Category: zerohedge

Authored by Sven Henrich via NorthmanTrader.com,

So Powell finally used the F word: Froth. Being non specific though as one would expect and being super careful as to not overtly link monetary policies to the said froth we can note some faint sense of recognition on the side of central bankers that the liquidity avalanche they have unleashed has resulted in market distortions.

Most notable the Fed’s Kaplan who noted late last week:”We are now at a point where I’m observing excesses and imbalances in financial markets,” Kaplan told the Montgomery Area Chamber of Commerce in a virtual appearance in front of a live audience, pointing to “historically” elevated stock prices, tight credit spreads, and surging house prices.

He’s starting to sound like me. And like me he’s not a voting member on the FOMC board this year, hence he can afford to make derelict statement such as this:

“I do think, at the earliest opportunity, I think it would be appropriate for us to start talking about adjusting those purchases,” referring to the Fed’s $120 billion in monthly bond buys that, along with near-zero interest rates, are aimed at keeping financial conditions super-easy and bolstering the recovery.

Never mind that the earliest opportunity was during last week’s Fed meeting. But no, silence. Yet the Fed is finally admitting there’s some froth:

Not a moment too soon I guess. For froth is what the data is screaming from the rooftops:

Money market fund data shows everyone all in long stocks while valuations are the most extreme ever:

Sentiment as expressed by headlines:

Headlines you don’t see at bottoms pic.twitter.com/pu6DCBnTUM

— Sven Henrich (@NorthmanTrader) May 2, 2021

Backed up by actual data:

Never have investors been this long stocks. Never have they had so much of their financial wealth tied to the future performance of stocks.

And margin debt as an expression of leverage employed tells its own horror story:

The wealth gap keeps expanding as last year’s trend just got exacerbated this year:

The big keep getting bigger and as a result the concentration of the few controlling everything gets ever more narrow:

Add $TSLA to the mix and you’re north of 25% in just a few stocks again tying market fortunes to nothing breaking to the future success story of the very few.

I’ve been clear that from my perch the Fed is overdoing it and to keep printing in this environment is just policy recklessness:

There is too much liquidity in the system and it is being allocated in reckless ways, furthering the market distortions we are witnessing now. None of these growth figures we see now will be sustained and my worry is the Fed is really screwing this up, for if they lose control of inflation and/or we are ending up with a colossal crash all these happy days may make way for a structural depression. Is this beginning of the roaring 20’s as so many believe? Or are we already in the tail end of this gilded age as non stop money printing has been with us now for 12 years already? The distortions didn’t just begin in the past 12 months after all.

I don’t know who has a grasp on reality here. Maybe Kaplan who’s admitted to the distortions.

Maybe it’s Dudley, but he’s throwing out numbers that suggest an overt collapse of the debt construct to come:

Reminder: Markets completely fell apart when the 10 year hit 3.2% in 2018.
Since then the US will have added nearly $8 trillion in debt by the end of this year.
H/t. @pdacosta https://t.co/RSKKKBQgKy

— Sven Henrich (@NorthmanTrader) May 1, 2021

It certainly is not our ‘savior’ Powell who recklessly keeps pressing the print button. Powell who famously denied the Fed’s role in inequality all the while getting richer with is all long ETF portfolio while he drives by the homeless camp every day on his way to work & then virtue signals about it.

That’s the world we live in. And yes, it’s the biggest bubble we’ve ever seen:

Oh it doesn’t matter because of the global footprint of big tech?
Think again. Take out the biggest tech companies like they didn’t exist & you still end up with 173% market cap vs GDP still higher than during the tech bubble.

It’s a bubble.

— Sven Henrich (@NorthmanTrader) April 30, 2021

Which is what happens when asset classes of all sorts explode vertically month after month. See the examples of small caps and the latest hot hand in crypto land, $ETH:

Anyone having outlined the case for a correction so far, bulls and bears alike, have found themselves out bulled by a market that has defied historical correlations and measures of reason. That’s what bubbles do. You could’ve been totally correct calling the tech bubble in 2000 as unsustainable in the fall of 1999 only to look the fool for a few months, yet being correct all along. Momentum continues to run until it burns itself out and reality sinks in.

Remember:

Don’t confuse a bull market with brains. pic.twitter.com/nfcsBx78Sr

— Sven Henrich (@NorthmanTrader) May 3, 2021

And yet sell signals abound in context of a technical profile that continues to show risk higher until something breaks:

For reference that upper trend line in red sits around $SPX 4287 at the moment and that trend line is rising.

Yet one of those sell signals is subtle and technical and still very much unconfirmed, that of a weekly black reversal candle on $SPX last week:

So far this week $SPX has yet to make a new high, and perhaps this signal will invalidate itself as others have under the sheer force of the unrelenting liquidity and sentiment machine. We’ll know more by the end of this week.

For now be cognizant of the fact that this market is full of ever’s: The most disconnected disconnected from the economy ever, the most long positioned ever, the most margin debt levered ever. The most uncorrected ever. That’s a lot of ever’s that hardly can afford a misstep.

The Fed’s excuse for maintaining the largest QE continuing program in history increasingly looks to be politically motivated as opposed to economic. As the economy shows sign of inflation and overheating a nightmare scenario is building: Too much liquidity having caused an outright asset bubble and outright casino effect accompanied by record over-levering of extreme long stock allocations risking a market corrective process that could go a lot deeper than anyone can fathom right now as selling could beget selling and becomes systemic once the rug gets pulled (for whatever reason).

The Fed doesn’t want to be the trigger for that hence it’ll will cautiously virtue signal with the F word rather than risk being blamed for the fall out with the T word, that of tapering.

So the Fed is trapped, held hostage by its own narrative as Mohamed El-Erian points out. The problem of course being:

And once markets drop 10%-20% they can’t reduce liquidity.

If you can’t tighten during the best of times you can’t when things slow down.

The ECB has already played that script. https://t.co/W0k6Tu3aJS

— Sven Henrich (@NorthmanTrader) May 3, 2021

These markets have been on liquidity autopilot for many weeks. Don’t forget we’ve seen even this movie before, think 2018:

16 weeks of buying were taken out in less than 2 weeks. Stuff happens. So don’t be surprised if it does again. This party is wearing thin.

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It’s not just this website that has slammed Robinhood over the past 3 years for misrepresenting its business model which it has claimed is “to democratize finance for all,” and instead of catering to the gambling instincts of millennial and GenZ traders, while quietly selling their orderflow (a practice it was forced to disclose not too long ago) to the highest bidders such as billionaire Ken Griffin’s Citadel, who then trade ahead of this mountain of bulk trading data to virtually risk-free profits: over the weekend Warren Buffett also slammed the “free” brokerage, which nearly imploded during the February short squeeze mania, accusing the company of “taking advantage of the gambling instincts of society.”

Speaking at Berkshire’s virtual shareholder meeting on Saturday, Buffett said that Robinhood has become “a very significant part of the casino group that has joined into the stock market in the last year or year and a half.”

The billionaire continued, saying that “it creates its own reality for a while, and nobody tells you when the clock is going to strike 12 and it all turns to pumpkins and mice,” he said. He added there is “nothing illegal to it, there’s nothing immoral, but I don’t think you build a society around people doing it” and said he looks forward to reading the S-1 filing of Robinhood, which has filed confidentially for an initial public offering.

Buffett’s faithful 97-year-old sidekick Charlie Munger disagreed, and unloaded on Robinhood saying it is “deeply wrong” and “god awful that something like that brought investments from civilized men and decent citizens.”

But in a surprising twist, instead of taking the insults from the geriatric duo silently and stoically – as so many other corporations tend to do – on Monday morning Robinhood hit back against the billionaire duo, saying criticisms of the no-fee trading app by Warren Buffett and Charlie Munger were insults against younger investors, blasting the billionaires as out-of-touch elites who are “acting like they are the only oracles of investing.”

Robinhood, which has a habit of taking from the poor and giving to Ken Griffin (so he can buy yet another 9 digit mansion somewhere in the world) but which nobody seems to mind as long as everything keeps rising, issued a statement saying that “if the last year has taught us anything, it is that people are tired of the Warren Buffetts and Charlie Mungers of the world acting like they are the only oracles of investing.”

The litany of faux outrage continued :

“It is clear that the elites benefited from a stock market that kept many families sidelined from participating while they amassed huge wealth from decades of investing — driving a deep wedge between the haves and have-nots.”

“At Robinhood, people now don’t need thousands of dollars to begin investing. We pioneered commission-free trading, and fractional shares make it possible for people with less money to invest in a piece of a stock. Take Berkshire Hathaway Class A stock. One share trades for north of $400,000. But with Robinhood, fans of the company can invest what they can afford and don’t need to amass what is a prohibitive sum for most Americans. Plenty of Robinhood customers do just that by buying a fraction of Berkshire Hathaway stocks, as well as many other stocks that Messrs. Buffett and Munger have invested in. In fact, we see that a majority of Robinhood’s customers are buying and holding.”

“Retail investing in America is thriving today because everyday investors are seizing the opportunity to build their own nest egg. It may never be nearly as big as the billions upon billions that the elites in this country have amassed. But it sure is something to celebrate.”

While we applaud Robinhood’s Herculean effort at misdirection, the only thing the company is “celebrating” is that the SEC and DOJ still find selling client orders as a legal activity, when in reality it is merely profiting from enabling frontrunning. But because this activity (which Citadel’s former GC once railed against before Citadel realized it would make much more money from encouraging it) has become the cornerstone of modern equity markets, since everyone is literally doing it, there is no way it can be banned, at not until there is a major market crash.

And speaking of selling client orders, Robinhood picked the worst possible timing to publish its latest Rule 606 filing, which reveals just how much money it made from selling Millennials’ orderflow. The filing showed that when it comes to hypocrisy, and taking pennies from the poor to give to the rich, it truly has no equal because in the first quarter, Robinhood’s revenue from “payment for order flow” – a system where market makers like Citadel pay brokers like Robinhood for not only routing orders to them but giving them an exclusive look at total retail orderflow, hit a record $331 million in the first quarter, up more than 3x from $91 million a year ago.

As shown in the chart below, revenue from payments for order flow peaked in February at about $121 million, before dropping 20% to $96.7 million in March. Much of the decline was due to reduced trading of non-S&P 500 stocks and options, the filing shows. As a reminder, non-S&P stock and option trading remain the only somewhat valuable aspects of market dataflow currently, as traditional S&P500 stock trading has been commoditized to death by other brokers and exchanges.

In 2020, Robinhood made a total of $687 million from selling orderflow, primarily to Citadel; it has almost hit the halfway point just one quarter into 2021.

And speaking of Citadel, it is quite clear that Robinhood continues to effectively act a subsidiary of the world’s largest retail order exchange: in Q1, Citadel accounts for a whopping 43% of all Robinhood revenues.

Authored by Ivan Pentchoukov via The Epoch Times,

A California professor who confronted a student about his view that police officers are heroes has taken a leave of absence.

The adjunct professor was recorded arguing with Braden Ellis, a 19-year-old student, at Cypress College in California.

What is most striking about the video below is that the student seems more balanced and reasonable than the professor.

The recording and transcript of the Zoom class were first published by The Daily Wire.

“Cypress College takes great pride in fostering a learning environment for students where ideas and opinions are exchanged as a vital piece of the educational journey. Our community fully embraces this culture; students often defend one another’s rights to express themselves freely, even when opinions differ. Any efforts to suppress free and respectful expression on our campus will not be tolerated,” Marc Posner, the school’s director of communications, said in a statement.

“The adjunct professor will be taking a leave of absence for the duration of her assignment at Cypress College. This was her first course at Cypress and she had previously indicated her intention to not return in the fall,” Posner added.

“We are reviewing the full recording of the exchange between the adjunct professor and the student and will address it fully in the coming days.”

After Ellis gave a presentation on cancel culture to the class, the unidentified professor used the question and answer session to confront him about his views about police, alleging that the police departments in the United States stem “from people in the South wanting to capture runaway slaves.”

When another classmate interjected that police officers should not be heroes who appear in kids’ shows, Ellis said he disagreed.

“I think cops are heroes and they have to have a difficult job. But we have to…”

Ellis said before the professor interrupted, asking, “all of them?”

“I’d say a good majority of them. You have bad people in every business and every…”

Ellis responded, before the professor interrupted again.

“A lot of police officers have committed atrocious crimes and have gotten away with it and have never been convicted of any of it,” the professor said. “And I say [it] as a person that has family members who are police officers.”

One of the largest surveys on freedom of speech on college campuses released last year found that 60 percent of student “can recall at least one time during their college experience when they did not share their perspective for fear of how others would respond.”

A sizable minority, 42 percent, believe their college would not defend them in case of a controversy over a view they expressed.

India reported more than 300K new COVID-19 cases for a 12th straight day on Monday as the country’s tally of total cases climbed to 19.93M, just shy of the 20M mark, a level that only the US has surpassed. The latest daily tally was 368.15K, which is down from the peak of 400K+ cases reported on Friday.

Offering a glimpse of progress, the health ministry reported Monday that the number of new positive cases relative to the number of tests had fallen for the first time since at least April 15, a sign that the peak might finally have passed.

But deaths, meanwhile, climbed by more than 3,400, falling short of the record daily number reported over the weekend, while still pushing India’s death toll higher to 218.96K.

Experts have estimated that the total number of cases and deaths could be as much as 5x or even 10x the official number, which would put India’s tally of cases at just shy of 200M, roughly 1/7th of India’s population of 1.4 billion.

As the government struggles to boost oxygen supplies, Reuters reports that volunteer groups have stepped into the breach.

“No one should die because of a lack of oxygen. It’s a small thing otherwise, but nowadays, it is the one thing every one needs,” Gurpreet Singh Rummy, who runs the service, told Reuters. He called it an oxygen “langar”, the word used by Sikhs for a communal free kitchen.

At least 11 states and regions have ordered new restrictions on movement to try and curb infections, but Prime Minister Narendra Modi’s government is reluctant to announce a national lockdown, concerned about the economic impact (and political blowback). Modi ordered multiple lockdowns that kept the country under tight restrictions for more than a year. While those measures helped tamp down COVID-19 cases, they helped destroy the Indian economy while having a disproportionately negative impact on poor farmers and others.

One public-health expert quoted by Reuters claimed that only a new national lockdown could save India from this crisis.

“In my opinion, only a national stay at home order and declaring medical emergency will help to address the current healthcare needs,” Bhramar Mukherjee, an epidemiologist with the University of Michigan, said in a post on social media.

“The number of active cases is accumulating, not just the daily new cases. Even the reported numbers state there are around 3.5 million active cases.”

Despite being the world’s biggest producer of vaccines, India does not have enough for itself. Just 9% of a population of 1.35 billion has received a dose.

Following Sunday’s defeat of Modi’s Hindu Nationalist Bharatiya Janata Party in the state of West Bengal at the hands of a rival party, investors are bidding up Indian stocks and political commentators are cheering a sign of Modi’s weakening popularity in the face of the country’s devastating second wave, which some have blamed on Modi-approved political rallies (and Hindu holidays that saw millions gathering in the streets).

“What Bengal does today, India does tomorrow,” columnist Shobhaa De wrote in The Print, paraphrasing a quotation by 19th century liberal Gopal Krishna Gokhale.

Writing for the Strategic Culture Foundation, Jayati Ghosh blamed Modi and India’s government of “complacency, inaction and irresponsibility…even when it was eident for several months that a fresh wave of infections of new mutant variants threatened the population.”

The incomprehensible decision to allow a major Hindu religious festival — the Mahakumbh Mela, held every 12 years — to be brought forward by a full year, on the advice of some astrologers, brought millions from across India to one small area along the Ganges River and contributed to ‘super-spreading’ the disease.

The exponential explosion of Covid-19 cases — and it is likely much worse than officially reported, because of inadequate testing and undercounting of cases and deaths — has revealed not just official hubris and incompetence but lack of planning and major deficiencies in the public health system. The shortage of medical oxygen, for instance, has effectively become a proximate cause of death for many patients.

Modi has held an iron grip on Indian politics since sweeping to power in 2014 and winning a bigger victory in the 2019 national election on the back of a strong Hindu ideology. But shortages of everything from vaccines, to medication, to hospital beds, to – most critically – hospital oxygen have inspired a major public backlash.

International aid has poured in, with foreign governments – including the US and UK – and western corporations – including Amazon and Blackstone – sending ventilators, oxygen supplies and doses of remdesivir and other therapeutics approved to treat COVID-19.

India has struggled to increase capacity beyond 80M doses a month due to lack of raw materials and a fire at the Serum Institute, which makes the AstraZeneca vaccine. Pfizer is reportedly in talks with the Indian government for “expedited approval” of its vaccine, said Pfizer CEO Albert Bourla in a post on LinkedIn, where he also announced a donation of medicines worth more than $70 million. Last month, India said its drugs regulator would hand down a decision within three days on emergency-use applications for foreign vaccines, including that of Pfize

However, there’s also a fear that mutant strains detected in India are continuing to evolve, potentially posing a threat to individuals who have already been sickened, or vaccinated. Some worry that a “variant” first identified in India has now reached at least 17 countries including Britain, Iran and Switzerland. A growing number of states, including the US, are shuttering travel with India over concerns about the mutants. Nigeria became the latest state to ban travelers from India on Monday.

Finally, even as Modi has pushed back against calls for a new national lockdown, India’s economy is still suffering from the new outbreak. India’s unemployment rate rose to a four-month high of nearly 8% in April as 7M jobs were destroyed while cases surged and hospitals saw a flood of patients across the country.

Authored by Paul Joseph Watson via Summit News,

A CIA recruitment ad featuring a “cisgender woman of color” who rails against the “patriarchy” and announces she has been diagnosed with “generalized anxiety disorder” has been ridiculed for its woke pandering.

The promo went viral on Twitter, racking up almost a million views, prompting ‘The CIA’ to start trending.

In the video, a Hispanic woman regurgitates glib social justice mantras, explaining how she is a “daughter of immigrants” while bragging about being “perfectly made.”

“I am a cisgender millennial who has been diagnosed with generalized anxiety disorder,” she states.

Turns out the CIA was behind Woke all along. Seems kind of obvious in hindsight. pic.twitter.com/QQfnV1It0k

— Jack Posobiec (@JackPosobiec) May 3, 2021

“I am intersectional, but my existence is not a box checking exercise,” she adds, after having ticked a whole raft of ‘diversity’ boxes and showing off her ‘Donald R. Cryer award for diversity and inclusion.’

She then begins rambling on about not allowing her inflection to rise at the end of her sentences and having “earned her way in” (but not by checking diversity boxes, surely?).

“I used to struggle with imposter syndrome, but at 36, I refuse to internalize misguided patriarchal ideas of what a woman can or should be,” she states, once again definitely not trying to tick diversity boxes.

She then continues to stroke her own ego before declaring herself to be “a proud first generation Latina and officer of the CIA.”

Respondents to the clip expressed a mixture of disgust and bewilderment at the utter state of the CIA to be forced to resort to such pandering.

Henceforth all criticism of the CIA is white privilege. https://t.co/416Gv8rNcX

— Richard Seymour (@leninology) May 3, 2021

The really telling thing about this video os that it speaks to the CIA’s assessment of who would be interested in working for them. Clearly, they think they have appeal to woke millenials – and they’re probably right. https://t.co/1hGuVRuE7B

— Matt Taibbi (@mtaibbi) May 3, 2021

The CIA went from waterboarding terrorists to torturing Americans with shitty woke commercials.

— Rising serpent 🇺🇸 (@rising_serpent) May 3, 2021

I hope the CIA actually is hiring fail brain millennials with debilitating anxiety like in the ad. that would be hilarious. Sam Fisher getting captured and tortured because the analyst working on his mission is hyperventilating due to being quote tweeted

— Anor Londo gentrifier (@ByYourLogic) May 2, 2021

Our enemies are laughing their asses off watching this. While the CIA virtue signals about hiring an “intersectional, cisgender millennial with generalized anxiety disorder”, our enemies are plotting to take advantage at every turn.

THE STATE OF OUR UNION IS IN PERIL.

— Robby Starbuck (@robbystarbuck) May 3, 2021

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With eBay shares sinking on lackluster earnings guidance from the company’s latest quarterly report released last week, CEO Jamie Iannone decided to spice things up by revealing in the middle of an interview on CNBC that the auction giant was looking into enabling payment in cryptocurrency. He also revealed that eBay is “exploring opportunities” on how to enable selling of NFTs, which have revolutionized the sports memorabilia business.

According to media reports, eBay originally started considering accepting Bitcoin for payments back in 2013, and there have been rumors since, but eBay has been much slower to embrace crypto than its former subsidiary, PayPal, which enabled customers to hold and trade crypto last year.

In a sign that investors might finally be catching on to executives jawboning their shares with talk of crypto-payments, eBay shares are languishing near their lows of the session.

If eBay does follow through with its plans, it would mark the latest US company after former partner PayPal, Square and Tesla all embraced crypto payments, among other firms.

Still, Iannone’s abrupt announcement elicited praise from some investors on twitter.

. @eBay is now considering to start accepting #crypto payments and #NFT sales. We are early. The institutions are playing catch-up. #HODL

— Joselito 💳 Swipe (@JLSwipe) May 3, 2021

In its latest earnings report, eBay said Wednesday afternoon that it expects 91 cents to 96 cents in adjusted earnings per share and revenue of $2.98 billion to $3.03 billion during Q2, which was less than analysts polled by Refinitiv had expected. Wedbush analysts Ygal Arounian and Chad Larkin downgraded eBay on Thursday to neutral from outperform following the guidance, which overshadowed better-than-expected sales and profits, as homebound customers spent more time hunting for deals on the site.

With PayPal shares surging partly due to its embrace of crypto, and purveyors of NFTs (which already includes the NBA’s popular “Top Shot” series) reporting millions of dollars in sales, it’s clear eBay needs to make a convincing attempt to break into the NFT market, an area where it might find opportunity as investors seek to “maximize value” and more mainstream players are drawn by sheer curiosity, combined with FOMO, as ethereum trades at new all-time highs north of $3K a coin.

A couple of hours after Ianonne’s interview, the Block, a popular crypto news organization, reported that PayPal, which was once part of eBay, has held “exploratory talks” about launching its own stablecoin, and that the company has reportedly made the rounds with various stablecoin protocol developers.

By Joseph Carson, former chief economist of Alliance Bernstein

Federal Reserve Chairman Jerome Powell has played down the current runup in inflation, arguing it is associated with the reopening of the economy. And as the low inflation readings of one year ago drop out, the twelve-month calculation (i.e., the so-called base effect) of reported inflation is likely to move up in the coming months.

Yet, Mr. Powell’s “base effect” inflation argument is nonsense. For the “base effect” argument to be correct, the twelve-month reading of reported inflation should be markedly lower when the economy was closed than what occurred before the pandemic. But that’s not the case.

Last week, the Bureau of Economic Analysis reported that the twelve-month change ending in March 2021 in the core personal consumption index (the Fed’s preferred price index) was 1.83%. That compares to the 1.87% reading for the year ending in February 2020 and 1.7% for the year before that.

The 1.83% reading for twelve months ending March 2021 essentially matches the average inflation rate of the two prior years. And that 12 month period includes the three months (April to June) when the economy was closed, and GDP plunged a record 31% annualized. How could there be a “base effect” on reported inflation when the base year has the same inflation rate as it did before the pandemic?

Mr. Powell’s “base effect” inflation argument has not been questioned or challenged by analysts or reporters. Regardless of that, investors need to ignore the Fed’s rhetoric and treat upcoming price increases as “new” inflation.

As nonsensical as the explanation for the uptick in inflation, so too is the remedy. Demand has always been the primary force behind broad inflation cycles. Yet, Mr. Powell argues that product price inflation will ease once manufacturers increase output and eliminate “supply bottlenecks,” and home inflation will slow once builders build more homes.

It’s hard to see how more supply (or growth) will slow inflation anytime soon. Federal Home Loan Mortgage Company (Freddie Mac) estimates that the US needs almost 4 million new homes to meet demand. That could take two to three years. Also, it’s hard to see how increasing product output will solve the inflation problem. The supply-side argument solution; fight inflation with more demand and more commodity inflation.

The Fed’s mantra has always been “inflation is everywhere and always a monetary phenomenon.” But nowhere in Mr. Powell’s statements or comments do you find any monetary policy role for increased inflation or any responsibility for containment. Investors forewarned.

Fierce fighting between US-allied national Afghan forces and the Taliban broke out Saturday into Sunday, the day after the May 1st American pullout deadline set under the Trump administration. It included the Taliban immediately attacking a government base in southwestern Ghazni province. 

Afghanistan’s defense ministry counted over 100 Taliban insurgents killed over the prior 24 hours in a statement on Sunday, at a moment the US is said to have started the process of withdrawal. The statement counted a further 52 Taliban wounded. Separately an attack on the Ghazni military outpost left at least 17 national soldiers dead and some 25 captured, according to international reports.

And elsewhere in the country “Afghan officials Saturday raised the death toll to at least 30 from an overnight truck bombing in Pul-e-Alam, the capital of eastern Logar province,” VOA News reports. Over 100 more were injured, with all or most of the victims being civilians.

Amid the flare-up in fighting the US military said it launched a “precision strike” against Taliban positions in the restive insurgent hotbed of Kandahar. 

Meanwhile as expected the Taliban has now declared ‘open season’ on all remaining American troops following President Biden’s new Sept.11 full withdrawal deadline. Taliban spokesman Zabihullah Mujahid issued the following statement: “As withdrawal of foreign forces from Afghanistan by agreed upon May 1st deadline has passed, this violation in principle has opened the way for [Islamic Emirate of Afghanistan] Mujahidin to take every counteraction it deems appropriate against the occupying forces.”

“The Mujahidin of IEA will now await what decision the leadership of Islamic Emirate takes in light of the sovereignty, values and higher interests of the country, and will then take action accordingly, Allah willing.”

#Clarification
As withdrawal of foreign forces from #Afghanistan by agreed upon May 1st deadline has passed, this violation in principle has opened the way for IEA Mujahidin to take every counteraction it deems appropriate against the occupying forces.

— Zabihullah (..ذبـــــیح الله م ) (@Zabehulah_M33) May 1, 2021

But US troops do appear to be drawing down in earnest, while also beefing up security to protect withdrawing forces during the dismantling process. For example on Sunday US forces handed over a Helmand camp to national forces. Senior officers representing both sides attended a handover ceremony on Sunday morning at Camp Antonik as fighting raged elsewhere in the country. The base is home to Afghan Special Forces.

“The Afghan military will intensify anti-terrorism operations and will target strongholds of the terrorists in any area of the southwest of the country (from this base),” a statement said.

Likely this is only the beginning, as indicators suggest Monday…

Head of provincial council in Helmand warns that Lashkar Gah is under threat of collapse. In two days 18 outposts have fallen in neighboring Nawa district and around the Lash-Kandahar road, he said. From @Taimoornyt

— Thomas Gibbons-Neff (@Tmgneff) May 3, 2021

Via SchiffGold.com,

A lot of the economic data that came out last week looked pretty good. GDP growth came in big in the first quarter. Personal income rose by a record amount in March. The mainstream spun it all as positive, raving as if the economy is earning an ‘A.’

But in his podcast, Peter Schiff argues that the only reason the economy isn’t getting an F is because the Federal Reserve is cheating on the test.

Dallas Federal Reserve President Robert Kaplan made some comments Friday that were widely viewed as somewhat hawkish. He warned about “excess imbalances” in the financial markets and warned about “historically” elevated stock prices, tight credit spreads, and surging home prices. And he said it’s time for the Fed to at least start talking about tapering bond purchases.

This was the exact opposite of what Fed Chair Jerome Powell said in his press conference after last week’s FOMC meeting.

Peter said it is probably safe to pretty much ignore what Kaplan said. But on one thing, Peter said he agrees with Kaplan – there are imbalances in the markets and in the economy more broadly.

They’re much bigger than what he’s letting on. It’s not only appropriate to start talking about shrinking the balance sheet. They should already be shrinking it. In fact, it was inappropriate to blow it up to the size that it’s already at. And they shouldn’t start raising rates in 2022. They should be raising them now. In fact, they should never have cut them this low in the first place. What they should have done is irrelevant to what they are going to do. And it doesn’t really matter what they say. The markets still haven’t grasped the idea that the Fed is in a box. Sure, it can talk about the need to taper its asset purchases. It could talk about normalizing interest rates. But that’s all it could do. Talk is cheap. Actions are expensive and they can’t afford to pay the price.”

The economy certainly can’t afford to pay that price. The US government can’t afford to pay the price.

Even if higher interest rates are appropriate, and they are, they’re not going to happen because they’re not appropriate for maintaining the bubble economy. And the bubble economy is all we’ve got.”

Also on Friday, we got the personal income and spending numbers for March. Personal income increased by over $4 trillion, a record 21.1% increase. Consumer spending was up by 4.2%. The savings rate was also way up. The financial media broadly reported this as fantastic news signaling a booming economy. Peter said the problem is that this big increase in income isn’t associated with any real economic activity.

It’s not that American citizens were a lot more productive in March and their productivity resulted in enhanced incomes. That didn’t happen. Where did all this income come from that Americans received? They didn’t really earn it. They just received it. And they got it from the government.”

In fact, 34% of household income in America is coming from the government. The government doesn’t produce anything. It just transfers money from one group to another. And Peter said a lot of this money isn’t even being transferred. It’s just being printed out of thin air.

So, inflation is what is powering increased incomes. The Federal Reserve just creates money out of thin air and makes it available to the US government, which then writes a check and sends it to American households, and that is where the added income is coming from. So, this is totally artificial. We should not be celebrating this record surge in household income when the income was not earned.”

Peter said it’s like a parent bragging about her child getting an ‘A’ on the test when the kid cheated.

You’ve got to earn your ‘A’ honestly if you’re going to brag about it. The US is cheating right now. We’re like an athlete that’s all doped up on steroids, and we’re trying to claim we’re setting all these records. Yeah, because we’ve got the steroids, this artificial stimulant that is enhancing performance.”

Of course, steroids ultimately do long-term damage to the health of an athlete.

What the Fed is doing to goose the economy in the short run is going to have tremendous long-term damage.”

The US will not prosper due to this surge in personal income because it’s not real income. People are sitting at home producing nothing and spending government money on goods and services made in other countries.

All this means is that prices are going to go much higher as people try to spend the money they didn’t earn buying products that they didn’t help make.”

In this podcast, Peter also broke down some of the other economic data that came out last week.

A vessel off the coast of San Diego broke apart Sunday, killing four and injuring dozens. Authorities suspect the ship was involved in a human smuggling operation, according to NPR. 

“Twenty-nine people have reportedly been accounted for, consisting of twenty-four people alive, four people declared deceased by local emergency medical services personnel and one person who was last reported to be in critical condition,” according to the U.S. Coast Guard statement issued late Sunday night. 

The incident occurred around 1030 PST Sunday. Dozens of rescue crews responded to the 200 block of Catalina Boulevard, near the Cabrillo National Monument. When first responders arrived at the scene, the forty-foot cabin cruiser was broken apart from heavy seas. 

James Gartland, the lifeguard chief for San Diego, said the vessel hit a reef and broke apart. He said this is one of the worst tragedies he’s seen in his 26-year career. 

Gartland called it a “tragic event.” 

Photos taken at the scene of the boat incident today. 40’ cabin cruiser broke up along the rocks inside the surf line. The @SDLifeguards cliff rescue veh was used to extricate one patient up to street level. pic.twitter.com/lQ54UdBWBG

— SDFD (@SDFD) May 2, 2021

According to Rick Romero of the San Diego Lifeguard Services, dozens of people were “sucked in by currents as the boat split apart.” Weather conditions were not ideal, and there were seven-foot swells, low clouds, and rain. 

The incident comes as the Biden administration finally admitted a crisis on the southern U.S. border that began after the 2020 election. 

Now it appears smugglers are using vessels to haul in illegals. 

Jeff Stephenson, supervisory Border Patrol agent, said the “smuggling vessel” was “severely overcrowded.” He believes the person operating the vessel was part of a Mexican smuggling operation. 

Border Patrol has reported an jump in maritime apprehensions this year. Between October 2019 and September 2020, the number of those arrests soared by 92% — about 1,200 more than the previous fiscal year.

The Biden border crisis now extends from land to sea. Perhaps Biden shouldn’t have promised illegal migrants the world during the 2020 U.S. election. Virtue signaling has consequences.