Zero Hedge

It Has To Stop!

It Has To Stop!

Authored by James Howard Kunstler via,

The current madness has to stop. And it will stop because, as the old wag Herb Stein laid down in his law years ago: Things that can’t go on, stop.

Which raises the question: Which things?

And the answer is the things Western Civ is doing in its attempted suicide: inciting war, recklessly running up debt, persecuting its own citizens and stealing their liberties, subjecting them to medical malfeasance, destroying their goods production and food-growing capabilities and subjecting the public to incessant harrassment in a campaign to falsify and disfigure reality.

Things like that.

A consortium of public and corporate bureaucracies has institutionalized the falsification of reality under the pretense of saving the human race from a pack of hobgoblins led by climate change denial, racism, Putin-worship and normal sexual reproduction.

They’ve been driven insane by the actual reality of pending economic collapse, which has only been accelerated by their own suicidal activities. What they apparently really want to save are their own positions, perquisite and power.

Their enabling mechanism is the digital computer and its many ways of assembling and controlling information, and thus controlling people, especially those who object to totalizing control.

They do it because they can.

Truth Became Misinformation

You can see how bad it got by reading the Twitter Files No. 19, assembled by independent reporter Matt Taibbi and released on March 17: The Great COVID-19 Lie Machine, Stanford, the Virality Project and the Censorship of “True Stories.”

The thread tells of the campaign led by Stanford University called the Virality Project, marshaling government agencies, academia, Big Pharma and NGOs, such as several financed by George Soros, to suppress “misinformation” on social media, including “stories of true vaccine side effects.”

Hence, truth became misinformation.

You might see in that how anyone on the side of falsifying reality is playing at a disadvantage. If that is your first principle in a political struggle, you are fighting not just against your opponents but against the laws of the universe.

The only recourse of a faction at war with reality is tyranny, forcing the people to accept your BS and do your will, whether they like it or not. That is exactly what you get in America’s ruling class and other regimes currently in power around Western Civ.

Being at war with reality places them at war against their own citizens.

Ulterior Motives?

The COVID-19 release seems to have been an act motivated by multiple players for their own reasons, which, combined, amounted to crimes against humanity. Anthony Fauci, America’s infectious disease czar, apparently sought a crowning career triumph, which would have been a successful vaccine against a dangerous virus.

So could he have arranged to engineer the organism that he could then triumph against? I’m not claiming he did, I’m just throwing the question out there. But like all of Dr. Fauci’s projects over the roughly 40 years that he ran the NIAID agency, the mRNA vaccines — subcontracted to the U.S. military and manufactured by Pfizer and Moderna — turned out to be an epic fiasco.

COVID-19 also happened to be a convenient device for ridding the government of the troublesome President Trump, who threatened to disassemble major parts of the permanent U.S. bureaucracy.

If you revisit the many videos of Mr. Trump appearing in the White House COVID crisis room in early 2020 with Dr. Fauci, Dr. Deborah Birx and other public health officials, I’m sure you will notice his discomfort, as if he suspected he was being played (he was).

And conveniently, right after that, the locked-down public’s attention was galvanized by the George Floyd, BLM and Antifa riots until the 2020 election was upon us. (Another grotesque prank against the people, never adjudicated.)

Meanwhile, it took more than a year after the “vaccines” came out for the disturbing actuarial data to emerge from the life insurance industry that many non-elderly people were being killed and disabled by the shots’ adverse effects. (I think the censors were caught by surprise that the truth leaked out from there).

Any able investigator could understand how the “vaccines,” along with the denigration of off-label early-treatment medicines, the reckless use of dangerous remdesivir combined with enormous government payments to hospitals for mistreating patients with it, the gaming and hiding of CDC statistics and the obvious censorship of all that information in the corporate news and social media (with help from the CIA and FBI) all added up to a monstrous criminal offense against human decency.

Whose Bright Idea Was This?

The government, now led by “Joe Biden,” needed another distraction from intrusive reality in 2022 — including the emergence of the Biden family’s possible crimes — so it arranged to start a war in Ukraine by threatening to turn that country into a forward NATO base on Russia’s border.

Russia was exceptionally clear and straightforward that it wouldn’t accept such an arrangement and the U.S. proceeded anyway. Our country was exceptionally dishonest in its positioning for this conflict. (And our NATO allies were astoundingly credulous going along with it, even after we fatally damaged the EU’s economy.)

Our lunatic project for using Ukraine to destabilize Russia was an enterprise so feckless it could have only been conceived by the dead-of-brain. Our geniuses of foreign affairs screwed the pooch on this one.

It’s almost too obvious that they never cared about the people of that sore-beset land. Notice they do not even use the word “peace” in any of their confabulations about what’s going on there, because it is the opposite of what they seek, which is… chaos unending.

Thus, others will end this vainglorious project for us — namely, our antagonist there, Russia — and quite possibly the regime of “Joe Biden.” For the second time in its mortifying two years-plus of rule, it will be left holding in its collective hand another humiliation for our overreaching imperial soldiery — and the deluded empty suits commanding it.

Will they be able to pretend this time, as they did in Afghanistan, 2021, that there’s nothing to see here, folks? Just a blizzard of press releases declaring “mission accomplished” or some such other craven BS?

I don’t think so.

Bye-Bye, Joey?

The reaction may be enough to bum-rush “Joe Biden” and company out of office. His grotesque family rackets (including the Ukraine grifts) will finally and magically come to the public’s attention, and that’ll be all she wrote for “JB”— except for the historians waking from their own long catatonic spells to record the disaster they will swear they couldn’t see coming.

Or maybe I’m being too hard on him. I don’t know.

Now, entering the spring of 2023, all of this sordid untruth is unraveling along with something else that the news media will have trouble lying about: the collapse of the money system in Western Civ.

Unlike COVID-19 and the Ukraine war, a banking collapse has no propaganda value to the regimes in power. There is no narrative they can concoct out of it to their advantage. The public will do what they always do to a government that plunges them into penury and hardship. They will turn it out or pull it down.

Since money and banking are subject to the laws of physics, we are going to get the ultimate payback for messing with reality.

A lot of things that can’t go on will stop.

Tyler Durden Wed, 03/29/2023 - 16:20

Bonds "Quiet, Too Quiet" As Big-Tech Soars Into New Bull Market

Bonds "Quiet, Too Quiet" As Big-Tech Soars Into New Bull Market

The last 'calm' day before GDP and PCE saw bond yields uncomfortably quiet ("too f**king quiet" as one rates vol trader MSG'd us), and more squeeziness in stocks (S&P above 50DMA and Nasdaq soaring) ahead of the month-/quarter-end flow-show.

Big banks took a small hit late in the day on a headline that FDIC is "mulling squeezing the big banks to plug its $32 billion hole" but shrugged that off pretty quickly to end a strong day...

Regional banks opened exuberantly once again and were sold off once again at the cash open, back into the red. They stabilized then dropped on FDIC headlines only to recover and end modestly green...

Mega-cap tech reasserted itself today, with Nasdaq soaring 2% today. The Dow and Small Caps lagged (but were still up 1% on the day...

This is Nasdaq's first close above 20% off the December lows - a new bull market?

The S&P 500 is back above pre-SVB levels... but Office REITs remain in pain...

Source: Bloomberg

Semis were on fire today after Intel said new server ships will come sooner than expected, and Micron jumped on upgrades due to "supply discipline"

Source: Bloomberg

The massive divergence between the Nasdaq and the A/D line confirms this rampage higher is all in the 'safe-haven' mega-cap tech names...

Source: Bloomberg

And tech is now trading almost as rich as it has ever traded to the overall market...

Source: Bloomberg

The S&P 500 broke above its 50DMA...

We do note that 0DTE traders stormed in to the short-side as the S&P traded back below its 50DMA around 1340ET, but that did nto work out for them and their covering helped lift stocks in the last hour...

Source: SpotGamma

Treasuries had a second 'calm' day in a row (after the raft of IG/HY issuance earlier in the week). Across the entire curve, yields were basically unchanged today...

Source: Bloomberg

Notably there is some divergence in positioning in bond-land with aggregate TSY futures specs still near record short (thouhg we do note the last couple of weeks have seen a notable cover)...

Source: Bloomberg

But, as Bloomberg notes, short interest as a percentage of shares outstanding in the $33 billion iShares 20+ Year Treasury Bond ETF (TLT) fell near record lows (least short)...

Source: Bloomberg

"Long-duration bonds are coming back as that shock absorber and it helps that the starting yield is a lot higher than it was a year ago,” Gene Tannuzzo, global head of fixed income at Columbia Threadneedle Investments, said in a Bloomberg Television interview.

“That’s why you’re not seeing the incredible short interest in long-maturity Treasuries as you were earlier in the year.”

The dollar was also practically unchanged on the day (after some buying in the Asia session gave way in Europe)...

Source: Bloomberg

Bitcoin surged back above $28,500 today...

Source: Bloomberg

Ethereum topped $1800...

Source: Bloomberg

After a week-long bounce, crude prices slipped despite a large inventory draw, with WTI dropping back to a $72 handle...

US (front month) NatGas prices tumbled back to a $1 handle today again...

Which left Nattie at its cheapest to crude in 9 years (a level that historically led to switching efforts)...

Source: Bloomberg

Gold managed to hold modest gains (despite dollar's small gains), testing $1990 intraday...

Finally, off-topic a little, but US unemployment is now worse than Russian unemployment...

Source: Bloomberg

That's awkward for the sanctions-pushers.

And then there's this - the S&P is back at pre-SVB Failure levels while Gold and Bonds (safe havens) remain far away from that level of risk appetite...

Source: Bloomberg

Will GDP and PCE break that spell?

Tyler Durden Wed, 03/29/2023 - 16:01

Watch: Ted Cruz Eviscerates DHS Secretary For Still Refusing To Admit There Is A Border Crisis

Watch: Ted Cruz Eviscerates DHS Secretary For Still Refusing To Admit There Is A Border Crisis

Authored by Steve Watson via Summit News,

During a Senate Judiciary Committee hearing Tuesday, Senator Ted Cruz grilled Department of Homeland Security (DHS) Secretary Alejandro Mayorkas, and described his refusal to answer questions on the border crisis as “disgraceful.”

Cruz asked Mayorkas if he thinks there is currently a crisis at the border, with Mayorkas only responding that there is “a very significant challenge” and refusing to answer with a “yes” or “no.”

Cruz noted that Border Patrol Chief Raul Ortiz has repeatedly testified that there is a crisis, and asked Mayorkas to “speak with the same clarity.” 

“That’s how someone answers a question and does their job,” Cruz asserted, adding “You’re being a politician, misleading the American people.”

The Senator went on to describe how migrant deaths, child assaults and rapes have risen significantly since Mayorkas took office

“The men and women of the Border Patrol, they’ve never had a political leader undermine them,” Cruz declared, telling Mayorkas that he should resign.

They despise you, Mr. Secretary, because you’re willing to let children be raped to follow political orders. This is a crisis, it’s disgrace, and you won’t even admit this human tragedy is a crisis,” Cruz blasted.

Mayorkas called Cruz’s comments “revolting,” prompting Cruz to respond, “Your refusal to do your job is revolting.”


Elsewhere during the hearing, Senator Josh Hawley slammed Mayorkas for assisting with and incentivising illegal entry into the U.S., noting that “It’s like a concierge service for illegal immigrants.”

“Rather than building a wall, Mr. Secretary, you have built Ticketmaster for illegal immigrants,” Hawley proclaimed.



CBP Data: 16 Terrorists On FBI Watchlist Crossed Southern Border In February Alone
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Video: Border Patrol Chief Testifies Border Is Not Secure, Wall Needed
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Videos: Massive Group Of 1000 Illegals Attempts To Smash Through El Paso Border Barriers
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Report: Red Cross Provides Illegals With Maps And Tips About How To Cross Border Into U.S.
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Pictured: Biden Admin Hands Out Nonsensical ‘Black Resistance’ Flyers To BORDER PATROL Agents
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Tyler Durden Wed, 03/29/2023 - 15:45

No, Social Media Had Nothing To Do With SVB's Implosion

No, Social Media Had Nothing To Do With SVB's Implosion

An odd narrative which emerged following the dramatic collapse of Silicon Valley Bank was that it was the "first Twitter-fueled bank run," with notables such as Peter Thiel and Bill Ackman taking the blame for influencing businesses to withdraw funds from the bank.

Also promoting this absurd narrative (without a clue about the underlying causes of the collapse, such as failure to hedge against interest-rate risk) was the 'woman-owned and operated' Alethea Group, which circulated a dossier of sorts accusing ZeroHedge and others of potentially contributing "to increased online panic about SVB."

Interestingly, Alethea - run by a former staffer for Sen. Angus King - cropped up in 2019, and last November received $10 million from Ballistic Ventures, whose general partner is Ted Schlein. Ted "provides counsel to the U.S. intelligence community, serves on the Board of Trustees at InQTel, and was recently named as a board member of the CISA Cybersecurity Advisory Committee."

Connecting the dots...

What did we learn recently from the latest "Twitter Files" from Matt Taibbi?

Last June, the advisory board recommended that CISA [on whose board Schlein sits] should work with and provide support to external partners “who identify emergent informational threats,” and find ways to mitigate “false and misleading narratives.”

So, the US Government is farming out 'misinformation' research, and a CISA board member doled out $10 million to Alethea as part of that effort.

Bloomberg, (which excluded ZeroHedge from their report referencing the Alethea dossier after we told them what bullshit it is), now reports that "SVB's demise swirled on private VC founder networks before hitting Twitter."

"It wasn’t phone calls; it wasn’t social media," said one Silicon Valley startup founder who wishes to remain anonymous. "It was private chat rooms and message groups."

By the time most people figured out that a bank run was a possibility on Thursday, March 9, it was already well underway. -Bloomberg

A WhatsApp text exchange in the chaotic hours leading up to SVB’s failure.
Source: Avinash Raghava

According to the report;

Gunjit Singh, the San Francisco-based co-founder of Electric Sheep Robotics, first heard chatter about Silicon Valley Bank’s financial straits in January via WhatsApp messages. Initially he dismissed it. His company, which makes robotic lawn mowers, had a line of credit and most of its cash with the bank, but the worry at that point was mostly theoretical. “There are rumors about everything,” he said.

The rumors, of course, turned out to be true. Silicon Valley Bank had liquidity issues thanks to the combination of rising interest rates and a large portfolio of long-term, low-interest assets. When it moved to shore up its financial position in early March, many people started taking the risks more seriously. 

It was Wednesday, March 8, the day before the company’s stock tumbled 60%, when Alfred Chuang became aware of worries over Silicon Valley Bank’s health, mostly via email and phone calls. Chuang, an investor at VC firm Race Capital, said chief executive officers of public companies began warning him about the bank that evening. “I knew it meant one thing: They were withdrawing money,” Chuang said. Race Capital “exited out of SVB in record time.”

The rest of the Bloomberg report, available to BBG subscribers, lays out what happened in painstaking detail. But the bottom line is this;

This was not a "Twitter-fueled bank run," and those accusing ZeroHedge or other financial media outlets of contributing to it for accurately reporting on what was going on can go pound sand.

Tyler Durden Wed, 03/29/2023 - 15:24

FDIC Weighs Squeezing Big Banks To Plug $23 Billion Hole From Small Bank Failure Costs

FDIC Weighs Squeezing Big Banks To Plug $23 Billion Hole From Small Bank Failure Costs

Yesterday, we explained that the reason why the stock price of First-Citizens Bank & Trust exploded on Monday after the FDIC revealed that it would "acquire" much of the now failed Silicon Valley Bank, is because in exchange for paying $500 million to the FDIC, the Raleigh, N.C. bank would not only get $16.5 billion in clean assets, but would also get a taxpayer backstop for future losses to boot.

But while the transaction was immediately accretive to First-Citizens shareholders (not to mention the billionaire dynasty of controlling shareholders) which doubled its market cap moments after the news hit...

... the question is who would end up footing the bill. The logical answer, of course, is "US taxpayers"... unless of course the FDIC found someone else to front the massive costs that have emerged as a result of the ongoing bank failures.

Well, moments ago Bloomberg reported that the FDIC may have found someone to "volunteer" and pick up most of the tab: that someone are the very same large, megabanks that have directly benefited from the ongoing crisis of confidence shaking their small, regional peers.

According to Bloomberg, the Federal Deposit Insurance Corp, which is facing almost $23 billion in costs from recent bank failures, is "considering steering a larger-than-usual portion of that burden to the nation’s biggest banks."

The agency has said it plans to propose a so-called special assessment on the industry in May to shore up a $128 billion deposit insurance fund that’s set to take major hits after the recent collapses of Silicon Valley Bank and Signature Bank, and whose purpose is to "insure" the roughly $10 trillion in guaranteed deposits (those under $250,000) yet which is a small fraction of that total amount.

The regulator — under political pressure to spare small banks now that politicians and the Fed have decimated small banks with both their actions and inactivity — has noted it has latitude in how it sets those fees. Behind the scenes, Bloomberg reports, officials are looking to limit the strain on community lenders by shifting an outsize portion of the expense toward much larger institutions, according to people with knowledge of the discussions. That would add to what already may be multibillion-dollar tabs apiece for the likes of JPMorgan Chase, Bank of America and Wells Fargo.

Talks for setting the size and timing of the assessment are in early stages. Leaning heavily on big banks is seen as the most politically palatable solution, some of the people said, asking not to be named describing private deliberations.

To be sure, the contentious question of how to spread the cost of SVB’s and Signature’s failures is already a hot topic in Washington, where lawmakers have pressed FDIC Chairman Martin Gruenberg, Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell over who will shoulder the burden — especially after an unusual decision to backstop all of those banks’ deposits while refusing to backstop all uninsured deposits across other banks, thus keeping the bank run dormant. The extraordinary measure saved legions of tech startups and wealthy customers whose balances far exceeded the FDIC’s typical $250,000 limit on coverage, and sparked a backlash against VC "billionaire bros" who were the latest beneficiaries of depositor bailouts.

“I’m concerned that Arkansans will have to subsidize Silicon Valley Bank and Signature Banks deposits, and maybe others that come forward,” Republican Senator John Boozman told Yellen at a hearing last week. “Will the community banks get charged that special assessment?”

She assured him the FDIC has leeway in deciding which banks will pay.

“We’re going to be keenly sensitive to the impact,” Gruenberg added at a hearing on Wednesday, when asked about the strain on community banks. “We have the discretion to tailor that assessment to the institutions that most directly benefited.”

And just as we explained in "Too-Big-To-Fail Banks Flooded With Deposits As Bank Run Drains Small Bank Of Cash", with the big banks benefiting "the most directly" from the regional bank crisis, it makes sense that they end up paying, and that the special assessment will be reserved for the Jamie Dimons of the world.

What kind of damage do the big banks have to look forward to? Well, as Bloomberg calculates "leaning on big banks can add up fast" - when the FDIC set out to raise $5.5 billion with a special assessment in 2009, JPMorgan said the surcharge extracted $675 million from its second-quarter earnings. Of course, the impact from SVB and Signature could easily go far beyond that; after all the implicit gift to First Citizens is at least $16 billion. Sure enough, the agency estimated Sunday that SVB’s failure will cost $20 billion, on top of the $2.5 billion bite it expects from Signature.

It is unclear is how quickly the FDIC wants to collect the assessment. Recently, some large banks have also faced pressure to shore up the balance sheet of another troubled lender, First Republic Bank. For now, regulators are giving that bank more time to reach a deal to bolster its balance sheet, people with knowledge of the situation said late last week. FRC traded up 7% late on Wednesday.

The news initially hit the KBW Bank ETF, but as traders assessed the broader implications of the report, they may concluded that more capital from the big banks to offset the pain caused by small banks may end up boosting confidence in the broader banking sector, and with some 40 minutes to go until he close, the KBWB ETF rose to session highs amid fresh optimism that the acute phase of the bank crisis is now in the rearview mirror.

Tyler Durden Wed, 03/29/2023 - 15:24

New IRS Report Provides Fascinating Glimpse Into Your "Fair Share"

New IRS Report Provides Fascinating Glimpse Into Your "Fair Share"

Authored by Simon Black via,

Every year the IRS publishes a detailed report on the taxes it collects. And the statistics are REALLY interesting.

A few weeks ago the agency released its most recent report. So this is the most objective, up-to-date information that exists about taxes in America.

This is important, because, these days, it’s common to hear progressive politicians and woke mobsters calling for higher income earners and wealthier Americans to pay their “fair share” of taxes.

But this report, directly from the US agency whose job it is to tax Americans, shows the truth:

The top 1% of US taxpayers paid 48% of total US income taxes.

And that’s just at the federal level, not even counting how much of the the local and state taxes the wealthy paid.

Further, the top 10% paid nearly 72% of total income taxes.

Meanwhile, the bottom 40% of US income tax filers paid no net income tax at all. And the next group, those making between $30-$50,000 per year, paid an effective rate of just 1.9%.

(Again, this is not some wild conspiracy theory; these numbers are directly from IRS data.)

But the fact that 10% of the taxpayers foot nearly three-fourths of the tax bill still isn’t enough for the progressive mob. They want even more.

The guy who shakes hands with thin air, for example, recently announced that he wants to introduce a new law that would create a minimum tax of 25% on the highest income earners.

But the government’s own statistics show that the highest income earners in America— those earning more than $10 million annually— paid an average tax rate of 25.5%. That’s higher than Mr. Biden’s 25% minimum.

So he is essentially proposing an unnecessary solution in search of a problem.

I bring this up because whenever you hear the leftist Bolsheviks in government and media talking about “fair share”, they always leave out what exactly the “fair share” is.

The top 1% already pay nearly half the taxes. Exactly how much more will be enough?

Should the top 1% pay 60% of all taxes? 80%? At what point will it be enough?

They never say. They’ll never commit to a number. They just keep expanding their thinking scope.

Elizabeth Warren, for example, quite famously stopped talking about the “top 1%” and started whining about the “top 5%”. And then the “top 10%”.

She has already decided that the top 5% of wealthy households should not be eligible for student loan forgiveness or Medicare.

And when she talks about “accountable capitalism” on her website, Warren calls out the top 10% for having too much wealth, compared to the rest of households.

Soon enough it will be the “top 25%” who are the real problem…

Honestly this whole way of thinking reminds me of Anthony “the Science” Fauci’s pandemic logic on lockdowns and mask mandates.

You probably remember how reporters always asked “the Science” when life could go back to normal… and he always replied that it was a function of vaccine uptake, i.e. whenever enough Americans were vaccinated.

But then he kept moving the goal posts. 50%. 60%. 70%. It was never enough. And there was never a concrete answer.

This same logic applies to what the “experts” believe is the “fair share” of taxes which the top whatever percent should pay.

They’ll never actually say what the fair share is. But my guess is that they won’t stop until 100% of taxes are paid by the top 10% … and the other 100% of taxes are paid by the other 90%.

Tyler Durden Wed, 03/29/2023 - 11:25

Fed Gauge Of Financial Stress Is Approaching Levels Of Concern

Fed Gauge Of Financial Stress Is Approaching Levels Of Concern

Authored by Ven Ram, Bloomberg cross-asset strategist,

It’s not just the credit markets that are sending out a signal of distress. A key barometer that the Fed watches, the St. Louis Fed Financial Stress Index, is telegraphing a similar message about the state of the US economy.

While the spread between high-yield and investment grade debt captures one major variable, the Fed’s gauge comprises a host of yield spreads, interest rates and other indicators, making it a veritable one-stop-shop.

The average value of the index is intentionally meant to be zero, capturing a moment in time when the financial markets are in a “normal” state, with values above indicative of heightened stress.

The markets have been relatively calm these past couple of days after immense volatility earlier this month. But the key question confronting the Fed is what the combination of widening credit spreads and a re-steepening of the Treasury curve tells us about damage already inflicted on the economy.

As far as interest-rate traders are concerned, the damage merits rate cuts down the line.

While Fed Chair Jerome Powell already poured cold water on the idea that the Fed would consider rate cuts this year, we heard overnight from James Bullard, who has espoused the separation principle in walking the fine balance between financial and price stability.

For now, though, policymakers’ best hope will be that the current calm will prevail long enough to keep the economy from falling off a cliff.

Tyler Durden Wed, 03/29/2023 - 10:45

WTI Extends Gains After Large Surprise Crude Draw, 'Adjustment' Factor Remains High

WTI Extends Gains After Large Surprise Crude Draw, 'Adjustment' Factor Remains High

Oil prices extended recent gains overnight (but have trodden water for the last couple of hours) after a surprise crude draw reported by API last night and the ongoing dispute over Iragi crude exports via Turkey (disrupting supply).

“Supply concerns continue to support oil prices,” said Warren Patterson, the Singapore-based head of commodities strategy at ING Groep NV.

One of the biggest oil producers in Iraqi Kurdistan, Norway’s DNO ASA, has started to lower production as the dispute drags on.

However, despite the support for oil prices coming from supply concerns, oil prices are likely to remain volatile in the near term, led by the financial market turmoil, according to UBS strategist Giovanni Staunovo.

And if official inventory, supply, and demand data matches API's that upside vol may continue as positioning is very short.


  • Crude -6.076mm (+300k exp) - biggest draw since 11/25/22

  • Cushing -2.388mm - biggest draw since Feb 2022

  • Gasoline -5.891mm (-1.6mm exp)

  • Distillates +548k (-1.1mm exp)


  • Crude -7.49mm (+300k exp)- biggest draw since 11/25/22

  • Cushing -1.632mm

  • Gasoline -2.904mm (-1.6mm exp)

  • Distillates +281k (-1.1mm exp)

The official DOE data shows an even bigger crude draw than API reported along with a draw in gasoline stocks (6th week in a row). Cushing stocks fell for the 4th straight week while Distillates saw a small build...

Source: Bloomberg

The infamous "adjustment factor" dropped last week but remains extremely high historically speaking...

Source: Bloomberg

US Crude stocks overall remain relatively elevated...

Source: Bloomberg

Overall US gasoline stocks are at their lowest for this time of year since 2014...

Source: Bloomberg

US Crude production was flat week-over-week, as rig counts continue to decline..

Source: Bloomberg

WTI has been chopping around in a narrow range around $74 for the last few hours ahead of the official data and extended gains after the draws...

Finally, as Bloomberg notes, while oil has rallied from recent lows as the banking sector stabilizes, it remains on track for a fifth monthly decline amid concerns over a potential US recession and resilient Russian energy flows. Most market watchers are still betting that China’s recovery will accelerate and boost prices later this year as demand rebounds.

Meanwhile, OPEC+ is showing no signs of adjusting oil production when it meets next week, staying the course amid turbulence in financial markets, delegates said. 

We also note that there is the 'Biden Call' sitting under the market as at some point he will have to start refilling the SPR.

Tyler Durden Wed, 03/29/2023 - 10:38

"A Herculean Task": You Don't Solve One Problem, You Create Two New Ones

"A Herculean Task": You Don't Solve One Problem, You Create Two New Ones

By Michael Every of Rabobank

I loved the Greek myths growing up, and the older I get the more they frame the contemporary world better than most contemporary takes. Among the rich pantheon, I turn to the Hydra in particular, a giant serpent with many heads, where each time you cut off one, two grow back in its place. That’s how the real world works: you don’t solve problems, but create two new ones.

Yesterday’s US consumer confidence data were better than expected at 104.2 post-SVB vs. 103.4 in February. So, less fear of the recession some see looming. However, the survey saw 12-month inflation expectations rise from 6.2% to 6.3%, and ‘jobs are plentiful’ minus ‘jobs are hard to get’ at a still-high 38.8, consistent with a tight labor market. Hence, the Fed need to do more on rates, which then places more potential stress on the banking sector and the economy.  

Yesterday saw ECB regulators state that just one small Credit Default Swap (CDS) trade was, in their eyes, behind the recent panic at Deutsche Bank. So, all is well? Hardly, if that kind of market structure exists, says the regulator. After all, CDS allows markets to trade on insurance on somebody else, which we don’t allow for any other insurance for obvious reasons. This morning also sees news of regulators raiding French banks in a tax fraud probe.

On US banks, testimony from the Fed’s Barr underlined the points already released in his text the day before and added little new. The Wall Street Journal summarises it as: ‘How Bank Oversight Failed: The Economy Changed, Regulators Didn’t - Overseers paid insufficient heed to risks of falling bond values and fleeing deposits. Social media and selling by smartphone made that worse’, adding the quote: ““The supervisory process has not evolved for rapid decision making. It is focused on consistency over speed. In a fast-moving situation, the system is not as well-designed to force change quickly.” So, they aren’t even cutting off the right heads(?)

In the Financial Times, Martin Wolf defends central banks, arguing ‘Monetary policy is not solely to blame for this banking crisis.’ Which is true, even though it arguably played the largest single role. He then adds: ‘It’s a fallacy to suppose there is a simple solution to the failings of our financial systems and economies’. Which is also true - thus the Hydra. At least he admits there are systemic failings – how much of that do you see in other financial media and market commentary?

The IMF understand things are changing. They just released ‘RETHINKING MONETARY POLICY IN A CHANGING WORLD’ (all caps, so it must be important!) that argues: “after decades of quiescence, inflation is back; to fight it central banks must change their approach. Monetary theory in economics has consisted of various schools of thought rather than a single unified model. Each of these schools emphasizes different forces that drive inflation and recommends a distinct policy response. Different times have raised different challenges -and each required its own policy approach.” It’s nice that the IMF finally recognises multiple schools of monetary theory. However, the paper lists our current problems before concluding that to address them, “central banks should return to a monetary approach in which stabilizing inflation expectations is a central priority” - without saying *how*. So, ‘Go slay the Hydra, Heracles!’

As Aussie CPI data today showed a downside surprise at 6.8% y-o-y vs. 7.2% expected --so, might the RBA sheath its sword in April?-- the new message is that central banks will keep hiking if the data back it, and use acronymic liquidity support to prevent a banking crisis at the same time. In other words, hybrid policy to deal with a Hydra.

Yet that creates all kinds of problems too, as central banks inexorably start getting involved in either deeper moral hazard or capital allocation decisions at a time when they can’t even get rates or financial supervision right. Those political-economy choices are likely to between guns and butter (or cat videos), as China, whose ruling ideology understands both financialisation and ‘fictitious capital’, is leading the way on.

On which, Congress yesterday heard another testimony as consequential as Barr’s. The Joint Armed Services Committee learned US naval logistics have atrophied and are a generation behind on sealift readiness, the entire end-to-end fuel system in question, US ship-building too slow, and buying new ships on the open market not an option. Congress was sympathetic. The potential bill could be astronomic. Without it, the US cannot permanently remain hegemonic.  

Coincidentally, today’s Financial Times also sees Janan Ganesh argue that regardless of the geopolitical crisis we are experiencing, Western voters --or at least European-- won’t give up their peace dividend because electorates prefer guns to butter. He concludes, “Governments have to decide between a retirement age here and a naval fleet there. Or rather, voters do. If they go the way I fear, it will be a legitimate and understandable democratic choice. But then so was the inward turn of the interwar years. The second world war happened, in part, because Germany and Japan didn’t believe a US that had lets its hard power run down for a generation could counter them….Weakness is provocative, goes the cliché. But so, at home, is paying for strength.” Of course, we have plenty of talking heads who point out that even Western strength is also provocative.

These issues flow back to markets even if most won’t join the dots. For example, as oil markets swing wildly (on which, see the latest energy outlook ‘Energy Security in a Walled World’ from our Joe DeLaura, which urges “Focus on the future!”) FinTwit is still, wrongly, echoing with cries of ‘the end of US dollar hegemony’, which implies market chaos on a scale few grasp.

Again, let me stake out the view that the US dollar will remain unchallenged as the global reserve currency. Again, however, let me also stress that if we keep seeing large emerging markets and commodity producers switch to de facto barter for trade settlement priced in US dollars, then there might over time be a growing imbalance between the supply of global dollars and the actual physical demand for them. The dollar could, hypothetically, become like Latin in Europe – still there as lingua franca, but never used in day-to-day interactions. The US recourse would logically *not* be lower rates and QE, as pivot-happy punters are saying.

Yet even if one buys this longer-term scenario, it’s still a Hydra. In the near term, barter is highly inefficient. If ‘no dollars’ means Saudi Arabia building up assets in China or Kenya rather than the US, good luck to them with their US-pegged currency. If it all means a weaker dollar and higher Treasury yields, which is questionable, it also means higher global inflation and more financial turbulence, and so a collapse in demand for commodity exporters ‘protecting themselves’. Moreover, as the logical end game, Michael Pettis has long argued the US would be better off without its global reserve currency role, which allows every other economy to dump their excess savings on it, pushing up US debt or unemployment in kind. A US walk-away would mean Japan, China, Germany, etc., would not be able to save and export so much to it, directly or indirectly.

As Pettis also points out, the path to achieving this global rebalancing is through increased financial regulation, not tariffs: stop the capital flows, and the inverse trade flows halt too. Is that the way to slay our global Hydra, as in the Greek myths, where Heracles and his nephew Iolaus cut off each head and cauterised the wound with a burning torch before new ones could grow back?

Of course, applying a burning torch to our financial system does not seem to be on the cards, and would create epic market volatility. We are more likely to see a fusion of fiscal, monetary, regulatory, and industrial policy, i.e., a new mercantilism – but that path also means geopolitical and geoeconomic tensions, rippling back to markets.

In short, there are always two new heads to the international political economy Hydra for every one we cut off. Pretending there is a pre-2020, pre-2008, pre-1971, or pre-1913 way to simply resolve all our global issues is a giant myth.  

Tyler Durden Wed, 03/29/2023 - 10:15

Pending Home Sales Rebound Slows In Feb As Mortgage Rates Reverse

Pending Home Sales Rebound Slows In Feb As Mortgage Rates Reverse

Despite a big jump in existing home sales (and continued increases in new home sales), pending home sales were expected to drop 3.1% MoM in February (the latest data) after the huge 8.1% surge in January. However, in line with the others, pending home sales beat expectations, rising 0.8% MoM

Source: Bloomberg

That pushed the pending home sales index to its highest since August...

Source: Bloomberg

Signings rose in February in all regions but the West (where the most expensive homes are), while the increase was led by a 6.5% advance in the Northeast.

Of course, so much of this recent resurgence was due to a brief dip in mortgage rates - what happens next...

Source: Bloomberg

The pending home sales report is often seen as a leading indicator of existing home sales given homes typically go under contract a month or two before they’re sold.

“After nearly a year, the housing sector’s contraction is coming to an end,” Lawrence Yun, NAR’s chief economist, said in a statement.

Sadly, Mr. Yun, we think your celebration is premature.

Tyler Durden Wed, 03/29/2023 - 10:06

Moving Beyond Banks

Moving Beyond Banks

Authored by Peter Tchir via Academy Securities,

Testimony on the hill yesterday turned financials (XLF and KRE) from positive to negative, dragging broader risk markets with them. Overnight, financials are performing well, along with broader risk markets (CDS indices in Europe are particularly strong).

The good news is that the overdone fear of depositor losses seems to be behind us (even after D.C. did little to help on that front yesterday).

I have some ongoing concerns about deposits from an overall yield standpoint (I Know What You Did Last Summer), but that is a concern, that even if I’m correct will work in slow motion.

The overall question of “unrealized bond market losses” (we can include loans and private debt in the “bond market” for these purposes) in the financial system hasn’t gone away, but many are wondering if it is already priced in? I expect that the “unrealized bond market losses” will play out in three ways:

  • As more in depth research on specific balance sheets is done (probably by distressed analysts, rather than traditional analysts who just don’t seem as focused on picking apart balance sheets), there is a risk that some entities will be flagged as being overexposed to obvious risks.

  • If questions arise about deposit stability (or cost of funds), then these unrealized bond market losses will weigh on the entire sector again, though I would expect the impact to be more and more correlated with institutions identified as having some potential losses of a material size.

  • Pull to par and time help, as does a strong economy. There can be a “healing” process.

The final issue, one that became quite painfully obvious yesterday, is that the industry has to brace for another round of regulatory scrutiny, brought on to the entire industry by a few particularly egregious situations.

Inventories, Shipments and Delinquencies

With so many potential things to look at, today we will just revisit a few that have influenced our outlook for the past year so.

Inventories remain elevated and after some progress, seem to be ticking higher again, which can partly be explained by supply chain resolution, may be better explained by consumer fatigue. We compare total retail inventories with those less autos, just to make sure the automobile industry, which experienced more than its fair share of supply chain issues, isn’t impacting the data disproportionately and it doesn’t seem to be.

A quick look at credit card debt, credit card delinquencies and auto loan delinquencies shows a deteriorating trend (higher debt, higher delinquency frequency), but in most cases still below pre-covid historical averages. Nothing to be overly concerned about today, but the trend is heading the wrong direction for those who are arguing that we can never bet against the American Consumer.

We used 50 day moving averages here (the weekly data is highly volatile and has some serious seasonality (we ramp up pre-holidays, slow down during holidays, etc.). Some of what we are catching in the data may be a typical seasonal effect (though it looks worse than that). It is possible the tragic derailment in East Palestine is affecting the data (I do not have that level of granularity into this data).

For me, it does fit into the “we overordered”, “we have too much inventory” so “we are taking our foot off the gas” narrative that I am using for goods inflation and potential economic impact.

I could look at Baltic Dry Index (which has bounced, but remains in a downtrend) but chose to start trying to figure out what to do with this mess of data from the ports.

For some reason I couldn’t get the moving average data to work, but in 2017 the lows were in February, for the following years, the lows were in March. So there is some seasonality to them, but:

  • That seasonality did not exist last year when the ports remained busy throughout the year (makes me wonder about the China closed vs China re-opening narrative??).

  • If historical data is correct, we should see worse data in March and the chart is now getting to be lower than historical levels and a big drop-off from the average of the past 2 years.

Given how messy this first cut of data is, maybe it isn’t relevant, but, then again, maybe it is telling us that companies are trying to fix the inventory “glut” (my word) by ordering less?

Bottom Line

Remain in a cautious, “risk-off” stance. Positioning doesn’t need to be doom and gloom and trying to time some moves higher and lower makes sense, but I’m erring to side of caution (small short, or small underweight) as laid out in Sunday’s report.

Also, as per Sunday’s “Last Summer” Report, there seem to be more obvious “event risks” to the downside than upside. Yes, that means the market is hedging and preparing for them, but if any of the events materialize (Debt Ceiling, China selling weapons to Russia, etc.) they will still drag markets lower.

The overdone fears of bank deposit safety should be behind us, but now we can all examine the economy again (not liking what I see) and start prepping for earnings which are just around the corner!

Tyler Durden Wed, 03/29/2023 - 09:45

Stocks See Rising Risk Of Recession That Ends Inflation

Stocks See Rising Risk Of Recession That Ends Inflation

Authored by Simon White, Bloomberg macro strategist,

Investors are more comfortable holding duration, while option markets are pricing in greater left-hand tail-risks, suggesting a prevailing view of rising recession risk and inflation continuing to fall.

When inflation is persistent and elevated, avoiding securities with higher duration is prudent. Up until the end of last year, this is generally what the market was doing, with higher-duration sectors such as tech lagging and low-duration sectors like energy leading.

Since the beginning of this year, this trend has reversed. The only GICS Level 1 sectors that have outperformed the index in 2023 are the three with the highest duration. This does not suggest a market that is particularly fearful about entrenched inflation or price-growth that is about to flare up again.

At the same time, option markets in equities have been pricing in greater downside tail-risks. Far out-of-the-money put skew has risen recently. Also, call skew has fallen. This reflects a market more expectant of downside than upside price surprises, which would be consistent with rising recession risk.

If we are to get a recession, the maximum inversion of the 2s10s yield curve would be consistent with a 35% peak-to-trough fall in the S&P, i.e. another ~18% from here.

The market appears to be leaning towards a mild recession which is enough to put inflation back in its box. This is an optimistic view given the rise of underlying structural drivers in inflation, such as elevated profit margins.

As discussed previously, the Fed may also soon see inflation as less of a problem, and cut rates sooner than the market is expecting, as the economy and markets face further stress.

Ultimately, this would add further fuel to structurally persistent inflation, but in the meantime equities look set to keep pricing inflation as a fading problem.

Tyler Durden Wed, 03/29/2023 - 09:05

A Federal Reserve Pivot Is Not Bullish

A Federal Reserve Pivot Is Not Bullish

Authored by Michael Lebowitz via,

An old saying cautions one to be careful of what one wishes for. Stock investors wishing for the Federal Reserve to pivot may want to rethink their logic and review the charts.

The second largest U.S. bank failure and the deeply discounted emergency sale of Credit Suisse have investors betting the Federal Reserve will pivot. They don’t seem to care that inflation is running hot and sticky, and the Fed remains determined to keep rates “higher for longer” despite the evolving crisis.

Like Pavlov’s dogs, investors buy when they hear the pivot bell ringing. Their conditioning may prove harmful if the past proves prescient.

The Bearish History of Rate Cuts

Since 1970, there have been nine instances in which the Fed significantly cut the Fed Funds rate. The average maximum drawdown from the start of each rate reduction period to the market trough was 27.25%.

The three most recent episodes saw larger-than-average drawdowns. Of the six other experiences, only one, 1974-1977, saw a drawdown worse than the average.  

So why are the most recent drawdowns worse than those before 1990? Before 1990, the Fed was more active. As such, they didn’t allow rates to get too far above or below the economy’s natural rate. Indeed, high inflation during the 1970s and early 1980s forced Fed vigilance. Regardless of the reason, higher interest rates helped keep speculative bubbles in check.

During the last 20 years, the Fed has presided over a low-interest rate environment. The graph below shows that real yields, yields less inflation expectations, have been trending lower for 40 years. From the pandemic until the Fed started raising rates in March 2022, the 10-year real yield was often negative.

Speculation often blossoms when interest rates are predictably low. As we are learning, such speculative behavior emanating from Fed policy in 2020 and 2021 led to conservative bankers and aggressive hedge funds taking outsized risks. While not coming to their side, what was their alternative? Accepting a negative real return is not good for profits.

We take a quick detour to appreciate how the level of interest rates drives speculation.

Wicksell’s Elegant Model

A few years ago, we shared the logic of famed Swedish economist Knut Wicksell. The nineteenth-century economist’s model states two interest rates help assess economic activity. Per Wicksell’s Elegant Model:

First, there is the “natural rate,” which reflects the structural growth rate of the economy (which is also reflective of the growth rate of corporate earnings). The natural rate is the combined growth of the working-age population and productivity growth. Second, Wicksell holds that there is the “market rate” or the cost of money in the economy as determined by supply and demand.

Wicksell viewed the divergences between the natural and market rates as the mechanism by which the economic cycle is determined. If a divergence between the natural and market rates is abnormally sustained, it causes a severe misallocation of capital.

The bottom line:

Per Wicksell, optimal policy should aim at keeping the natural and market rate as closely aligned as possible to prevent misallocation. But when short-term market rates are below the natural rate, intelligent investors respond appropriately. They borrow heavily at the low rate and buy existing assets with somewhat predictable returns and shorter time horizons. Financial assets skyrocket in value while long-term, cash-flow-driven investments with riskier prospects languish.

The second half of 2020 and 2021 provide evidence of Wicksell’s theory. Despite brisk economic activity and rising inflation, the Fed kept interest rates at zero and added more to its balance sheet (QE) than during the Financial Crisis. The speculation resulting from keeping rates well below the natural rate was palpable.

What Percentage Drawdown Should We Expect This Time?

Since the market experienced a decent drawdown during the rate hike cycle starting in March 2022, might a good chunk of the rate drawdown associated with a rate cut have already occurred?

The graph below shows the maximum drawdown from the beginning of rate hiking cycles. The average drawdown during rate hiking cycles is 11.50%. The S&P 500 experienced a nearly 25% drawdown during the current cycle.

There are two other considerations in formulating expectations for what the next Federal Reserve pivot has in store for stocks.

First, the graph below shows the maximum drawdowns during rate-cutting periods and the one-year returns following the final rate cut. From May 2020 to May 2021, the one-year period following the last rate cut, the S&P 500 rose over 50%. Such is three times the 16% average of the prior eight episodes. Therefore, it’s not surprising the maximum drawdown during the current rate hike cycle was larger than average.

Second, valuations help explain why recent drawdowns during Federal Reserve pivots are worse than those before the dot-com bubble crash. The graph below shows the last three rate cuts started when CAPE10 valuations were above the historical average. The prior instances all occurred at below-average valuations.

The current CAPE valuation is not as extended as in late 2021 but is about 50% above average. While the market has already corrected some, the valuation may still return to average or below it, as it did in 2003 and 2009.

It’s tough to draw conclusions about the 2020 drawdown. Unprecedented fiscal and monetary policies played a prominent role in boosting animal spirits and elevating stocks. Given inflation and political discord, we don’t think Fed members or politicians will be likely to gun the fiscal and monetary engines in the event of a more significant market decline.


The Federal Reserve is outspoken about its desire to get inflation to its 2% target. If they were to pivot by as much and as soon as the market predicts, something has broken. Currently, it would take a severe negative turn to the banking crisis or a rapidly deteriorating economy to justify a pivot, the likes of which markets imply. Mind you, something breaking, be it a crisis or recession, does not bode well for corporate earnings and stock prices.

There is one more point worth considering regarding a Federal Reserve pivot. If the Fed cuts Fed Funds, the yield curve will likely un-invert and return to a normal positive slope. Historically yield curve inversions, as we have, are only recession warnings. The un-inversion of yield curves has traditionally signaled that a recession is imminent. 

The graph below shows two well-followed Treasury yield curves. The steepening of both curves, shown in all four cases and other instances before 1990, accompanied a recession.

Over the past two weeks, the two-year- ten-year UST yield curve has steepened by 60 bps!

Tyler Durden Wed, 03/29/2023 - 08:25

Futures Gain On China Tech Optimism, Easing Bank Fears; Nasdaq On Pace For Best Quarter In 3 Years

Futures Gain On China Tech Optimism, Easing Bank Fears; Nasdaq On Pace For Best Quarter In 3 Years

US futures extended gains for a second day on Wednesday as banking sector fears continued to ease, while Nasdaq futs got a boost from a rally in Asian tech stocks following the announced split of Chinese internet giant Alibaba which sent the Hang Seng up 2.1% and HSTECH +2.5%. 

S&P 500 and Nasdaq 100 futures contracts were up 0.8% as of 7:30 a.m. in New York, trading at 4,034 and 12832 respectively.

The S&P 500 is set for a flat month, while the Nasdaq 100 has surged nearly 5% in March and more than 15% in Q1 - its best quarter in nearly three years and its first rise in 5 quarters - as tech stocks, especially megacaps, found renewed favor with investors.

Bond yields are lower following dovish comments by ECB’s Philip Lane on inflation which supported bunds over London session, and helping drive declines for front-end Treasury yields. The USD stronger, and commodities are flattish. WTI is up small, approaching the bottom-end of the recent $75 - $80 YTD range. Overnight, the WaPo reported that the government may move to strengthen capital/liquidity requirements for banks with assets larger than $100bn. Fed’s Bullard said that banking crisis can be contained with policy rather than by moves in interest rates; will the bond market remove any rate cut expectations? Doubtful.

In premarket trading, Alibaba Group ADRs fell in US premarket trading after surging Tuesday on plans to split. Its Hong Kong-listed shares were 12% higher, tracking overnight gains on Wall Street. That sparked a rally in Chinese tech shares as investors piled into the companies that were stung by a crackdown from Beijing over the past two years. UBS shares climbed as much as 3% after the Swiss lender said veteran UBS CEO Sergio Ermotti will return and replace Ralph Hamers as chief executive officer; Jefferies shares were little changed after the financial services firm’s profit plunged in its fiscal first quarter, as a bump in equities and fixed income trading failed to offset a slump in investment banking. Here are some other notable premarket movers:

  • Lululemon shares leap 15% in premarket trading after the athletic-apparel brand reported fourth-quarter adjusted earnings per share that beat analyst estimates and issued guidance that topped expectations. Analysts found the results to be strong overall, with most expecting the negative sentiment around the stock to be alleviated with the performance.
  • Micron rises 2.7% after the largest US maker of memory chips issued a forecast of adjusted revenue for the third quarter that was better than some had feared. Analysts were still cautious about the tough environment facing chipmakers, but see signs that the worst of the downturn may be behind the industry.
  • Shares of semiconductor companies are rising following Micron’s forecast and after Infineon raised its revenue outlook. Qualcomm gains 1%, Advanced Micro Devices (AMD US) +0.9%, Nvidia +0.8% and Intel +0.8%.
  • Alibaba and other US-listed Chinese internet stocks are poised for a pullback, after their shares surged on Tuesday following Alibaba’s plan to split into six units and seek separate listings. Alibaba slides 1.4% in premarket trading, Baidu -0.8%, -1.5%.
  • Cryptocurrency- related stocks rally as Bitcoin extends gains into a second day to breach the $28,000 level. Cipher Mining rises 15%, Riot Platforms +7.4%, Marathon Digital +6.3%, Coinbase +4%, MicroStrategy +3.9%.
  • Arcturus Therapeutics shares jump 25% after the biotech beat analysts’ earnings estimates for the fourth quarter and repaid debts that allow its “cash runway” to extend to 2026. Analysts were especially positive on the company’s update regarding its pipeline and its potential.
  • Lucid rose 1.9% after the electric vehicle-maker said it would cut 18% of its workforce, including employees and contractors. Morgan Stanley notes that fellow EV startups may need to consider similar cost cutting measures given increased competition and a challenging capital-raising environment.

US equities have traded in a narrow range over the past week, as investors digested the banking sector crisis, with contagion fears easing, while the Fed hinted that the rate-hiking cycle was near the end, but not ready for a pivot yet as inflation was still too high. Swaps traders currently price in more than a 50% probability the Fed will raise rates by a quarter point at its next meeting, with plans to ease thereafter, something with which several strategists, including those at BlackRock, disagree.

The bad news for markets “is that the Fed is very unlikely to cut rates until Q2 2024, unless US growth slows more markedly than we anticipate, leaving us with a ‘higher for longer’ scenario,” Willem Sels, global chief investment officer at HSBC Private Banking and Wealth, wrote in a note on the outlook for the next quarter. “Another key consideration for investors should be China’s reopening and the bounce in consumer activity, which markets are still completely underestimating,” he added, saying China’s renewed focus on growth will help reduce the risk of a recession in the rest of the world.

“We associate the current market pricing in terms of rate cuts not to be appropriate, we are not expecting any rate cuts in 2023 across different economies, especially in the US,” Giulio Renzi Ricci, investment strategist at Vanguard Asset Services, said on Bloomberg Television. “For that reason we don’t expect growth stocks, and tech in particular, still will need to be discounted back” once the market realizes a pause in rate cuts isn’t really happening.

At the same time, investors argue that the odds of a recession have risen after banking turmoil earlier this month sparked fears of wider contagion, and will lead to sharply tighter lending conditions. An index of dollar strength was steady after ending Tuesday near the lowest level in eight weeks. The banking crisis and the new tighter standards for banks is equivalent to one to two rate hikes,” said Eva Ados, chief investment strategist for ERShares, in an interview with Bloomberg Television. “There is a big possibility here of a pricing mistake. We are pricing in the rate drop rather than the reason why rates are dropping, which is the banking crisis.”

Meanwhile, top US financial officials on Tuesday outlined what’s likely to be the biggest regulatory overhaul of the banking sector in years, addressing underlying issues that contributed to the collapse of Silicon Valley Bank and other US regional lenders.

There is a sea of green across the equity space with European stocks following their Asian counterparts higher and futures pointing to a positive open on Wall Street. Alibaba led the rally in Hong Kong after announcing plans to split into six business units, while tech stocks are also outperforming in Europe after upbeat forecasts from Micron and Infineon. here are the biggest European movers:

  • UBS shares climb as much as 3% after the Swiss lender said Sergio Ermotti will replace Ralph Hamers as chief executive officer
  • Coloplast rises as much as 2.6% after being upgraded to equal-weight at Barclays with the broker saying the ostomy products maker’s estimates now look more achievable
  • Infineon jumps as much as 7.9%, the biggest intraday advance since Feb. 2, after the chipmaker lifted revenue and margin estimates for the second quarter
  • Strix rises as much as 9.8%, the most in more than two months, after the kettle safety-control producer said in its full-year earnings report there are “green shoots” appearing
  • OCI gains as much as 13%, the most intraday since April 2020, after activist investor Jeff Ubben’s Inclusive Capital Partners urged the fertilizer maker to explore strategic options
  • WPP advances as much as 2.6% after Exane BNP upgraded to outperform from neutral, turning more positive on the ad agency sector
  • Next shares fall as much as 9.1%, with analysts viewing the clothing retailer’s maintained sales and profit guidance for 2024 as disappointing
  • Mercedes-Benz Group drops as much as 2.8% after Kuwait Investment Authority placed 20 million shares at a ~3.6% discount to the last close
  • Aroundtown falls as much as 12%, hitting another record low after Tuesday’s 10% drop, as in-line results and a dividend suspension did little to reassure traders
  • Atos drops as much as 11% after a report from BFM said Airbus wanted to renegotiate the price of Evidian, a unit of the embattled French digital services firm
  • Encavis sinks as much as 12%, the most intraday since January, as Jefferies notes the decision to waive its dividend to fund future growth marks a turning point

Asian stocks advanced as Chinese tech shares rallied on optimism Alibaba’s overhaul will pave the way for other tech giants to potentially unlock billions of dollars in shareholder value. The MSCI Asia Pacific Index rose as much as 0.8%, led by Hong Kong. Chinese technology stocks climbed 2.5% to a five-week high. Alibaba jumped 12%, while its biggest shareholder Softbank Group gained more than 6%. Alibaba surprised markets after the internet behemoth announced plans to split its $220 billion empire into six units that will individually raise funds and explore initial public offerings. The plan is positive for the sector and could signal further easing of regulatory constraints, according to analysts.

“The government needs to boost the economy this year, and the big tech platforms, which have been under pressure over the last couple of years and shedding staff, are key to help the government boost employment,” Vey-Sern Ling, managing director at Union Bancaire Privee, told Bloomberg TV.  Elsewhere, Japanese stocks gained as easing concerns over the banking sector revived risk appetite following weeks of volatility. Shares in mainland China and South Korea eked out small gains as investors braced for a slew of data on the US economy this week

Japanese stocks rose as a revamp plan at Alibaba boosted SoftBank. Gains accelerated in the afternoon ahead of Thursday’s ex-dividend date for some 1,500 stocks. The Topix rose 1.5% to close at 1,995.48, while the Nikkei advanced 1.3% to 27,883.78.  SoftBank Group surged 6.2%, the biggest boost to the Nikkei 225, after China’s Alibaba Group announced a six-way split of its businesses. The news fueled optimism for a recovery at one of the Japanese company’s most important holdings. Toyota contributed the most to the Topix gain, increasing 2.6%. Out of 2,159 stocks in the index, 2,013 rose and 101 fell, while 45 were unchanged. “Globally excessive concerns about the financial system have receded, and there is no new additional bad news,” said Shogo Maekawa, global market strategist at JPMorgan Asset Management Japan. “Domestically, the market was supported by buying for year-end dividends and dividend reinvestment.

Australian stocks also rose: the S&P/ASX 200 index gained 0.2% to close at 7,050.30, after Australian inflation decelerated more than expected in February, bolstering the case for the Reserve Bank to stand pat at next week’s policy meeting. Materials and energy stocks were the biggest gainers on the benchmark.  Read: Australian Inflation Eases, Bolstering Case for Rate Pause “Markets were already quite convinced with the story of an April pause, given what’s happening globally. But this just adds to the story,” said Jessica Ren, a strategist at Westpac Banking Corp. in Sydney. Recent comments from RBA policymakers had been implying “get ready for a pause.” In New Zealand, the S&P/NZX 50 index fell 0.3% to 11,736.75

Finally, Indian stocks also ended higher on Wednesday with small-cap stocks registering their best performance in two months. Adani group stocks rebounded from the steep losses seen on Tuesday as company officials rebutted media reports that raised concerns about the group’s ability to repay debt. Flagship Adani Enterprises rallied 8.7%, while Adani Ports rose 7.3%. A late spurt in buying led by traders covering short positions ahead of monthly derivatives expiry saw India outperform most equity gauges in Asia. The S&P BSE Sensex rose 0.6% to 57,960.09 in Mumbai, while the NSE Nifty 50 Index advanced 0.8% to 17,080.70. The latter saw its best one-day gain since March 3. A gauge of small-cap stocks climbed 1.7% to mark its best day since January 31. “There was some short covering in the market toward the end of the session but it was not a sharp move,” Gaurav Bissa, vice president at InCred Capital. “That said, we are recommending clients to turn bullish on the Nifty as we see a bounceback in the near-term.”  Hindustan Unilever contributed the most to the Sensex’s gains, increasing 1.9%. Out of 30 shares in the Sensex index, 26 rose while 4 stocks fell.

In FX, the dollar rose nearly 1% versus the yen to 132.09, its highest since March 22; the Bloomberg Dollar Spot Index edged up 0.1%. The US currency also benefited from Japanese financial year-end flows, which weighed on the yen in Asian trade. The Australian and New Zealand dollars struggled, while the euro and the pound were little changed against the US currency.

In rates, treasuries rose after a two-day selloff and erased a portion of the curve-flattening selloff of past two days as investors awaited remarks from Federal Reserve officials and economic releases this week for clues on monetary policy. In particular focus will be data on the central bank’s preferred inflation measure - the core PCE deflator - which is likely to factor into the Fed’s next policy decision. Dovish comments by ECB’s Philip Lane on inflation supported bunds over London session, helping drive declines for front-end Treasury yields. US yields, off session lows, remain richer by ~4bp on the day across front-end of the curve with inverted 2s10s spread steeper by ~2bp; 10-year around 3.55% is richer by ~2bp on the day with bunds lagging by 2.5bp in the sector. The US auction cycle concludes with $35BN 7-year note sale at 1pm, follows Tuesday’s decent 5-year note sale which stopped 1bp through the WI; WI 7-year yield around 3.590% is ~47bp richer than February’s result.

In commodities, crude futures advance with WTI rising 0.7% to trade near $73.70. Spot gold falls 0.4% to around $1,966. Bitcoin gains 4.1%.

Now to the day ahead. In terms of data releases, we have the US February pending home sales, in the UK February net consumer credit, mortgage approvals and M4, in Germany the April GfK consumer confidence and lastly in France March consumer confidence data. Finally, we will hear from ECB’s Kazimir as well the BoE’s Mann.

Market Snapshot

  • S&P 500 futures up 0.9% to 4,036.50
  • STOXX Europe 600 up 0.8% to 448.02
  • MXAP up 0.6% to 160.78
  • MXAPJ up 0.7% to 517.13
  • Nikkei up 1.3% to 27,883.78
  • Topix up 1.5% to 1,995.48
  • Hang Seng Index up 2.1% to 20,192.40
  • Shanghai Composite down 0.2% to 3,240.06
  • Sensex up 0.4% to 57,866.24
  • Australia S&P/ASX 200 up 0.2% to 7,050.33
  • Kospi up 0.4% to 2,443.92
  • German 10Y yield little changed at 2.32%
  • Euro down 0.1% to $1.0832
  • Brent Futures up 0.3% to $78.87/bbl
  • Gold spot down 0.6% to $1,962.15
  • U.S. Dollar Index up 0.24% to 102.68

Top Overnight News from Bloomberg

  • China warned the US and Taiwan President Tsai Ing-wen that any meeting with House Speaker Kevin McCarthy would be a serious provocation, raising the stakes for her trip to the US. Tsai left Taipei on Wednesday bound for New York on a plane that was guarded by F-16 fighters as it headed over the Pacific. She’ll later visit two Central American allies, and on the way home she’s planning to stop in Los Angeles, where she’s expected to meet with McCarthy. BBG
  • The BOJ's Shinichi Uchida indicated that any yield curve control adjustment wouldn't be communicated ahead of time. That'll keep the market on its toes, with some concluding it's the only way to avoid a bond selloff in advance. It comes as bets on policy normalization help the yen make a comeback as a haven. BBG
  • UBS said Sergio Ermotti will return as chief executive, as the Swiss giant moves into a new era with its takeover of Credit Suisse. Mr. Ermotti has been credited with repositioning the bank and focusing it on less risky businesses after UBS suffered big losses during the financial crisis. WSJ
  • UK mortgage approvals edged up in February but remained more than a third below their levels from a year ago as high borrowing costs squeezed household spending, the BOE has said. Lenders last month approved a total of 43,500 mortgages for house purchases, from 39,600 in January, the BoE said on Wednesday. Approvals in February 2022 came to 69,131. The figure was above analysts’ forecast of 42,000, and marked the first monthly increase since August 2022. FT
  • The UK competition regulator has launched an in-depth probe into US chipmaker Broadcom’s $69bn takeover of cloud software company VMware, after warning it could make computer servers more expensive. FT
  • More bullish oil momentum. US crude stockpiles slumped by 6.1 million barrels last week, API data is said to have shown, in what would be the biggest drop this year if confirmed by the EIA. Gasoline supplies also sank. In the Middle East, one of the top producers in Iraq's Kurdistan region started cutting production as a spat that has halted 400,000 barrels a day of exports drags on. BBG
  • Jamie Dimon will be questioned in a civil lawsuit over JPMorgan Chase’s relationship with Jeffrey Epstein, people familiar with the matter said. The U.S. Virgin Islands sued JPMorgan last year, saying the bank facilitated Epstein’s alleged sex trafficking and abuse. WSJ
  • Top officials from the Federal Reserve and Federal Deposit Insurance Corporation will testify to the House Financial Services Committee on the collapse of Silicon Valley Bank and Signature Bank, a day after Tim Scott, a Republican senator, accused SVB of being “rife with mismanagement”. FT
  • Tesla’s move to slash prices in China has backfired as Elon Musk’s company loses market share to Warren Buffett-backed BYD, putting Chinese carmakers on track to sell more passenger vehicles than their foreign rivals for the first time in 2023. FT
  • The European Central Bank will need to increase interest rates further if recent stress in the financial system stays contained, Chief Economist Philip Lane told Zeit in an interview: BBG
  • The yen is making a comeback as a preferred foreign- exchange haven, after banking crises in the US and Switzerland hurt the dollar and franc’s standing as go-to assets for turbulent times: BBG
  • Traders are leaning toward further gains in the world’s biggest bond market, after a rally that got a major boost from short-covering by hedge funds this month: BBG
  • President Joe Biden responded to House Speaker Kevin McCarthy’s demands that he begin negotiations over the debt ceiling by challenging Republicans to produce a public budget plan before departing Thursday for a two-week Easter recess" BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly positive albeit with most major indices rangebound amid a lack of fresh macro drivers and heading into quarter-end, while Hong Kong markets outperformed as tech stocks surged on Alibaba’s plan for a six-way split. ASX 200 was kept afloat by strength in the commodity-related sectors and after softer-than-expected CPI data supported the case for the RBA to pause at next week’s meeting, although gains were limited by weakness in the top-weighted financial industry. Nikkei 225 traded higher after Japan’s parliament passed a record JPY 114tln budget for FY23 and with policymakers said to consider lowering mortgage rates for families with children, while BoJ officials also stuck to the dovish script. Hang Seng and Shanghai Comp. were varied with Alibaba front-running the advances in Hong Kong as its plan for a split is seen to unlock value for shareholders and has spurred some speculation that its large tech peers could follow suit, while the mainland lagged despite the PBoC’s liquidity injection as frictions lingered regarding Taiwan President Tsai’s planned transit through the US and after the Biden administration added five Chinese companies to the entity list for allegedly aiding China's repression of Uyghurs.

Top Asian News

  • China NDRC Deputy Director General said China's potential growth rate is the potential growth rate of the whole world and said they are optimistic for the growth situation for this year, according to Reuters.
  • US President Biden's administration added five Chinese Co.s to the entity list for allegedly aiding China's repression of Uyghurs.
  • Taiwan's President Tsai comments before boarding a flight to New York in which she noted Democratic Taiwan defends democratic values and external pressure does not affect their determination to go out into the world, according to Reuters.
  • China's Taiwan Affairs Office urged the US not to arrange a transit of Taiwan's leader through the US and said any meeting between Taiwan President Tsai and US House Speaker McCarthy would be a severe provocation, while it added that China firmly opposes this and will definitely take measures to fight back, according to Reuters.
  • US senior administration official said Taiwan President Tsai's planned transit is consistent with a long-standing US practice and the US sees no reason for Beijing to overreact to the transit which is consistent with the unofficial relationship and the One-China policy. The official added that every Taiwan president has transited through the US and President Tsai has met with members of Congress in all her previous six transits, as well as stated that China's attempts to alter Taiwan's status quo will not pressure the US to alter its practice of facilitating transits by Taiwan's presidents, according to Reuters.
  • BoJ Deputy Governor Uchida said they will make a judgement on trend inflation by looking at various indicators, while he noted the BoJ would face an unrealised loss of JPY 50tln on its balance sheet if the 10yr bond yield rises to 2%, according to Reuters.

European bourses are firmer across the board, Euro Stoxx 50 +1.2%, as banking concerns continue to dissipate and focus turns to the sessions speakers. Sectors feature marked outperformance in Tech names after updates from Infineon and Micron; MU +2.5% pre-market. Stateside, futures are in the green, ES +0.9%, paring the downside from Tuesday which was a feature of underperformance in large-cap names; ahead, the US-specific docket is relatively light. Infineon raised Q2 revenue and segment margin guidance alongside lifting FY revenue guidance, primarily due to resilient business dynamics in its core automotive and industrial segments. Micron: Q2 adj. EPS -1.91 (exp. -0.86); it made inventory write-downs of USD 1.43bln in the quarter, which had an impact of USD 1.34/shr. Q2 revenue USD 3.69bln (exp. 3.702bln). Expects profitability to remain extremely challenged in the near-term and said profitability levels in the industry are currently not sustainable.

Top European News

  • EU's Dombrovskis said the situation in the EU banking sector is stable and banks are prepared to withstand shocks.
  • ECB's Lane says to ensure that inflation falls to 2%, further interest rate hikes are required under the scenario expected by the ECB, according to Die Zeit; rates must increase if banking tensions have no or a "fairly limited" impact, bank sector tensions are seen as settling down and there is no reason to expects major problems.
  • ECB's Kazimir agreed not to give guidance on the May ECB meeting, Kazimir thinks inflation is too high for too long; ECB should continue increasing rates, possibly at a slower pace; will take into account financial market situation.
  • BoE FPC Minutes: All UK banks are resilient to risks from rising interest rates, including from bond positions; maintains countercyclical capital buffer rate at 2%; UK firms are resilient from higher debt costs.


  • The DXY is erring lower and has dipped below the 102.50 mark within 102.41-102.75 boundaries despite marked AUD & JPY pressure.
  • Pressure which stems from cooler-than-expected inflation and a myriad of factors sparking a pullback from recent peaks respectively; AUD/USD at 0.6662 low and USD/JPY above 132.00.
  • In contrast, the DXY remains softer given the resilience of the EUR and GBP with ECB's Lane and BoE data respectively perhaps assisting with EUR/USD above 1.0850 though Cable is yet to breach 1.2350 convincingly.
  • CAD fails to derive any lasting support from oil benchmarks and as such is struggling to retain the 1.36 handle while the SEK is impaired by softer retail data despite favourable sentiment indicators.
  • Swedish NIER expects the Riksbank to continue on its set path re. rate increases, with the cycle deemed to be over in July when the rate will be 3.75%.
  • PBoC set USD/CNY mid-point at 6.8771vs exp. 6.8780 (prev. 6.8749)

Fixed Income

  • Debt futures rebound relatively firmly to defy month end rebalancing flows tilted towards stocks over bonds.
  • Bunds reclaim more than half of Tuesday's losses within a 135.47-136.28 range, Gilts towards the top of 104.18-103.56 parameters and T-note nearer 114-28 than 114-14+ ahead of US housing data, House hearing on bank failures and USD 35bln 7-year auction.
  • Greece has commenced the sale of a new 5yr bond with price guidance at circa 95bps over mid-swaps, according to Reuters sources.


  • WTI and Brent are firmer but reside in relatively narrow sub-USD 1/bbl parameters which specifics light aside from weekly inventory data yesterday and ahead alongside ongoing focus re. Iraqi flows through Turkey.
  • Specifically, WTI trades around USD 74/bbl (in a 73.51-74.00/bbl range) while its Brent counterpart trades on either side of USD 79/bbl (in a 78.73-79.32/bbl parameter).
  • Spot gold remains softer and in Tuesday's parameters while base metals are generally softer despite the tone but again in narrow ranges, with the exception of iron ore which is bolstered on steel consumption expectations.
  • US Private Energy Inventory (bbls): Crude -6.1mln (exp. +0.1mln), Cushing -2.4mln, Distillate +0.5mln (exp. -1.5mln), Gasoline -5.9mln (exp. -1.6mln).
  • US Energy Secretary Granholm said Strategic Petroleum Reserve buybacks could begin late this year and that work on two of four oil reserve sites are to go 'into the fall' which has delayed the buybacks, according to Reuters.
  • Russian Gazprom says "We are approaching the limit of gas supplies to China", via Sky News Arabia.
  • Cargill informed the Russian Agriculture Ministry that it will stop the export of Russian grain from the next exporting season (July), according to the Russian ministry which adds it will not affect the volume of domestic grain shipments abroad.


  • Ukrainian military officials said Russian forces remain relentless in their attempts to take full control of Bakhmut and Avdiivka in eastern Ukraine but were not making progress, according to Reuters.
  • Ukrainian President Zelensky extended an invitation to Chinese President Xi to visit Ukraine, according to AP; Kremlin says it is not up to Russia to advise China's leader when to visit Ukraine, adds that Russia's wider war with hostile states will last for a long time
  • US President Biden responded that he hasn't seen that but is concerned when asked if he was concerned about Russia sending tactical nuclear weapons to Belarus, according to Reuters.
  • Russia has started drills with Yars Intercontinental Ballistic Missiles, according to its Defence Ministry

US Event Calendar

  • 07:00: March MBA Mortgage Applications 2.9%, prior 3.0%
  • 10:00: Feb. Pending Home Sales YoY, prior -22.4%
  • 10:00: Feb. Pending Home Sales (MoM), est. -3.0%, prior 8.1%

Central Banks

  • 08:05: NY Fed Head of Supervision Dianne Dobbeck Speaks to Bankers
  • 10:00: Fed’s Barr Appears Before the House Financial Services Panel

DB's Jim Reid concludes the overnight wrap

Two days of relative calm has helped encourage a quieter week and encourages me that I can go on holiday after tomorrow without too much disturbances. If anything spectacular happens for an hour this afternoon I’ll be oblivious to it as I’m having another back injection under general anaesthetic as the sciatica is flaring up again. So my recent operation hasn’t helped. I went for a nerve conduction test last Friday and I have 4 trapped nerves. 2 in my leg and 2 in my neck/arm. I can’t ask for too much sympathy as its all golf and weight training related. If I accepted that I wasn’t 25 anymore I suspect I’d be in decent shape. However I still have an ambition to get down to become a scratch golfer and without exciting goals and targets life is a duller affair. Anyway, I’ll be doing the EMR tomorrow before heading off skiing, where I'll also be trying to protect my knees. So we’ll save our emotional goodbyes for two weeks until tomorrow.

Anyway the relative calm continues to be most felt in bond market repricing, 2yr USTs rose +13.4bps yesterday (unchanged in Asia). They are around +50bps above where they were last Friday lunchtime but still down about -100bps from where they were on March 9th, around Powell’s testimonies. Improving sentiment was also evident in the fed futures market which further trimmed expectations of rate cuts. Fed futures are pricing in -70bps of rate cuts to year-end, with the implied rate for the Fed’s December meeting rising +11.2bps yesterday to 4.318%. This is up from 3.57% at the lows on Friday. So a big but steady and fairly quiet move over the last 48-72 business hours.

Longer-dated Treasury yields were more subdued yesterday, with 10yr yields just +3.9bps higher at 3.564%. This is the second smallest move in either direction since the SVB news broke. European sovereign debt yields also rose as the banking sector further stabilised and regional economic survey data improved (more on that below). 10yr bund yields were +6.3bps higher at 2.29%, while the more policy sensitive 2yr rate was +7.1bps higher to 2.59%. Other sovereign 10yr European yields rose more than German yields, with Gilts (+9.0bps), BTPs (+7.4bps), and OATs (+6.5bps) all higher.

In equities, the S&P 500 fell back -0.16%. On a sector-by-sector level there was a significant amount of dispersion, as energy (+1.45%) and other cyclicals such as transports (+0.78%) and capital goods (+0.55%) outperformed but media (-1.10 %) and healthcare equipment (-1.04%) fell back. The tech-heavy NASDAQ traded down -0.45%.

Briefly looking at the US regional banking sector, the FDIC’s Gruenberg stated yesterday that regional bank liquidity has remained stable. Against this backdrop, the regional banks KBW index traded up +0.32% with most of the smaller regional banks gaining on the day, while a couple of heavier weighted banks (BofA -1.3% & Wells Fargo -0.8%) were a drag on the KBW index. The embattled First Republic also finished -2.32% lower.

European equity markets traded flat, with the STOXX 600 down -0.06%. We heard the ECB’s Enria emphasise that bank oversight needs to be more efficient in Europe, and that changes to supervision should reduce the burden on banks. In particular, Enria stated that a closer look at the European CDS market is in order, calling for an improvement in the degree of information available on the market, as opposed to implementing prohibitions or new rules. He also spoke on the recent banking turmoil, stating that the “direct exposure to Credit Suisse is relevant but manageable”, but that he was “concerned by nervousness among investors on banks”.

This morning in Asia, equity markets are seeing decent gains. The Hang Seng (+1.80%) is outperforming amid a rally in Chinese technology shares on Alibaba’s reorganisation news that will see the company split into six independent business groups seeking separate IPOs. Their shares are up around +13%. This rally bolstered other Asian equities with the Nikkei (+0.46%) and the CSI (+0.24%) edging higher while the Shanghai Composite (-0.04%) is just above flat. Elsewhere, the KOSPI (-0.16%) is losing ground after opening slightly higher in early trade. In overnight trading, US stock futures are indicating a positive start with contracts tied to the S&P 500 (+0.39%) and NASDAQ 100 (+0.30%) both higher.

Moving on, Australia's CPI slowed to an eight-month low of +6.8% y/y in February (v/s +7.2% expected), down from the prior month’s +7.4% annual increase. This was down to a smaller rise in housing and fuel costs. This will further support the pause narrative at next month's RBA meeting.

In terms of yesterday’s data, the US March Conference Board consumer confidence index results came in firmly above expectations at 104.2 (vs 101 expected and 103.4 last month) as confidence in future business and labour market conditions rose. Looking into the details, the expectations index, the short-term outlook for income, business and labour market conditions, rose to 73 from 69.7 in February, however, the present situation index, which reflects consumer assessment of current business and labour market conditions, fell from 152.8 to 151. The survey was for the 4 week period up to March 20, which puts just about half the response time after SVB first showed signs of stress and only really covered the first few days of the CS news flow.

In the same vein, the Richmond business conditions index came in at -17, down from -6 last month, its lowest level since October, as broader business conditions deteriorated over the month following the banking sector jitters. The manufacturing index did post above expectations at -5 (vs -10 expected), a firm rise from -16 in February. Putting the improvement in manufacturing aside momentarily, adding further to the picture of weakening business conditions was the March Dallas Fed services activity index that fell to -18 down from -9.3 in its largest drop since December. The Richmond survey period went from March 1 to March 25 and the Dallas survey went from March 14-22. Of the three US surveys to release data yesterday, only the Dallas survey was completed entirely after SVB and Signature failed and perhaps that is why it was the most negative, however they were all measuring slightly different metrics. This trend bears watching as we get the final University of Michigan data on Friday, which could show an interesting change from the preliminary results.

We additionally had two key national data releases in France and Italy. In France, the business confidence index came out in line with expectations at 103, whilst the manufacturing confidence slightly beat forecasts to hit 104 (vs 103 expected). The overall index came down one point to 103, but this remains above the long-term average of 100. This is a divergence from the French PMI data from last Friday, which had a strong beat, but this can be attributed to the more expectations-focused PMI. Off the back of this, the CAC jumped nearly +1.1 at the open before moderating down to +0.14% on the day. For Italy, the consumer confidence modestly beat expectations at 105.1 (vs 104 expected) and manufacturing confidence was up at 104.2 (vs 103 expected). Finally, Italian economic sentiment for February hit its highest level since July last year, up from 109.1 to 110.2.

In the UK, we heard from the BoE’s Bailey, who spoke on the recent Silicon Valley Bank crisis, emphasising that the recent turmoil we saw was “very different” to the financial crisis of 2008. However, Bailey did highlight that the BoE was “in a period of very heightened and alertness”, seeking to reassure investors that the “creditor hierarchy in UK is a cardinal principle.”

In terms of other, more backward-looking, data releases, we had the January FHFA house price index that beat expectations at 0.2% (vs -0.3% expected), as well as the February wholesale and retail inventories which were up 0.2% (vs -0.1% expected) and 0.8% (vs 0.2% expected) month-on-month respectively. The advance goods trade for February fell below expectations at -$91.6 billion (vs -$90 billion expected).

Finally, in commodity markets, oil extended its rally as the clash between Iraq, the Kurdistan Regional government, and Turkey has developed into a deadlock, curtailing exports equal to 400,000 bbl/day. Last night, US National Security Council spokesman Kirby said that the Biden administration had urged both the Turkish and Iraqi governments to allow oil to flow through the pipeline between the two countries while conducting negotiations. It was also reported that Genel Energy, which is a producer in the region said that they had storage for “several days of production.” WTI crude rose a more moderate +0.54% to $73.20/bbl yesterday after the huge moves the day before, while Brent crude gained +0.68% to $78.65/bbl. Oil is edging a little higher in Asia as well.

Now to the day ahead. In terms of data releases, we have the US February pending home sales, in the UK February net consumer credit, mortgage approvals and M4, in Germany the April GfK consumer confidence and lastly in France March consumer confidence data. Finally, we will hear from ECB’s Kazimir as well the BoE’s Mann.

Tyler Durden Wed, 03/29/2023 - 08:09

Nomura Has "No Intention" Of Hiring Credit Suisse Formers, As Laid Off Employees Search For New Jobs

Nomura Has "No Intention" Of Hiring Credit Suisse Formers, As Laid Off Employees Search For New Jobs

When Lehman Brothers collapsed, Nomura was one firm that "snapped up" thousands of its former employees. But now that the same opportunity is presenting itself with Credit Suisse, the firm is being more cautious about opening its doors to new "talent", according to Bloomberg

Nomura said that any additions to its staff will be on a "case by case" basis and that the firm has "no intention" of buying any of Credit Suisse's assets. It's not trying to “systematically” take on any of Credit Suisse's staff, though the firm acknowledges it may eventually wind up with some formers. 

“We’re not going to suddenly hire, you know, 30 people because they happen to become available out of a one-off event. Our plans have not changed as a result of Credit Suisse," Christopher Willcox, head of Nomura’s wholesale business, told Bloomberg. 

Willcox added: “Sometimes events like this look like they present you a huge opportunity, but there’s a risk when you do that. You then end up doing something quickly because it’s as a consequence of reacting to events.”

“Our agenda is organically building our capabilities," he added. “In some ways in these situations, there’s a sort of tendency for people to look to, you know, shark-like behavior in terms of plundering the corpse of some of a firm where something’s gone wrong. I think that’s not the right way to think about this. I think about this as a very sad event.” 

Recall, just days ago we wrote that Credit Suisse employees were flooding headhunters, looking for new jobs. "Anxious Credit Suisse staff" created a flood of calls as they looked for new job with one firm in Singapore claiming it took in questions from 30 private bankers from Credit Suisse on Monday last week alone. 

Another firm, focused just on managing director hires, said it has received similar interest since last Friday. 

The bank has about 5,500 employees in London, leading one job search firm to be receiving calls all throughout last week, especially from bankers in the equities division, where there's the most overlap with new parent company UBS. 

Michael Nelson, managing director at recruitment firm Quest Group in New York, said: “If they aren’t going to CSFB they will have to be emigrated into UBS fixed-income, which is a much smaller business than Credit Suisse. My guess is they will dismiss them and turn them out onto the street.”

Tyler Durden Wed, 03/29/2023 - 07:45

Peter Schiff: Bank Bailouts Will Devalue The Dollar

Peter Schiff: Bank Bailouts Will Devalue The Dollar


Peter Schiff appeared on NTD News to talk about the bank bailout and the March Federal Reserve meeting. During the conversation, Peter explained that everybody is going to pay for these bailouts because they will ultimately devalue the dollar as inflation skyrockets.

During his press conference after the March FOMC meeting, Jerome Powell said the banking system is “sound and resilient.” Peter said it’s not sound at all.

It’s a house of cards that is starting to collapse.”

Peter explained how the banking system became so unsound.

First, the Federal Reserve kept interest rates at zero for over a decade. During that time, banks loaded up on low-yielding, long-term Treasuries and mortgage-backed securities. With interest rates so low, they had to go out further on the yield curve. And the reason they were able to take so much risk is because the government guarantees bank accounts. That created a moral hazard. Customers didn’t care what the banks did with their money because they knew the government would bail them out.

Thanks to the mistakes the Fed has made since the 2008 crisis, we have a much bigger bubble now. The Fed caused the bubble that led to the financial crisis of 2008, and then they inflated a bigger bubble to try to paper over those mistakes and kick the can down the road so that we wouldn’t have to deal with the full consequences of resolving all those mistakes. And of course, we just compounded the problem with bigger mistakes and now the US economy is poised on the biggest economic disaster in its history.”

In the wake of the failures of SVB and Signature Bank, Peter said it was the beginning of the next financial crisis. But virtually nobody in the mainstream is calling it a financial crisis. Peter compared the situation in 2008 with the situation today. In a nutshell, the 2008 financial crisis was about debt people ran up during a bubble and the inability of borrowers to pay when the air came out.

That’s exactly what’s happening now. It is a banking crisis, and banks are financials. I think people are reluctant to call it a financial crisis because they don’t want to evoke the memories of 2008 and they don’t want to make any comparisons. They don’t want to acknowledge that.”

Even as the subprime mortgage market was blowing up in 2007, people were insisting that everything was fine and “contained.” We’re hearing the same thing today as this crisis unfolds.

They are dismissing all the early signs of a major financial crisis. But make no mistake, we’re on the cusp of one. And it’s going to be much bigger than the last.”

Peter said the big event that banks can’t handle is a major economic downturn coupled with a rise in inflation.

So, if we have high inflation and a recession at the same time, banks are going to fail.”

Peter explained that with inflation devaluing everybody’s money, they will want to get it out of banks because banks won’t be able to pay an interest rate high enough to compensate for the loss.

Of course, when people want to get their money out of banks, the money isn’t there. So the only way people can get their money is if the Fed prints it. But if the Fed prints it, it just destroys even more of the value. So, it accelerates the momentum for a spiraling inflation.”

Treasury Secretary Janet Yellen, President Biden, and others insist that taxpayers won’t foot the bill for the bailout. So, who will pay for it? Peter said anybody who holds US dollars. That includes taxpayers, non-taxpayers, and people all over the world.

The dollar is being debased in order to fund the bank bailouts.”

In just two weeks, the Federal Reserve added nearly $400 billion to its balance sheet. That’s money created out of thin air.

That’s inflation. And so, when you do that, you destroy the value of all the money that’s already in circulation. So, Americans are going to pay, not because they are taxpayers, but because they are US dollar owners and US dollar earners. Everybody’s paycheck is going to be reduced in value because of the bank bailouts. These bailouts are endangering everybody’s bank deposits, even the banks that are solvent. Now it’s inflation that is the risk. And so it doesn’t matter if your bank fails. You’re still going to lose. In the event that your bank failed, you lose your money. But now, because the government won’t let the banks fail, everybody who has a bank account is going to lose purchasing power.”

Tyler Durden Wed, 03/29/2023 - 07:20

California City Caught In National Controversy Over Critical Race Theory

California City Caught In National Controversy Over Critical Race Theory

Authored by Brad Jones via The Epoch Times (emphasis ours),

Heightened tensions among opposing sides regarding the teaching of critical race theory—or its underlying tenets—in K–12 schools erupted into chaos at a local school board meeting in Temecula, California, last week, creating deeper rifts in the community.

A special meeting is held to discuss critical race theory with the Temecula Valley Unified School District Board and invited experts in Temecula, Calif., on March 22, 2023. (Brad Jones/The Epoch Times)

The otherwise sleepy city tucked away in southwest Riverside County known best for its wineries has become the latest crucible in the heated war of words over critical race theory, or CRT.

The Temecula Valley Unified School District fell under the national media spotlight in December when a slate of newly elected conservative school trustees—Joseph Komrosky, Jen Wiersma, and Danny Gonzalez—were sworn into office. The trio shifted the balance of power on the school board and voted to ban CRT at the board’s first meeting after the Nov. 8 election.

The other trustees, Steven Schwartz and Allison Barclay, opposed the resolution banning CRT, both claiming that the topic isn’t taught in district classrooms.

The special meeting on March 22, which lasted nearly five hours, was billed as a workshop to inform parents about CRT and why the school board banned it from being taught in classrooms.

We’re not debating whether we should have [CRT] or not. It is condemned. It is gone,” Komrosky said at the meeting. “We have local control here as school board members. We can make it explicitly clear what we condemn. Racism is morally reprehensible, and CRT is racism in disguise.

Dozens of activists, including parents, politicians, teachers, and students, showed up at James L. Day Middle School to protest the ban, while a few hundred others gathered to hear the presentations of six expert panelists.

People protest a special meeting to discuss critical race theory with the Temecula Valley Unified School District Board and invited experts in Temecula, Calif., on March 22, 2023. (Brad Jones/The Epoch Times)

The panelists were Dr. Joe Nalven, a professor of cultural anthropology, peace and justice, and indigenous religions at the University of San Diego; Walter H. Myers, an adjunct faculty member at Biola University and Master of Arts, Science, and Religion; Wenyuan Wu, director of Californians for Equal Rights, who spoke via Zoom; Esther Valdez-Clayton, an immigration attorney and former school board president; Brandy Shufutinsky, director of education and community engagement at the Jewish Institute for Liberal Values; and Chris Arend, former Paso Robles Joint Union High School District board member, who played an instrumental role in drafting the CRT ban resolution.

All of the panelists opposed CRT being taught in K-12 schools and told the audience that banning it is not a ban on teaching black history or ethnic studies, contrary to the signs and claims of protesters.

Audience Members Removed

The meeting got off to a raucous start with the public comment portion, as Deon Hairston, a local black pastor, gave a fiery speech against racism and the CRT ban.

Your continued blatant, willful ignorance of the black experience in this country is not only shameful, but also detrimental to the education and growth of our children,” he told the board and panelists who were invited to speak on the issue.

As he walked away from the podium, Hairston said a woman in the audience told him that, “If I feel that way, why don’t I get out of the country?” and he shouted the alleged comment to the crowd.

Hairston continued yelling and was warned twice before Komrosky told sheriff’s deputies to escort him out of the school auditorium.

As Hairston left the building, some protesters surrounded the woman and pointed at her, chanting “get that woman” and “kick her out,” and she was also later escorted out.

Gonzalez later told The Epoch Times the woman could be heard saying something, but he could not confirm what she said. The alleged comment was inaudible on recordings.

Komrosky suspended public comments and called a recess, but before order was restored, a student protester draped in a Pan-African flag confronted a parent. She walked towards the man and put her hand on his chest.

When the man said, “Don’t touch me,” San Jacinto City Councilor Brian Hawkins moved toward him, grabbing his arm and shouting repeatedly “That’s a child!” over the crowd until the man said “Shut up!” and walked away.

Deputies asked the man to leave and escorted him out.

The man, who asked not to be named for fear of retaliation, told The Epoch Times he has retained legal counsel and is prepared to sue anyone making false accusations against him.

A narrative being spread that he sought out the girl with the flag and got in her face is “is a complete lie,” he said.

Jenn Reeves, a local activist, recently posted video clips on TikTok of the incident between the man and the girl with the flag from the March 22 meeting, claiming Hawkins prevented the man from “assaulting” the girl.

But, several videos show the girl with the flag jumping in front of the man and putting her hand on his chest.

“I didn’t know what happened, and then I looked down. I saw it was a person, and I pointed at my chest. … I just said ‘Don’t touch me,’” the man said.

Hawkins, who was wearing a Black Panther Party hoodie under his open suit jacket, ran unsuccessfully for Congress as a Republican in 2022 and adamantly opposed CRT during his campaign.

San Jacinto City Councilor Brian Hawkins attends a special meeting to discuss critical race theory with the Temecula Valley Unified School District Board and invited experts in Temecula, Calif., on March 22, 2023. (Brad Jones/The Epoch Times)

He later told The Epoch Times he has changed his mind about CRT and left the GOP at the end of last year before registering as a Democrat in February.

The immediate solution for unity in the district is to repeal the CRT ban, Hawkins said.

“This piece of paper has caused more harm than good,” he said.

CRT Controversy

A San Diego parent who goes by the pseudonym Ben Richards and advocates for parents’ rights, told The Epoch Times that Temecula is now “the tip of the spear” in the national fight against critical race theory.

Richards claims there is a coordinated effort by educators and activist groups such as Fight Back Collective to portray those who oppose CRT as “white Christian nationalists” and “foment, coordinate and support leftist student walkouts,” in the district, Richards said.

Fight Back Collective states on its website that school boards across the United States “are being infiltrated by far-right white supremacists running on a campaign of ‘parents’ rights.’ Usually endorsed by hate groups such as Moms for Liberty and backed by dark money, these school board members are banning ‘CRT,’ attacking trans youth and LGBTQ+ kids, and running smear campaigns on teachers who support inclusivity.”

Students are being told they are either a racist, or an anti-racist and that in order to be the latter, they must become an activist and support CRT, Richards said.

“CRT seeks to create student activists and that is exactly what you’re seeing in Temecula,” he said.

Read more here...

Tyler Durden Tue, 03/28/2023 - 21:05

Clinton, Inc. Formed "Joint Venture" Of "Co-Conspirators" To Smear Trump: Durham

Clinton, Inc. Formed "Joint Venture" Of "Co-Conspirators" To Smear Trump: Durham

Special Counsel John Durham stated in a Monday night filing that Hillary Clinton's 2016 campaign and researchers trying to dig up dirt on the Trump campaign "should be considered as co-conspirators" in an effort to smear Donald Trump with the Russia collusion hoax, Just the News reports.

According to Durham, Clinton and her cronies formed a "joint venture or conspiracy" in order to harm Trump's chances of being elected.

"Durham has just shown the whole world what major pieces of our Russiagate investigation revealed," said former House Intelligence Committee GOP investigative counsel, Kash Patel. "Hard evidence, emails and text messages, showing the Clinton Campaign, Fusion GPS, Perkins Coie, Joffe, and the media were all synced in August of 2016 pushing the false Alfa Bank server story, while also all working on the Steele Dossier matter. Durham submits all this evidence as 'joint venture conspiracy' under the rules of evidence."

Durham's filing also highlights an unearthed text message from disgraced Clinton campaign lawyer Michael Sussmann in which he lies to the FBI about not working for Clinton when he hand-delivered now-discredited anti-Trump research prior to the election.

The existence of the text message between Sussmann and then-FBI General Counsel James Baker was revealed in a court filing late Monday night by Durham's team. Prosecutors said they intend to show Sussmann gave a false story to the FBI but then told the truth about working on behalf of the Clinton campaign when he later testified to Congress.

"Jim – it's Michael Sussmann. I have something time-sensitive (and sensitive) I need to discuss," Sussmann texted Baker on Sept. 18, 2016, according to the new court filing. "Do you have availability for a short meeting tomorrow? I'm coming on my own – not on behalf of a client or company – want to help the Bureau. Thanks."

Prosecutors said the text message will become essential evidence at trial to show Sussmann lied to the FBI. -Just the News

According to Durham, "The defendant lied in that meeting, falsely stating to the General Counsel that he was not providing the allegations to the FBI on behalf of any client," adding "In fact, the defendant had assembled and conveyed the allegations to the FBI on behalf of at least two specific clients, including (i) a technology executive ("Tech Executive-1") at a U.S.-based Internet company ("Internet Company-1"), and (ii) the Clinton Campaign."

Sussmann eventually admitted he lied a year later during testimony in front of the House.

"We had a conversation, as lawyers do with their clients, about client 1 needs and objectives and the best course to take for a client," Sussman told Patel in a sworn deposition. "And so it may have been a decision that we came to together. I mean, I don't want to imply that I was sort of directed to do something against my better judgment, or that we were in any sort of conflict."

Durham says he plans to present evidence that Sussmann worked with the Clinton campaign, 'Tech Executive 1' Rodney Joffe, and others in aforementioned "joint venture" to push the Russian collusion hoax, particularly the fabrication that Trump had a secret backchannel to the Kremlin via the Moscow-based Alfa bank.

"As an initial matter, the Government expects that the evidence at trial will show that beginning in late July/early August 2016, the defendant, Tech Executive-1, and agents of the Clinton Campaign were 'acting in concert toward a common goal,' ... namely, the goal of assembling and disseminating the Russian Bank-1 allegations and other derogatory information about Trump and his associates to the media and the U.S. government," reads the filing.

"The evidence of a joint venture or conspiracy will establish that in November 2016, soon after the Presidential election, Tech Executive-1 emailed a colleague, stating, "I was tentatively offered the top [cybersecurity] job by the Democrats when it looked like they'd win.'"

"In sum," Durham's filing concludes, "the above evidence, public information, and expected testimony clearly establishes by a preponderance of the evidence that the defendant and Tech Executive-1 worked in concert with each other and with agents of the Clinton Campaign to research and disseminate the Russian Bank-1 allegations."

Tyler Durden Tue, 03/28/2023 - 20:45

CDC Found COVID-19 Vaccine Safety Signals Months Earlier Than Previously Known, Files Show

CDC Found COVID-19 Vaccine Safety Signals Months Earlier Than Previously Known, Files Show

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

The top U.S. public health agency identified hundreds of safety signals for the Pfizer and Moderna COVID-19 vaccines months earlier than previously known, according to files obtained by The Epoch Times.

The U.S. Centers for Disease Control and Prevention (CDC) found more than 700 signals that the vaccines could cause adverse events—including acute heart failure and death—in May 2022, the files show.

The CDC detected many of the same signals in July 2022, The Epoch Times previously reported. The new files show that the first time the CDC calculated a proportional reporting ratio (PRR) on vaccine injury reports, signals were identified.

The analysis went over reports lodged between Dec. 14, 2020, and May 6, 2022.

The CDC initially claimed that it didn’t run the PRR, a data mining method, on the injury reports made to the Vaccine Adverse Event Reporting System. The CDC later claimed that it started the method in February 2021, shortly after the vaccines were rolled out. Both of those claims were false, the CDC ultimately said, adding that it didn’t start until March 2022.

When the first analyses were done that month, CDC employees identified more than 200 signals for Pfizer’s shot and 93 signals for Moderna’s vaccine, the files show. Those analyses compare the events lodged after receiving one vaccine with events lodged after receiving another, or several others.

The Epoch Times obtained the files through Freedom of Information Act requests.

The strongest analysis involves comparing the reports lodged after vaccination with the Pfizer and Moderna COVID-19 vaccines with the reports lodged after vaccination with all non-COVID-19 vaccines. The analysis is contained in files labeled “Table 5.”

According to the files provided by the CDC, the agency didn’t start that analysis until May 2022.

The program staff advises that ‘Table 5 was only created from May 6, 2022, to July 31, 2022,'” a CDC Freedom of Information Act processer told The Epoch Times via email.

The CDC didn’t respond to a request for more information.

“Federal health agencies have ignored the flashing alarms of their own safety surveillance systems since early 2021. They have ignored my oversight letters and lied about what analyses they have performed. It is well past time for the American public to be told the truth,” Sen. Ron Johnson (R-Wis.), the top Republican on the Permanent Subcommittee on Investigations, told The Epoch Times via email.

Operating Procedures

The CDC and the U.S. Food and Drug Administration (FDA) co-manage the Vaccine Adverse Event Reporting System, which accepts reports from anybody but is primarily used by health care workers. Reports to the system are analyzed and verified by health officials and contractors.

In operating procedure documents, the agencies said that officials would monitor the system to identify “potential new safety concerns for COVID-19 vaccines.” The FDA would perform one type of analysis, called Empirical Bayesian data mining, while the CDC would perform PRR data mining.

Read more here...

Tyler Durden Tue, 03/28/2023 - 20:25

Is Japan's Population Really Going To Fall By A Third

Is Japan's Population Really Going To Fall By A Third

By Russell Clark, author of the Capital Flows and Asset Markets substack,

Japanese demographics is often cited in the secular stagnation story, and particularly by bond bulls.

The UN’s Population Division has a forecast for Japanese population to fall below 80m by the end of the century.

I think it is unlikely that Japanese population falls that far, but first of all you need to understand how unusual Japan is demographically. Japan only has a land mass 50% greater than the UK. In arable land terms, the UK has 50% more than Japan, reflecting the far more mountainous terrain in Japan. 120 years ago, Japan and the UK had similar sized populations, but then Japanese population grew rapidly, while the UK stagnated. If you ever visit Japan, you will notice on train trips between cities that ever single bit of flat land is used. This really gives the impression that Japanese overpopulated their island, and now need to see their population fall.

I can get Japanese population and birth statistics back to 1900, and assuming relatively low (to none) immigration, work out births and deaths by year. A few surprising features is how Japanese births peaked soon after WWII. While there was another rise in the 1970s, it was very low compared to number births before WWII. Intriguingly, 1947 and 1972 show negative deaths. This is reflecting the repatriation of 6 million Japanese citizens from former colonies in Taiwan, Korea and Manchuria, and the return of Okinawa respectively. So after the trauma of World War II, mainland Japanese population actually grew at the end of World War II due to repatriation.

For comparison, the UK saw peak births, in 1901. If there is a demographic crisis, its has been brewing for a very long time. The rise in the UK population is mainly due to net migration. Both Japan and UK saw a countertrend rise in the 1960s and 1970s, which I think was due to pro-labour policies - but I will leave that aside for the moment.

The first part of my argument for a change in birth rates is that changes in technology means that women can have children later. In this area, Japan is a leader. In the last available data I have, 6% of all Japanese births, which is far higher than any other large country.

For me ART births take away age as a constraint on fertility rates. Technology means that women well into their 40s and even 50s can now have children if they want and can afford it. And here we see another positive trend in Japanese fertility rates. Working mothers are having more children are having more children than non-working mothers, after being the minority for years.

Another possible pro-labor shift that could reverse fertility trends is the work-from-home shift. I speak from personal experience that working from home is far more conducive to raising children than office based working. I also know that childcare in Japan is both expensive, and culturally women were expected to quit work to have children, as the above chart shows (at least until relatively recently). As we have seen with recent government actions on green energy, once a crisis is declared, governments can quickly accelerate trends. At some point, fertility rates in Japan will be declared a “real crisis”, and policies of free IVF, and free childcare will transform fertility rates. I very much doubt Japanese population will fall below 100 million people.

Tyler Durden Tue, 03/28/2023 - 19:45