Month: May 2021

Ask around on Wall Street (or any street) what the biggest bogeyman to capital markets is and 11 times out of 10 the answer will be “the taper“, even though the fact that everyone is fully aware of the risks from the Fed’s looming announcement, also means that it is more than fully priced in.

Which is why, in light of the fact that the market’s true biggest risk is runaway, out-of-control, inflation, we previously suggested that far from being a crash catalyst, the taper may well end up being a trigger for further market gains especially since it would mean that the unprecedented flood of liquidity in the market which has sent the Fed’s reverse repo facility to near record levels…

… as banks simply no longer have a place where to store all the Fed’s reserves, will finally ease.

Translation: there is so much excess liquidity in the system, banks don’t have a place to store it and are BEGGING the Fed to taper.

Yes, taper will be bullish https://t.co/nFrmsr2ooK

— zerohedge (@zerohedge) May 21, 2021

taper will be bullish https://t.co/5gh2f2VxkF

— zerohedge (@zerohedge) May 11, 2021

Incidentally, we are not the first ones to make that argument: back in 2013, just around the time Ben Bernanke spooked the market with the first “Taper Tantrum”, none other than hedge fund titan David Tepper made the same argument:  “If the Fed doesn’t taper back, we’re going to get into this hyper-drive market,” he explained. “It’s a backwards argument. To keep the markets going up at a steady pace the Fed has to taper back.”

Fast forward to today when the same logic applies: the longer the Fed does nothing, the more likely it is to lose control of inflation altogether (not to mention flooding the repo system with liquidity beyond repair) and so we expect that within the next few weeks ahead of the Fed’s September “Taper bomb”, the narrative will change accordingly.

Which brings us to the first indication thereof: in his latest Global Money Dispatch note, repo guru Zoltan Pozsar (formerly the NY Fed’s market plumbing wunderkind and currently at Credit Suisse), the Hungarian provides a rather technical and more nuanced, if altogether similar argument: the taper could well lead to lower rates (i.e., no bond market tantrum when then jumps to stocks) provided that at the same time, the Fed announced the end of Wells Fargo’s asset growth ban, activating some $500 billion in unused balance sheet capacity, or more than enough to offset many months of declining Fed purchases courtesy of a brand new private sector entity.

For those curious how the groundwork is being set to paint the taper in a positive light, here is the full Pozsar note:

There is the QE problem, the Wells Fargo problem, and the taper problem…

The QE problem has to do with the Fed buying way too many mortgages, richening MBS relative to Treasuries. The Fed is buying $40 billion of MBS a month, and Bank of America is providing a tailwind by buying as many MBS as the Fed.

What will fix this issue is either the Fed buying less MBS and more Treasuries, or Bank of America doing the same – the Fed for “market functioning” reasons and Bank of America for relative value reasons. Either way, fixing the QE problem will require one of these banks to buy more Treasuries before taper commences.

If you are concerned about the MBS float, the last thing you need is the Fed suddenly lifting Wells Fargo’s asset growth ban. Well Fargo has an unused balance sheet capacity of more than $500 billion, and after years of no growth and a shrinking loan book, it would be stepping into duration markets with force.

If the QE problem is bad enough for MBS and leads to a bid for Treasuries, the QE problem plus freeing Wells Fargo now would mean MBS trading even richer and, by extension, an even stronger bid for Treasuries. Timing is everything…

…and getting it right can turn a problem into an opportunity.

While lifting Wells Fargo’s asset growth ban now would do more harm than good, it could come in handy when the Fed commences taper later this year or next. The market assumes that taper will lead to a sell-off in rates, like in the past – but that need not be the case. The Fed could announce its plans to taper, while at the same time announcing the end of Wells Fargo’s asset growth ban, so that fewer purchases by the Fed would be offset by more purchases by Wells.

Less buying by the Fed and more buying by Wells Fargo…

…and rates don’t have to sell off, provided there is coordination at the Fed. The monetary and regulatory arms of the Fed typically do not coordinate, but never say never. Using the Wells Fargo “option” could help the Fed make taper a smoother affair than the 2013 experience, which wasn’t smooth to begin with. It’s one thing to taper against a boring fiscal backdrop like during 2013, and another to taper against a backdrop painted with cumulonimbi of fiscal issuance – given the fiscal outlook, the Fed should be creative with the Wells Fargo option.

Then there is the consensus problem, which is that everyone expects rates to go up from here, and “if everyone is thinking alike, then somebody isn’t thinking”: the macro reasons for higher rates make sense, but the potential for more Treasury purchases either by the Fed or banks before taper commences, and Wells Fargo deploying $500 billion of balance sheet after taper commences, could set off a rates rally from here. Consider these problems at least as risks…

by Robert Dalheim of Woodworking Network

The U.S. Department of Commerce says it will seek to double tariff rates on most Canadian softwood lumber, angering home builders. New rates vary by company. West Fraser goes from 9 percent to 11.4 percent, Canfor from 4.6 to 21 percent, Resolute Forest from 20.3 to 30.2 percent, and J.D. Irving from 4.2 to 15.8 percent.

The overall increase is from 9 percent to 18.32 percent.

Home builders, who had been urging for a removal of tariffs, expressed their disappointment.

“At a time when soaring lumber prices have added nearly $36,000 to the price of a new home and priced millions of middle class households out of the housing market, the Biden administration’s preliminary finding to double the tariffs on Canadian lumber shipments shows the White House does not care about the plight of American home buyers and renters who have been forced to pay much higher costs for housing,” said National Association of Home Builders chairman Chuck Fowke.

“The administration should be ashamed for casting its lot with special interest groups and abandoning the interests of the American people. It knows that the lumber tariffs are nothing less than a tax on American home buyers, renters and businesses that rely on lumber products and they could not have come at a worse time. Lumber prices are already up more than 300 percent from a year ago. If the administration’s decision to double tariffs is allowed to go into effect, it will further exacerbate the nation’s housing affordability crisis, put even more upward pressure on the price of lumber and force millions of U.S. home buyers and lumber consumers to foot the bill for this ill-conceived protectionist action.

U.S. lumber producers on the other hand, applauded the decision.

“A level playing field is a critical element for continued investment and growth for U.S. lumber manufacturing to meet strong building demand to build more American homes,” said Jason Brochu, U.S. Lumber Coalition Co-Chair and Co-President of Pleasant River Lumber Company.  “The U.S. Lumber Coalition applauds the Commerce Department’s continued commitment to strongly enforce the U.S. trade laws against subsidized and unfairly traded Canadian lumber imports.”

Canada, as one would predict, was also unhappy.

“U.S. duties on Canadian softwood lumber products are a tax on the American people,” said Mary Ng, Canadian Minister of Small Business, Export Promotion and International Trade. “We will keep challenging these unwarranted and damaging duties through all available avenues. We remain confident that a negotiated solution to this long-standing trade issue is not only possible, but in the best interest of both our countries.”

The decision comes as somewhat of a surprise. Home builders had been lobbying hard for a temporary removal of tariffs. Many Republicans had championed the NAHB’s claims. They had asked trade chief Katherine Tai to eliminate the tariffs.

It’s unclear how much the new tariffs will affect lumber prices.

Lumber companies say tariffs hardly make an impact.

“Lumber only makes up 4 percent of the cost of a new home— with near-zero impact on homebuyers,” the Lumber Coalition wrote in an opinion article published on Woodworking Network. “The NAHB’s claim that import duties cause today’s high lumber prices and therefore drive up the cost of homes is false. Supply and demand, not import duties, cause price fluctuations.”

The article was controversial, drawing in heavy scrutiny online.

The NAHB argued back, saying the Coalition was severely and intentionally underrating the cost of lumber in a home.

“If you walk into a home, you may notice that cabinets, windows, doors, and trusses are also often made of wood. And if you watch a home being built, you will see a lot of plywood and OSB being used for sheathing, flooring underlayment, siding, and interior wall and finishing, just to name a few uses. Also, builders do not in general buy lumber from sawmills, but from an intermediary like a lumber yard that operates with a profit margin.”

In a rare and refreshing interview which on YouTube has garnered 100,000 views in less than 24 hours, British comedian and actor Russell Brand and former Intercept journalist Glenn Greenwald teamed up to explain last year’s scandalous coordination by the mainstream media and social media companies to ensure the Hunter Biden laptop story and accompanying revelations over the Hunter-Ukrainian Burisma energy company scandal never reached broader public view. 

“I’m not a pro-Republican person,” Brand introduced while talking to Greenwald on his YouTube channel. “I don’t see myself that way. I don’t see myself as conservative, or that I’m in a Trump, or Giuliani, or the  kind of media establishments that were reporting on these revelations [about Biden’s family]. They are not my cultural, social, or political allies. That’s certainly not how I see myself.” And then he blasted away: “However, it seems to me — what reason is Hunter Biden sat on the board of an energy company in… Ukraine?” he questioned. “What reason is James Biden sat on the board, or receiving payments from an energy company, in China?”

Recall that The New York Post among others saw their Twitter account suspended for a whopping 16 days over the news story, while Facebook also aggressively cracked down on users’ ability to share any content related to Burisma, the Biden family’s Ukraine dealings, or the infamous laptop archive. 

Brand said further in the interview, according to a transcript:

“We’re talking about sleaze, corruption, financial misdemeanors, and relationships between corporations, big business, and politicians — let’s face it, unless you’re bloody stupid, you know that’s going on all the time.”

“For me, revelations that there are financial connections between energy companies in… Ukraine, energy companies in China, and the Biden family are troubling. That should be public knowledge.”

Brand emphasized “That should be public knowledge.” He went on to discuss Silicon Valley’s efforts at controlling and blatantly censoring the political conversation in order to “protect” a crucial election… or rather to outright prevent a Trump victory. 

“And it’s even more troubling that Twitter, and Facebook and the media at large deliberately kept it out of the news because they didn’t want it to influence the election,” Brand told Greenwald.

In part two of my conversation with journalist Glenn Greenwald we discuss events surrounding his Hunter Biden revelations…what are your thoughts?

Watch the full video here: https://t.co/VxdqoDlqMT pic.twitter.com/5m2zA7q5jT

— Russell Brand (@rustyrockets) May 24, 2021

And more…

What is democracy then? It suggests to me that democracy is, ‘We want you to vote for this person. We don’t want you to vote for that person.’ 

As I’ve said, Donald Trump, you know, I don’t think Donald Trump’s the answer, but I’m sad to realize that I can no longer even claim to believe Joe Biden or the Democratic Party might be the answer, because look at how they behave. And look at the relationships between media, social media, and that party.

Using word choice that clearly denotes his concluding that there was a choreographed plot among big media and big tech to sanitize information before it reached the public, Brand concluded, “They conspired to keep information away from you because it was not convenient to their agenda.”

Really interesting from Russell Brand, of all people. “Did Media conspire with social media to CENSOR Joe/Hunter Biden Corruption Report? (Yes!)” https://t.co/oGGWMwBtPu

— Mollie (@MZHemingway) May 25, 2021

And Greenwald later commented of the new interview with Brand: “US media and tech giants united to bar millions of Americans from hearing this reporting before they voted” – in reference to the Biden Family laptop archive.

Meanwhile it will be interesting to see how long YouTube actually leaves up the new Brand-Greenwald interview, or whether it gets slapped with a restrictive “warning” label. 

Authored by Janita Kan via The Epoch Times,

Sen. Mitt Romney (R-Utah) on Monday said he was willing to support a Democrat-led bill that was passed by the House to create an independent commission to investigate the Jan. 6 breach of the U.S. Capitol.

Romney answered that he “would support the bill” when asked by reporters how he would vote if Senate Majority Leader Charles Schumer (D-N.Y.) starts a debate on the House bill, according to multiple congressional reporters. He is the first Republican in the Senate to do so.

The Utah senator’s comments come on the same day that Schumer vowed to bring the bill for a vote on the Senate floor.

“I will bring to the Senate floor the legislation passed by the House to create an independent commission to investigate and report on the January 6th attack on the Capitol,” Schumer said in a statement on Twitter.

Currently, Democrats are short on the 60 votes required to defeat a likely filibuster from Republicans, who have expressed opposition to the bill in its current form.

During the House vote, most Republicans voted against the measure, with only 35 Republicans crossing the aisle to approve the bill.

The National Commission to Investigate the January 6 Attack on the United States Capitol Complex Act, also known as HR 3233, is modeled after the investigation into the Sept. 11, 2001, attacks. The proposed measure would create in the legislative branch an independent, 10-member commission to investigate “relevant facts and circumstances relating to the attack on the Capitol,” and “evaluate the causes of and the lessons learned from this attack.”

The commission must also submit reports of their findings, alongside recommendations to “improve the detection, prevention, preparedness for, and response to targeted violence and domestic terrorism and improve the security posture of the U.S. Capitol Complex.”

The bill will grant the commission powers such as the authority to hold hearings, receive evidence, and issue subpoenas. It also enables the commission to appoint staff.

Sen. Susan Collins (R-Maine), who says she backs the creation of a commission but has reservations, has begun suggesting amendments to the House’s proposal. In an interview on Sunday, Collins said her support is conditional on bipartisan staffing and a report issued no later than by the end of this year.

“I think that both sides should either jointly appoint the staff or there should be equal numbers of staff appointed by the chairman and the vice-chairman,” Collins told ABC’s “This Week.” She also expresses optimism that Congress would be able to get past the issues.

In a separate interview, Sen. Roy Blunt (R-Mo.) said he believes Senate Republicans are likely to decide that it’s “too early” to establish a commission. Blunt also said he is opposed the establishment of such a commission over concerns of delays and effectiveness.

“I’ve actually opposed the idea of a commission from the very first because I think we’ll start waiting for a commission rather than moving forward with what we know we need to do now,” Blunt told Fox News.

“There’s a bipartisan effort in the Senate with two committees to produce not only a report but also a number of recommendations, and we should be able to do that in the first full week of June, and we haven’t even waited for that to decide what a commission should do,” he added.

Last week, Senate Minority Leader Mitch McConnell (R-Ky.) said he would oppose the House-passed bill, characterizing the proposal as a “slanted and unbalanced” study of the Jan. 6 incident.

“After careful consideration, I’ve made the decision to oppose the House Democrats’ slanted and unbalanced proposal for another commission to study the events of Jan. 6,” McConnell said on the Senate floor on May 19.

Meanwhile, top Democrat leader House Speaker Nancy Pelosi (D-Calif.) on Monday issued a statement calling for the Senate to quickly act on the bill, saying that “there is no time to waste or room for partisanship in keeping our Capitol and Country safe.”

Last week’s good news of easing vessel congestion earlier this month outside the busiest U.S. gateway for trade with Asia showed a glimmer of hope that supply chain disruptions could subside had flipped last week as more containerships join the queue.  

Bloomberg data shows the number of containerships queuing off the coast of Los Angeles reached the highest in two weeks.

As of Sunday, 21 containerships were anchored waiting for entry into L.A.-Long Beach, compared with 19 a week earlier. The bottleneck peaked at around 40 vessels in the queue in early February and has steadily declined ever since, but the latest data shows progress could be reversing. 

Shipping data shows another 16 vessels are expected to arrive at L.A.-Long Beach over the next few days, with ten of those scheduled to be moored offshore and join the queue. 

On Friday, the average waits for berth space, a designated location in a port used for mooring vessels when they are not at sea, was 5.9 days, compared with 6.1 a week earlier. That number peaked in April around eight days.

Readers may recall the collapse of the trans-pacific supply chains has been among the main reasons for soaring prices. It’s also hardly a secret that the most vulnerable section of supply chains are West Coast ports where congestion remains off the charts (as recently discussed in “It’s About To Get Much Worse”: Supply Chains Implode As “Price Doesn’t Even Matter Anymore” and “Port Of LA Volumes Are “Off The Charts.””) Which is why the first, and most critical step to restoring normalcy in both supply chains – and prices – will come from stabilizing and normalizing shipping congestion and backlog… at some point.

But as new data suggest, shipping congestion and backlogs are reversing and could result in even higher prices for any product that has to cross the Pacific before ending up in an Amazon warehouse or Walmart store shelf. 

Via South Front,

On May 25th, the Iranian Army kicked off a large-scale military drill to practice electronic warfare tactics, this drill on electronic warfare is dubbed ‘Separ-e-Aseman 1400’ (Sky Shield 1400).

According to a statement, this joint drill is being held by the strategic electronic warfare forces of the four forces of the Army and covers large areas of Iran. Rapid response and electronic warfare units of the Army’s Ground Force, Air Force, Navy and Air Defense are participating in the joint aerial maneuvers, codenamed Sky Shield 1400, whose headquarters will be located in Iran’s central province of Isfahan.

According to Deputy Chief of Iran’s Army for Coordination Rear Admiral Habibollah Sayyari, the drill is the most practical exercise in the field of military electronic warfare in recent years. He said the Iranian Army is going to use its latest achievements and combat capabilities during the drill, with offensive as well as defensive electronic warfare tactics to be put into practice.

Sayyari also pointed out the high significance of electronic warfare in both operational and intelligence aspects of present-day military encounters, stressing that the Iranian Army has developed the necessary infrastructure for defense and electronic warfare. Sayyari said aerial interception and cyber defense operations will also be conducted in the drill.

Participants in the drill practice using electronic defense tactics against small aircraft and intruding drones as well as, perform cyber defense maneuvers and evaluate function by eavesdropping, electronic jamming and target detection systems. During the drill, drones and smart micro aerial vehicles (MAVs) will also strike predetermined targets using electronic warfare cover, he said.

Accuracy and speed in detection of aircraft will be analyzed, and electronic eavesdropping and jamming systems monitored.

According to Iranian state media, in recent years, Iranian military experts and technicians have made great progress in indigenously developing and manufacturing a broad range of equipment, making the armed forces self-sufficient in this regard.

Iran’s Air Defense holds annual war games in order to enhance capabilities to defend the country’s airspace.

An Airbnb listing hidden deep within western Montana’s woods has been taken down after it discriminated against vaccinated people with “COVID misinformation.” 

“WE ARE RESTRICTING THE CABIN TO NON-COVID VACCINATED GUESTS ONLY,” the listing read. 

“For the health and safety of not only other guests but also ourselves, all COVID vaccinated guests are asked to find another vacation rental that allows vaccinated guests,” it said.

The listing continued: “It has now been scientifically proven and is clearly stated on the vaccine manufacturers web sites, that the MRNA protein in the ingredients SHED through the vaccinated persons skin, breath etc, and will be passed along to non-vaccinated people.” 

Charlie Warzel, a former reporter at BuzzFeed News, brought attention to the listing on Twitter on Sunday. He direct messaged the owners of the property and asked about their vetting process. The owners replied by saying they abide by the honor system. 

“We are not able to prove we have not taken the shots so it’s all on the honor system. We just have to all trust each other. If you say you haven’t taken the shots we trust you and you are more than welcome here,” one of the owners told Warzel. But the conversation ended quickly as Warzel believes the owners saw his tweets about the property, which had gone viral. 

Update 2: I think they saw the tweets! (fwiw I did not request to rent it, only to message the host!) pic.twitter.com/5sO3eHfFl3

— Charlie Warzel (@cwarzel) May 24, 2021

An Airbnb spokesperson told BuzzFeed the listing for the Montana cabin was suspended Sunday night “for promoting COVID misinformation in violation of our content policy.”

The continued canceled movement has reached new levels. Any opposition to vaccines and big tech will censor, suspend, or delete opposition accounts. The division between vaxxed and non-vaxxed continues to grow as the country is more fractured than ever. 

Authored by John Tamny via RealClear Markets (emphasis ours),

If you want to act in movies or on television in Hollywood, you must be a member of the Screen Actors Guild. That’s why the accession of a “SAG” card is such a momentous achievement for actors. It means they’re Hollywood legal as it were.

So why does acting professionally require union membership? The answer is very simple: SAG wants to prevent those yearning to be stars from flooding the market, and subsequently bidding starting wages down to zero.

It’s as old as the hills for actors and actresses to wistfully proclaim that “I just want a chance to show them what I can do.” Since they’re all looking for a break, it’s not unreasonable to speculate that most actors would take next to nothing (or nothing) just to be in a television show or a movie. If it’s all about getting in the door, why not give the labor away for free with the long-term in mind?

In reality, a wholly free market for actors would likely result in negative wage minimums. Any ambitious entertainer would logically and happily pay Steven Spielberg for the opportunity to act in one of his films. Why not? The exposure achieved in a film directed by someone known to helm blockbusters would be much more valuable than negative wages endured amid production.

All of this explains why SAG limits the number of actors legal to work, all the while pushing up minimum wage floors for its limited membership. In a figurative sense “everyone” wants to work in movies and television, so SAG erects barriers to supply and price so that excessive supply combined with a willingness to work for “anything” doesn’t push down actor pay. 

The Screen Actors Guild stands athwart market forces in order to keep entertainment compensation artificially high. Capitalism is not fully at work in the movie business.

This came to mind while reading a recent piece by New York Times economics writer, David Leonhardt. The columnist believes he’s got an easy answer to the present labor shortage in the U.S.: capitalism. The problem, one not diagnosed by Leonhardt, is that the present labor shortage he’s writing about has nothing to do with capitalism, and everything to do with the fleecing of capitalists.

To see why, let’s stop and consider why there’s a shortage of labor in the first place. It’s a consequence of a much-too-belated opening of the U.S. economy after over a year of needless lockdowns. With them finally ending, labor-intensive businesses are finding it exceedingly hard to hire workers.

Leonhardt says the presumed shortages are nonsense, that the “capitalism” he routinely attacks in his column is ready-made for fixing the shortage. In Leonhardt’s words:

“When a company is struggling to find enough labor, it can solve the problem by offering to pay a higher price for that labor — also known as higher wages. More workers will then enter the labor market. Suddenly, the labor shortage will be no more.”

Leonhardt’s diagnosis is much more than naive. 

Stated simply, labor is a price like any other. Just as SAG keeps the price of hiring an actor artificially high by limiting supply, so has government to some degree done the same over the past year. With unemployment benefits abnormally high due to Congress’s generosity with the money of others, the incentive to work isn’t as great as it was before the lockdowns began in March of 2020.

Put another way, generous unemployment benefits are bidding workers to the sidelines. The able-bodied have a choice right now: they can either resume working again, or they can receive unemployment checks that in all-too-many instances are greater than what they would earn if they were working. In which case capitalists are hit hard in two ways: government intervention has made it artificially expensive to hire, plus that same government is also limiting supply of workers; thus making it more expensive to hire from a shallower pool of labor.

Leonhardt believes that the labor shortage problem is as simple as businesses offering better pay, that increasing compensation to lure individuals back to work is the capitalist way, but he conveniently ignores that the labor shortage is a direct consequence of a lack of capitalism. Government has intervened in the labor market, and created an artificial shortage. Much more galling about the shortage is that it was created by government taking from the capitalists. 

Lest readers forget, governments have no resources. They only have spending power and faux swagger insofar as they arrogate to themselves a rising percentage of the production created by capitalistic endeavor. In other words, capitalism is the source of congressional largesse. In 2020, Congress chose to use the wealth extracted from capitalists in order to make hiring quite a bit more expensive for capitalists.

The mystery about all this is why Leonhardt can’t see the obvious contradiction in his thesis. Government is paying individuals not to work, and more than a few are biting. Labor shortages are the result.

In short, a lack of capitalism is behind the labor shortages and the higher cost of labor. If Leonhardt doubts this truth, he need only visit left leaning Hollywood. It’s there that unions long ago perfected the art of artificial labor scarcity that Congress is foisting on us now through its own interventions.

After by the end of last year New York City’s beleaguered subways fell to carrying a mere 30% of pre-pandemic volumes but also as vandalism and random violent attacks soared, sparking widespread concern over safety, officials with the state’s Metropolitan Transportation Authority are now looking to spend $2.2 million a month on private security guards, a recent Wall Street Journal report confirmed.

By month’s end some 200 private guards are expected to be present at stations and on trains, which is double what it’s been in prior months – after the MTA urged more city police amid rising crime in areas of the transit system where there’s often near-deserted platforms given the prior COVID-fueled rider drop off.

While MTA’s budget is huge, into the multiple billions annually, it’s lately had to rely heavily on federal Covid relief to continue operations. 

“The last thing I want to do is to devote precious resources in the middle of a financial crisis to additional security contractors,” MTA’s interim head of subway operations Sarah Feinberg said. “But I’m also not going to be in a position where my customers and workforce continue to feel uncomfortable and unsafe.”

The move also comes after a persistent homeless and vagrant problem, as largely empty cars often get essentially taken over by transient “residents”. The private security guards will reportedly be unarmed and will mostly operate in an “observe and report” capacity, as part of broader efforts to prevent drug-use, fare evasion, robberies, violent crime, and vandalism at the stations. 

A huge spike in robberies and violent attacks was observed starting in March and April of 2020, just after pandemic shutdowns left the underground transport network largely abandoned in many spots. For example, an April 2020 crime report noted after a full month of the pandemic that “Robberies jumped 55% last month, compared to the same period in 2019, according to an NYPD report to the MTA, and major felonies remained essentially flat even as ridership all but vanished due to the coronavirus crisis.”

And from the opening months of pandemic lockdowns, the MTA began adding more and more security in an attempt to get a handle on the continually deteriorating safety situation: “With platforms and stations increasingly desolate — and the NYPD hit by coronavirus-related absences — the MTA is adding 70 more uniformed personnel to the subway, from its own police department and a pair of firms that already had security contracts with the transit agency.”

However, at this point a mere extra 200 unarmed guards seems like a drop in the bucket in terms of the immense number of issues facing New York’s subways on multiple fronts, which continues to fuel hesitancy among an increasingly vaccinated public in terms of jumping back into pre-pandemic public transport routines at prior normal levels.

Tommy Thornton, founder of Hedge Fund Telemetry, joins Real Vision senior editor Ash Bennington to sharing his latest insights on market activity as U.S. consumer confidence falls slightly for May and questions about inflation’s permanence still linger. Thornton considers the implications of the repo market displaying surging levels of reverse repurchase agreements (RRPs) and explains what indicators he’s paying attention to and what that means for markets going forward.