwise it will not end well, while he added that structural reforms are needed to increase competitiveness so that growth can increase which is one of the biggest challenges, according to Reuters.

Fixed Income

• USTs have been contained within a 107.25-17+ range, given the lack of geopolitical escalations over the weekend. From a yield perspective, 4.696% remains the recent peak for the US 10-year with a current level of circa 4.65%.
• Bund price action has followed USTs; the benchmark hit a fresh YTD trough earlier in the session at 130.64, before scaling back losses. German 10-year yield now at levels not seen since last November, and eyes 2.55%.
• Gilts are leading peers as the fallout from dovish comments by BoE Deputy Governor Ramsden continues to reverberate around the market with the central banker confident that inflation is returning to target; Gilts are trading on either side of 97.00 mark with a session high of 97.13 eclipsing Friday's peak at 97.05.

Commodities

• Crude is softer but off worst levels as a lack of major geopolitical escalations over the weekend unwinds geopolitical premium in the complex. Brent Jun'24 slipped from a USD 87.15/bbl high to a USD 85.79/bbl intraday trough before trimming overnight losses.
• The geopolitical unwind is also reflected in precious metals prices amid a lack of escalation over the weekend; XAU declined from a USD 2,392/oz high to a USD 2,351.60/oz intraday low.
• Mixed trade across base metals within relatively tight ranges, in fitting with the price action seen in the greenback.
• UBS said it is targeting an increase in Brent to USD 91/bbl by mid-year; continues to see the oil market as being undersupplied.
• Nornickel said the Co. plans to gain access to Chinese battery technology and produce them in Russia
• Chile imposed temporary anti-dumping tariffs on Chinese steel products used in mining to support the local industry, according to Bloomberg.

Geopolitics: Middle East

• "Another attack on US forces in the region in the last hours, now on Al Assad base in Iraq", according to Walla News' Elster.
• Iran said nuclear weapons have no place in its nuclear doctrine.
• An explosion at a military base in Iraq used by the pro-Iranian militant group Iraqi Mobilization Forces south of Baghdad killed one person and wounded eight people, while the explosion was said to have been caused by an unknown air attack although Iraq’s military reported there were no drones or fighter jets in the area, according to Reuters.
• Five rockets were fired from the northern Iraqi town of Mosul towards a US military base inside of Syria, according to two security sources cited by Reuters. Furthermore, a US official said a coalition fighter destroyed a launcher in self-defence after reports of a failed rocket attack near the coalition base at Rumalyn, Syria.
• Iran-backed Lebanese group Hezbollah said it downed a drone that was attacking locations in southern Lebanon. It was separately reported that Hezbollah targeted two buildings used by enemy soldiers in the settlement of Metula and achieved a direct hit.
• Iran’s Supreme Leader Khamenei thanked the Revolutionary Guards for the April 13th attack on Israel and said the key issue is how Iran displayed its power in attacking Israel not how many missiles were launched or hit their target, while he called on Iranian armed forces to ceaselessly pursue military innovation and learn the ‘enemy’s tactics’, according to state media.
• Iraqi Kataib Hezbollah announced a resumption of operations against US forces citing a lack of progress on US troop withdrawal during the Iraqi PM's Washington visit.
• US is expected to sanction an IDF unit for human rights violations in the West Bank, while Israeli Defence Minister Gallant spoke with US Secretary of State Blinken and urged the US to reconsider the decision to sanction the IDF, according to Axios.
• US State Department said Secretary of State Blinken discussed with Israel's Gantz the need for an immediate ceasefire in Gaza and the release of detainees, according to Reuters.
• German Chancellor Scholz had a telephone call with Israeli PM Netanyahu and stressed the importance of avoiding escalation of regional hostilities, while Scholz explained the decision of the EU to impose further sanctions against Iran, according to Reuters.
• Turkish President Erdogan discussed efforts to reach a ceasefire and deliver humanitarian aid to Gaza with Hamas leader Haniyeh during a meeting in Istanbul, according to Reuters.
• Palestinian Authority President Abbas said they will reconsider bilateral relations with the US after its veto against the Palestinian bid for UN membership, according to Reuters.

Geopolitics: Other

• US House passed a USD 95bln aid package for Ukraine, Israel and Taiwan, while the bills include legislation on TikTok that would force it to be sold or face a national ban in the US, according to Reuters.
• Ukrainian President Zelensky US aid will send a signal that it will not be a second Afghanistan and that the US will stay with Ukraine, while he said Ukraine will have a chance for victory and needs long-range weapons not to lose people on the front line. Furthermore, he responded that Ukraine is preparing when asked about a possible major offensive by Russia, according to Reuters.
• Ukraine sources said a large-scale drone attack was conducted against Russia which targeted energy facilities that support Russian military-industrial production in which at least three power substations and a fuel depot were hit in the attack, according to Reuters.
• Kremlin spokesman Peskov said the House passage of the Ukraine bill will make the US richer and further ruin Ukraine, resulting in more deaths, while he added the bill’s provision on confiscation of Russian assets will tarnish the image of the US and that Russia will take measures in response, according to Reuters.
• Russian Foreign Ministry said the US is using Ukrainians as cannon fodder and is fighting a hybrid war against Russia, while it added that deeper US immersion in a hybrid war against Russia will turn into a fiasco like its wars in Vietnam or Afghanistan, according to Reuters. In relevant news, the Russian Defence Ministry said Russia took full control over Bohdanivka in the Donetsk region, according to IFAX.
• China’s Foreign Ministry said any attempt to provoke camp confrontation in the South Pacific region does not serve the urgent needs of South Pacific island countries and the region should not become an arena for a major power rivalry, according to Reuters.
• North Korea said it conducted a test firing of missiles on Friday.
• North Korea fired would could be a ballistic missile on Monday, via Japanese Government; missile flew towards the sea off the East coast, according to South Korean military; missile believed to have fallen outside of Japan's Exclusive Economic Zone (EEZ).
• Poland is "ready" to have nuclear weapons on its territory, according to the President cited by AFP. Russia's Kremlin on reports Poland is ready to host US nuclear weapons, said "our military will analyst this and take the necessary steps".

US Event Calendar

• 08:30: March Chicago Fed Nat Activity Index, est. 0.09, prior 0.05

DB's Jim Reid concludes the overnight wrap

It's a bit of a messy picture for markets at the moment with huge uncertainty around events in the Middle East, US tech seeing its biggest sell-off for around 18 months, and with yields climbing as rate cuts gets increasingly pushed out. The lack of further escalations in tensions over the weekend in the Iran and Israel situation is helping Asia get off to a better start this morning though.

In terms of this week, we’ll have to wait for Friday for the main macro event namely the US core PCE print within the income and spending report. Our economists expect the core PCE deflator to come in at +0.30% vs. +0.26% last month. This would drop the YoY rate to 2.7% but within a whisker of rounding up to 2.8%, a level that both Chair Powell and Vice Chair Jefferson suggested that the Fed staff’s estimate had pencilled in.

In equity markets all eyes will be on earnings with a whopping 178 of the S&P 500 reporting including four of the Magnificent Seven namely Tesla (after Tuesday’s close), Microsoft, Alphabet (Thursday) and Meta (Wednesday). The final three are the 1st, 4th and 6th largest S&P 500 firms by market cap and make up nearly 14% of its market cap. Tesla is down -41% YTD and under a lot of pressure so it’s an important release for them. This all comes off the back of the worst week for the S&P 500 (-3.05%) since the US regional banking stress last March, and the worst week for the Nasdaq 100 (-5.36%) and the Magnificent Seven (-7.73%) since November 2022. A -3.47% decline on Friday marked a sixth day of consecutive losses for the Mag-7.

With three consecutive weeks of losses, the longest such streak since last September, the S&P 500 is now -5.5% from its recent peak. The VIX volatility index rose +1.4 points (and +0.7 points on Friday) to 18.71, to its highest weekly close since last October.

Nvidia (which doesn't report for another month) fell exactly -10% on Friday (-13.59% on the week), contributing around half of the -0.88% loss in the S&P 500 on Friday, and is now down -25% from its highs on 25 March. One catalyst appeared to be their hardware partner Super Micro Computer announcing its earnings date (April 30th) but without preliminary guidance as they have previously tended to do. They fell -23.1%. Everything else related to chips and AI also got stung with Advanced Micro Devices dropping -5.4%, and Arm Holdings -16.9% to 87.19 as examples. By contrast, the Dow Jones index was largely resilient last week, up +0.56% on Friday and flat (+0.01%) over the week. The Europe STOXX 600 also suffered in the risk-off environment but outperformed the tech heavy US market, falling -1.18% (and -0.08% on Friday).

Bonds did not benefit much from the risk-off tone, as markets became more sceptical about US rate cuts. Investors dialled back the number of rate cuts expected by year-end by +7.6bps to 39bps (+0.2bps on Friday). Off the back of this, 2yr Treasury yields jumped +8.8bps last week (unchanged on Friday). The story was similar for 10yr Treasury yields, which rose +9.9bps on the week to 4.62%, though they fell -1.2bps on Friday as markets sought haven assets. In Asia this morning they are back up +3.9bps to 4.66%. In Europe, 10yr bund yields were up +14.1bps on the week (+0.3bps on Friday), reaching the 2.50% level for the first time since November.

In commodities, oil prices initially surged following the news of a retaliatory Israeli missile strike against Iran on Friday, before unwinding most of the gains as details emerged suggesting no further imminent escalation. Brent crude fell -3.49% last week to $87.29/bbl (+0.21% on Friday), and WTI slipped -2.94% to $83.14/bbl (and +0.50% on Friday), also weighed down by stronger US crude inventories data earlier in the week. This morning in Asia, Brent futures are lower again, trading -0.62% as I type.

On the other hand, gold continued its ascent to another record high, rising +2.03% to $2392/oz (and +0.16% on Friday). It's losing a bit of safe haven demand this morning though (-0.9%). Ahead of its major halving event on Saturday, Bitcoin rose +0.72% to $64,034 on Friday after a volatile week. It is up at $64,800 this morning. For more detail on the halving, see here.

In Asia the Hang Seng (+1.67%) is outperforming following a regulatory boost as China’s market regulator pledged support to bolster Hong Kong’s status as a financial hub. Elsewhere, the S&P/ASX 200 (+0.87%), the KOSPI (+0.77%) and the Nikkei (+0.72%) are also edging higher. Meanwhile, Chinese stocks are bucking the trend (down around a quarter to a half percent), after the People’s Bank of China (PBoC) kept the loan prime rates steady. Outside of Asia, S&P 500 (+0.26%) and NASDAQ 100 (+0.36%) futures are trading higher.

Overnight, French central bank chief Francois Villeroy de Galhau stated in an interview that Middle East tension are unlikely to drive up energy prices and should not derail the ECB plans to start cutting interest rates in June.

Coming back to this week, the other main highlights by day are the global flash PMIs and US new home sales tomorrow, US durable goods and the German IFO (Wednesday), and US GDP and pending home sales (Thursday). Alongside the core US PCE print, Friday also sees the latest BoJ meeting and Tokyo CPI. Our Japan economist previews the BoJ here and expects no change in their monetary policy stance. However, he forecasts that the BoJ will remove its JGB purchasing guidelines from its statement or revise them to make its purchasing operations more flexible. He also sees the central bank raising its inflation forecast for FY24 amid the strong wage growth data already available as of the March meeting. Elsewhere, the Fed is now on its pre-FOMC media blackout but the ECB speakers will be in full force as you'll see in the week ahead calendar at the end, alongside all the main earnings and macro highlights. 112 Stoxx 600 companies will report this week alongside the 178 for the S&P 500 we mentioned above.

Tyler Durden Mon, 04/22/2024 - 08:10

The Three Oil And Gas Stocks Most Sensitive To Oil Price Swings

By Alex Kimani of OilPrice

Following a strong rally amid escalating tensions in the Middle East, oil prices have pulled back sharply in the current week as demand worries outweigh geopolitical concerns. WTI crude for May delivery has declined 5.1% from the Friday close to trade at $83.15 per barrel while Brent crude June contract has retreated 4.9% to change hands at $87.50, marking the first time it has slipped under $90 in more than a week.

However, several commodity analysts believe the markets are unduly discounting the risk of a full-blown war between Iran and Israel. According to Standard Chartered, Iran’s revised position is that any future attacks on Iranian interests anywhere will draw significant retaliation, with the IRGC seizure of a cargo ship on 13 April intended as a related signal of Iran’s ability to influence regional shipping flows. StanChart has warned that the market is understating the risk of further escalation due to miscalculation, miscommunication or other human error. Meanwhile, oil prices have declined after U.S. House of Representatives Speaker Mike Johnson lined up four bills providing assistance to Ukraine, Israel and the Indo-Pacific. Bank of America estimates that an all-out war between the two countries could lead to a $30-$40 spike in the price of crude.

"The market was waiting to sell off on indications of calming of tensions in the Middle East ... progress on these bills and a three-day delay in Israel's response to Iran is helping today," John Kilduff, partner at Again Capital LLC, told CNBC.

"We're leaving our price forecasts unchanged for now and still expect ICE Brent to average US$96 over the second half of this year. The macro outlook continues to be a more important driver for prices than fundamentals at the moment," analysts at ING have said.

Bank of America has analyzed stocks in the MSCI AC World Index (ACWI) Energy, Materials and Industrials sectors for oil price sensitivity. BofA defines Oil Price Sensitivity for each stock as the regression coefficient from regressing 60 months of monthly price returns against the 3-month change in the Oil Price - Brent Crude. Here are 3 of the most sensitive oil and gas stocks to oil price changes.

APA Corp.

Market Cap: $12.1B

12-Month Returns: -17.9%

APA Corp. (NASDAQ:APA) is an independent energy company. It explores, develops and produces natural gas, crude oil and natural gas liquids. At a time when the oil sector has been rallying, APA stock has managed to decline nearly 20% over the past 12 months, and was the most shorted energy name in March.

That said, back in January, Fitch affirmed its 'BBB- credit rating for APA Corp, saying, “The $4.5 billion acquisition of Permian pure play Callon Petroleum should improve APA Corp's business profile by adding scale to the company's Permian operations. Callon will contribute 145k net acres in the Permian, split between the Delaware (82%) and Midland basins (18%), with Delaware acreage primarily in Ward, Reeves, and Winkler counties. The acquisition also adds 102kboepd of Permian production, boosting APA's pro forma size by around one-quarter to over 500kboepd, and increasing its portfolio tilt towards the U.S.’’

Further, APA holds a 50% stake in Suriname’s Block 58 alongside operator TotalEnergies (NYSE:TTE). Block 58. The block has been compared to the Guyana-Suriname basin, with analysts comparing it to Exxon Mobil”s (NYSE:XOM) Liza find in the Stabroek Block. 

Marathon Oil Corp.

Market Cap: $15.8B

12-Month Returns: 11.2%

Marathon Oil Corp. operates the United State's largest refining system, with 3 million barrels per calendar day of crude oil refining capacity across 13 refineries. Recently, equity analysts at Goldman Sachs, headed by Jenny Ma, picked MRO amongst a basket of stocks expected to benefit from high operating leverage, adding that companies with a high degree of operating leverage can generate more sales without increasing their costs. MRO has an operating leverage of 6.9.

However, JPMorgan has picked MRO stock thanks to an attractive call overwriting opportunity,

“The call overwriting signal will be triggered if the sell signals are greater than the buy signal, and if the volume richness signals are greater than the cheapness signals,” they said.

Targa Resources Corp.

Market Cap: $25.0B

12-Month Returns: 45.6%

Texas-based Targa Resources Corp. (NYSE:TRGP) owns general and limited partner interests in a limited partnership that provides midstream natural gas and natural gas liquid services. The company gathers, compresses, treats, processes, and sells natural gas. On Tuesday, TRGP was one of the stocks that earned a Buy recommendation from Goldman Sachs thanks to a strong return on equity (or ROE).

“Stronger-than-expected economic growth represents the clearest upside risk to ROE. [It] would create upside to asset turnover through faster sales growth and to profit margins through operating leverage. Stronger growth has recently coincided with hotter-than-expected inflation, however,” wrote GS analyst David J. Kostin. “

GS estimates that Targa Resources will be able to grow its ROE by 17% in the current year.

Tyler Durden Mon, 04/22/2024 - 06:30

Commercial Real Estate Foreclosures Soar To Levels Not Seen In Nearly A Decade 

Larger cracks are appearing in the US commercial real estate market at a time when uncertainty around the regional bank industry flashes red. 

The latest report from real estate data provider ATTOM shows CRE foreclosures topped 625 in March, up 6% from February and 117% from the same period last year.

ATTOM has been tracking commercial foreclosures since 2014. The number of foreclosures is approaching the peak of 889 in October 2014. 

"California began experiencing a notable rise in commercial foreclosures in November 2023, surpassing 100 cases and continuing to escalate thereafter," the report said. 

New York, Florida, Texas, and New Jersey also showed increases in CRE foreclosures last month. 

Regional banks provide a bulk of the financing for the space. The ongoing mess in the lending space due to tighter conditions adds pressure to the CRE downturn. Banks are expected to set aside more money to cover potential CRE losses. 

Last month, Federal Reserve Chair Jerome Powell testified on Capitol Hill, "We have identified the banks that have high commercial real estate concentrations, particularly office and retail and other ones that have been affected a lot," adding, "This is a problem that we'll be working on for years more, I'm sure. There will be bank failures, but not the big banks." 

Data from a recent Treasury Department's Financial Stability Oversight Council warned office vacancy rates have climbed sharply in recent years, reaching a record of 13.1% at the end of 2023. 

CoStar analyst Phil Mobley recently noted the "reset in office demand has rocked US markets." 

Morgan Stanley warned earlier this year that office prices could plunge 30% due to sliding demand. 

With sliding demand comes a massive amount of supply. Morgan Stanley pointed out that most of the oversupply is in offices and apartments. 

Source: Morgan Stanley

For those wondering why the excess supply of office towers can't be converted into affordable housing, Goldman also noted that prices must drop 50% for housing conversions to make sense. 

Powell has a rolling crisis on his hands. And the goal is to save the fireworks for after the election. 

Tyler Durden Mon, 04/22/2024 - 05:45

Tit-For-Tat Responses From Beijing To Trade Restrictions May Bring About A Full-Blown Trade War

By John Liu, Zhu Lin and Abhishek Vishnoi, Bloomberg Markets Live reporters and strategists

China’s most-promising industries are facing a growing threat of trade restrictions from Western governments, blurring the outlook for stocks that have the potential to fuel the nation’s market growth.

The sectors under scrutiny by Europe and the US are as wide-ranging as electric vehicles, wind and solar projects, medical devices and chips, but have one thing in common: they are of strategic importance to President Xi Jinping’s bid for leadership in the global race toward green transition and high-tech development.

The rising tensions come at an inopportune time. Stocks were starting to emerge from a multi-year slump as investors bought into China’s efforts to build new growth engines and achieve self-sufficiency along key supply chains. A materialization of those threats can hinder China’s global expansion, while tit-for-tat responses from Beijing may bring about a full-blown trade war that would drastically alter the investment landscape.

“Geopolitical pressures will only rise — any exports can be targeted since it’s no longer really about trade fairness,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “It dampens the export growth drivers for China’s economy.”

China’s CSI 300 Index has climbed about 3% this year, regaining some footing after a third-annual loss. Performances among leaders in the green and high-tech industry have been mixed as geopolitical risks add to concerns over oversupply and price competition.

Battery giant Contemporary Amperex Technology Co. Ltd has jumped nearly 17% onshore this year while EV leader BYD Co. has advanced 6%. Longi Green Energy Technology Co. and Semiconductor Manufacturing International Corp. have lost about 20% each.

The biggest Chinese firms that get at least a fifth of their revenue from exports command more than a 14% weight in the CSI 300, with many of them including CATL and BYD trading at a higher price-to-earnings ratio than the benchmark, according to data compiled by Bloomberg.

While trade spats have become a permanent feature in China-Western relations under Xi, recent months saw tensions worsen. The European Union has joined US-styled protectionist moves as a complex mix of national security concerns, economic and political considerations play out.

President Joe Biden’s call for tariffs as high as 25% on some Chinese steel and aluminum products shows how China-bashing will ratchet up in a presidential election year. In Europe, policymakers are responding to growing complaints from local manufacturers that China’s industrial overcapacity is crowding them out.

The range of targeted products largely overlap with Xi’s industrial priorities labeled “new productive forces.” Investors had been hunting for stock winners since the phrase was listed on Beijing’s top agenda in early March, triggering a brief rally in shares from robotics companies to chip makers.

“While the new productive forces may have policy tailwinds, these may be somewhat offset by rising geopolitical tensions, particularly in an election year where noise will likely increase,” said Marvin Chen, a strategist at Bloomberg Intelligence.

The focus is now on which sector will end up next in the crosshairs. EVs have so far been a key target, with Gavekal Research pointing to the EU’s worsening trade balance with China in the industry.

“The cyclical positioning of Europe and China points to the trade balance tipping in China’s favor,” Gavekal analysts Cedric Gemehl and Thomas Gatley wrote in a note dated April 15. European domestic demand is strengthening, which should spur more purchases of Chinese goods, while EU exports to China are likely to flat-line at best on weak demand, they said.

Shen Meng, director at Chanson & Co. in Beijing, expects lithium battery makers to face growing pressure. The industry falls under the category of clean tech and has been a top driver of China’s export growth in past years, he said. Key players include CATL, Eve Energy Co. and Gotion High-Tech Co.

In some sense, there’s a bright side to the tensions as they can help accelerate China’s industrial upgrade. A technical breakthrough by Huawei Technologies Co., which is not listed and faces US sanctions, has spurred a surge in the shares of its suppliers.

“While immediate impacts of such geopolitical tensions might constrain certain sectors temporarily, the long-term outcome could favor Chinese companies that innovate and adapt to changing regulatory and market dynamics,” said Tareck Horchani, head of prime brokerage dealing at Maybank Securities Pte.  

The various restrictions mulled will also take time to deliver. A planned probe by Europe into Chinese medical devices procurement has sent stocks like Shenzhen Mindray Bio-Medical Electronics Co. plunging following the report, but most have since partially recovered their losses.  

All things considered, the unpredictable nature of geopolitical tensions increases the risk of investing in Chinese stocks, an asset class that many were already avoiding due to regulatory uncertainties and a slowing economy.

“Any future EU protectionist moves against China will further impede trade and capital flows into the Chinese economy and add to the already heavy downward pressure on its stock market,” said Han Piow Liew, fund manager at Maitri Asset Management Pte. “What all these means is that investing in Chinese stocks in such an environment is an arduous endeavor requiring razor-like focus on stocks.”

Tyler Durden Sun, 04/21/2024 - 22:10

Northern California City Relaxes Homeless Rules Amid Federal Lawsuit

Authored by Brian Back via The Epoch Times,

The city council of San Rafael in Marin County, California, voted unanimously in a public hearing last week, to approve a more relaxed version of its ordinance dealing with homeless camps and where they are allowed.

The ordinance was originally approved by the council in July 2023 to help curb violence, crime, fires, and littering at an encampment dubbed “Camp Integrity” in the Mahon Creek area near James B. Davidson Middle School.

Several days before the ordinance was set to take effect, a group of homeless residents represented by a local chapter of the California Homeless Union filed a lawsuit to block it in federal court. A judge tentatively granted their request and has since issued preliminary orders to limit certain aspects of the city ordinance.

San Rafael Mayor Kate Colin told the Marin Independent Journal the city has passed numerous ordinances in recent years as encampments have grown along with increased calls for police and fire response, but “has been sued in federal court every single time.”

Officials say the ordinance passed Monday, which goes into effect in June, allows campsites to double in size to up to 200 square feet for one person or up to 400 square feet for up to four people living together, provided the camps are located more than 250 feet away from schools and have 10-foot buffers between sites. It also prohibits camping 100 feet from playgrounds—about one-third of a regulation football field—and 10 feet from private property and public utility infrastructure.

San Rafael’s “Camp Integrity” has grown significantly over the past year with tents and other structures, and the accompanying drug use, sanitation problems, physical violence, and other issues are posing public health and safety hazards, according to the city.

“My business is surrounded,” Jay Ress, general manager of East Bay Tire Co., told the council at the meeting.

East Bay Tire purchased its property on Lincoln Avenue two-and-a-half years ago and invested $750,000 to renovate the site, Mr. Ress said. If the situation does not turn around soon they will be forced to shut down, he added.

“We moved into San Rafael because of the reputation the city has had in supporting the business community,” Mr. Ress said.

“But with the current situation, that reputation is being completely ruined, and I think the city is doomed to more people leaving.”

Christine Miller, who with her husband Rick owns the 103-year-old nearby business Marin County Roofing Co., also pleaded with the council in a letter. She wrote the encampment next to her property has led to violent attacks against employees and resulted in the death of at least one homeless person in front of her business.

“These are not people who lost their jobs and have fallen on hard times,” Ms. Miller wrote.

“These are people who are addicted to drugs and actively engaging in drug related activity. Nothing is being done to hold them accountable.”

City staff said rules at “Camp Integrity” have been enforced with incentives and voluntary compliance, and under the new ordinance, no homeless individuals will be charged with violations unless their unlawful conduct is knowing or willful.

“Is it enforcement never? Is that what you’re saying?” asked City Councilmember Maribeth Bushey.

Told some enforcement tools do remain available, Ms. Bushey asked, “And when, pray tell, will the city plan to exercise those tools?”

The law remains unsettled as to whether or not cities have the right to evict homeless campers on public property, and if San Rafael violated their federal injunction, the city could be held in contempt of court, officials noted.

The "Camp Integrity" homeless encampment on Andersen Drive in San Rafael, Calif., on April 16, 2024. (Brian Back/The Epoch Times)

In a similar case that could guide the fate of lawsuits targeting San Rafael and other cities, the U.S. Supreme Court will hear opening arguments April 22 in Grants Pass v. Johnson, which explores how far the Oregon city and others can go in policing homeless camps.

The case addresses the Eighth Amendment dealing with “cruel and unusual punishment,” which has been invoked to block oversight of encampments in cities where limited taxpayer-funded housing is available for homeless individuals. Lower court decisions in the case have focused on whether people are “involuntarily” homeless and would agree to leave an encampment and occupy a shelter bed if available.

The "Camp Integrity" homeless encampment on Andersen Drive in San Rafael, Calif., on April 16, 2024. (Brian Back/The Epoch Times)

As “Camp Integrity” has grown, the city has added garbage collection services, hand-washing stations, and six portable restrooms, two of which are ADA compliant. Some of the health and safety upgrades were requested by campers in a city-administered survey.

Marin County and the City of San Rafael jointly applied for $5.9 million in state funds earlier this year and say they are optimistic they will be awarded the money this month. The grant would add outreach staff, case managers, facilities such as mobile showers, and provide funds for interim housing.

California Gov. Gavin Newsom attended Redwood High School, just a few miles from San Rafael, and he previously lived with his family in a nearby Marin County estate that sold for $5.9 million before he was elected governor.

Tyler Durden Sun, 04/21/2024 - 21:00

Sidney Powell Handed Win After Judges Dismiss Disciplinary Effort By Texas State Bar

Authored by Jack Phillips via The Epoch Times (emphasis ours),

Sidney Powell speaks during a press conference at the Republican National Committee headquarters in Washington on Nov. 19, 2020. (Mandel Ngan/AFP via Getty Images)

Sidney Powell, a lawyer who filed lawsuits after the 2020 election, got a win in Texas after an appeals court ruled that the Texas bar did not prove that she engaged in misconduct or fraud.

A panel of judges on the Fifth District of Texas Court of Appeals in Dallas ruled Wednesday that the state bar’s arguments lacked merit and evidence. They found that state bar prosecutors “employed a ’scattershot' approach to the case” that had alleged Ms. Powell did not have a reasonable basis to file lawsuits that challenged the 2020 election’s outcome in battleground states.

“The Bar employed a ‘scattershot’ approach to the case, which left this court and the trial court ‘with the task of sorting through the argument to determine what issue ha[d] actually been raised,'” Justice Dennise Garcia wrote in the court’s ruling. “Having done so, the absence of competent summary judgment compels our conclusion that the Bar failed to meet its summary judgment burden.”

A separate court had sided with Ms. Powell in the case last year, finding “numerous defects” in the evidence presented by the State Bar of Texas Commission for Lawyer Discipline. The court also found that the bar couldn’t provide evidence that she filed frivolous lawsuits.

“Under these circumstances and on this record, we conclude the trial court did not err in granting Powell’s no-evidence motion for summary judgment,” the appeals court wrote.

The State Bar of Texas Commission for Lawyer Discipline has not yet issued a statement on the matter. A representative for the Texas State Bar told Reuters that the commission would meet to determine its next steps but declined to comment further.

“The Dallas Court of Appeals has affirmed the Texas state court’s dismissal of the Texas Bar’s case against Powell. After three years of litigation, the Court of Appeals held the Bar had no evidence Powell violated any disciplinary rule in filing four federal lawsuits in the aftermath of the 2020 election,” she said in a statement this week after the court’s decision.

In court papers filed with the appeals court, Ms. Powell disputed the bar’s allegations that she provided altered evidence in her legal filings. She said the documents were provided by other attorneys involved in the case.

The court appeared to agree with her arguments. “Regardless of whether the challenged conduct must be knowing, intentional, or otherwise, a question we need not resolve here, it is axiomatic that dishonesty involves some conscious perversion of truth,” the judge wrote Wednesday.

Following the 2020 contest, Ms. Powell was among the most prominent attorneys to file lawsuits, alleging there was enough fraud in battleground states that swung it in favor of President Joe Biden. A federal judge in Detroit sanctioned Ms. Powell and other lawyers in 2021 over the lawsuits.

The 6th Circuit U.S. Court of Appeals largely upheld those sanctions, and the U.S. Supreme Court recently declined to hear Ms. Powell’s appeal.

Ms. Powell in October 2023 pleaded guilty in Georgia and took a plea deal with Fulton County prosecutors after she was charged with illegally attempting to overturn the 2020 election results. President Trump, the Republican Party’s presumptive 2024 presidential nominee, has also been charged in the case.

He and more than a dozen other co-defendants in the case have pleaded not guilty. President Trump has said the Fulton County case is an attempt to interfere with the 2024 election, describing the charges as baseless.

Under the terms of her plea deal, Ms. Powell had to write an apology. “I apologize for my actions in connection with the events in Coffee County,” she wrote in the letter, made public in December.

Fani Willis, the embattled Democrat district attorney of Fulton County who presented the charges to a grand jury, said that the apology letters needed to include “real contrition” but that they did not need to be long.

Jenna Ellis, another lawyer who was charged and took a plea deal in Fulton County, also wrote an apology letter. However, she read hers aloud in court while pleading guilty.

In response to Ms. Powell’s apology letter, President Trump wrote on social media last year that Ms. Powell never worked for him in an official capacity.

“Sidney Powell was one of millions and millions of people who thought, and in ever increasing numbers still think, correctly, that the 2020 Presidential Election was rigged & stolen,” he wrote on Truth Social. He added that Ms. Powell “was not my attorney and never was.” If she was, “she would have been conflicted,” the former president wrote at the time.

“Ms. Powell did a valiant job of representing a very unfairly treated and governmentally abused General Mike Flynn, but to no avail. His prosecution, despite the facts, was ruthless. He was an innocent man, much like many other innocent people who are being persecuted by this now Fascist government of ours, and I was honored to give him a Full Pardon,” he added.

Reuters and Zachary Stieber contributed to this report.

Tyler Durden Sun, 04/21/2024 - 19:50

"Seven F*cking Dollars!": Social Media Influencer Rages After Paying $7 For An Apple At Whole Foods

We're being told that Bidenomics is working and that inflation is under control.

Yet, when we see articles about shoppers in America paying $7 for an apple, it's hard to make peace with the narrative the current administration is trying to convince its populace of. 

That was the case last week when a Boston-based influencer took to Tik Tok to claim that she paid $7 for an apple - and only an apple - at a Whole Foods, according to a report by the NY Post. 

“Literally just did grocery shopping at Whole Foods and look at this. Guess how much this is. This is an apple, it’s called a Sugarbee f–king apple apparently and look at it,” she said. 

She continued: “The size of my palm. I thought it was like probably 2 to 3 dollars. I scanned this motherf–ker I scanned it — 7 f–king dollars, 7!”

The user @via..li shared a video of her expensive purchase on social media, which has been widely re-circulated. The video, now deleted from her account, featured her removing an apple from a bag outside an unnamed Whole Foods store.

As the Post notes, Whole Foods' website prices the Organic Sugarbee Apple at $3.99 per pound across most Boston areas, though rates can differ by location. In her video, the TikToker even confirmed the price with a store employee.

She added: “Genuinely what economy are we all f–king living in that it costs 7 dollars to buy an apple? I could have sworn that some other like apple that I bought was not 7 f–king dollars. It’s crazy, like 7 dollars for a latte? OK. This apple better be tasting so f–king good.”

Viewers responded with an array of comments, with some supporting the influencer and others questioning her. One user wrote: “On average a pound will give you 2-3 apples. Maybe her anxiety was leaning on the scale.”

Another added: “Even more insane when you realize that’s almost an entire hour of labor for some people even in the US. Imagine working an entire hour in exchange for 1 apple…”

Tyler Durden Sun, 04/21/2024 - 19:11