Category: zerohedge

Naturally, a CNN camera crew was in tow for last week’s visit of Ukrainian President Volodymyr Zelensky to an area near Mariupol in Donetsk where he “walked the front line with the troops” amid renewed fighting with Russian-backed separatists in the eastern Donbass region.

Days later CNN’s homepage dramatically hyped the story with a recent headline of “Ukraine’s President runs for cover on front line against Russia” . The story kicks off with: “Ankle-deep in thick black sludge, Ukrainian President Volodymyr Zelensky moves stealthily with his troops in single file through the warren of trenches and tunnels that form the tense front lines in the east of his country.”

And the front line feature gets even more dramatic from there: “It feels more like the early 20th century than a modern conflict, with tired, nervous soldiers gripping their rifles around him as they reach open ground, scanning the area for movement across no-mans-land,” the CNN correspondent reports. “They know snipers, likely trained by Russians, say Ukrainian officials are looking for a chance to fire. More than 20 of their comrades have been gunned down already this year.”

But more important and hugely revealing in terms of what’s perhaps the real purpose of the CNN puff piece portraying Ukraine’s former comedian-turned-president (and now apparently an ‘action hero’ of sorts) is the following section…

On board the aging presidential chopper, which retains a degree of well-worn comfort, Zelensky shouts above the engine noise of how the US is a “good friend” of Ukraine, but that President Biden “must do more,” to deter Russia and help bring this conflict to an end.

More weapons, more money to fight, and, crucially, more support to join NATO, the Western military alliance where an attack on one member commits all to respond, he explained.

“If they [the US] see Ukraine in NATO, they have to say it directly, and do it. Not words,” Zelensky told CNN.

Curiously, the interview was published the same day that NATO’s Ukraine council announced its Tuesday meeting to consider the rise in tensions on the Ukraine-Russia border, coming after widespread accusations the Kremlin is mustering a nearly unprecedented number of troops there – numbers not seen since 2014, according to US officials. 

It also came as the Group of 7 foreign ministers issued a statement earlier this week condemning Russia’s “destablizing activities” in the region. 

The G-7 statement urged for Russia to “cease its provocations” on the Ukraine-Russia border and said they are:

“…deeply concerned by the large ongoing build-up of Russian military forces on Ukraine’s borders and in illegally-annexed Crimea.”

US Secretary of State Antony Blinken also spoke by phone with NATO Secretary-General Jens Stoltenberg on Monday, with the two also reviewing Russia’s “aggressive military buildup along Ukraine’s borders and in occupied Crimea,” according to a State Dept. statement. 

So by all appearances and with these latest appeals out of the West, things don’t look to de-escalate anytime soon – instead tensions remain on a knife’s edge. 

Summarizing the big bank data dump this morning, Bloomberg’s Jenny Surane writes that “as usual, you see a bit of push and pull between banks’ divisions that cater to Main Street and those that focus on Wall Street.”

And this quarter, she concludes “it seems as though Wall Street took the win. Again.”

• Goldman Sachs posted record profit, helped by a standout performance from its traders and dealmakers. The firm just a few months ago had expressed some real skepticism about the trend of blank-check firms going public. But that didn’t scare it away from the business, which helped boost equity underwriting revenue by more than 300%.

• JPMorgan’s traders also had a strong quarter, with revenue climbing a whopping 25% (analysts were expecting volume and revenue to moderate across the industry). But those results were overshadowed by weak loan demand. In a conference call, JPMorgan’s top executives warned that consumers who received the most recent stimulus checks are simply setting aside the funds for savings or paying down debts rather than going out and spending it. The firm also warned that expenses will be slightly higher this year than it previously thought.

• Wells Fargo doesn’t really have much of a Wall Street operation to lean on, so it’s got nowhere to hide from stubbornly low interest rates and tepid demand for loans. The firm’s net interest income dropped a whopping 22%, and CEO Charlie Scharf warned that low rates would continue to be a drag on earnings.

Source: Bloomberg

Israeli media is widely reporting that another Israel-owned commercial vessel has come under attack in regional waters – this time off the coast of the United Arab Emirates (UAE) in Gulf waters. 

“Israel’s top-rated Channel 12 quoted unnamed Israeli officials as blaming arch-foe Iran for the assault, which it described as a missile strike,” Reuters reports of the Tuesday incident. “There were no casualties and the ship continued on its course, the TV channel added.”

It was later identified as the Bahamas-flagged vehicle carrier Hyperion Ray which was en route to Fujairah port from Kuwait. The New York Times has in follow-up cited “a person familiar with the details of the ship’s voyage” who describes that the ship avoided the attack and was not hit, though details remain murky.

Just last week an Iranian ship called the Saviz was hit in a mysterious attack in the Red Sea. While Iran claimed it was a civilian commercial vessel, Israeli sources claim the Saviz was actually a spy ship.

Regardless that and this latest attack appear part of the growing tit-for-tat ‘tanker war’ between Israel and the Islamic Republic on the high seas as Tel Aviv continues to try to put pressure on all parties meeting in Vienna to abandon the 2015 nuclear deal (JCPOA).

More crucially, this fresh vessel attack incident comes just two days after the Natanz sabotage attack on Sunday. Iran has since formally blamed Israel for mounting a covert operation to bring the nuclear enrichment facility offline. Thus Tuesday’s Hyperion Ray attack looks to have been Iran’s immediate act of retaliation.

Israeli vessel #Hyperion Ray allegedly attacked by Iranian missiles/UAVS last position in the Gulf of #Oman pic.twitter.com/lO41ekeW5J

— Manu Gómez (@GDarkconrad) April 13, 2021

Israeli for its part appears to have conducted at least a dozen attacks on Iranian ships in the region since 2019, which was revealed in a bombshell Wall Street Journal report last month.

The series of covert sabotage attacks mostly targeted ships carrying Iranian oil bound for Syria. If there’s not any attempt at serious de-escalation fast, and Vienna talks continue to linger on with no significant breakthrough, we can expect these tanker attacks to continue, and to grow more brazen.

Just over 12 years after he was jailed for the largest ponzi scheme fraud ever, AP reports that Bernie Madoff has died in a federal prison, believed to be from natural causes.

Timeline: Key dates in the Bernard Madoff case

1980s

Bernard Madoff, a renowned Wall Street trader, initiates a scheme to defraud his investment clients. He eventually accepts billions of dollars from individual investors, charitable organisations, pension funds, hedge funds, and others. He claims that his sophisticated trading and hedging strategy will produce investment gains in all market conditions, though securities regulators later say he never traded any shares for client accounts.

May 2000

Massachusetts financial analyst Harry Markopolos tries to alert financial regulators to Madoff’s fraud, saying his alleged trading strategy could never yield such continuously positive returns. The US securities and exchange commission ignores his warning several more times over the next few years.

25 November 2008

Ruth Madoff withdraws $5.5m from a Madoff-linked brokerage firm. She withdraws another $10m on 10 December.

Early December 2008

Bernard Madoff tells a senior employee of his investment firm that clients had requested $7bn in redemptions, and he was having trouble coming up with the cash to fulfil the withdrawals.

Madoff tells his sons that the business was “all just one big lie” and “basically, a giant Ponzi scheme”. He estimates the fraud to be $50bn. Prosecutors later allege that the combined balance on client statements was approximately $64.8bn.

11 December 2008

Madoff surrenders to authorities, saying “there is no innocent explanation”. Madoff is freed on a $10m bond. Federal prosecutors eventually charge him with fraud, international money laundering, lying to federal securities regulators, and other counts.

12 December 2008

A federal judge freezes Madoff’s assets.

15 December 2008

A federal judge appoints a trustee to find funds to restore to Madoff’s victims, who number roughly 4,800 in the US and abroad.

17 December 2008

Madoff’s wife surrenders her passport. He is confined to his luxurious $7m Manhattan apartment and ordered to wear an electronic tag after failing to find anyone outside his family willing to guarantee his $10m bail.

23 December 2008

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French hedge fund manager Thierry de la Villehuchet is found dead in an apparent suicide. His company Access International Advisers lost as much as $1.4bn of its clients’ money in Madoff’s scam.

5 January 2009

Prosecutors reveal Madoff distributed $1m worth of jewelry and personal possessions to friends and relatives. Prosecutors say he violated an order freezing his assets.

8 January 2009

Prosecutors reveal Madoff had $173m in signed cheques in his desk when he was arrested, which they argue show he sought to keep assets from fleeced investors. Prosecutors ask Judge Ronald Ellis to send Madoff to jail; Ellis declines.

12 January 2009

Madoff avoids jail when judge rules he can stay in his $7m apartment but must submit to mail searches.

15 January 2009

Financial services regulators say no evidence exists that Madoff ever traded a single share on behalf of his investment clients, in more than 40 years of examining his books.

12 March 2009

Madoff jailed after pleading guilty to all 11 charges against him.

14 March 2009

Madoff appeals for bail and reveals his wife’s huge fortune.

16 March 2009

US authorities to seize $69m of assets held in Ruth Madoff’s name, including a Manhattan penthouse and $17m bank account

18 March 2009

Madoff accountant, David Friehling, charged with fraud as prosecutors claim he helped deceive investors by rubber-stamping accounts for 17 years.

11 June 2009

Madoff fraud victim, William Foxton, 65, killed himself amid claims he was unable to face the shame of losing his family savings through the Ponzi scheme.

16 June 2009

More than 100 former clients who lost money in Madoff’s Ponzi scheme outline the devastation wreaked on their lives in statements to the judge conducting the case.

29 June 2009

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Madoff sentenced to 150 years in prison. He said he has left “a legacy of shame”, while victims applaud the maximum sentence.

29 July 2009

Madoff tells a lawyer that he was “amazed that he got away with it” for so long and thought several times when meeting SEC officials that “they got me”.

2 April 2010

Actor John Malkovich seeks to recover $2.3m he lost in Madoff’s firm.

25 November 2010

A trustee for Madoff’s victims launches legal action against UBS for “enabling” the fraud. Goes on to sue JP Morgan and HSBC.

11 December 2010

Mark Madoff, Bernard’s son, is found dead in his apartment on the second anniversary of his father’s arrest.

16 February 2011

Madoff tells his biographer that banks knew he was committing fraud but chose not to do anything about it.

14 April 2021

Madoff dies.

Developing…

Authored by Bill Blain via MorningPorridge.com,

“Bond markets can bully anyone…”

Europe’s plans for a €1 trillion bond program will create a single US Treasury scale market, but who agreed to it? The big risks are the imperfect non-democracy’s funding program will magnify political volatility, while empowering bad political deals.

After I’d finally got the day together, what did catch my eye on Bloomberg is the EU’s plans to rival the US Treasury market through its long-term recovery plan for Europe. Over the next five years The European Commission intends to issue €1 trillion of European Union debt to finance Europe’s recovery from the pandemic. Naturally, most of that issuance will be made more palatable and attractive by calling the new EU financings “Green Bonds” – defined as green by a framework the EU itself is writing. Ahem…

Now some folk might be labouring under the impression the European Union is a customs union that got around to currency union and asking why it, and not the sovereign states of Europe themselves, are financing recovery? After all, there are no treaties to say Brussels is responsible for the financing of Europe, or that it should set fiscal plans and objectives.

Hah. You haven’t been paying attention then…..

Perhaps the Euro is “democratised finance”, (as a bogus “Crypto-barker” might call it), in that it’s a monetary union agreed by, and overseen by every member nation in the ECB. But Central Banks are not democracies – if every member nation got to determine policy, it would be chaos. Which is why the ECB is presided over by a former French politician, Christine Lagarde, to ensure stuff gets done, that stuff is the right stuff, and the membership falls into line. Being head of the ECB is not your typical central banker gig.

Meanwhile, the European Commission – another not-a-democracy – will allocate the recovery funds and is run by a former German Politician, Ursula von der Leyen, a lady who has been having such success with the European’s union vaccination programme. Do you discern a theme?

The key thing about the EU bond programme – which has been quietly taking shape for years – will be its eventual scale and its status as, effectively, the European Sovereign Debt market.

If you want bond exposure to Europe – what would you buy? Naturally the lowest risk is the incredibly tight and undersupplied Bund market for German debt? Or maybe the slightly more whoosh French OAT market? Or for a bit of a dare, Italy or France? These are all relatively small, insular markets, best used to play themes and hunches in terms of their relative spreads and, critically, how much more the ECB is prepared to spend in terms of QE buying them on the open market.

But, but and but again…. none of these European national bond markets are truly sovereign debt. All the member nations of the European Union’s Euro gave up their financial sovereignty when the joined the Euro. In effect the member states are merely sovereign credits – as they don’t hold the keys to the Euro printing presses, they rely on the whim of the ECB to allow them to borrow. The ECB does this by setting rules – which all the member states struggle with – which constrain them from printing money to reflate their own economies. Such constrain breeds political unrest as we saw in Greece and Italy, and now elsewhere.

Its size makes the new EC programme look very attractive as it lays out its alternative recovery programme and financing plans for both “Green” and “Social” bond flavours. As it effectively controls the ECB, it has monetary sovereignty. The EU has now clearly signposted its objective – to replace all the national bond markets, and compete in scale terms with the US Treasury bond market (the most liquid and largest market). The EU is demonstrating it bonds are therefore a much better bet than Bunds, Oats, BTPs or Bonos issued by member nations.

Except… there is no such thing as a riskless or free lunch.

The big, the massive risk, to EC bonds is politics. The Euro only exists on the willingness of the member states to stick with it, just as its theoretically possible – although in practice very difficult – to exit the EC. By combining all the national markets of Europe, it would become even less likely. The mutualisation of Europe’s debt is therefore a political objective for the Eurocrats in Bruxelles. But mutualisation and Brussels control will raise the level of dissent… it’s a difficult square to circle.

The big risk buying EC debt is a rupture in the political process – nations pushing back politically over the mutualisation of their debt. We know that is a massive concern for the German constitutional courts, which have pointed out the lack of any treaty signed by Germany to agree to such a burden on the German tax-payer. It’s also a cornerstone for pushback from the far-right across France and Northern Europe.

Even worse would be European nations gaming the EC debt programmes – refusing to sign or agree on vital European matters unless they were guaranteed specific pork-barrel funding programme finance from Brussels, which might just end up in shady places. Heaven forbid anything Europe finances ends up in less than salubrious places….

At this point it might be interesting to look at an example of what happens when politics impacts markets. I thought about the unpleasantness in the Americas between the Union and Confederacy in the 186os. Surprisingly even the domestic yield on Confederate bonds remained relatively low until the end – driven by patriotic buying. What is fascinating is that US (Union) government debt rose from $77mm when Lincoln took office in 1861 to over $3.4 bln in 1865 – largely financed by government bond sales pushed to investors on the basis it was the patriotic thing to do to preserve the Union.

Somehow, I don’t see much appetite across Europe for saving Brussels on the same patriotic basis? I would be very interested in reader views, especially from Europe, on the new European bond market. Please post them on the Website.

(Also worth noting – The EU will be launching its new bonds at an interesting moment with a long-term bear bond market on the horizon. With y’day’s US consumer price inflation at 2.6%, it’s a clear sign of a developing inflationary bias. That’s hardly a surprise as the global economy prepares for the pandemic reopening, global supply chains remain taught, and fiscal stimulus plans abound.)

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After the stellar results from both JPM and Goldman, we got the now traditional disappointment from Wells Fargo which reported Q1 earnings that were mixed at best.

The bank reported Q1 total revenue of $18.063BN, beating estimates of $17.5BN, with EPS of $1.05 also stronger than the 0.70 expected, and while CEO Charlie Scharf said that “Charge-offs are at historic lows and we are making changes to improve our operations and efficiency” he cautioned that “low interest rates and tepid loan demand continued to be a headwind.”

The good news: at least Wells revenues beat expectations, not something it can say for its previous quarters:

Sure enough, as with JPM, there were a number of asterisks here: the bank’s net income of $4.74 billion was boosted by a larger-than-expected release of loan-loss reserves. To wit, the $1.6 billion reduction in the allowance for loan losses “reflected an improving U.S. economy,” and “due to continued improvements in the economic environment and lower net charge-offs” the bank said.

Also of note, net of $523MM in charge offs (a 0.24% charge off ratio), Wells loan loss provision declined by $1.048BN, a huge boost compared to the $121MM estimate.

Additionally, the bank’s effective income tax rate was just 6.4%, which “included net discrete income tax benefits related to closing out prior years’ tax matters.”

Things were especially ugly in net interest income, which fell 22% to $8.8BN from $11.3BN as “interest rates were a drag” and the impact was felt across the company’s businesses: consumer, commercial and corporate and investment banking.

Commenting on this ongoing decline in Net Interest Income, the bank blamed it on lower rates even though rates actually jumped substantially in Q1.

• Net interest income decreased $2.5 billion, or 22%, YoY reflecting the impact of lower interest rates, which drove a repricing of the balance sheet, lower loan balances due to soft demand and elevated prepayments, as well as unfavorable hedge ineffectiveness accounting results, and higher mortgage-backed securities (MBS) premium amortization; 1Q21 MBS premium amortization was $616 million vs. $361 million in 1Q20 and $646 million in 4Q20
• Net interest income decreased $477 million, or 5%, from 4Q20 reflecting 2 fewer days in the quarter, unfavorable hedge ineffectiveness accounting results, continued repricing of the balance sheet, and lower loan balances

And while consumer-bank earnings dropped 6% because of lower interest rates, home lending was a bright spot, with earnings rising 19% on higher retail mortgage originations and a higher gain on sale margin. Wells Fargo is the biggest mortgage lender in the U.S.

Like JPM, Wells reported a decline in loans while deposits increased thanks to the ongoing QE.

Some more details, first on loans:

• Average loans down $91.6 billion, or 9%, year-over-year (YoY), and down $26.3 billion, or 3%, from 4Q20 on lower consumer loans predominantly driven by a $23.0 billion decline in consumer real estate loans
• Total average loan yield of 3.33%, down 6 bps from 4Q20 and down 87 bps YoY reflecting the repricing impacts of lower interest rates, as well as lower consumer real estate loans

… and deposits:

• Average deposits up $55.5 billion, or 4%, YoY, and up $13.4 billion, or 1%, from 4Q20 as growth in Consumer Banking and Lending, Wealth and Investment Management, and Commercial Banking deposits was partially offset by targeted actions to manage to the asset cap, primarily in Corporate and Investment Banking, and Corporate Treasury
• Average deposit cost of 3 bps, down 2 bps from 4Q20 and 49 bps YoY reflecting the lower interest rate environment

While interest income missed expectations, expenses jumped $1BN Y/Y and at $14 billion, were a touch higher than analysts forecast, showing the company still has a long road ahead to rein in costs, and primarily the impact of a lower deferred compensation plan expense.

This is what Wells said:

• Noninterest expense up 7% from 1Q20
  • Personnel expense up 15%
    • Higher incentives and revenue-related compensation, including the impact of higher market valuations on stock-based compensation
    • 1Q21 deferred compensation expense was $5 million vs. $(598) million in 1Q20
    • Partially offset by a decline in salaries expense on lower headcount
  • 1Q21 included a $104 million goodwill write-down related to the sale of student loans
  • All other expense down 4% on lower professional services expense largely driven by efficiency initiatives, as well as lower advertising and promotion expense

Moving on to Wells Fargo’s corporate and investment bank, which was also a mixed picture:

• Markets earnings jumped 19% on increased client demand for asset-backed finance products, other credit products and municipal bonds.
• Banking results fell 6% because of lower interest rates (again) and lower deposit balances.
• Commercial real estate gained 5%, driven by higher sale margins and better results in the low income housing business.

Commenting on the results,Wells Fargo CEO Charlie Scharf’s said “our results for the quarter, which included a $1.6 billion pre-tax reduction in the allowance for credit losses, reflected an improving U.S. economy, continued focus on our strategic priorities, and ongoing support for our customers and our communities. Charge-offs are at historic lows and we are making changes to improve our operations and efficiency, but low interest rates and tepid loan demand continued to be a headwind.”

Scharf also said the bank was working to “build the appropriate risk and control environment remains our top priority. This is a multiyear effort and there is still much to do, but I am confident we are making progress.”

In response to the earnings, Wells Fargo initially fell more than 1% but then swung to a gain of about 0.4% as investors assessed first-quarter results that included a revenue beat, a miss in net interest income, and CEO Charlie Scharf calling low interest rates and loan demand headwinds.

Finally, here is the company’s Q1 presentation (pdf link)

China is holding provocative new military exercises just off Taiwan on Wednesday which it described as “combat drills”. The drills are considered to be sending an especially ‘threatening’ message as they come a mere hours ahead of the arrival of a US delegation in Taipei headed by senior former US officials.

The drills appear to be Beijing’s ‘counter signal’ to Joe Biden’s “personal signal” of support to the democratic island, also a mere days after the White House published new guidelines which greatly loosen prior long-standing restrictions on American officials’ ability to meet with their Taiwan counterparts. 

“United States President Joe Biden sent an unofficial delegation of former high-level officials to Taiwan on Wednesday in a signal of support for the democratic island, which China claims as its own,” Al Jazeera reports. 

It’s being called Biden’s “unofficial delegation” to Taiwan, and is led by the following Americans:

• former Senator Chris Dodd
• former Deputy Secretary of State Richard Armitage and
• former US Deputy Secretary of State James Steinberg 

“The selection of these three individuals – senior statesmen who are longtime friends of Taiwan and personally close with President Biden – sends an important signal about the US commitment to Taiwan and its democracy,” a US statement said.

The PLA combat exercises come a day after China’s air force sent a whopping 25 military aircraft to breach Taiwan’s airspace in the ‘largest ever’ such breach. 

Senior U.S. officials arrived in Taiwan as China steps up what it calls ‘combat drills’ around the island https://t.co/D3pOlhsSpt pic.twitter.com/bpHMydTnpk

— Reuters (@Reuters) April 14, 2021

And here’s how Beijing described the rationale for its new combat drills in the area on Wednesday:

Beijing’s Taiwan Affairs Office claimed Taiwan’s government and alleged “separatists” were “colluding with external forces” and trying to undermine peace and stability.

“The People’s Liberation Army’s organizing of actual combat exercises in the Taiwan Strait is necessary action to address the security situation in the Taiwan Strait and to safeguard national sovereignty,” spokesman Ma Xiaoguang said.

Given that China just appears to have greatly ramped up its threat level around the island, now would likely be a less than ideal time for the US navy to do one of its warship “freedom of navigation” sail-throughs of the Taiwan Strait, however, something like this will probably happen in the coming weeks as Washington will feel the need to “answer” Beijing’s growing and tightening presence. 

Authored by Tom Ozimek via the Epoch Times

California’s Orange County plans to launch a pilot program for digital CCP virus vaccine and testing passports, according to health officials.

The vaccine and testing credentialing arrangement will be rolled out sometime in April, Orange County Health Care Agency officials said on Twitter.

“The Digital Passport enables individuals to participate safely and with peace of mind in activities that involve interactions with other people, including travel, attractions, conferences/meetings, concerts, sports, school and more,” officials added.

While details are scant about how the digital vaccine passport would work, the Orange County health agency’s director and health officer, Dr. Clayton Chau, told the O.C. Register that the county’s existing Othena vaccine scheduling app could be modified to include a credentialing feature.

The Othena app is being used to schedule vaccine appointments at the county’s mass inoculation sites, including at Disneyland.

Chau also told the outlet that printed cards could be issued for use by people who don’t use smartphones.

California Public Health Officer Dr. Tomás Aragón said last week that there are currently no plans to create a state-level vaccination passport system, although health officials are looking into formulating standards and guidelines around the use of such credentials, KTLA reported.

Aragón said that if federal authorities “don’t move fast enough” with developing such guidelines, “we will come up with technical standards that will be expected—really focusing on making sure that privacy is protected and that equity is protected.”

It comes amid controversy over vaccine passport-style systems, which have been proposed in some countries, and as some U.S. states and regions have either considered their adoption or moved forward with their deployment.

Hawaii Gov. David Ige’s latest emergency proclamation includes a plan for vaccine passports that would allow travelers to avoid quarantine and COVID-19 testing. While there is no timeline for its adoption and it still needs approval by the director of the Hawaii Emergency Management Agency, Lt. Gov. Josh Green told Hawaii News Now that the plan is to launch a pilot for inter-island travel by May 1.

New York state has also rolled out its “Excelsior Pass” system that would require people to show that they have been vaccinated when trying to enter certain events and locations.

Vaccine passports have been criticized by civil liberties groups, who say they would potentially violate Americans’ privacy rights while denying key services to people who are not vaccinated.

The Biden administration has said that it would not develop a federal vaccine passport system, but that it would come up with guidelines around their use and leave development to the private sector and local authorities.

“The government is not now, nor will we be supporting a system that requires Americans to carry a credential. There will be no federal vaccinations database and no federal mandate requiring everyone to obtain a single vaccination credential,” White House press secretary Jen Psaki told reporters at the White House last week.

Psaki last month responded to reports that the administration was working with private firms to create a passport system, saying the administration would only provide guidance.

“Our interest is very simple from the federal government, which is Americans’ privacy and rights should be protected so that these systems are not used against people unfairly,” Psaki clarified Tuesday. She again said the government would provide guidance on privacy concerns related to vaccines.

Several governors, including Texas Gov. Greg Abbott and Florida Gov. Ron DeSantis, both Republicans, have issued executive orders barring the use of vaccine passports.

Rep. Andy Biggs (R-Ariz.) has also introduced legislation that would ban federal agencies from future issuance of any standardized documentation that could be used to certify COVID-19 vaccination status to third parties, like airlines or restaurants.

Biggs’s proposed bill, called the No Vaccine Passports Act (pdf), would also prohibit proof of COVID-19 vaccination from being a requirement to access federal or congressional property and services, Biggs’s office said in a statement.

“My private health care decisions—and yours—are nobody else’s business,” Biggs said. “Vaccine passports will not help our nation recover from COVID-19, instead, they will simply impose more Big Brother surveillance on our society.”

Amid global supply chain disruptions and trillions in liquidity to support consumption, it is perhaps unsurprising that import and export price inflation is soaring.

However, the scale of the moves is notable with import prices rising 1.2% MoM (+0.9% exp) and export prices rising 2.1% MoM (+1.0% exp).

Sparking the hottest inflationary prints in a decade (import prices +6.9% YoY, export prices +9.1% YoY) …

Source: Bloomberg

Perhaps more worrisome is that if historical relationships between China’s Credit Impulse and trade inflation are anything to go by, import and export prices are set to soar even further

Source: Bloomberg

Still, nothing to worry about – Mr.Powell has ‘tools’.

A Texas nonprofit landed a federal contract worth up to $530 million to manage the influx of migrant children at the southern border – after recently hiring a Biden transition official.

The organization, Family Endeavors, won the no-bid contract just months after hiring Biden transition official, Andrew Lorenzen-Strait, as its senior director for migrant services and federal affairs, according to Axios, which notes that the deal is the second largest ever awarded by the agency overseeing the migrant child program. It’s worth more than 12 times the group’s most recently reported annual budget.

The news comes as the Biden administration scrambles to handle over 21,000 unaccompanied minors currently in government custody.

More via Axios:

• Lorenzen-Strait, a former official at U.S. Immigration and Customs Enforcement, previously advised the Biden-Harris transition team on Department of Homeland Security policy and staffing matters.
• He also ran a consulting firm advising companies on federal procurement practices, according to his LinkedIn page, with specific expertise on agencies that include the Administration for Children and Families — the division of the Department of Health and Human Services tasked with detaining and processing child migrants.
• The Washington Examiner first reported on Lorenzen-Strait’s role at Family Endeavors, in the context of an $87 million DHS contract awarded to the group last month.
• ACF officials did not respond to a request for comment from Axios. Family Endeavors said its contracting work on the border is “a continuation of services we have delivered to the migrant population since 2012.”

What’s new: ACF contracted Family Endeavors last month to provide “emergency intake” and “wrap-around care” services at a temporary facility in Pecos, Texas.

• According to federal procurement records, ACF has disbursed $255 million to the nonprofit under the new contract, which has a maximum potential value of $530 million.
• Family Endeavors’ most recent publicly available annual tax filing, covering calendar year 2018, showed its annual budget for the year was just $43 million.
• Before last month, it had never received a prime contract award from HHS, though, according to a source familiar with Family Endeavors’ operations, it did provide staffing services at migrant intake shelters run by another HHS vendor, BCFS, in 2012, 2014, 2016 and 2019.

*  *  *

The only contract larger than Family Endeavors’ was a March award of $719 million to Deployed Resources – which does extensive work for the Defense Department and DHS.

Now let’s watch the media’s reaction to this, vs. the manufactured lie that Florida Governor Ron DeSantis awarded a vaccine distribution contract to a campaign donor.