Janet Yellen Seeks (Just) $78 Trillion To Fight Climate Change

Janet Yellen Seeks (Just) $78 Trillion To Fight Climate Change

Authored by Mike Shedlock via MishTalk.com,

New Rule: When Jackasses demand money, they should have to state where the money comes from.

Image courtesy of the Visual Capitalist

Secretary of the Treasury Janet Yellen on Climate Change

Please consider Remarks by Secretary of the Treasury Janet Yellen at the Goeldi Museum in Belém, Brazil

Good afternoon. I am very glad to be here at the Goeldi Museum with Inter-American Development Bank President Ilan Goldfajn and Governor Helder Barbalho and to have spent the day engaging with ministers from the region and leaders from the IDB and the private sector. I have seen today and throughout my week in Brazil the value of three key aspects of the Treasury Department’s approach to advance the Biden-Harris Administration’s international climate and nature and biodiversity agenda: strengthening relationships with allies and partners; making the international financial architecture work better for countries; and harnessing the power of markets.

Climate change poses a daily and existential threat to individuals, communities, and countries. It harms human health, damages homes and businesses, and strains government budgets. It poses risks across sectors of our economies, from agriculture to infrastructure. And the harsh reality is that the people and countries with fewer resources to prepare and respond often must bear even greater costs.

In the Amazon and elsewhere, we also see another concerning trend: the unprecedented and accelerating loss of nature and biodiversity. Like climate change, this loss has wide-ranging impacts, from driving migration and fragility to increasing food and water insecurity. And we are in a vicious cycle: Climate change accelerates nature and biodiversity loss, while this loss turns carbon sinks into carbon sources and eliminates natural infrastructure that supports resilience to climate change.

But being so close to the magnificent Amazon is also a reminder that the transition to a lower-carbon global economy is also the single greatest economic opportunity of the twenty-first century. The transition will require no less than $3 trillion in new capital from many sources each year between now and 2050. This can be leveraged to support pathways to sustainable and inclusive growth, including for countries that have historically received less investment. 

The Math

$3 Trillion per year * 26 Years = $78 trillion.

Not to worry, the $78 trillion will come from “many sources”.

Uh… like US taxpayers? Printing presses?

Yellen did not say. So, let’s assign the cost as a Percentage of Global GDP per Visual Capitalist.

$78 Trillion Allocated by Global GDP

  • US: $78T * 0.263 = $20.51T

  • EU: $78T * 0.173 = $13.49T

  • China: $78T * 0.169 = $13.18T

  • Japan: $78T * 0.038 = $2.96T

  • India: $78T * 0.038 = $2.81T

  • UK: $78T * 0.032 = $2.50T

  • Rest of World: $22.55T

The US share is a mere $20.51 Trillion. That’s only $789 billion per year.

Of course, this assumes the entire rest of the world kicks in their fair share.

In addition, we need to add free universal health care, free college education, free child care, guaranteed living wages, and all the rest of the Progressive nutcase ideas.

And we need open borders too.

The whole world will want to move here. This is how you become a socialist mecca, just like Venezuela.

And who wouldn’t want that?

If You Thought Biden Was Bad, Look at the Promises of Kamala

Meanwhile, on our way to becoming a socialist mecca, please consider If You Thought Biden Was Bad, Look at the Promises of Kamala

Kamala Harris is off and running with a mind meld of the most progressive policies of Biden, AOC, and California governor Gavin Newsom.

Tyler Durden
Mon, 07/29/2024 – 13:10

via ZeroHedge News https://ift.tt/Sb5a6gQ Tyler Durden

A former Fed official finally tells the truth about inflation…

My sister used to be a reporter for Fox News based in south Florida and would regularly be assigned to cover NASA press conferences.

And she’s often told me about how reporters were terrified to ask any real questions. They’re not astrophysicists and don’t understand the first thing about rocket propulsion, and most of the journalists never bothered to learn even the basics of the topic.

So, the majority of the questions were very superficial; quite simply the reporters didn’t want to embarrass themselves.

This is how the media covers the Federal Reserve. Most reporters don’t have a clue about central banking, so, not wanting to look stupid, they just sit quietly and give the Fed a pass. There’s no real scrutiny.

At the same time, Fed officials are generally in lockstep with one another; it’s not like politics where the two sides constantly chastise one another. With the Fed, there is virtually no public dissent.

Even former Fed officials who have long left the bank maintain an almost mafioso code of silence.

The end result is that no one really criticizes the Fed. And because of this, the Fed has been able to cultivate a reputation that they’re in total control of the situation… even though their track record proves the opposite.

The Fed completely failed to predict inflation in 2020 after engaging in record money printing. Then they missed the warning signs in early 2021, then misdiagnosed inflation as “transitory” in late 2021, then still failed to act until early 2022.

Yet despite such failures, the Fed is still sticking to the narrative that they know what they’re doing. And with hardly anyone challenging them, it’s been easy to maintain a veneer of omnipotence.

But Kevin Warsh broke ranks this weekend. As a former Fed governor, he is the ultimate insider… and he penned an editorial published in the Wall Street Journal on Saturday blasting many of the Fed’s decisions.

Warsh describes how, when he joined the central bank in 2006, its entire balance sheet was just $800 billion. But in order to deal with the 2008 financial shock (yet another crisis that the Fed missed), they invented “quantitative easing”, or QE.

QE was just a fancy way to say they were conjuring massive amounts of money out of thin air. Informally we could say they were ‘printing money’, though almost all of the new money was created in digital rather than paper form. They click a few buttons, and, poof, new money.

Naturally the Fed promised to eventually unwind QE and drain all of that new money out of the financial system. But they never did.

On the contrary, the Fed embarked on THREE distinct rounds of QE between 2008 and 2013, increasing the balance sheet each time. In the end, the Fed’s balance sheet peaked at $4.5 TRILLION, more than 5x its size prior to the 2008 crisis.

And they kept it at that level for years. Even by 2020, the Fed balance sheet was still around $4 trillion in size.

So much for unwinding. And when the pandemic hit, the Fed quickly pulled out its QE playbook and embarked on a fourth round of money printing… exploding the balance sheet all the way to NINE TRILLION dollars.

Warsh eviscerates the Fed policymakers for failing to see such obvious consequences and explains that there is a very clear connection between the size of the Fed’s balance sheet, i.e. the amount of money it prints, and inflation.

“The monetary base is up 60% since the pandemic. Another measure of money, M2, is up 36% in the past four years. The inflation surge in the same period– cumulatively about 22%– shouldn’t have been a surprise.”

“The high priests of central bank dogma might consider it blasphemy,” he writes, but “less money printing, less inflation.” Duh.

He goes on to say, “The American people are still paying a high price for the central bank’s policy error,” and that if the Fed really wants to tame inflation, they’re going to have to slash their balance sheet, i.e. unwind most of the new money that they printed.

Fat chance.

In fact, Warsh points out that the Fed has already indicated they will NOT reduce the size of their balance sheet any longer. And Peter and I both believe the Fed will soon embark on even more QE.

Why? Because the federal government has a serious spending problem. Even the government’s own budget forecasts show an additional $22 trillion in deficit spending over the next decade.

And where will the bulk of that money come from? Most likely from the Fed. They’ll launch QE5, QE6, and beyond, to print the trillions and trillions of dollars that the US government will need to make ends meet in the coming decade.

Sure, it’s possible that the government gets real… that they cut spending, eliminate some entitlements, slash regulations, abandon idiotic green initiatives, and stop standing in the way of conventional energy.

But the window of opportunity is extremely narrow… and depends on the election this year. Plus, a lot of things will have to go right, and very little can go wrong.

So, it’s reasonable to anticipate more deficit spending, which means more Fed printing. And more inflation.

Source

from Schiff Sovereign https://ift.tt/AsJSbKo
via IFTTT

A Child Tax Credit Expansion Is Stuck In The Senate… Here’s Why

A Child Tax Credit Expansion Is Stuck In The Senate… Here’s Why

Authored by Ariun Singh via The Epoch Times (emphasis ours),

Legislation to expand the Child Tax Credit is currently stalled in the Senate amid deep disagreements about its passage before the 2024 election.

Senate Majority Leader Sen. Chuck Schumer (D-N.Y.) speaks to members of the press flanked by Sen. Todd Young (R-Ind.) and Sen. Michael Rounds (R-S.D.) on Capitol Hill in Washington on Sept. 13, 2023. (Alex Wong/Getty Images)

The federal Child Tax Credit was first introduced in 1997 and currently allows parents with children up to age 17 to write off up to $2,000 per child on their annual tax burden, of which $1,600 is refundable. The credit was temporarily expanded to $3,000 for the year 2021 and made fully refundable—leading to an estimated 44 percent reduction in the national child poverty rate. Proponents argue that is necessary to help low-income families afford food and clothing, among other things, for their children.

In January, negotiators in the Senate and House of Representatives announced a bipartisan deal to expand the credit for tax years 2023, 2024, and 2025, which passed the House by a vote of 357–70 later that month.

However, nearly six months later, no action has been taken on the bill in the Senate, with time running out for the 118th Congress to pass it.

The ‘Lookback’ Provision

Senate Republicans have opposed the bill, objecting to a provision that would allow parents to use prior years’ income to claim the credit if their earnings fall in the subsequent year. Their stated concern is that parents who stop working altogether could claim the credit intended to help working families with children.

Allowing individuals to receive a refundable credit when they have zero annual earnings—as the prior year’s earnings provision allows—is a departure from longstanding policy,” Sen. Mike Crapo (R-Idaho), the ranking Republican member of the Senate Finance Committee, wrote in a statement. “My key concerns, shared by many of my colleagues, remain the same—the prior year’s earnings provision must be dropped.”

Many groups have defended the prior year’s provision, or the “lookback” provision, as essential to helping taxpayers adjust to temporary changes in circumstances, such as a job loss or a parent’s sickness. The Center on Budget and Policy Priorities wrote, “The lookback provision acknowledges these realities and would provide a modest income buffer when a setback occurs or when people move through cycles of life that reduce their earnings.”

Still, responding to Republican opposition, Sen. Ron Wyden (D-Ore.), the Finance Committee’s chairman and the bill’s leading proponent, has offered to drop that provision. Senate Republicans have not accepted that offer and, since then, proposed more changes to the bill, such as preventing illegal immigrants who are parents of U.S. citizens from claiming the credit, which proponents have described as a “poison pill” for Democrats that would kill the bill.

“The Senate Republican leadership has basically said, ‘We’re interested in doing this in 2025 because we believe that we will be in the majority,’ and they basically want to give the tax breaks to their business buddies and maybe offer crumbs to kids,” Mr. Wyden told The Epoch Times. “I’ll change the work rules. I offered that to them, and that wasn’t good enough.”

Sen. Ron Wyden (D-Ore.) speaks with reporters at the U.S. Capitol on Sept. 11, 2023. (Drew Angerer/Getty Images)

A January report by the Joint Committee on Taxation found that the credit would increase labor supply but that the increase was “too small to be significant.”

Republicans remain firm in their position.

“There need to be changes that can get a majority of Republican senators’ support,” Amanda Critchfield, a spokesperson for Mr. Crapo, told The Epoch Times.

A Republican source speaking on background told The Epoch Times: “In March, Wyden said he is done negotiating with Crapo. … Senate Republicans won’t be jammed with a take-it-or-leave-it proposition.”

The 2024 Election

Senate Republicans’ new demands have led stakeholder groups to accuse them of acting in bad faith to try to delay the bill’s passage, allegedly to prevent Democrats from claiming a political victory ahead of the 2024 presidential election.

“I do not think removing the lookback provision would improve the odds of the bill passing the Senate,” Joe Hughes, a senior analyst at the Institute on Taxation and Economic Policy, wrote to The Epoch Times. “They do not want to hand the President what would widely be seen as a victory this close to the election.”

The hang-up is less this provision and more, to be frank, about the politics,” Meredith Dodson, a senior official with the Coalition on Human Needs, which has advocated for the bill, told The Epoch Times.

Stakeholders also have said that Republicans are delaying the bill so that it will expire at the end of the 118th Congress and then be renegotiated in a new Congress with a substantially lower tax credit. Congress is expected to consider changes to the Internal Revenue Code in early 2025, when several business tax provisions of the Tax Cuts and Jobs Act of 2017—the Trump administration’s tax cut package—will expire.

Sen. Mike Crapo (R-Idaho) on Capitol Hill in Washington on Feb. 24, 2021. (Michael Reynolds-Pool/Getty Images)

There is widespread understanding that the Republican caucus is holding ground … because certain members believe that they will get a better ideological tax deal if they were to take back the Senate,” a source familiar with the negotiations, speaking on background, told The Epoch Times.

Mr. Crapo has rebuffed the argument that Republicans are holding out on the bill.

I don’t presume those kinds of things, and that’s not the position I’m advocating,” he said, according to comments shared by his office with The Epoch Times.

Pressure on Schumer

In response to Republican opposition, senators supporting the bill are demanding that Senate Majority Leader Chuck Schumer (D-N.Y.) schedule a vote, in hopes that it will compel reluctant senators to vote in favor and avoid being seen as targeting the Child Tax Credit, which is popular in opinion polls.

“I urge you to also bring this critical middle class tax relief legislation to the Senate floor as soon as possible,” Sen. Jacky Rosen (D-Nev.) wrote in a February letter to Mr. Schumer.

“We want to get the Child Tax Credit done. It’s an urgency,” Sen. Cory Booker (D-N.J.) told The Epoch Times.

Sen. Cory Booker (D-N.J.) speaks during a press conference on Capitol Hill in Washington on June 12, 2024. (Madalina Vasiliu/The Epoch Times)

“Many of us have made clear that we support moving forward [on the bill],” Sen. Chris Van Hollen (D-Md.) told The Epoch Times.

Still, his colleagues indicated to The Epoch Times that they didn’t know when a vote would occur.

Some Democrats were hesitant in their commitment to the bill.

“I haven’t made a decision on it,” Sen. Chris Murphy (D-Conn.) told The Epoch Times.

“I’ll have to look at the latest negotiations,” Sen. Tammy Duckworth (D-Ill.) told The Epoch Times, although she expressed general approval of the bill.

Mr. Wyden noted that there is “substantial agreement” in the Senate Democratic Caucus on the current bill, though it would require at least nine Republican votes to clear the “cloture” hurdle of a filibuster. He did not answer when The Epoch Times asked about whether the expansion could be passed this Congress.

Advocates warn that the Senate is running out of time to act. After July 4, the body will be in session for just 55 days for the remainder of the year. The bill will lapse on Jan. 2, 2025.

“There’s limited time that the Senate’s in session,” Mr. Dodson said. “I hope that Senator Schumer will offer a clear signal that this is going to come up for a vote in July.”

The Epoch Times caught up with Mr. Schumer in the Senate foyer and asked whether the bill would come to the floor. He did not answer the question.

Tyler Durden
Mon, 07/29/2024 – 11:40

via ZeroHedge News https://ift.tt/3fr54Lp Tyler Durden

Rebel Archbishop Slams Olympics’ “Vile Attacks On God” – Says Macron, Obama Married To Trans Men

Rebel Archbishop Slams Olympics’ “Vile Attacks On God” – Says Macron, Obama Married To Trans Men

As we noted on Sunday, French bishops were outraged at the Olympics’ opening ceremony over its blatant mockery of Christianity – in which transgender men and a child reenacted Leonardo da Vinci’s “The Last Supper” – along with many other sexualized scenes that included a man with his testicles exposed and hanging out of his outfit. The display has led to worldwide outrage, including several corporate sponsors ditching the Olympics.

At the center of this scene was rotund French DJ ‘Barbara Butch,’ a Jewish lesbian who at bragged on social media about mocking Christianity, only to delete the post after controversy erupted.

The Olympics apologized for the ceremony, insisting “There was never an intention to show disrespect to a religious group” with the scene created by artistic director Thomas Jolly – also of Jewish descent, who notably excluded a depiction of, say, Mohammad and his young bride at the table.

Needless to say, Christians are pissed

including Italian Archbishop Carlo Maria Viganò – the former papal nuncio to the United States who questioned the legitimacy of Pope Francis and the authority of the Second Vatican Council, and was excommunicated three weeks ago for “his refusal to recognize and submit to the Supreme Pontiff.”

In a scathing rebuke of the Olympics, Viganò called the opening ceremony “the latest in a long series of vile attacks on God, the Catholic Religion and natural Morality by the antichristic elite holds that hostage Western countries.

“We a dystopian dance macabre in Holograms of the horsemen of the Apocalypse alternated with a plump blue Dionysius, served under a bell of various courses; the parody of the LGBTQ+ Last Supper…” the letter continues.

Viganò also pointed to “disconcerting scenes at the 2012 London Olympics, the 2016 of inauguration of the Gotthard Tunnel, and the 2022 Commonwealth Games, featuring infernal figures, goats, and terrifying animals.

The elite who organizes these ceremonies demand not only the right to blasphemy and the obscene display of the foulest vices, but even their mute acceptance by Catholics and decent people, who are forced to suffer the outrage the most sacred symbols of their Faith and the very foundations of the Natural Law desecrated. -Carlo Maria Viganò

According to Viganò, “Satan makes nothing: only he ruins everything. He does not invent: he tampers. And his followers are no different: they humiliate woman’s femininity in order to erase the motherhood that recalls the Virgin Mother; they castrate man’s manhood in order to tear from the image of God’s fatherhood; they corrupt the little ones in order to kill in them and make them victims of the most abject wokeism.”

Viganò says it’s “no coincidence” that the ceremonies were presided over by French President Emanuel Macron, an ’emissary of the World Economic Forum,’ who ‘passes off a transvestite as his own wife with impunity, just as Barack Obama is accompanied by a muscular man in a wig.’

Overton window intensifies?

Even the governments of Egypt and Iran were offended…

Tyler Durden
Mon, 07/29/2024 – 11:20

via ZeroHedge News https://ift.tt/odb5JIK Tyler Durden

A Premature Fed Rate Cut Will Be A Mistake Of Olympic Proportions

A Premature Fed Rate Cut Will Be A Mistake Of Olympic Proportions

By Benjamin Picton, Senior Macro Strategist at Rabobank

Equities pumped on Friday to recover some of the losses posted earlier in the week. The EuroStoxx50 rose 1.06% to 4,863, the S&P500 closed 1.11% higher at 5,459 and the NASDAQ was up 1.03% to 19,023. High beta China-adjacent currencies like the AUD and NZD came in for a battering during the week after a surprise rate cut from the PBOC and a broad selloff in commodities. The Japanese Yen, meanwhile, surged on renewed bets that the BOJ could be poised to say “uncle!” and deliver further monetary tightening as early as this week. Brent crude fell to close at a $81.13/bbl, and spot gold also fell for the second week in a row to close just below the $2,400/oz level (though it is testing resistance there in early trade).

Gold will be on the minds of more people than usual with the Paris Olympics having kicked-off over the weekend. Japan and Australia currently sit at spots 1 and 2 on the medal tally, which might cause hard-money types to facetiously note the correlation between gold demand and too-loose monetary policy. Both countries will be in focus this week as the market keeps a close eye on the outcome of Wednesday’s BOJ meeting and the release of June retail sales figures and the all-important Q2 CPI inflation report for Australia.

The Aussie Q2 CPI number is likely to be make-or-break for the prospects of an RBA hike in August. Anything greater than 1% q-o-q (the market consensus) is going to be very uncomfortable for a central bank that has been too optimistic on its inflation forecasts for two out of the last three quarters, and whose implied forecast this time around is just +0.8% q-o-q.

Elsewhere this week we will also see the FOMC and the BOE in action. The Fed is widely expected to hold rates – particularly after growth and inflation figures released last week surprised on the high side – while the market consensus on the BOE is for the cutting cycle to begin, a view that our own BOE watcher Stefan Koopman shares.

The Fed is in a particularly delicate position. Former Fed Governor – and former rate hawk – Bill Dudley wrote a piece for Bloomberg last week where he said that he had changed his mind and now believes that the Fed should begin cutting rates immediately. Bill’s change of heart coincides with the Democrats’ switch-out of Joe Biden for Kamala Harris as their (presumptive) nominee for the Presidency. The Harris ascendancy might make it awkward for Powell & Co to fast-track policy easing in the leadup to an election contest that has suddenly tightened. Especially since the Trump campaign has previously indicated interest in taking a more interventionist approach on monetary policy.

While the eyes of rates traders will be on central bank decisions, and the eyes of almost everyone else will be on the bread and circuses unfolding in Paris, tensions in the Middle East have again risen after a Hezbollah rocket struck a football field in the Golan Heights, killing twelve Israelis aged between 10 and 20 and injuring dozens of others. Israel has vowed severe retaliation and Israeli Foreign Minister Katz said over the weekend that “we are approaching the moment of an all-out war against Hezbollah and Lebanon” (!).

World leaders are reportedly working frantically behind the scenes to de-escalate tensions, but it is no exaggeration to say that the incident – and Hezbollah’s status as a favourite proxy of Iran – has heightened the possibility of broader war that Rabobank has flagged as an important risk since the October 7th attacks last year. Indeed, Iran’s Foreign Ministry has warned that any Israeli response to the attack could “prepare ground for the expansion of instability, insecurity and flames of war in the region” (!!).

The Hezbollah rocket strike follows similar recent attacks on Israel launched from Yemen by the Iranian-backed Houthis. Those attacks drew retaliatory strikes from Israel on a Houthi-controlled port just over a week ago. The effects of Houthi attacks on Western shipping in the Red Sea – and the subsequent effective closure of the Suez Canal – are by now well known. Surging shipping costs are an artefact of the conflict, but a step up in direct attacks on Israel from Iran’s regional proxies presents renewed risk of supply shocks in the energy complex. If such a supply shock were to occur, it could derail monetary easing as progress in goods disinflation is thrown into reverse while services inflation remains uncomfortably high in many advance economies.

Dual supply shocks in energy and shipping sounds like Covid-era déjà vu that could make premature monetary easing look like a mistake of Olympic proportions, but waiting too long to ease will mount pressure on a floundering commercial real estate sector and households who have run through accumulated savings. Who would be a central banker?

Week Ahead  

Monday: New Zealand filled jobs for June fell by 0.1% while the previous month’s number was revised down from 0% to -0.3%. That presents an interesting setup for the more comprehensive Q2 labour market report due next week. Elsewhere today we have mortgage approvals and money supply figures for the UK and the Dallas Fed’s manufacturing activity index for July.

Tuesday: Japan labour market data and Aussie building approvals kick things off before we head to Europe for the Q2 GDP advance read. Seasonally-adjusted growth of 0.2% q-o-q is expected. That’s a touch lower than the Q1 result, but sufficient to see year-on-year growth rise by one tenth to 0.5%. We will also get CPI reports for Spain and Germany before we head over to the USA for the JOLTS report, the FHFA House Price Index and the Conference Board’s consumer confidence report for July.

Wednesday: The BOJ and FOMC meetings (covered above) are the headliners for the day. We will also see NZ building permits, Aussie Q2 CPI, retail sales and private credit, China PMIs and Japan industrial production. The ECB’s latest economic bulletin, Eurozone unemployment figures and preliminary Eurozone CPI for July will be released with the year-on-year core CPI reading expected to fall modestly to 2.8%. In addition, we get CPI reports for France and Italy, Canadian GDP for May (1% y-o-y expected), the ADP Employment report in the USA (+149k exp) and weekly MBA mortgage application figures.

Thursday: The Bank of England policy rate decision is the key event for the day (25bp cut expected), but Aussie trade figures for June are first up. That’s followed by UK house prices, Caixin manufacturing PMIs for China, Italy unemployment figures for June, the USA’s ISM manufacturing index for July, and the USA’s usual weekly jobless claims figures. BOE Governor Andrew Bailey will be speaking following the Bank Rate announcement, and Huw Pill is also scheduled to give remarks later in the day.

Friday: July non-farm payrolls headlines the day and is expected to print at +178k with the unemployment rate remaining at 4.1%. That follows a stronger-than-expected print of +206k in June, but will we see that revised lower this week? (probably, if form is any guide). Earlier in the trading day we will see Q2 PPI for Australia, industrial production for France and Italy, retail sales for Italy, unemployment figures for Spain, and then both factory orders and durable goods orders for the USA after the payrolls release. The BOE’s Huw Pill will again be speaking.

Tyler Durden
Mon, 07/29/2024 – 11:00

via ZeroHedge News https://ift.tt/MN0xRGS Tyler Durden

America’s Lab Rats?

America’s Lab Rats?

Authored by Victor Davis Hanson via American Greatness,

Half the country thinks something has gone drastically wrong in America, to the point that it is rapidly becoming unrecognizable. Millions feel they are virtual lab rats in some grand research project conducted by entitled elites who could care less when the experiment blows up.

Consider:

Our military turns over $60 billion in state-of-the-art weapons to terrorists in Kabul and then flees in disgrace?

Terrorist flags fly in place of incinerated Old Glory at the iconic Union Station in Washington as radical students and green card-holding guests deface statues with threats that “Hamas is coming” while spewing hatred toward Jews—and all with impunity?

A wide-open border with 10 million unaudited illegal immigrants?

Once beautiful downtowns resembling Nairobi or Cairo—as paralyzed mayors spend billions without a clue how to remedy the self-created disaster?

Fast food drive-ins priced as if they were near-gourmet restaurants?

In truth, this apparent rapid cultural, economic, and political upheaval is well into its third decade. The disruptions are the results of the long-term effects of globalization and the high-tech revolution that brought enormous wealth into the hands of a tiny utopian elite. Almost overnight, every American household became a consumer of cellular phones and cameras, laptop computers, social media, and Google searches.

We then entered into a virtual, soulless world of hedonism, narcissism, and the cheap, anonymous cruelty of click-bait, cancel culture, doxing, ghosting, blacklisting, and trolling. The toxic COVID lockdown and the DEI racist fixations that followed the George Floyd death only accelerated what had been an ongoing three-decade devolution.

By 2000, a former market of 300 million American consumers was widening to a globalized 7 billion shoppers—at least for those mostly on the two coasts, whose expertise and merchandising were universalized in megaprofit high-tech, finance, investment, media, law, and entertainment.

Americans of the 20th century had never quite seen anything like the mega-global celebrities from Michael Jackson to Taylor Swift, or a Bezos fortune of $170 billion, or the sorts who fly in their Gulfstream private jets to Davos, Sun Valley, and Aspen to lament the ignorance of the backward muscular classes and to plot their noblesse oblige salvation for them.

Indeed, for those reliant on muscular jobs and the production of the material essentials of life—agriculture, fuels, construction, assembly, timber, mining, and services—their livelihoods were often xeroxed abroad. Millions of their jobs were offshored or outsourced to third- and second-world countries with cheaper labor, abundant natural resources, and less overhead that made investment “wiser” and more profitable.

Anointed Americans in the “soft” or informational economy achieved levels of wealth never seen before in history. Meanwhile, Americans in the “hard” or concrete sectors saw stagnation in wages, job losses, and the erosion of middle-class life itself.

That the universities, the media, the administrative state, entertainment, high tech, and the federal government were mostly on the coasts became a geographical force multiplier of the growing economic and cultural divide—perhaps in the manner that the Civil War became not just an ideological conflict but one of definable geography as well.

Red-state and blue-state cultures followed these radical displacements in the global economy. Urban bicoastal America created an ethos and an accompanying narrative that it was blessed, rich, and all-knowing because it had been rightfully rewarded for supposedly being innately smarter, better credentialed, more worldly and—given its wealth—more moral than the losers who fell behind. The new multibillionaires reinvented the Democrat Party into a concord of the hyper-rich and subsidized poor, abandoning the now caricatured working and losing middle classes.

Indeed, a sort of atheistic, reverse-Calvinism arose. The elite left-wing, monied classes were left-wing and monied precisely because of some sort of fated reward for their obvious innate superior virtue and wisdom—even as millions fled from failing blue states to their freer and more prosperous red counterparts.

An entire moral vocabulary of condemnation followed to stigmatize those who supposedly lacked the know-how or morality to appreciate their elite benefactors—clingers, deplorables, irredeemables, hobbits, chumps, dregs, and “crazies,” to use the parlance of Barack Obama, John McCain, Hillary Clinton, and Joe Biden. Their targets were the relics of a vanishing America who did quirky things like salute the flag, go to church, believe there were still only two sexes, honor America as always far better than the alternative, and believe they were the muscles that kept the nation fed, fueled, and housed for one more day.

The chief characteristic of the 21st century American revolution’s vast recalibrations in wealth was not just the transition from the muscular to the supposedly cerebral, but from right to left. Look at the Fortune 400. There is a pattern in the rankings—mostly progressives and rich—and the winners’ wealth is usually not created from old sources like transportation, manufacturing, agriculture, or construction.

The real multibillion-dollar fortunes in America are now in tech and investment. The hierarchies that own and manage Amazon, Apple, Citigroup, Goldman Sachs, Google, JPMorgan, Chase, Microsoft, or Morgan Stanley are now decidedly left-wing Democrats. That 21st century reality marked a radical change from the past. Democrats now typically vastly outraise Republicans in most national campaigns. Their philanthropic foundations dwarf those of their right-wing rivals.

Elite hard-left universities are flush with multibillion-dollar endowments in a manner unimaginable just 40 years ago. And they are no longer merely liberal but overwhelmingly woke and uncompromisingly hard left—with millions of dollars to waste on their unicorn chases of mandated equality and racist “anti-racism.” Hollywood, the media, new and old, and Wall Street are not just far wealthier than ever but far more intolerant and sanctimonious as well.

It was not just money that gave the new left-wing oligarchy such clout in the administrative state, Wall Street, tech, the media, the corporate world, and the university. It was the accompanying assurance that, unlike other Americans, the lab rats of the mostly rural or interior parts of the country were exempt. They were to be free to apply their bankrupt agendas—open borders, DEI, globalism, climate change gospels, critical legal theory, modern monetary theory, critical race theory—to distant others. They assumed correctly that they were never really to be subject to the concrete and real-life disasters arising from the implementation of their ideology.

Certainly, guilt over their largess, together with our 21st century secular update of sanctimonious New England puritanism, explain this overweening left-wing new zealotry to change the world, but largely at others’ expense. They are the descendants of Salem, who share the same superstitions and fanaticism to punish all who doubt their purity and wisdom.

So arose the idea among elites of a borderless America, where yearly 2-3 million poor and downtrodden of Latin America, and soon the world at large, could surge into a humane and progressive America—without the ossified and illiberal idea of background checks, or legal “technicalities.”

The arrivals’ abject poverty would remind the bigoted American middle classes of the need to expand their welfare state—as if a lifelong victim of the institutional oppression of Oaxaca, Mexico became a legitimate victim of white capitalist America the very moment he set foot across a now mythical border. Importing massive poverty would remind the middle classes that racism and inequality were still on the rise.

The locus classicus of this self-righteousness and contrition was emblemized when a few dozen illegal aliens were redirected toward tony Martha’s Vineyard. The locals immediately rushed to reveal to us two realities: 1) shower the illegals with food, upscale clothing, and other essentials to virtue signal their universal concern for the downtrodden; and 2) bus them out of the neighborhood as quickly as possible to where they “belonged”—either among the inner-city poor or struggling rural Hispanic communities of the American southwest.

In the abstract, open borders were what any progressive nation should aspire to; in the concrete among the architects of such idealism—not in their backyard.

Following the death of George Floyd, corporations, universities, and administrative state agencies rushed to compete to “level the playing field” by eroding meritocratic criteria such as calcified SAT tests, background checks, resumes, etc., and began hiring by race, gender, and sexual orientation.

Tens of thousands of DEI commissars and their henchmen have now spread far beyond their birthplaces in the university (where elite schools routinely restrict so-called whites [ca. 65–70 percent of the population] to 20–40 percent of incoming classes). At some Ivy League schools and their kindred elite campuses, grades are “adjusted” to ensure 60-80 percent are A’s.

Almost everything in revolutionary America has “evolved” beyond silly notions like “meritocracy” and “standards” and has instead become DEI hot-wired—from the hiring and promotion of airline pilots, selection of actors, management of the Secret Service, and the rank and file of FBI and CIA operatives to admissions to medical school, corporate boardrooms, and advertising.

In response, a dangerous underground cynicism grows commensurately. As in the old Soviet Union, so too here arises our official “truth” beside the subterranean truth that most rely on when an incompetent Secret Service hierarchy allows a shooter to take pot shots at a president’s head, or there is a sharp rise in passenger jet near misses and go-arounds, or students in mass demand exemptions from final schedules or expect amnesties when they storm campus buildings, or major corporations—like Disney, Target, Anheuser Busch, and John Deere—ostentatiously virtue signal.

In sum, we are knee-deep in an authoritarian commissariat that we do not even dare formally acknowledge. DEI, like open borders, was predicated on the idea that the good one percent who ran the country was too good to experience the trickle-down from the commissar system it imposed on others.

Ditto the top-down green revolution. We are to assume that sweaty truckers should have no problem juicing up their battery engines every 300 miles. Hispanics in Bakersfield should appreciate turning down their air conditioning when it hits 115. Lower-middle-class moms should learn the advantages of high-cost electric stoves and ovens once they are forcibly weaned off their cheap but too-hot natural gas appliances.

Meanwhile, the sales of designer Italian cooking platforms, 10,000-square-foot air-conditioned second homes (the Obamas own three), private jets, yachts, and huge limo SUVs have reached record levels. The model is John Kerryism—or the rationale that to help the uneducated, dumber, and less moral people survive global warming, the enlightened need the tools to do it. So, they must avoid messy airports, 9-hour delays due to missed connections, and the stuffy, cramped middle seat on modern commercial jets.

The idea of 100,000-200,000 legal immigrants admitted annually and meritocratically, charter schools in the inner city, beefed-up policing in our major urban areas, nationwide civic education, reemphasis on assimilation, integration, and intermarriage of the melting pot, wide use of nuclear power—all the things that might make the life of the middle class more secure, more prosperous, and more confident—are deemed corny and passé.

Again, what we got in the last quarter century was a shrill elite that subjects their Jacobin theories upon a distant other but has absolutely no intention of ever getting near the very disasters they wrought, much less suffering the collateral damage that was inevitable from their social engineering.

Or, to put it another way, they were to be our few genius white-coasted researchers while we were their many expendable lab rats.

Tyler Durden
Mon, 07/29/2024 – 10:20

via ZeroHedge News https://ift.tt/pmnWJfa Tyler Durden

Big Mac Demand Drops At Micky D’s As Same-Store Sales Slide For First Time Since 2020

Big Mac Demand Drops At Micky D’s As Same-Store Sales Slide For First Time Since 2020

McDonald’s reported disappointing Q2 results, missing both the average earnings and revenue expectations tracked by FactSet. The largest fast-food chain in the country reported the first quarterly decline in same-store sales since Q4 2020, as sliding Big Mac demand is evident of low and mid-tier consumers being squeezed by elevated inflation and sky-high interest rates produced by failed Bidenomics.

“We are confident that Accelerating the Arches is the right playbook for our business and as consumers are more discriminating with their spend, we are focused on the outstanding execution of delivering reliable, everyday value and accelerating strategic growth drivers like chicken and loyalty,” MCD Chairman and CEO Chris Kempczinski wrote in a press release. 

McDonald’s reported adjusted earnings of $2.97 per share for the quarter, down from $3.17 one year ago. This missed the average analyst estimate of $3.07 tracked by FactSet. Revenue was flat at around $6.49 billion, falling short of the average analyst estimate of $6.62 billion. 

For the April-June period, sales at burger shops fell 1% worldwide. This was the first decline since Q4 2020, when the government-enforced shutdown and panic doom broadcasted by MSM kept everyone out of stores and hiding in their homes. In the US, same-store sales fell about 1%. 

Here’s a snapshot of the second quarter financial performance (courtesy of MCD):

Global comparable sales decreased 1%, reflecting negative comparable sales across all segments:

  • US decreased 0.7%

  • International Operated Markets segment decreased 1.1%

  • International Developmental Licensed Markets segment decreased 1.3%

Continues: 

  • Consolidated revenues were flat (increased 1% in constant currencies).

  • Systemwide sales decreased 1% (increased 1% in constant currencies).

  • Consolidated operating income decreased 6% (5% in constant currencies). Results included $97 million of pre-tax non-cash impairment charges and $57 million of pre-tax restructuring charges associated with Accelerating the Organization. Excluding these current year charges, as well as prior year pre-tax charges of $18 million, consolidated operating income decreased 2% (was flat in constant currencies).**

  • Diluted earnings per share was $2.80, a decrease of 11% (10% in constant currencies). Excluding the current year charges described above of $0.17 per share, diluted earnings per share was $2.97, a decrease of 6% (5% in constant currencies) when also excluding prior year charges.**

Here’s more color on comparable sales:

Same-store sales in Q2 have slipped into negative territory for the first time since Q4 2020. 

Goldman’s Eric Mihelc and Scott Feiler’s take on MCD’s earnings this morning is as follows for their clients:

MCD +0.5%…Missed both comp sales/EPS as expected but focus is on recent/forward trends From Scott: “I am not arguing it’s good (it’s not), but the comps at -1% in total and -0.7% in the US are sort of in-line with where most expectations/bogies were into the quarter. The big factor for the stock will depend on what they say about QTD and the reception to the value launch (end of June) when they speak on the call. The print alone is not a huge surprise and likely won’t have a big impact to MCD shares or the group. Details: 2Q EPS of $2.97 vs Consensus $3.07, with total comps -1% vs Consensus +0.4% and US comps -0.7% vs Consensus +0.5% (we think bogey was -1%).  International comps missed as well.

Here’s what other Wall Street analysts are saying about MCD’s ER (courtesy of BBG):

Bernstein (market perform), Danilo Gargiulo

  • “Despite missing on consensus, McDonald’s results were better than feared, especially in the US where the contraction was a mere -0.7% same store sales growth,” Gargiulo writes
  • He’s looking to gain a better understanding on the main cause of the international markets slowness and the “path toward recovery”

Citi (neutral) Jon Tower

  • US comps are “slightly better than feared,” as many investors were anticipating negative low-single digits, though IOM missed Citi/Street estimates by a “wide mark,” Tower writes
  • Adjusted Ebit was also a miss, with G&A expense a 5% headwind vs his estimate
  • Expects management comments on call to be “cautious” regarding the current state of the global consumer, with “value initiatives likely improving traffic, but mix a major headwind”
  • Consensus estimates are likely to move lower, and shares are likely to continue seeing pressure in the near term

Baird (outperform), David Tarantino

  • “The company held guidance ranges for key operating metrics (including unit growth, EBIT margin), but we expect a more muted comps outlook to lead to a slight downward revision to 2024-2025 EPS estimates,” Tarantino writes
  • Sensed that recent investor expectations called for US comps. flat to down 1%
  • Sees opportunity for the company to show improved fundamental performance in upcoming quarters, which can result in improved investor sentiment on the stock
  • Key focus area for call: perspective on recent demand trends, including initial performance for the $5 Meal Deal in U.S.; initiatives to support comps performance amid what looks to be “an increasingly challenging global macro backdrop”

TD Cowen (buy), Andrew Charles

“2Q results were challenged in the US as expected while IOM was negative, in-line with the bear thesis,” Charles writes

  • To him, key factor to determine today’s stock move will be conference call comments on plans to improve 2H traffic, which he thinks will include ongoing focus on value, and how this has resonated in July after $5 Meal Deal launch June 25

In early May, McDonald’s warned its cash-strapped customers were desperately seeking cheaper food. We noted at the time, “McDonald’s Admits Consumers Are Broke With Planned Reintroduction Of $5 Meal Deal.” The implementation of the $5 meal deal occurred on June 25, which was in the final days of last quarter. 

Based on Q2 earnings, McDonald’s sliding Big Mac demand from cash-strapped consumers is an ominous sign that low/mid-tier households are under deep financial stress. 

We’ve detailed for months about the onset of a consumer slowdown:

Days ago, a Bloomberg report provided some hope that the meal deal has spurred some demand in the current quarter:

About 93% of McDonald’s locations have committed to selling the bundle past the initial four-week window that started June 25, according to a memo seen by Bloomberg News. The timetables will vary across the country, with some locations planning to make it available through August.

Early performance indicates the meal deal “is meeting the objective of driving guests back to our restaurants,” McDonald’s said in a message signed by Tariq Hassan, chief marketing officer, and Myra Doria, national field president. “Driving guest counts ultimately propels our business and is the key to sustained growth,” they added. 

MCD confirmed that this morning:

  • MCDONALD’S: NUMBER OF $5 MEAL DEALS SOLD ABOVE EXPECTATIONS

Shares of MCD are mixed in premarket trading in New York. On the year, shares are down 15%. 

In recent weeks, we penned a note titled “Restaurant Stocks Slide As Wall Street Sours On Consumer.” 

McDonald’s plans to extend the meal deal through the end of the year, signaling that executives are concerned the downturn in the consumer space could worsen from here.

Tyler Durden
Mon, 07/29/2024 – 10:00

via ZeroHedge News https://ift.tt/LonqVCZ Tyler Durden

CIA Denies Trump Shooter Was Subject Of MKUltra Program

CIA Denies Trump Shooter Was Subject Of MKUltra Program

Authored by Steve Watson via Modernity.news,

The CIA has actually taken time to issue a denial that would be Trump assassin Thomas Matthew Crooks was part of an infamous agency mind control program.

In the wake of a lack of information on Crooks’ background, and an empty social media footprint, along with a plethora of unanswered questions regarding his whereabouts and activities on the day of the shooting, speculation is now rife that he was some sort of patsy to the forces that want Trump out of the picture.

Many have suggested that Crooks may have been ‘MKUltra‘d’, referring to a mind control experiment conducted by the CIA between 1953 and 1973 wherein the agency used psychoactive drugs and sensory experiments on subjects in an attempt to control their behaviour.

Remarkably, the CIA has responded to the accusations, telling Gizmodo, “These claims are utterly false, absurd, and damaging.”

The statement adds that “The CIA had no relationship whatsoever with Thomas Crooks.”

It further states that “Regarding MKULTRA, the CIA’s program was shut down more than 40 years ago, and declassified information about the program is publicly available on CIA.gov.”

Unfortunately, trust in the intelligence agencies is at such a low that anything they say just makes people believe the exact opposite.

*  *  *

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

Tyler Durden
Mon, 07/29/2024 – 09:40

via ZeroHedge News https://ift.tt/MvyW6EJ Tyler Durden

Key Events This Blockbuster Week: Fed, BOJ, BOE, Jobs, Jolts, QRA, And Earnings Galore

Key Events This Blockbuster Week: Fed, BOJ, BOE, Jobs, Jolts, QRA, And Earnings Galore

As we hit the last few days of July, we are facing a blockbuster week ahead for markets, arguably the single-most important week of the summer which sees a convergence of central bank, macroeconomic, earnings and geopolitical events all hitting at once. As DB’s Jim Reid notes, “it’s probably easier to start with what I think are the potential market moving day by day highlights before we expand deeper into the main events: Today we see the latest Treasury borrowing estimates as part of the quarterly refunding announcement (QRA). Tomorrow sees Microsoft report, US JOLTS, German/French/Italian Q2 GDP and German July CPI. Wednesday sees Meta report, both the BoJ and the Fed deciding on rates, China PMIs, French and Eurozone July CPI, and Australian Q2 CPI. Thursday sees Apple and Amazon report, various global PMIs and the US ISM, and the BoE decision. Friday sees US payrolls.”

It’s hard to guess which of the above will have the largest impact on markets but it’s probably going to be the four Mag-7 tech companies that report this week. They cover around 19.7% of the S&P 500 on their own so will have a huge influence on sentiment. The Mag-7 is down -12% from its peak 2 and a half weeks ago with the Russell 2000 outperforming by around 25pp over this period which shows the extreme rotation that has been occurring over this period. So their results will be a huge driver with some nerves after Tesla and Alphabet disappointed last week.

With the Fed likely to start an easing cycle soon – as the WSJ’s Nikileaks definitvely previewed over the weekendthe FOMC (Wednesday) has the potential to be a big event but the likelihood is that they will simply signal a rate cut which is a reasonable baseline for September without pre-committing. So it may not be hugely market moving. Jackson Hole (August 22-24) may see a more definitive signal from Powell. Note that no economist on the street expects a cut this week with the market pricing in a very small (4%) probability.

Earlier that day the BoJ seem more likely than not to hike rates and to reduce bond buying. Momentum towards the hike has been building over the last couple of weeks with the Yen now at 153.28 from a low of 161.69 on July 3. In another close decision our UK economists thinks the BoE will vote 5-4 to cut rates on Thursday.

With all the above it’s easy to forget Friday’s payrolls, but with some signs that the US labor market is weakening it is a very important release. DB’s economists find this tricky to forecast given storms in Texas earlier this month. They think headline (+175k vs. +206k last month) and private (+150k vs. +136k last month) payrolls will contain a roughly 15k drag from the storms. This shouldn’t impact an unchanged unemployment rate of 4.1% though. We’re not far from breaching the Sahm rule as on a 3m average basis we’re 0.43pp above the lows. However the bulls would point to a rise in the labor force rather than lay-offs being the main driver. Ex Fed President Dudley did point out last week that this also happened around the 1970s recessions though.

For European CPI, DB’s economists expect July flash data to come in at 2.59% YoY (2.52% in June) for the Eurozone, with core HICP to remain at 2.87%. Across countries, they forecast HICP in Germany at 2.5% (2.5%), France at 3.0% (2.5%), Italy at 1.1% (0.9%) and Spain at 3.4% (3.6%). More of their analysis and forecasts can be found in the latest inflation chartbook here .

As a curiosity, this week marks a year since the huge bearish surprise for bond markets from the Treasury QRA. Today’s borrowing estimates and Wednesday’s refunding statement should be much calmer affairs.

Finally, a whopping 34% of the S&P reports earnings this week, including names such as MCD, MSFT, AMD, PYPL, SBUX, PFE, BA, META, QCOM, MRNA, AMZN, INTC, COIN, XOM, CVX.

Courtesy of DB, here is a day-by-day calendar of events

Monday July 29

  • Data: US July Dallas Fed manufacturing activity, UK June net consumer credit, June M4, Sweden June GDP
  • Earnings: McDonald’s, Welltower, Heineken
  • Auctions: US Treasury quarterly borrowing estimates

Tuesday July 30

  • Data: US June JOLTS report, July Conference Board consumer confidence index, Dallas Fed services activity, May FHFA house price index, Japan June jobless rate, job-to-applicant ratio, Germany Q2 GDP, July CPI, France Q2 GDP, June consumer spending, Italy Q2 GDP , Eurozone July services confidence, industrial confidence, economic confidence, Q2 GDP
  • Earnings: Microsoft, Procter & Gamble, Merck & Co, AMD, L’Oreal, Pfizer, S&P Global, Stryker, Airbus, Rio Tinto, Arista Networks, American Tower, BP, Mondelez, Starbucks, Diageo, PayPal, Electronic Arts, Pinterest, First Solar, Live Nation Entertainment, Leonardo, Davide Campari-Milano, Covestro

Wednesday July 31

  • Data: US July ADP report, MNI Chicago PMI, June pending home sales, Q2 employment cost index, China July PMIs, UK July Lloyds Business Barometer, Japan June retail sales, industrial production, housing starts, July consumer confidence index, Germany July unemployment claims rate, June import price index, France July CPI, June PPI, Italy July PPI, June PPI, May industrial sales, Eurozone July CPI, Canada May GDP, Australia Q2 CPI
  • Central banks: Fed’s decision, BoJ’s decision
  • Earnings: Meta, Mastercard, Samsung Electronics, T-Mobile US, Qualcomm, ARM, Schneider Electric, Lam Research, Boeing, KKR, Safran, GSK, Marriott, Humana, Hess, adidas, Kraft Heinz, eBay, Carvana, Teva, Albemarle, Norwegian Cruise Line, Etsy, Telecom Italia
  • Auctions: US Treasury refunding statement

Thursday August 1

  • Data: US Q2 nonfarm productivity, unit labor costs, July ISM index, total vehicle sales, June construction spending, initial jobless claims, China July Caixin manufacturing PMI, Italy July manufacturing PMI, June unemployment rate, July new car registrations, budget balance, Eurozone June unemployment rate, Canada July manufacturing PMI
  • Central banks: BoE’s decision, Pill speaks, decision maker panel survey, ECB’s economic bulletin
  • Earnings: Apple, Amazon, Toyota Motor, Shell, Intel, ConocoPhillips, Booking, Vertex, AB InBev, Eaton, Regeneron, Cigna, Ferrari, Merck KGaA, EOG, Apollo, BMW, Volkswagen, Deutsche Post, BAE, Rolls-Royce, Moderna, DoorDash, Haleon, Hershey, Block, Blue Owl, Vonovia

Friday August 2

  • Data: US July jobs report, June factory orders, Japan July monetary base, France June industrial production, budget balance, Italy June industrial production, retail sales, Switzerland July CPI
  • Central banks: BoE’s Pill speaks
  • Earnings: Exxon Mobil, Chevron, Linde, Ares, Engie

* * *

Finally, looking at just the US econ calendar, Goldman writes that the key economic data releases this week are the JOLTS job openings report on Tuesday, the ISM manufacturing index on Thursday, and the employment report on Friday. The July FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM.

Monday, July 29

  • There are no major economic data releases scheduled.

Tuesday, July 30

  • 09:00 AM FHFA house price index, May (consensus +0.3%, last +0.2%)
  • 09:00 AM S&P Case-Shiller 20-city home price index, May (GS +0.3%, consensus +0.3%, last +0.2%)
  • 10:00 AM JOLTS job openings, June (GS 7,900k, consensus 8,055k, last 8,140k): We estimate that JOLTS job openings fell by 0.2mn to 7.9mn in June, reflecting further pullback in online job postings and possible reversion in the government and manufacturing sectors after experiencing outsized increases in measured job openings in the prior month.
  • 10:00 AM Conference Board consumer confidence, July (GS 100.3, consensus 99.5, last 100.4)

Wednesday, July 31

  • 08:15 AM ADP employment change, July (GS +140k, consensus +149k, last +150k); We estimate ADP payroll employment growth slowed to 140k in July, partly reflecting a drag from Hurricane Beryl.
  • 08:30 AM Employment cost index, Q2 (GS +1.0%, consensus +1.0%, last +1.2%); We estimate the employment cost index rose by 1.0% in Q2 (qoq sa), which would lower the year-on-year rate by one tenth to 4.1% (nsa yoy). Our forecast reflects deceleration in average hourly earnings of production and nonsupervisory workers. We also expect a slower pace of ECI growth among unionized workers—following 1.7% increases on average in Q4 and Q1 (SA by GS, not annualized)—and a moderation in ECI benefit growth after resetting higher in Q1 (0.9% vs. 1.1% in Q1).
  • 09:45 AM Chicago PMI, July (GS 45.5, consensus 44.5, last 47.4)
  • 10:00 AM Pending home sales, June (GS +2.6%, consensus +1.3%, last -2.1%)
  • 02:00 PM FOMC statement, July 30-31 meeting: As discussed in our FOMC preview, we continue to expect the first rate cut in September as encouraging inflation news and a further rise in the unemployment rate have moved the FOMC closer to cutting. After September, we expect quarterly rate cuts for a total of two cuts in 2024 and four cuts in 2025.

Thursday, August 1

  • 08:30 AM Nonfarm productivity, Q2 preliminary (GS +1.7%, consensus +1.7%, last +0.2%); Unit labor cost, Q2 preliminary (GS +1.8%, consensus +1.9%, last +4.0%)
  • 08:30 AM Initial jobless claims, week ended July 27 (GS 230k, consensus 236k, last 235k); Continuing jobless claims, week ended July 20 (consensus 1,855k, last 1,851k)
  • 09:45 AM S&P Global US manufacturing PMI, July final (last 49.5)
  • 10:00 AM Construction spending, June (GS +0.1%, consensus +0.2%, last -0.1%)
  • 10:00 AM ISM manufacturing index, July (GS 48.5, consensus 48.8, last 48.5): We estimate the ISM manufacturing index was unchanged in July (at 48.5), reflecting weaker regional manufacturing surveys so far on net this month (GS manufacturing survey tracker -1.0pt to 48.2) but a potential boost from residual seasonality.

Friday, August 2

  • 08:30 AM Nonfarm payroll employment, July (GS +165k, consensus +178k, last +206k); Private payroll employment, July (GS +125k, consensus +148k, last +136k); Average hourly earnings (mom), July (GS +0.3%, consensus +0.3%, last +0.3%); Average hourly earnings (yoy), July (GS +3.7%, consensus +3.7%, last +3.9%); Unemployment rate, July (GS 4.1%, consensus 4.1%, last 4.1%);  Labor force participation rate, July (GS 62.6%, consensus 62.6%, last 62.6%): We estimate nonfarm payrolls rose by 165k in July (mom sa). While job growth tends to accelerate in the summer when the labor market is tight (as an influx of the labor supply allows vacant positions to be filled), we assume a 15k drag from Hurricane Beryl and a moderating (albeit still above-trend) contribution from the recent surge in immigration. Additionally, Big Data measures indicate a pace of job creation below the recent payrolls trend. We estimate that the unemployment rate was unchanged at 4.1%, reflecting higher household employment and flat labor force participation at 62.6%. We estimate average hourly earnings rose 0.3% (mom sa), which would lower the year-on-year rate by 0.2pp to 3.7%.

Source: DB, Goldman

Tyler Durden
Mon, 07/29/2024 – 09:27

via ZeroHedge News https://ift.tt/u4UWwvy Tyler Durden

Mortgage Hack: Homebuyers Score Low Rates By Finding Assumable Loans

Mortgage Hack: Homebuyers Score Low Rates By Finding Assumable Loans

Combined with stubbornly-high house prices, higher mortgage interest rates are putting homebuyers behind the 8-ball. Many resourceful house-hunters are doing an end-run around that doubly-daunting dynamic — by seeking out sellers who have assumable, low-rate mortgages

As the name implies, an assumable mortgage is one that allows a buyer to essentially step into the shoes of the seller, taking over the loan as it is — with the same interest rate, payment and schedule. Generally speaking, the only assumable loans are those backed by a federal agency such as the Veterans Affairs Department (VA) or the Federal Housing Administration (FHA). By “backed by,” we mean loans where the government — acting well beyond the bounds of the Constitution — guarantees lenders they’ll be made whole if the borrower defaults.  

Roughly 80% of outstanding VA mortgages have a sub-5% rate. Plenty are sub-3%. Together, VA and FHA mortgages account for about 25% of the entire mortgage universe. Of course, only a small fraction of VA- or FHA-backed homes are on the market at any point in time. Nonetheless, the number of assumptions is growing by leaps and bounds. Among FHA mortgages, the number of assumptions rose from 3,825 in all of 2023 to 3,477 in just the first five months of this year.  

Some firms have emerged to help buyers ferret out assumable loan opportunities. Launched in September, Roam has an online search feature, and offers fee-based services to help buyers navigate the process of assuming a mortgage. Sellers can also use it to capitalize on the extra value-proposition their assumable mortgage presents, by putting themselves on Roam’s radar. 

Roam‘s search feature displays homes for sale with assumable mortgages

Just because a mortgage is assumable doesn’t mean anybody can take it over. For example, while you don’t have to be a veteran to assume a VA loan, you will have to meet certain credit requirements and come in within a specified debt-to-income ratio. The FHA has similar requirements. 

Buyers have to come up with their own money to cover the difference between the purchase price and the amount left on the mortgage. Depending on how long the mortgage has been going — and the price shift over that time — buyers might need significant funds to fill the gap. Lenders facilitating the assumption may come through with a second loan — but at current-market rates. 

Using an assumption to shave five points off your mortgage rate could yield blissfully-affordable homeownership (Photo: Wesley Davi)

If you’re a veteran, you may have a competitive advantage when bidding on a home with a VA assumption opportunity. If the seller transfers their mortgage to a non-veteran, the seller’s VA loan privilege for future purchases could be diminished or suspended altogether until the assuming party pays the mortgage down. On the other hand, a VA-qualified assumer brings their own eligibility to the deal, which means the seller can move on with their VA benefit fully restored.  

That said, any assumption — VA or FHA — generally means more work and a slower close for the seller, particularly compared to a cash bid. Loan servicers aren’t crazy about them. “Servicers have been very reluctant to do them,” Ted Tozer of the Urban Institute’s Housing Finance Policy Center told the New York Times in May. “They are actually losing money on each one that they do because they have substantial costs that are not covered by the fee they can charge.”

Tyler Durden
Mon, 07/29/2024 – 07:45

via ZeroHedge News https://ift.tt/oW5cSbI Tyler Durden