Hurricane Forecasters Expect Two Storms To Form In Atlantic Basin This Week

Hurricane Forecasters Expect Two Storms To Form In Atlantic Basin This Week

As major Hurricane Sam continues to swirl in the Atlantic and possibly take a northern track that entirely misses the US East Coast, there are two other trouble spots that National Hurricane Center (NHC) forecasters are monitoring for tropical development. 

Two tropical waves have emerged off the coast of Africa and are in an environment that favors rapid intensification in the next several days. Water in the Atlantic Basin is 78F, and wind shear is low, a perfect recipe for tropical development. 

NHC wrote on Tuesday morning that Disturbance 1 has a 70% chance of tropical formation in the next 48 hours and an 80% chance over the next five days. Disturbance 2, right behind the first tropical wave, has an 80% chance of formation in the next 48 hours and 90% over the next five days. 

Both systems are likely to move across the Atlantic later this week and become more organized. Disturbance 1 is most likely to move west and may reach the Leeward Islands, where the northeastern Caribbean Sea meets the western Atlantic Ocean, by the weekend or early next week. Disturbance 2 has a chance of shifting northwestward and northward over the central Atlantic, where it would be an insignificant concern for any landmasses.

So far, the 2021 hurricane season has produced 19 named storms and could be on track to surpass the record-setting 2020 Atlantic hurricane season, which made 30 named storms. 

 

Tyler Durden
Tue, 09/28/2021 – 17:45

via ZeroHedge News https://ift.tt/3m7n3Jh Tyler Durden

Will Biden’s Border Crisis Cost Democrats Texas Seats?

Will Biden’s Border Crisis Cost Democrats Texas Seats?

Authored by Susan Crabtree via RealClearPolitics.com,

As the immigration crisis worsens in South Texas, President Biden’s inconsistent border policies and messaging are not only damaging his approval ratings nationwide, but they could also cost the Democratic Party once-safe seats in Congress.

The Rio Grande Valley is the epicenter of the crisis, and its residents feel the impact of the surge in border crossings every day. Illegal crossings reached a 21-year high in July with 212,672 encounters reported by the U.S. Border Patrol that month alone. Across southern Texas, car chases have spiked this year, nearly nine-fold in some areas. Ranchers struggle to balance compassion for exhausted immigrants crossing through their property with concerns over personal safety, as well as costs to repair broken fences, trashed land, and stolen equipment. Federal agents also have reported a staggering increase of 4,000 in fentanyl seizures this year in Texas as smugglers exploit stretched border-patrol resources.

Although Democrats now control a trio of House seats representing Texas’ southern-most border with Mexico, voting patterns are making the districts more competitive.

Republicans are heavily targeting all three seats after the 2020 election showed a surprising swing in the GOP’s favor along the Texas-Mexico border. Once deep-blue, the three districts voted for Biden by just two to four percentage points, down from the 17-to-22-point margin Hillary Clinton racked up in 2016. Republicans also have redistricting on their side this year with the GOP-controlled Texas legislature poised to redraw several congressional districts in their favor.

Recent polling from the Dallas Morning News and the University of Texas signaled another reason for Democratic angst: Biden’s approval rating is underwater among Latino voters in the Lone Star State. More than 54% of the state’s registered Latino voters said they disapprove of the job Biden is doing overall, while only 35% said they approve.

When it comes to the president’s handling of the immigration crisis at the border, only 29% of the state’s Latino voters indicated their support while 52% said they disapprove (with the rest undecided). The survey was conducted Sept. 7-14, before more than 12,000 Haitian immigrants amassed under the Del Rio International Bridge, creating a new humanitarian crisis with immigration facilities already stretched beyond capacity.

The shift in voting patterns is already having an impact.

Earlier this year, Rep. Filemon Vela, who represents Texas’ 34th Congressional District, which includes the city of Brownsville, abruptly announced his retirement.

In 2020, he won reelection by nearly 14 percentage points in a seat generally considered safe for Democrats. But national Republicans identified Vela as a target after Biden won the district by just four points, down from the 21.5-point Clinton margin. Five Republicans and four Democrats are now running to replace Vela in what promises to be a sharply contested campaign.

Reps. Henry Cuellar (pictured) and Vicente Gonzalez, the two other Democratic congressmen who represent the Rio Grande Valley, are fighting to keep their seats while taking different approaches to the immigration crisis, even though both strongly campaigned for Biden last year.

Cuellar, who has regularly bucked his party’s leadership over the years, has been an outspoken critic of Biden’s more lenient immigration policies, repeatedly blasting the administration for creating “incentives” for immigrants to make the dangerous journey to the U.S. instead of instituting “uncomfortable” but effective deportation policies.

The 16-year House veteran was the first lawmaker to provide photos of overcrowded detention facilities in Donna, Texas, when the administration was instituting a media blackout earlier this year. He also led calls for Vice President Kamala Harris, Biden’s point person on immigration, to visit the border months before her trip to Central America in June.

Last week, Cuellar waded into the debate over whether Border Patrol agents in Del Rio were using their horse reins as whips against Haitian immigrants, defending their efforts to stop illegal crossings while acknowledging that all immigrants must be treated humanely. Appearing on “CNN Newsroom” Tuesday, Cueller was asked about the photos of border agents chasing migrants on horses – and one that a host said appeared to be using a “rope or a lasso.”

He quickly came to the agents’ defense.

“Certainly, we got to make sure we treat all the immigrants with respect and dignity, but I will say this: Border Patrol has had those horse brigades for a while. They’ve had them for a while, number one. Number two, they don’t carry whips, and they do not carry lassos.”

“Should those be used, even if it is a rein?” the CNN host asked.

“If there was a problem, it should be investigated, and I think that’s it,” Cuellar responded.

“But we cannot paint the Border Patrol with the same type of paintbrush. What are they supposed to do, just stand there and let everybody come in? They’re supposed to be enforcing the law.”

After the images surfaced, creating an uproar among civil rights leaders, the Homeland Security Department launched an investigation. White House press secretary Jen Psaki announced Wednesday that agents in Del Rio would no longer use horses to try to prevent illegal crossings.

Cuellar has represented South Texas for his entire career, either in the state legislature or in Congress. He won reelection last year by a whopping 20 points but faced a serious challenge during the primary, besting a more liberal candidate by just 3.6 percentage points. The same Democratic challenger, Jessica Cisneros, is running against him again. Republicans suggest that Cuellar is in a lose-lose situation, barely fending off a primary opponent in 2020 and facing a rematch because his immigration views aren’t liberal enough for the Democratic Party even if they represent his district as a whole.

Vicente Gonzalez appears to be even more vulnerable than Cuellar. He won reelection by just 2.9 points last fall after topping his GOP rival in 2018 by 19.6 points. Despite that shift, Gonzalez has mainly defended the administration’s immigration policies, praising Harris’ plan to address the root-causes of immigration as “a holistic approach” to “create conditions for people to want to stay in their native countries.”

“We had a good meeting a few weeks ago with the vice president, and I think she has a very good plan to get to the root causes, which will be the only way to ultimately curb the mass migration,” he told CNN in early June.

“If we don’t address the root causes, all we’re doing is putting a Band-Aid on it on our border.”

Over the last two weeks, as the Haitian immigration crisis overwhelmed resources in Del Rio, Gonzalez has steered clear of the controversy, refraining even from tweeting about it. But during a Fox News appearance Thursday, host Neil Cavuto pressed him on Biden’s decision to stop allowing the agents to use horses to control the border.

Gonzalez called it a “very complex and tough situation that we have to investigate.”

“We certainly need to find an orderly way to deal with the crisis,” he added. “I’m not for just releasing people into the country. We need to have a vetting process before they get here.”

A member of the moderate Problem Solvers Caucus, Gonzalez has pushed back against progressives’ calls to abolish the Immigration and Customs Enforcement agency. But he has not joined Cuellar in forcefully criticizing Biden’s approach even as he’s decried the way it has enriched Mexican drug cartels.

Since Biden took office, Gonzalez laments, those cartels are taking advantage of immigrants, charging each of them $6,000 to get to the U.S. border, and raking in more than $1.3 billion in the first few months of this year alone.

The three-term Texas Democrat has so far unsuccessfully tried to persuade the Biden administration to back his idea to establish a processing center for asylum seekers on the Mexico-Guatemala border where immigrants could apply for asylum and fly to the U.S. only if and when they qualify. President Trump secured an agreement with Mexico, Guatemala and Honduras to use their militaries to prevent caravans from continuing into the United States, but when COVID hit, he used an obscure health measure, known as Title 42, to deport immigrants immediately without due process for their asylum requests in the name of public health. Biden is under fire from the left for continuing to use the policy to deport thousands of immigrants while releasing others into the U.S. who have requested asylum.

Those deciding to make the dangerous journey north are only coming from certain impoverished pockets of several Central American countries, Gonzalez has asserted. Because of this, the U.S. needs to make “surgical, thoughtful, intelligent investments that create jobs, create security, that invest in agricultural projects, manufacturing and tourism and ideas that create better jobs for people to want to stay,” he argued.

He didn’t mention that the Obama administration’s attempt to address root-causes by sending billions of taxpayer dollars to Central America – an effort Biden led — had virtually no impact on the continued exodus north.

Gonzalez was far more critical of Trump’s immigration policies. Last year, he called on the administration to suspend its COVID immigration restrictions that were dramatically reducing the number of illegal border crossings but swelling border camp populations in Mexico.

“Imagine these people who have gone through a 2,000-mile trek and are now in a one-acre plot of land — thousands of them. Certainly, it’s an easy place for viruses to spread,” he told The Hill newspaper.

“Mexico could probably do more too, because I went over there, and it was a mess. It’s not like detention centers on this side, as much as we complain about them. They’re living in squalor —  tents on the ground and dirt. Now there’s a place for them to plug in their phones and some port-a-potties, but it’s really bad,” he added.

With the ongoing border crisis continuing to be a drag on Biden’s poll numbers nationwide, Republicans are keeping close track of every statement Cuellar and Gonzalez make on the issue. If their districts keep trending purple next year, Republicans could see a path to retaking the House majority straight through the border territory. No matter the outcome, Democrats will have to invest far more resources than usual to keep these seats in their column next year.

Tyler Durden
Tue, 09/28/2021 – 17:25

via ZeroHedge News https://ift.tt/3m65vNM Tyler Durden

Taiwan’s Defense Minister Demands Long-Range Missiles For The Island To Repel China

Taiwan’s Defense Minister Demands Long-Range Missiles For The Island To Repel China

Just on the heels of Taiwan recently unveiling a proposed defense budget of almost $9 billion over the next five years, its defense ministry is provocatively calling for more long-range missiles in order to deter potential future aggression from China

“The development of equipment must be long-range, precise, and mobile, so that the enemy can sense that we are prepared as soon as they dispatch their troops,” Defense Minister Chiu Kuo-cheng told parliament in Taipei on Monday. 


2020 test launch of an anti-ship cruise missile, source: National Chung-Shan Institute of Science and Technology

This after Taiwan officials, including President Tsai Ing-wen, have said rapid modernization of the island’s defense arsenal is necessary given the “severe” threat from China, which means Taiwan must have the capability to be turned into a “fortress” and “porcupine” in event of attack.

It’s unclear what DM Chiu Kuo-cheng is envisioning in terms of the reach of proposed long-range missiles, but it’s sure to be seen as a “red line” for Beijing. According to Reuters:

In a written report to parliament to accompany Chiu’s appearance, the ministry said both medium- and long-range missiles were being used in intercept drills at a key test facility on Taiwan’s southeastern coast.

Chiu declined to give details to reporters of how far Taiwan’s missiles could reach, something the government has always keep well under wraps.

China would no doubt see these as offensive and not merely defensive weapons, putting the mainland under threat.

Among the last major US arms packages approved by the Trump administration last year included over 100 cruise missiles and about a dozen truck-based launchers, both with a striking range of more than 168 miles.

So far the mood in Washington and the Biden administration appears to be one of willingness to encircle China with missiles in southeast Asia and among Indo-Pacific allies, an initiative first floated during the Trump administration; however, reluctant US allies have remained unwilling to quickly to make themselves a prime target in China’s eyes. 

Tyler Durden
Tue, 09/28/2021 – 17:05

via ZeroHedge News https://ift.tt/2XQkuTv Tyler Durden

“Fill The Swamp”: The Federal Administrative State Grew Even Under Trump

“Fill The Swamp”: The Federal Administrative State Grew Even Under Trump

By Adam Andrzejewski, CEO/Founder of OpenTheBooks.com originally posted at Forbes,

Everyone from Ronald Reagan (1983) to Nancy Pelosi (2006) to Donald Trump (2016) issued calls to “drain the swamp.” However, in a new oversight report by OpenTheBooks.com, Mapping The Swamp, A Study Of The Administrative State, we found that the federal agency payrolls continued to grow unabated.

President Trump was holding the headcount of the executive agencies roughly flat through at least 2018. Then, the pandemic driven spending caused a massive federal hiring spree in FY2020.

Key Facts

1. EXPENSIVE BUREAUCRACY: The federal disclosed workforce costs the American taxpayer $2.3 million per minute, $140 million per hour, and $1.1 billion per day. In FY2020, the federal government disclosed 2.8 million employees — including 1.4 million executive agency bureaucrats; 698,547 DOD employees; and 678,537 USPS employees — for an estimated total compensation cost of $292 billion. (Formula: disclosed cash compensation: $225 billion plus an estimated 30-percent in benefits equals $292 billion).

2. THE SWAMP GETS BIGGER: 1.4 million disclosed employees in the executive agencies (non DOD and USPS) rose to a modern-day high (2020) – up 3.7-percent from 1.35 million employees in FY2016. Veterans Affairs with 421,542 employees was the largest executive agency, and, since FY2016, headcount grew by 48,928 employees (13-percent). Homeland Security with 210,253 employees, grew by 26,290 employees (14.3-percent).

3. HIGHLY COMPENSATED BUREAUCRATS: 532,784 employees made $100,000+ in the 122 executive agencies (non DOD and USPS) — from 406,960 employees in FY2016 (up 31-percent). Furthermore, 37,631 employees made $200,000+ (up 52-percent) and 7,692 employees earned $300,000+ (up 144-percent). Dr. Anthony Fauci was the most highly compensated federal employee — across all agencies — for the second year and earned $434,312.

4. A NEW MINIMUM WAGE: The average pay was $100,000+ in 100 of 122 executive agencies (non DOD and USPS) and departments. 26,853 federal employees out-earned every state governor ($225,000 | New York).

5. PAID TO STAY HOME: 44-days of paid-time off (PTO) on average for bureaucrats employed in the executive agencies (non DOD and USPS) – 11 holidays, 13 sick days, and 20 vacation days. The estimated taxpayer subsidy of this benefit is $22 billion annually.

6. THE $15 MILLION MAN: The Tennessee Valley Authority (TVA), a quasi-public federal agency, paid their CEO Jeffry Lyash $15.5 million in salary, retirement and other benefits over a two-year period, FY2019-FY2020. The TVA is a federal entity, but doesn’t currently receive taxpayer funding.

7. VA EMPLOYMENT FARM: Since 2012, Veterans Affairs added 106,037 new positions to payroll, yet only 6,674 were doctors (Medical Officers). Only one in every sixteen new positions were doctors.

8. BLOATED WHITE HOUSE PAYROLL: The Biden White House is the most expensive in history with over 560 employees and $50 million annual payroll expense. By comparison, President Trump employed 377 staffers with an inflation adjusted $40 million payroll in his first year (2017).

9. ARMED BUREAUCRATS: Federal employees (non-DOD) with firearm authority (200,000+) now exceeds the number of U.S. Marines (186,000). Employees in 103 agencies with firearm authority include 69,000 at Department of Justice; 63,000 at Homeland Security; and even 4,547 police officers at Veterans Affairs and 2,159 special agents at the Internal Revenue Service.

10. TRANSPARENCY PROBLEMS: 259,000 names were redacted accounting for an estimated $25 billion in cash compensation within the executive agency payroll (non DOD and USPS). The number of redactions grew from 3,500 in FY2016. Department of Defense: only disclosed the 698,547 civilian employees with salary, title and branch, but redacted all names. The U.S. Post Office disclosed 678,537 employees, but redacted all bonuses.

In addition, another $225 billion in estimated compensation remains hidden and not subject to the oversight of this report: an estimated $100 billion in non-disclosed salaries of the 1,379,800 million active military members; and another $125 billion in undisclosed pension-retirement annuity payouts.

Tyler Durden
Tue, 09/28/2021 – 16:45

via ZeroHedge News https://ift.tt/3um5GZ1 Tyler Durden

WTI Extends Losses After Surprise Crude Build

WTI Extends Losses After Surprise Crude Build

Oil prices pumped’n’dumped today with WTI above $76.50 intraday before falling back (and Brent near 3-year highs above $80 before fading) as a shortfall in global energy supplies is spilling into crude markets.

“It got ugly in the equity space and the interest rate environment got stronger this morning too,” said Bob Yawger, director of the futures division at Mizuho Securities USA.

“Those two facts conspired to tank the market here.”

The latest gains for oil prices have come as part of a broader rally in energy markets, with depleted natural gas inventories and resurgent economic activity sparking fierce competition in Europe and Asia for natural gas to feed their power markets.

“Oil’s move is really to do with the global energy crunch coming out of the gas power market,” said Norbert Rücker, head of economics at Swiss private bank Julius Baer.

“This is now spilling over into the oil market because of the expectation that this energy scarcity means we’re going to use oil for spillover demand.”

In some power plants, oil can be used to generate electricity when gas prices surge.

Losses in U.S. Gulf of Mexico production following the impact of Hurricane Ida are also supportive of higher prices in the short-term.

API

  • Crude +4.127mm (-2.5mm exp)

  • Cushing +359k

  • Gasoline +3.555mm

  • Distillates +2.483mm

Analysts expected an 8th straight week of crude inventory draws, but were surprised when API reported a 4.127mm build. In fact, the entire complex saw inventories rise

Source: Bloomberg

WTI was hovering just below $75 ahead of the API print and extended losses after the surprise build…

Not everyone is bullish from here. “OPEC is still ramping up production and [the market is] getting frothy but by next year we have confidence that we see much lower prices,” said Julius Baer’s Mr. Rücker.

Tyler Durden
Tue, 09/28/2021 – 16:34

via ZeroHedge News https://ift.tt/2ZGLWUI Tyler Durden

Are We Really So “Rich”? A New Way Of Defining Wealth

Are We Really So “Rich”? A New Way Of Defining Wealth

Authored by Charles Hugh Smith via OfTwoMinds blog,

What if our commoditized, financialized definition of wealth reflects a staggering poverty of culture, spirit, wisdom, practicality and common sense?

The conventional definition of wealth is solely financial: ownership of money and assets. The assumption is that money can buy anything the owner desires: power, access, land, shelter, energy, transport and if not love, then a facsimile of caring.

The flaw in this reductionist definition is obvious: not everything of value can be purchased at any price–for example, health, once lost, cannot be purchased for $1 million, $10 million or even $100 million. A facsimile of friendship can be purchased (i.e. companions willing to trade fake friendliness for money), but true friendship cannot be bought at any price: its very nature renders friendship a non-commodity.

This explains the abundance of wealthy people who are miserable, lonely and phony to the core. Only commoditized goods and services can be bought with money or assets.

Given the limits of the conventional model of wealth, the question naturally arises: what if we defined wealth more by what cannot be bought rather than by what can be bought? Another way of making the distinction is to ask: what has been commoditized/globalized such that any person with money anywhere on the planet can buy it? What cannot be commoditized because it is intrinsically inaccessible to commodification?

We can start our inquiry with a series of questions:

1. What would be the impact on an individual’s health if modern medicine/pharmaceuticals were no longer available? Put another way: how dependent is one’s “good health” on commoditized interventions? How independent is an individual’s health/vitality from commoditized medicine?

Health that is sufficiently vibrant that it has no need for commoditized medicine cannot be bought, and therefore it is a form of intrinsic (non-commodity) wealth.

2. Can a shipwrecked individual swim two miles through open ocean from a doomed ship to safety? Money has no value if there is no help that can be bought; the individual’s only wealth in this situation (assuming they know how to swim) is their core physical strength and endurance–forms of wealth that cannot be substituted with money.

3. If Cicero was correct and “The man who has a garden and a library has everything,” then let’s ask not how extensive one’s library might be in terms of the number of volumes, but ask how many of the books (or ebooks) have been read, absorbed and enjoyed by the owner?

In other words, it’s not the ownership of a library which creates non-commoditized wealth but the joy, knowledge and pleasure derived from the reading of the books which defines wealth.

4. The same analysis can also be applied to a garden/orchard: what if we ask not how large the garden/orchard is in terms of square meters, but how expansive is the owner’s participation in the care of the garden/orchard, how much pleasure is created by the toil and harvest, and how much of the bounty is shared with others?

5. How many friendships does an individual have that began in high school or earlier and are still vibrant? How many friends does one have who can be entrusted with the deepest personal crises? How many friends’ homes are open to you, rain or shine?

What if we defined the person with no true friends as impoverished, regardless of their ownership of assets and cash? Many people seem to have professional acquaintances they call “friends” to mask their bottomless poverty of real friends and friendships.

6. What if wealth were measured in personal integrity, i.e. honesty, trustworthiness, compassion and the ability to remain accountable even as things fall apart?

This is of course just a start: we could continue our redefinition of wealth to include kindness, empathy, the skills needed to organize volunteer community work parties, and so on.

As we explore what actually cannot be bought or commoditized, it raises this question: what if our commoditized, financialized definition of wealth reflects a staggering poverty of culture, spirit, wisdom, integrity, warmth, kindness, friendship, practicality and common sense?

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

My recent books:

A Hacker’s Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($5 (Kindle), $10 (print), ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

Tyler Durden
Tue, 09/28/2021 – 16:20

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

‘Dangerous’ Jerome & ‘Doomsaying’ Janet Spark Bond, Stock, Bullion, & Bitcoin Battering

‘Dangerous’ Jerome & ‘Doomsaying’ Janet Spark Bond, Stock, Bullion, & Bitcoin Battering

Fed Chair Jerome Powell (accused of being a “dangerous man” by Sen/ Warren) seemed to hint today that the shift in inflation is not just ‘not transitory’ but could be ‘structural’, prompting many to adjust expectations even more hawkishly for Fed action.

Source: Bloomberg

There is now a greater than 50% probability of rate-hike in September 2022…

Source: Bloomberg

Treasury Secretary Janet Yellen began her testimony today by warning of all the worst parts of the bible occurring if Republicans don’t vote to increase the debt limit by October 18th (which Democrats can do all on their own but are loathed to be pinned to) – “likely spur major financial collapse”. That sent Debt Ceiling anxiety soaring…

Source: Bloomberg

Is it different this time?

hhmm…

Either way, both of the events above helped spike Treasury yields, especially at the long-end…

Source: Bloomberg

And the surge in yields extended the pain for growth stocks relative to value, but as yields really accelerated higher, equity traders got spooked and puked (dumping at the European open and US open). Stocks bounced off their lows around 1430ET (margin call time) but Jeremy Grantham’s appearance on CNBC, calling the market a spectacular bubble coincided with another leg lower in the major indices..

This was the S&P worst day since -2.45% on 2/25

All the major indices tested/broke key technical levels today:

  • S&P broke back below 50DMA, testing 100DMA

  • Nasdaq broke back below 50DMA, testing 100DMA

  • Dow broke back below 50DMA and 100DMA

  • Russell 2000 broke back below 50DMA

The relationship between the Russell 2000 and Nasdaq 100 pair has tested in a serious band of resistance…

Growth stocks were clubbed like a baby seal again and while value stocks suffered, the divergence remains…

Source: Bloomberg

Risk Parity Funds are starting to crack amid the surge in both realized and implied vol for stocks and bonds. We are heading for the worst month for risk parity since March 2020…

Source: Bloomberg

FAAMG stocks were FUBAR today, breaking down to their lowest in over 2 months…

Source: Bloomberg

“Most Shorted” Stocks were slammed lower today, erasing all of yesterday’s squeeze gains…

Source: Bloomberg

Tech stocks were worst today and Energy best (Financials lagged despite higher rates)…

Source: Bloomberg

The moves in Treasury yields were almost entirely driven by higher inflation breakevens, with 10yr breakevens up +3.7bps. That echoed similar moves in Europe, where the German 10yr breakeven (+4.7bps) hit a post-2013 high of 1.653%, and their Italian counterparts (+3.9bps) hit a post-2011 high. The biggest move was in the UK however, where the 10yr breakeven (+13.2bps) reached its highest level since 2008, which comes amidst a continued fuel shortage in the country, alongside another rise in UK natural gas futures, which were up +8.20% yesterday to £190/therm, exceeding the previous closing peak set a week earlier.

Source: Bloomberg

Bear in mind that the current move is a 1.4 sigma shift. If it gets to a 2.0 Sigma move, then shit breaks fast…

Cryptos were clubbed like a baby seal too today with Bitcoin sliding back to the weekend’s post-China-ban lows at around $40k…

Source: Bloomberg

The dollar soared higher again today, breaking above the August highs to its highest level since Nov 5th…

Source: Bloomberg

Oil prices (WTI) soared to near the July cycle high, as Biden’s call to OPEC appears to have failed…

Source: Bloomberg

NatGas had a wild day, soaring over 10% once again at its peak today, before plunging back into the red and then bouncing back towards the close to end higher…

The dollar’s gain was gold’s loss today as the barbarous relic extended its slide lower…

Copper’s recent outperformance of gold continues to suggest that nominal yields have a long way to go to catch up to reality (10Y ~3.00%!)…

Source: Bloomberg

And finally, none of this is helping Biden’s approval rating which, after a small bounce post-Afghanistan, is back at its term lows…

Source: Bloomberg

Tyler Durden
Tue, 09/28/2021 – 16:01

via ZeroHedge News https://ift.tt/3m5WxQC Tyler Durden

Jamie Dimon Warns JP Morgan Bracing For “Potentially Catastrophic” US Default Debt-Ceiling Battle Drags On

Jamie Dimon Warns JP Morgan Bracing For “Potentially Catastrophic” US Default Debt-Ceiling Battle Drags On

Now that Janet Yellen has confirmed Oct. 18 is the “drop dead” for Congress to lift the federal debt borrowing limit, progressives are pushing even harder against the Democratic leadership, which is stuck between appeasing the “Squad”, and moderates like Sens. Joe Manchin and Kyrsten Sinema. Markets are starting to get anxious as there’s no obvious path toward raising the debt limit and passing the Dems’ financial agenda.

So, with stocks in free-fall on Tuesday, JP Morgan CEO Jamie Dimon told Reuters that America’s biggest bank by assets has begun preparing for the possibility that the debt ceiling might not be lifted in time. Dimon said that while he ultimately expects politicians to find a solution, a “catastrophic event” like what Yellen described during her Senate testimony today could still be imminent.

Specifically, JPM has begun planning for a scenario for the US to default on its debt, and how this would impact repo and money markets, client contracts, the bank’s capital ratios while also trying to discern how ratings’ agencies might react.

“This is like the third time we’ve had to do this, it is a potentially catastrophic event,” he said. “Every single time this comes up, it gets fixed, but we should never even get this close. I just think this whole thing is mistaken and one day we should just have a bipartisan bill and get rid of the debt ceiling. It’s all politics,” Dimon added.

What Dimon is referencing are down-to-the-wire debt-ceiling battles in 2011 and 2017 under presidents Barack Obama and Donald Trump, respectively.

But while Dimon has seen this show before, many market participants are growing increasingly worried that this time, the US might actually default.

As far as the ratings agencies are concerned, markets are already pricing in higher credit risk for the US via short-term CDS, where insurance against a US default in September has skyrocketed.

A major part of this preparation involves the bank combining through its client contracts, which is a resource-intensive process that cost the bank $100 million “if I remember correctly,” Dimon said.

Dimon, who was speaking to Reuters ahead of a ribbon-cutting ceremony at a new Chase branch in southeast Washington DC, part of a promise made by Dimon in a letter to shareholders, where he outlined certain efforts to recruit more customers and employees from “under-served” communities. Per Reuters, the branch is the eleventh of its kind JPMorgan has opened since 2019 in cities including New York, Detroit, LA and Chicago. As well as providing traditional services, the branches will also work with local community groups to provide free skills training and other support for minority-owned small businesses.

“It’s not a traditional bank branch, we want it to be very welcoming, we want it to be attractive,” said Dimon.

Dimon also took a few minutes to criticize the Community Reinvestment Act, which requires regulators to “score” megabanks based on how well they accommodate “under-served” communities. Dimon said the law needs to be “modernized” to account for “technology-driven changes” to the banking business.

“It is very complicated, very slow, very late, very hard to measure,” Dimon said, adding that CRA assessments should be conducted in real time, as opposed to a retrospective review every few years. “Does it actually capture everything? No. Is it real time? No. Is it politicized? Absolutely.”

Biden’s acting Comptroller of the Currency Michael Hsu said earlier this month that’s he planning to dump changes to fair-lending laws that had been imposed by his Trump-appointed predecessor.

While Dimon used Tuesday’s interview to flex JPM’s ESG credentials, it’s too bad nobody asked him for his thoughts on other looming market risks, like the Evergrande situation. We’d also be curious to know how much JPM lost on the Didi IPO, where it served as one of the lead underwriters alongside Goldman and Morgan Stanley.

Tyler Durden
Tue, 09/28/2021 – 15:45

via ZeroHedge News https://ift.tt/3EY8dgX Tyler Durden

Chaos On The Hill: Progressives Threaten To Nuke Infrastructure Deal, Schumer Blows Gasket Over Reconciliation, McConnell Smug

Chaos On The Hill: Progressives Threaten To Nuke Infrastructure Deal, Schumer Blows Gasket Over Reconciliation, McConnell Smug

Republicans on Capitol Hill are watching with Cheshire cat grins as Democrats scramble to avoid a US default, while attempting to pass two major pieces of time-sensitive legislation that have the party’s progressives pitted against moderate Democrats.

For starters, House progressives have banded together to nuke the $550 billion bipartisan infrastructure package passed by the Senate in August, unless Speaker Nancy Pelosi links it to the $3.5 trillion Build Back Better act – which party moderates including Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) will tank in the Senate unless it’s significantly smaller and has legitimate budgetary mechanisms to pay for it that doesn’t just include a beefed-up IRS collecting deadbeat taxes.


Sen Joe Manchin (D-WV)

“Progressives will vote for both bills, but a majority of our members will only vote for the infrastructure bill after the President’s visionary Build Back Better Act passes,” said Congressional Progressive Caucus Chair (and boss from hell) Pramila Jayapal (D-WA). The progressive caucus, which claims 95 members, is using their vote on the infrastructure bill as leverage to force the Build Back Better act via the reconciliation process, according to Bloomberg.

“This agenda is not some fringe wish list: it is the President’s agenda, the Democratic agenda, and what we all promised voters when they delivered us the House, Senate, and White House,” Jayapal added.

According to Rep. Rashida Tlaib (D-MI) – a member of the so-called “Squad” of progressive Democrats, Pelosi’s decision to separate the bills is a “betrayal.”

“Let me be clear: bringing the so-called bipartisan infrastructure plan to a vote without the #BuildBackBetter Act at the same time is a betrayal. We will hold the line and vote it down,” Tlaib wrote on Twitter, adding “This is not the time for half measures or to go back on our promises.”

On Monday night, Rep. Ilhan Omar (D-MN) knocked Manchin and Sinema, telling CNN‘s Manu Raju “It is saddening to see them use Republican talking points. We obviously didn’t envision having Republicans as part of our party. And I hope that they will understand that Democrats need to be united behind the president’s agenda, and we need to have urgent conversations on how to get this agenda done.”

Meanwhile, President Biden(‘s handlers) have arranged for separate meetings on Tuesday with Manchin and Sinema in an attempt to broker an agreement.

Pelosi says she plans to move forward with the infrastructure vote on Thursday, however even close allies such as Rep. Jan Schakowsky (D-IL) have cast doubt on its current ability to pass.

“If she were to call the bill, it will fail,” she told The Hill, adding “Not because the Progressive Caucus, people like me, aren’t willing to vote for it. But … we had an agreement that we were going to get these two pieces [together].”

Debt ceiling disaster

Democrats – which could simply raise the debt ceiling via reconciliation to avoid a US default, have dug in their heels over Republican involvement – with Senate Majority Leader Chuck Schumer (D-NY) calling it a “non-starter.”

“Going through reconciliation is risky to the country and is a non-starter,” he said at a press conference following a meeting of the Senate Democratic conference, adding “It’s very, very risky.”

On Tuesday, Republicans shut down a bid by Schumer to hold a vote to suspend the debt limit with a 51-vote threshold, to which Senate Minority Leader Mitch McConnell (R-KY) objected – saying that Democrats can do it by themselves.

Tyler Durden
Tue, 09/28/2021 – 15:25

via ZeroHedge News https://ift.tt/2XRN3js Tyler Durden

We Are Entering The Most Aggressive Global Hiking Cycle In A Decade

We Are Entering The Most Aggressive Global Hiking Cycle In A Decade

Maybe the market has been too hypnotized by the promise of cheap free money flowing forever, or maybe it remembers how the Fed stepped in last March to ensure that nobody lost any money and thus nobody wants to sell this time, or maybe it is just too used to buying every single dip so that news of the Fed’s taper actually sent stocks higher. But all that may soon change, because as Deutsche Bank’s Jim Reid calculates in terms of global central bank hikes exceeding cuts, we are now at the highest differential for a decade on a rolling 12-month basis.

In other words, we are now entering the most aggressively global hiking cycle in a decade.

Some points on the data:

  • The last 12 months have actually seen a historically low number of central bank rate moves in either direction. Never have global central banks been so inactive on that score. This is now starting to pick up though.

  • Since May 2012, global central banks have only seen the rolling 12m hike totals exceed cuts on 10% of occasions. We have just entered such a net hiking zone.

  • Central bank cuts have overwhelming exceeded hikes over the last couple of decades.

So its quite clear that a global hiking cycle had already started before the recent mini energy crisis. Will this renewed spike in energy costs mean central banks accelerate this (e.g. BoE guidance last week) or will it hit demand enough that it actually slows them down as stocks slide?

The answer is unclear but as Reid concludes, “this is an incredibly delicate and difficult period for central banks.”  As a minimum, Reid notes, rates markets are finally waking up to the asymmetric risk/reward that had developed over the summer months given all the global inflation in the system and the evidence that we were in a global hiking cycle. One wonders when stocks will do the same.

Tyler Durden
Tue, 09/28/2021 – 15:06

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