Category: zerohedge

Authored by JP Cortez via SoudMoneyDefense.org,

By signing sound money legislation today, Arkansas Gov. Asa Hutchinson has officially ended sales taxation on gold, silver, platinum, and palladium bullion and coins– thereby setting an example for legislators in New Jersey, Maine, Ohio, and Tennessee, who are still considering similar measures in their own states this year.

Arkansas’s Senate Bill 336, originally introduced by Sen. Mark Johnson and Rep. Delia Haak, enjoyed tremendous popularity, passing through the state Senate 30-1 before passing out of the state House unanimously by a vote of 93-0.

Backed by the Sound Money Defense League, Money Metals Exchange, and grassroots activists and coin dealers in Arkansas, Senate Bill 336 will allow Arkansas investors, savers, and small businesses to acquire precious metals without being slapped with sales and use taxes.

The Arkansas sales tax exemption takes effect on July 1, 2021.

Meanwhile, similar bills are still pending in Ohio, Maine, Tennessee, and New Jersey as the national backlash against taxing constitutional money continues.

Governor Hutchinson signs Senate Bill 336 alongside sponsors and supporters of the measure

Including Arkansas, 40 U.S. states now fully or partially exempt gold and silver from sales taxes. That leaves 10 states and the District of Columbia as the primary jurisdictions that still harshly penalize citizens seeking to protect their savings against the serial devaluation of the Federal Reserve Note.

States have been removing sales taxes from monetary metals for the following reasons:

• Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. States do not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments, so it makes no sense to tax monetary metals.

• Levying sales taxes on precious metals is illogical because gold and silver are inherently held for resale. Sales taxes are typically levied on final consumer goods. Precious metals are inherently held for resale, not “consumption,” making the application of sales taxes on precious metals illogical and especially inappropriate.

• Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers in states with precious-metals sales taxes often take their business to neighboring states that have eliminated or reduced sales tax on precious metals. Investors can easily avoid paying $136.50 in sales taxes, for example, on a $1,950 purchase of a one-ounce gold bar. Therefore, levying sales tax on precious metals harms in-state businesses, who will lose business to out-of-state precious metals dealers.  Coin conventions also tend to avoid the sales tax states.

• Taxing precious metals is harmful to citizens attempting to protect their assets. Purchasers of precious metals aren’t fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals as a way to preserve their wealth against the damages of inflation. Inflation harms the poorest among us—including pensioners, Arkansans on fixed incomes, wage-earners, savers, and more.

Jp Cortez, policy director for the Sound Money Defense League, explained that “the vast majority of states realize that taxing sound money harms in-state investors, in-state businesses, and even state revenues.”

Cortez continued: “by eliminating taxes on the purchase of gold and silver, Arkansas citizens can protect themselves against inflation, while citizens in the few states that still tax sound money are punished for trying to preserve their wealth.”

Having eliminated sales taxes on the monetary metals, Arkansas will rise from dead last in the Sound Money Index to 30th place among the 50 states.

While representatives of America’s Gen Z are stugling with daytrading dogecoin, finding jobs, and generally leaving their parents’ basement…

… China’s youth is rapidly emerging as the greatest spending power in the world, especially when it comes to buying luxury items they can’t afford.

Take Chinese live-streamer Huang Hanwen who uses domestic cosmetics brands and spends his time talking about animation, comics, games and short novels, as well as domestic, Japanese and Korean celebrities and entertainment news. At weekends, he uses Make Up For Ever and drinks imported whisky mixed with Coke or Red Bull.

Huang – profiled by the SCMP – is 24, putting him in the same demographic as most of his 300,000 fans from across China – Generation Z, which is helping to drive Chinese consumer spending. This generation, born from 1995-2010, buys 15% of all luxury goods sold in China, compared with a worldwide average of 10%. Their expenditures also account for 13% of their total household income, versus just 4% in the US and Britain, according to a survey.

The willingness and desire of young Chinese people to spend their hard-earned income, and that of their families, is also playing an increasingly large role in driving China’s economic development, while outpacing the consumption habits of their peers in the West.

“My fans think I am handsome and look like Japanese and Korean stars,” Huang said. “Young people my age are very concerned about their appearance. I and many of my fans are willing to spend 40% or more of our income on cosmetics, aesthetic medicine and clothing. And we also enjoy spending on whisky, vodka and blind boxes of art toys. We love watching TV series and videos of Chinese ‘ancientry’ style and ACGN. But we rarely talk about politics and the authorities, which are risky to discuss in public.”

Huang became a contracted live-streaming host for a leading video-streaming social platform in China in 2016 when the concept was still in its infancy.

Dressed in ancient clothing traditionally worn by China’s dominant Han ethnicity, Huang sings Chinese pop songs and chats with his fans. He needs to entice 240,000 people a month to watch at least a minute of his live stream so he can earn his base salary.
In addition to the monthly rewards he receives from fans, Huang’s monthly income ranges from 10,000 yuan (US$1,540) to 40,000 yuan.

“My plan is to attract more than 1 million fans on several Chinese live-streaming social media platforms,” he said, adding that he could earn more than 100,000 yuan (US$15,000) per month through advertising and promoting brands online.

Some demographics: the number of Chinese millennials (born between 1980-95) and those from Generation Z has reached 386 million, accounting for 27% of the population. Most do not have siblings, and their peers are more like competitors. Their affinity for the internet is much higher than that of their parents, making them eager for a sense of belonging.

According to China’s “Gen Z White Paper” by Kantar and Tencent, 46% of China’s Generation Z think the goal of consumption is to seek identity recognition, with social, personal style and immediate pleasure seen as their leading motivators. Some 42% of Chinese born in the 1960s are willing to socialize with acquaintances, according to the survey, but the figure is only around 33% among those born in the 2000s, as they take solace in consumption.

“I will spend all of my salary every month, 40% for rent and meals, and 60% for beauty, fitness, travel and clothing. Travel is a must every month,” said Monica Liu, 25, who has an annual income of 250,000 yuan (US$38,500) from her job working in sales for a medical device provider. “I think people around my age are still a generation pursuing designer luxury and will spend a lot of money on European and American brands.

“I come from a middle-class family from Shandong [in northeast China], I shop at Michael Kors and Coach. Friends and colleagues from wealthier families, they shop at Chanel or Gucci. But the younger ones, those born after 2000, may be different from us in spending habits.

“Now, many emerging cosmetics and fashion brands of clothing are domestic brands. For example, many teenagers now like Urban Revivo, which is a local brand in Guangzhou.”

Or take, Yu Mingqian, 21, who lives in Zhumadian, a small city in Henan province, and dreams of spending her money on the gym, travel and imported cosmetics with her friends. Yu borrowed 70,000 yuan from friends and family this year to set up a children’s painting studio, charging each student 3,000 yuan for a year’s course.

“I have already taken a fancy to a Coach bag,” she said. “If the investment goes well, I would like to buy Gucci shoes next year.”

A survey released by OC&C Strategy Consultants showed that of 15,500 young people born in 1998 or later in nine countries – China, the United States, Britain, France, Germany, Italy, Poland, Turkey and Brazil – China’s Generation Z saves less and spends a much higher proportion of their household income than in the Western world.

Expenditures among China’s Generation Z account for 15% of their household income, compared with 4% in France and Germany and 3% in the US and Britain, the survey said.

Although their average monthly disposable income is only around 3,500 yuan, China’s Generation Z spends a lot of their families’ money.

Meanwhile, compared with the generation born in the early stage of China’s reform and opening up, China’s youth have a stronger sense of identity with traditional culture and cultural nationalism, which has driven demand for domestic brands and products that incorporate Chinese traditional style and culture, a trend known as guochao that serves as an emotional outlet for self-expression.

The sales of hanfu, referring to traditional Chinese garments worn by the Han ethnic group before the Qing dynasty in the 1700s, increased from 190 million yuan (US$30 million) in 2015 to 4.52 billion (US$696 million) in 2019, with half bought by China’s Generation Z. The group is generally optimistic about China’s economic development and think property is the most reliable form of wealth in the country.

“I’ve been to several countries in Europe and America for business or leisure. I am optimistic about China’s economic development, especially the performance of China’s economy under the pandemic,” Liu added. “But on the other hand, the mortgage pressure in China’s first-tier cities is too huge. I feel that I will not be happy for a lifetime if I buy one [flat] in Shenzhen. Except for living expenses and mortgage, there is no balance for eating, drinking and playing.”

Of course, at some point the debt hangover will come and it will be horrific.

According to data from the People’s Bank of China at the end of June, the total amount of credit card bills overdue for more than six months had soared to 85.4 billion yuan (US$13 billion), more than 10 times that of 10 years ago. And around half of those who owe the debt were born in the 1990s.

“Many of my friends have several or even up to a dozen credit cards at the same time, and online loans are also very common too.” Yu said.

An HSBC survey in 2019 showed the debt-to-income ratio of China’s youth born in the 1990s had reached a staggering 1,850%.

Via SchiffGold.com,

China and India rank one-two in global gold consumption, and through the first quarter of 2021, gold demand charted an impressive rebound in both countries.

China’s year-on-year gold consumption surged 93.9% as first-quarter demand rebounded to pre-pandemic levels. Meanwhile, official Indian gold imports hit the highest level in a decade in March.

Demand for gold in both India and China took a hard hit due to COVID-19 and their governments’ response to the pandemic.

India

Gold demand in India has languished for the last couple of years. The pandemic crushed demand, particularly for gold jewelry, but record-high gold prices in rupee terms and government policy put a drag on the gold market even before COVID-19. There were signs of a turnaround late last year and it continued through the first two months of 2021.

Gold imports into India came in at 164 tons in March, according to the World Gold Council. This followed on the heels of 91 tons of gold imported in February. It was only the third time over the last 10-year period that official imports have exceeded 150 tons on a monthly basis.

According to the World Gold Council, “Robust retail demand – on the back of the lower gold price and wedding demand – along with re-stocking by jewelry manufacturers and retailers, are the factors responsible for driving official imports to such a high level.”

Retail demand for gold in India was robust in Q1, as evidenced by increasing premiums. With a significant pick-up in retail demand, the monthly average premium in March jumped to $4.20 per ounce compared to an average of $3.30 an ounce in February.

Gold also continued to flow into Indian-based ETFs in March. Total holdings for Indian gold-backed funds reached 31.8 tons by the end of March, a net inflow of 1.6 tons.

As we reported recently, policy shifts announced by the Indian government in its Union Budget earlier this year will likely have a positive impact on the country’s gold market. These include a reduction in the gold import duty, some regulatory changes, and income-boosting welfare schemes for rural Indians.

A further recovery in the Indian gold market would further boost global demand and would be supportive of gold prices.

China

China ranks as the world’s gold consumer, but imports plunged during the coronavirus pandemic as local demand for the yellow metal dried up. The Chinese economy rebounded during the second half of 2020, and demand for gold coins, bars and jewelry has recovered.

According to the China Gold Association, gold consumption in China came in at 288.2 tons in March. That compared with 148.63 tons a year ago.

“Recovery in macro economy and falling gold prices have also extended enthusiasm towards gold investment,” the China Gold Association said in a statement reported by Reuters, adding that demand for industrial used gold increased as well.

There is also a supply squeeze in China. Chinese gold production fell 9.92% year-on-year to 74.44 tons in Q1. According to the China Gold Association, two gold mine accidents led to shutdowns for safety inspections, driving the decline in gold output.

China recently gave the green light for the import of 150 tons of gold valued at around $8.5 billion at current prices. The report notes that China’s sudden appetite for gold could potentially “support global prices.” Reuters called the size of the expected Chinese gold imports a “dramatic return to the global bullion market.” In 2019, China imported about 75 tons of gold per month. Imports plunged in February 2020, falling to about 10 tons per month.

Tony Greer joins Ash Bennington to discuss the latest events in markets live at 4:15 PM ET. Greer will provide his updated outlook on commodities, interest rates, and more. Greer and Bennington will also be taking questions from the audience.

Americans continued to panic hoard guns for the 16th straight month in April, according to the FBI’s National Instant Criminal Background Check System’s (NICS) statistics report. The data provides insight into the trends behind Americans purchasing firearms.

The FBI’s NICS logged 3.514 million background checks in April 2021, which is more than any other April on record. Background checks have been elevated since the virus pandemic began and recently supercharged under an anti-gun Biden administration.

Visualizing the panic hoarding…

The Small Arms Analytics & Forecasting group (SAAF) told the Washington Examiner that gun sales topped 1.8 million for the month, another record for April. 

“The April 2021 number of just over 1.8 million firearms sold is large,” SAAF Chief Economist Jurgen Brauer said. “In fact, it is the largest April figure on record. While the year-over-year percentage increase of 2.1% is relatively modest, it nonetheless represents growth on top of last year’s COVID-19 panic-driven sales boom. Handgun sales declined in April 2021 relative to the same month last year, so that long-gun sales drove this April’s overall increase.”

Before Biden, Americans panic hoarded guns and ammo during the virus pandemic in spring 2020. Another round of buying kicked off during the summer riots across major metro areas—the surge in buying produced shortages of certain weapons, ammo, and other gun-related products. 

“Sales continue to be brisk, and we’re showing growth in the 25%-35% range compared to last year,” Justin Anderson, marketing director of Hyatt Guns of Charlotte, N.C., told the Examiner. “This is a more natural growth and isn’t strictly being driven by political or other outside forces.

“More than likely, many of the 8 million people that bought their first gun in the last year have caught the bug and are buying more guns and accessories,” Anderson added. “While ammo remains scarce, Remington’s ammunition plant is back online, and we think this will help to mitigate the unprecedented demand. We expect another busy summer, both online and in the store, and another record year.”

One of the reasons why the guns and ammo market is in a bull cycle this summer is politics. President Biden has requested lawmakers to pass an assault weapons ban, prohibit high-capacity magazines, eliminate “ghost guns,” and make background checks universal.

“I’m the only one ever to have passed an assault weapons ban. I’m the only one that ever got a 10-year ban on assault weapons and clips of more than ten bullets,” Biden recently said. “Immediately upon us becoming an office, having an attorney general, I asked him to put together the things I could do by executive order, including dealing with new guns that can be made, you can buy in pieces and put together, and other, and other initiatives.”

Background checks and the gun-buying trends suggests Americans are armed to the teeth – waiting for the country to sink deeper into a hellhole under the Biden administration. 

Authored by Caitlin Johnstone via Medium.com,

The emergence of the internet was met with hope and enthusiasm by people who understood that the plutocrat-controlled mainstream media were manipulating public opinion to manufacture consent for the status quo. The democratization of information-sharing was going to give rise to a public consciousness that is emancipated from the domination of plutocratic narrative control, thereby opening up the possibility of revolutionary change to our society’s corrupt systems.

But it never happened. Internet use has become commonplace around the world and humanity is able to network and share information like never before, yet we remain firmly under the thumb of the same power structures we’ve been ruled by for generations, both politically and psychologically. Even the dominant media institutions are somehow still the same.

So what went wrong? Nobody’s buying newspapers anymore, and the audiences for television and radio are dwindling. How is it possible that those same imperialist oligarchic institutions are still controlling the way most people think about their world?

The answer is algorithm manipulation.

Here’s @YouTube‘s CEO openly admitting to:

1) Ranking corporate news higher in YT’s algorithim
2)Suppressing independent news/politics channels
3)Suppressing people creating content “from their basement” (THE ORIGINAL PURPOSE of YT)

This is scandaloushttps://t.co/B8G2AYvBul

— Jordan (@JordanChariton) April 22, 2021

Last month a very informative interview saw the CEO of YouTube, which is owned by Google, candidly discussing the way the platform uses algorithms to elevate mainstream news outlets and suppress independent content.

At the World Economic Forum’s 2021 Global Technology Governance Summit, YouTube CEO Susan Wojcicki told Atlantic CEO Nicholas Thompson that while the platform still allows arts and entertainment videos an equal shot at going viral and getting lots of views and subscribers, on important areas like news media it artificially elevates “authoritative sources”.

“What we’ve done is really fine-tune our algorithms to be able to make sure that we are still giving the new creators the ability to be found when it comes to music or humor or something funny,” Wojcicki said.

“But when we’re dealing with sensitive areas, we really need to take a different approach.”

Wojcicki said in addition to banning content deemed harmful, YouTube has also created a category labeled “borderline content” which it algorithmically de-boosts so that it won’t show up as a recommended video to viewers who are interested in that topic:

“When we deal with information, we want to make sure that the sources that we’re recommending are authoritative news, medical science, et cetera. And we also have created a category of more borderline content where sometimes we’ll see people looking at content that’s lower quality and borderline. And so we want to be careful about not over-recommending that. So that’s a content that stays on the platform but is not something that we’re going to recommend. And so our algorithms have definitely evolved in terms of handling all these different content types.”

Progressive commentator Kyle Kulinski has a good video out reacting to Wojcicki’s comments, saying he believes his (entirely harmless) channel has been grouped in the “borderline” category because his views and new subscribers suddenly took a dramatic and inexplicable plunge. Kulinski reports that overnight he went from getting tens of thousands of new subscriptions per month to maybe a thousand.

“People went to YouTube to escape the mainstream nonsense that they see on cable news and on TV, and now YouTube just wants to become cable news and TV,” Kulinski says.

“People are coming here to escape that and you’re gonna force-feed them the stuff they’re escaping like CNN and MSNBC and Fox News.”

It is not terribly surprising to hear Susan Wojcicki admit to elevating the media of the oligarchic empire to the CEO of a neoconservative publication at the World Economic Forum. She comes from the same elite empire management background as all the empire managers who’ve been placed in charge of mainstream media outlets by their plutocratic owners, having gone to Harvard after being literally raised on the campus of Stanford University as a child. Her sister Anne is the founder of the genetic-testing company 23andMe and was married to Google co-founder Sergey Brin.

Google itself also uses algorithms to artificially boost empire media in its searches. In 2017 World Socialist Website (WSWS) began documenting the fact that it, along with other leftist and antiwar outlets, had suddenly experienced a dramatic drop in traffic from Google searches. In 2019 the Wall Street Journal confirmed WSWS claims, reporting that “Despite publicly denying doing so, Google keeps blacklists to remove certain sites or prevent others from surfacing in certain types of results.” In 2020 the CEO of Google’s parent company Alphabet admitted to censoring WSWS at a Senate hearing in response to one senator’s suggestion that Google only censors right wing content.

Google, for the record, has been financially intertwined with US intelligence agencies since its very inception when it received research grants from the CIA and NSA. It pours massive amounts of money into federal lobbying and DC think tanks, has a cozy relationship with the NSA, and has been a military-intelligence contractor from the beginning.

We should be extremely alarmed that the Atlantic Council—funded by NATO and the state department and Gulf monarchies and weapons companies—is telling Facebook who to delete https://t.co/7N6fDjDSHR pic.twitter.com/W2zLmx1MKI

— Rania Khalek (@RaniaKhalek) August 25, 2018

Then you’ve got Facebook, where a third of Americans regularly get their news. Facebook is a bit less evasive about its status quo-enforcing censorship practices, openly enlisting the government-and-plutocrat-funded imperialist narrative management firm The Atlantic Council to help it determine what content to censor and what to boost. Facebook has stated that if its “fact checkers” like The Atlantic Council deem a page or domain guilty of spreading false information, it will “dramatically reduce the distribution of all of their Page-level or domain-level content on Facebook.”

All the algorithm stacking by the dominant news distribution giants Google and Facebook also ensures that mainstream platforms and reporters will have far more followers than indie media on platforms like Twitter, since an article that has been artificially amplified will receive far more views and therefore far more clicks on their social media information. Mass media employees tend to clique up and amplify each other on Twitter, further exacerbating the divide. Meanwhile left and antiwar voices, including myself, have been complaining for years that Twitter artificially throttles their follower count.

If not for these deliberate acts of sabotage and manipulation by Silicon Valley megacorporations, the mainstream media which have deceived us into war after war and which manufacture consent for an oppressive status quo would have been replaced by independent media years ago. These tech giants are the life support system of corporate media propaganda.

*  *  *

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Earlier today we noted that the one thing every company was obsessing during their Q1 earnings call: inflation. As BofA equity strategist Savita Subramanian calculated, mentions of “inflation” quadrupled YoY, and after last week, mentions have exploded nearly 800% YoY. More striking was her observation that as “mentions skyrocket to near record highs from 2011” these point to at the very least, “transitory hyper-inflation ahead.” This is an official statement from a Big-4 bank, not some tinfoil conspiracy blog.

What is more concerning is that not only are companies talking about inflation, they are also responding to soaring input costs by hiking prices either in absolute terms or by stealth shrinkflation.

We presented an example of the latter over the weekend when we showed how Costco was masking nearly 15% inflation by selling a paper roll with 140 sheets for the same price it used to sell 160 sheets.

Of course, once companies realize they can get away with such shrinkflation – and they will because as a member of the Red Flag Deals message board pointed out…

I tried telling the clerk at Costco about this, and they said “who cares, it’s just 20 sheets.”

Will be the typical response.

… the obvious next step will be to no longer bother with such attempts at masking double digit inflation, and to hike prices outright until there is an actual decline in supply, or as TBT predicts, “this is the precursor to real inflation next.” And sure enough, names from consumer giants from Kimberly-Clark to Clorox, Procter & Gamble, as well as food makers such as Hormel, JM Smucker, General Mills, Skippy and Hershey are already doing just that.

But don’t worry, according to the Chairman, “it’s transitory.” Or maybe it won’t be, as increasingly more banks are starting to speculate.

One thing we do know: once companies hike prices, they almost never cut them again. In fact, most companies would rather file for bankruptcy rather than reverse their pricing strategy, especially since among the most striking outcomes of Q1 earnings season are record high profit margins. Well, guess what happens to those margins as input costs continue to soar – either they collapse (and turn negative), or companies hike prices. Guess which choice they will pick.

Finally, courtesy of BofA, here is a list of the companies that have complained in recent weeks about soaring prices most if not all of which have proceeded to pass on price increases to consumers… that would be you dear readers:

• FAST (Industrials): “we are experiencing significant material cost inflation, particularly for steel, fuel and transportation costs.”

• GIS (Staples): “Looking ahead, as we experienced higher inflationary environment, our first line of defense will continue to be our strong holistic margin management cost savings program. In addition, we are taking actions now and in the coming months […] to drive net price realization that will benefit our FY2022. “

• CAG (Staples): “we’re seeing input cost inflation accelerate in many of our categories and across the industry.”

• LW (Staples): “while the pandemic-related effects on our supply chain were the primary drivers of our cost increases, we also realized higher costs due to input cost inflation in the low single-digits. We expect that rate will begin to tick up in the coming quarters as edible oil and transportation costs continue to increase.”

• PPG (Materials): “we experienced a significant acceleration of raw material and logistics cost inflation during the quarter. Coming into the year, we were expecting an inflationary environment and had prioritized selling price increases across all of our businesses. This has helped us achieve solid price increases year-to-date. With a higher inflation backdrop, we have already secured further selling price increases and are in the process of executing additional ones during the second quarter. “

• DOV (Industrials): “What we are going to fight against between now and the end of the year […] is inflationary input costs between raw materials, labor, and price/cost […] the way it’s looking we may have to intervene on price again in certain of the businesses over the balance of the year.”

• TEL (Tech): “I would expect our margins to modestly improve as we work our way forward here into the third and fourth quarter based on some of the actions that are underway and our ability to combat some of the inflationary pressures out there. […] Certainly, we’re feeling the biggest inflation right now is on the freight side. The freight inflation has been significant. And as we battled through there and there’s a variety of reasons for that including higher air freight and so forth in terms of that. And that’s not unique to TE. Certainly, I think that’s been as well publicized across the overall supply chain. […] labor cost is not a major issue on the inflation side, but labor  availability in certain places that are still being more impacted by COVID continues to drive some inefficiencies.”

• CMG (Consumer Discretionary): “So, all of that is very, very manageable and we feel like if there is going to be significant increased inflation because of market-driven or because of federal minimum wage, we think everybody in the restaurant industry is going to have to pass those costs along to the customer.”

• ALLE (Industrials): “This guide incorporates pricing actions to offset direct material inflation, as well as reflecting our supply chain capability to mitigate industry challenges on supply and electronic component shortages. We anticipate that these challenges will persist for the balance of the year, and we will continue to monitor and adapt to changing market conditions.”

• WHR (Consumer Discretionary): “The global material cost inflation in particular in steel and resins will negatively impact our business by about $1 billion. We expect cost increases to peak in the third quarter.”

• PNR (Industrials): “All inflation remains high. We have instituted a number of selling price increases across the portfolio that we expect to help mitigate inflation in the second half of the year.”

• TSCO (Consumer Discretionary): “Compared to our initial outlook for the year, our forecast does reflect higher transportation costs and product inflation. We experienced increasing pressures from these factors during the first quarter and expect them to continue to be a headwind throughout 2021.”

• POOL (Consumer Discretionary): “We previously said that inflation would be in the 2% to 3% range but now believe it will be in the 4% to 5% with some products into double-digits. We don’t anticipate any of this getting hung up in the channel so that will provide a tailwind for the year. Considering that most of our – most of the cost of constructing a new pool or remodeling an existing pool is tied up in labor we don’t anticipate this inflation having a meaningful effect on demand as it relates to nondiscretionary products such as chemicals, inflation has simply passed through again with no real effects on demand.”

• LUV (Industrials): “Outside of salary, wages and benefits, the largest drivers of our sequential cost pressure are flight driven cost increases and landing fees, employee, customer and revenue related cost, and maintenance expense…”

• HON (Industrials): “Yeah, that’s definitely a watch out item for the year. And for us, inflation is taking hold. There’s no doubt about it. We knew it. We see it. It’s real. And if you don’t stay on top of it, the two areas where – and this is not a surprise – steel, semiconductors, copper, ethylene, those are the four elements that we saw substantial inflation in Q1. [..] I can tell you that we stood up a pricing team, which has been in place since the beginning of the year. We’re quickly taking actions and we are staying ahead of it. And we’re going to continue to monitor what happens and stay ahead of it. But it’s a watchout item. I don’t think things are going to abate. The short cycle is definitely hot. We all read the same articles around semiconductors and what’s going on there, and I think we’re going to have to just stay ahead of it. But we do expect an inflationary environment this year. And we’re going to stay ahead of it. That’s our commitment.”

• CE (Materials): “We’re certainly feeling the inflationary factor. I think, the good news is we anticipated this coming back in the fourth quarter of last year already and started moving prices […] So, although it is an inflationary pressure, we’ve been able to push that through in our pricing and basically maintain the same level of variable margin.”

• KMB (Staples): “The biggest reason being that our pricing actions and the benefits of that will be coming through the P&L in the second half. In terms of input cost inflation, that is ramping in the first quarter, and the second quarter. We expect that, it will peak and then moderate and, in some cases, come down a bit in the second half.”

• MDLZ (Staples): “In terms of inflation, there is more inflation coming. And so, profitability is great in Q1. We believe we are going to hit the numbers as we had originally in mind. But the higher inflation will require some additional pricing and some additional productivities to offset the impact, which I believe at this point is absolutely manageable given that all these positions are pretty much hedged for 2021.”

• SHW (Materials): “On the cost side of the equation we now expect raw material inflation for the year to be in the high-single-digit to low-double-digit range, a significant increase from the low- to mid-single-digit range we communicated in January. And let me just begin by reiterating a little bit what John and Al have been saying. This whole area of raw material inflation is a transitory issue for us. It’s not new for us. We’ve demonstrated an ability to manage through this many times in the past, and we’ll get through this as well.”

• WM (Industrials): “We do expect that inflation will kick up a little bit, and so we’ll get some help. And we’re typically a beneficiary of higher inflation.”

• PKG (Materials): “We also anticipate continued inflation with freight and logistics expenses as well as most of our operating and conversion costs. However, energy costs should improve as we move into seasonally milder weather.”

• MMM (Industrials): “We are also raising prices, but it’s going to take a little bit of time. The inflation has come in faster. So you’re going to see 75 to 125 basis points of headwind which is the net of price versus inflation and logistics.” “On supply chain disruption, there are two pieces. One is of course the inflation that we’ve told you about which will cost 75 to 125 basis points of headwind between price and inflation and the raw material and logistics costs as well as making sure that we have all the product availability that we have. So that’s the other, I would say, headwind to 1Q.”

• PHM (Consumer Discretionary): “We have updated our guide in terms of what the inflationary aspect of the sticks and bricks is. We have been at or near 5%, 6%. We’re now 6% to 8%. And depending what lumber does, that could move a little bit even higher than that.”

• F (Consumer Discretionary): “We’re definitely feeling the commodity headwind, as John said. And inflation, it feels like we’re seeing inflation in variety parts of our industry kind of in ways we haven’t seen for many years. On the other hand, it feels like it’s all due to a lot of one-timers as the economy comes out of lockdown. So I think it’s a bit too early to declare the run rate or where it’s going to be. It’s just too hard to tell from my standpoint.”

• AVY (Materials): “supply chains have remained tight and input costs have been increasing. As a result, raw material and freight inflation were above our initial expectations. And we have continued to see costs rise as we entered the second quarter We now expect mid to high single digit inflation for the year with variations by region and product category.”

• IDX (Health Care): “I would say on the inflationary front, it’s kind of spotty for us. I mean remember we’re a little further down the food chain. We don’t buy a lot of giant quantities of base material. We buy things that have been converted, so it does have a little bit of a lag for us. And so we see the same things others are seeing where we buy lots of metals. There’s some inflationary pressure; electronics, a few other places but we’re navigating around those on the freight side. That’s certainly a challenge both on the price, frankly more on the availability side. […] We’re no different than anybody else trying to find sea containers, trucking, trains, port facilities that have to unclog all of those things. Our model helps us. Our folks help us. I think as we go further out, the inflationary pressure, I actually think that’s going to ramp up a bit for everybody.”

• SWK (Industrials): “As many of you follow, steel and resin represent the two largest commodity exposures and they have been impacted by rapid spot market increases as the global supply chain response to the surge of demand and temporary supply gaps. This dynamic has occurred across many of our key commodities, components, finished goods that we purchase. We now expect inflation headwinds to approximate $235 million, which is up $160 million versus our previous outlook of $75 million.”

• MAS (Industrials): “We have seen significant inflation in raw materials, namely copper, zinc, and resin, used in both our paint and plumbing businesses as well as increases in freight costs. All in, we expect our raw material and freight costs to be up in the  mid single-digit range for the full year for both our Plumbing and Decorative segments, with inflation likely reaching high single-digit levels in both segments in the third and fourth quarters.”

We can’t wait for all the above companies to cut prices as soon as the “transitory” period is over.

Authored by Isabel van Brugen via The Epoch Times,

Two candidates opposed to teaching critical race theory (CRT) in public school classes have been elected to a Texas school board.

Nine months after Hannah Smith and Cameron “Cam” Bryan introduced a proposal to prevent teaching CRT in the Dallas-area Carroll Independent School District, the pair received nearly 70 percent of the vote in their respective races, winning two seats on the board.

The election came after a 2018 video surfaced showing two students shouting the N-word. The district in response proposed a “Cultural Competency Action Plan,” drawing backlash from parents and the two candidates, who vocally criticized CRT.

Some parents argued during school board meetings that the district’s proposal, which would require diversity and inclusion training, would create “diversity police” and discriminate against white children.

Smith and Bryan won Saturday’s election in landslide, taking two open school board spots.

“The voters have come together in record-breaking numbers to restore unity,” said Smith, a Southlake attorney and former clerk for Supreme Court Justice Samuel Alito.

“By a landslide vote, they don’t want racially divisive critical race theory taught to their children or forced on their teachers. Voters agreed with my positive vision of our community and its future.”

Smith’s opponent, Erik Hernandez, said after the vote that he was worried about how the result would impact students in the affluent school district.

“I don’t want to think about all these kids that shared their stories, their testimonies,” Hernandez said.

“I don’t want to think about that right now because it’s really, really hard for me. I feel really bad for all those kids, every single one of them that shared a story. I don’t have any words for them.”

The news comes as a growing number of Republican leaders nationwide have said they aim to ban the teaching of CRT in schools, workplaces, and government agencies.

President Joe Biden, in one of his first executive actions in the White House, rescinded his predecessor’s ban of CRT in federal workplaces. Former President Donald Trump’s September 2020 executive order declared that diversity and inclusion training for federal employees should not promote “un-American” and “divisive concepts.”

Biden instead issued an executive order stating that the federal government must pursue “a comprehensive approach to advancing equity for all.”

CRT has gradually proliferated in recent decades through academia, government structures, school systems, and the corporate world. It redefines human history as a struggle between the “oppressors” (white people) and the “oppressed” (everybody else), similarly to Marxism’s reduction of history to a struggle between the “bourgeois” and the “proletariat.” It labels institutions that emerged in majority-white societies as racist and “white supremacist.”

Like Marxism, it advocates for the destruction of institutions, such as the Western justice system, free-market economy, and orthodox religions, while demanding that they be replaced with institutions compliant with the CRT ideology.

In February, the Chinese American Citizens Alliance of Greater New York condemned CRT, describing it as an outgrowth of the European Marxist school of critical theory that interprets American social and political life through the lens of a power struggle between the race of the oppressor and that of the oppressed.

Proponents of CRT have argued that the theory is merely “demonstrating how pervasive systemic racism truly is.”

On Thursday, the Oklahoma House voted to ban public schools and universities from teaching CRT. The bill, HB1775, now heads to Gov. Kevin Stitt’s desk to be signed into law. He has received requests to veto the bill.

Days earlier, Idado Gov. Brad Little signed into law a bill, H 377 (pdf), that would prevent the teaching of CRT in the Gem State’s public schools and universities.

And last month, Florida Gov. Ron DeSantis denounced CRT as hateful.

“There’s no room in our classrooms for things like critical race theory,” he said, announcing that the state’s new civic curriculum will explicitly exclude critical race theory.

“Teaching kids to hate their country and to hate each other is not worth one red cent of taxpayer money.”

A stronger dollar and a hawkish Yellen were not enough to slow oil’s rebound as more US states eased lockdowns and the European Union sought to attract more travellers, which would help offset weakened fuel demand in India as COVID-19 cases soar.

“Gasoline inventories in the U.S. are well below where they were a year ago and we’ve taken out refinery capacity,” said Peter McNally, global head for industrials, materials and energy at Third Bridge.

“We’ve seen the impact on demand as more people get vaccinated, so we’re going to get that tailwind plus seasonality coming later this month.”

While OPEC kept its crude production steady in April, ahead of a planned output hike this month, all eyes will be on signs of demand picking up in US crude stocks.

API

• Crude -7.688mm

• Cushing +548k

• Gasoline -5.308mm

• Distillates -3.453mm

The last few weeks have seen very modest changes in crude stocks and analysts expected inventories to have fallen last week, and it did in a big way. Crude stocks fell 7.688mm barrels – the biggest weekly draw since January

Source: Bloomberg

Solid gains for WTI today left it hovering at the highs of the day around $65.75 ahead of the API print – its highest since mid-March – and extended gains above $66 after the data.

“The news from Europe on the outlook toward reopening is providing a good sense of optimism for global demand continuing to rise,” said Gary Cunningham, director at Stamford, Connecticut-based Tradition Energy.

With the world slowly emerging from the covid pandemic, ridesharing services are seeing an impressive return to normalcy as the just released results from Lyft showed.

After seeing its revenue crash as much as 61% in the first full post-covid quarter, moments ago Lyft reported that in Q1 2021, earnings were down 36% from a year ago (and up 7% from Q4), the smallest decline in a year, even if total revenues of $609MM (which beat exp of $557.3MM) were still some $350MM shy of the $955MM it made a year ago, thanks to 13.5 million active riders, above the estimated 12.7 million.

Some more Q1 earnings details:

• Adjusted net loss for Q1 2021 was $114.1 million versus an adjusted net loss of $97.4 million in the first quarter of 2020.
• Lyft reported Contribution for Q1 2021 of $337.3 million versus $547.4 million in the first quarter of 2020, down 38 percent year-over-year but up 7 percent from $316.0 million in Q4 2020. Contribution Margin for Q1 2021 was 55.4 percent, which was down by 1.9 percentage points year-over-year but down by just 10 basis points quarter-over-quarter. Contribution Margin for Q1 2021 exceeded the Company’s outlook of 51 to 51.5 percent1.
• Lyft reported $2.2 billion of unrestricted cash, cash equivalents and short-term investments at the end of the first quarter of 2021, roughly unchanged on the quarter.

But what was most impressive, was the remarkable improvement in EBITDA, which shrank to just a loss of $73MM, nearly half the expected loss of $143.5MM, and on pace to turn cash flow positive despite still generating well below pre-covid revenues.

The company’s revenue and EBITDA over time:

“The improvements we’ve made over the last year are paying off – we’ve built a much stronger business. As the recovery continues, we are confident that we will be able to deliver strong financial results” said Logan Green, co-founder and chief executive officer of Lyft.

“We had an exceptionally strong Q1 as more people started moving again. Our results meaningfully exceeded our outlook driven by elevated demand across our network,” said Brian Roberts, chief financial officer of Lyft.

“With the pending sale of our Level 5 self-driving division, Lyft is set up to win the transition to autonomous through our hybrid network of human drivers and AVs, advanced marketplace tech, and leading fleet management capabilities,” said John Zimmer, co-founder and president of Lyft.

Remarkably, unlike most of its covid vaccine beneficiary peers who have seen their stock tumble despite beating, LYFT shares jumped after hours, rising as high as $59 after closing at $56 in the regular session…

… although the company’s announcement that it plans to increase driver incentives in the coming months – i.e., hike net pay, could end up hitting the stock once the news is digested.