Victims of Communism Day—2023


KolymaBones
Bones of tortured prisoners. Kolyma Gulag, USSR (Nikolai Nikitin, Tass).

 

NOTE: This post largely reprints last year’s Victims of Communism Day post, with some modifications.

Today is May Day. Since 2007, I have advocated using this date as an international Victims of Communism Day. I outlined the rationale for this proposal (which was not my original idea) in my very first post on the subject:

May Day began as a holiday for socialists and labor union activists, not just communists. But over time, the date was taken over by the Soviet Union and other communist regimes and used as a propaganda tool to prop up their [authority]. I suggest that we instead use it as a day to commemorate those regimes’ millions of victims. The authoritative Black Book of Communism estimates the total at 80 to 100 million dead, greater than that caused by all other twentieth century tyrannies combined. We appropriately have a Holocaust Memorial Day. It is equally appropriate to commemorate the victims of the twentieth century’s other great totalitarian tyranny. And May Day is the most fitting day to do so….

Our comparative neglect of communist crimes has serious costs. Victims of Communism Day can serve the dual purpose of appropriately commemorating the millions of victims, and diminishing the likelihood that such atrocities will recur. Just as Holocaust Memorial Day and other similar events promote awareness of the dangers of racism, anti-Semitism, and radical nationalism, so Victims of Communism Day can increase awareness of the dangers of left-wing forms of totalitarianism, and government domination of the economy and civil society.

While communism is most closely associated with Russia, where the first communist regime was established, it had comparably horrendous effects in other nations around the world. The highest death toll for a communist regime was not in Russia, but in China. Mao Zedong’s Great Leap Forward was likely the biggest episode of mass murder in the entire history of the world.

November 7, 2017 was the 100th anniversary of the Bolshevik seizure of power in Russia, which led to the establishment of the first-ever communist regime. On that day, I put up a post outlining some of the lessons to be learned from a century of experience with communism.  The post explains why the lion’s share of the horrors perpetrated by communist regimes were inherent flaws  of the system. For the most part, they cannot be ascribed to circumstantial factors, such as flawed individual leaders, peculiarities of Russian and Chinese culture, or the absence of democracy. Some of these other factors, especially the last, probably did make the situation worse than it might have been otherwise. But, for reasons I explained in the same post, some form of dictatorship or oligarchy is  virtually inevitable in a socialist economic system whire the government controls all or nearly all of the economy.

While the influence of communist ideology has declined since its mid-twentieth century peak, it is far from dead. Largely unreformed communist regimes remain in power in Cuba and North Korea. In Venezuela, the Marxist government’s socialist policies have resulted in political repression, the starvation of children, and a massive refugee crisis—the biggest in the history of the Western hemisphere.

In Russia, the authoritarian regime of former KGB Colonel Vladimir Putin has embarked on a wholesale whitewashing of communism’s historical record. Putin’s brutal and indefensible invasion of Ukraine probably owes more to Russian nationalist ideology than communism. But it is nonetheless fed in part by his desire to recapture the supposed power and glory of the Soviet Union, and his long-held belief that the collapse of the USSR was “the greatest geopolitical catastrophe of the century.” It is also telling that most communists in Russia and elsewhere have joined with far-right nationalists in largely backing Putin’s line on the war.

In China, the Communist Party remains in power (albeit after having abandoned many of its previous socialist economic policies), and has recently become less tolerant of criticism of the mass murders of the Mao era (part of a more general turn towards greater repression).

The Chinese regime’s repressive policies also played a major role in its initial attempts to cover up the coronavirus crisis, which probably forestalled any chance of containing it before it became a massive pandemic. The brutal mass lockdowns entailed by the government’s “zero Covid” policies also had much in common with the communist totalitarian legacy.

Perhaps worst of all its recent atrocities, China’s horrific repression of the Uighur minority is reminiscent of similar policies under Mao and Stalin, though it has not—so far—reached the level of actual mass murder. But imprisoning over 1 million people in horrific concentration camps is more than bad enough.

In a 2012 post, I explained why May 1 is a better date for Victims of Communism Day than the available alternatives, such as November 7 (the anniversary of the Bolshevik seizure of power in Russia) and August 23 (the anniversary of the Nazi-Soviet Pact). I also addressed various possible objections to using May Day, including claims that the date should be reserved for the celebration of labor unions.

But, as explained in my 2013 Victims of Communism Day post, I would be happy to support a different date if it turns out to be easier to build a consensus around it. If another date is chosen, I would prefer November 7; not out of any desire to diminish the significance of communist atrocities in other nations, but because it marks the establishment of the very first communist regime. November 7 has in fact been declared Victims of Communism Memorial Day by three state legislatures.

If this approach continues to spread, I would be happy to switch to November 7, even though May 1 would be still more appropriate. For that reason, I have adopted the practice of also commemorating the victims of communism on November 7.

I  would also be happy to back almost any other date that could command broad support. Unless and until that happens, however, May 1 will continue to be Victims of Communism Day at the Volokh Conspiracy.

The post Victims of Communism Day—2023 appeared first on Reason.com.

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Russian Freight Train Derails In Sabotage Attack As Airstrikes Pummel Ukraine For 2nd Day

Russian Freight Train Derails In Sabotage Attack As Airstrikes Pummel Ukraine For 2nd Day

An apparent sabotage attack with an “explosive device” has resulted in a disastrous train derailment in the Russian region of Byransk which borders Ukraine. 

“An unidentified explosive device went off, as a result of which a locomotive of a freight train derailed,” Bryansk governor Alexander Bogomaz announced on Telegram Monday.

Aftermath of train derailment in Byransk, via Telegram.

The governor further confirmed there were no casualties and that the train struck the device “on the 136th kilometer” of the railroad between regional hub Bryansk and the town of Unecha, as cited in AFP.

The Bryansk region near Ukraine has been site of frequent cross-border attacks throughout the conflict. The latest was just the day prior, with projectiles fire from Ukraine killing four people in a Russian village which lies just 10km from the border.

Bogomaz says the FSB security service has opened a criminal case looking into the act of “sabotage”.

Meanwhile Monday witnessed the second consecutive day of large-scale Russian airstrikes across mainly central Ukraine

Central Dnipropetrovsk saw the heaviest bombardment, resulting in at least 34 people wounded – among them children – according to regional Ukrainian authorities. “There are already 34 wounded due to a missile attack on the Pavlograd district,” head of the Dnipropetrovsk region Sergiy Lysak said in a press statement.

Russia’s defense ministry confirmed the overnight wave of strikes, which it said was directed at Ukrainian military targets, including weapons depots and ammunition factories.

The United States condemned the missile attack as “barbaric”. US ambassador to Kyiv, Bridget Brink, issued a statement on Twitter describing that “Russia again launched missiles in the deep of night at Ukrainian cities where civilians, including children, should be able to sleep safely and peacefully.”

“I am grateful for those who protect Ukraine’s skies, and the United States will continue to work hard and fast to support them and their ability to defeat Russia’s barbaric attacks on the people of Ukraine,” she said.

Ukraine’s military once again claimed its anti-air defenses had intercepted many of the inbound missiles. As casualties mount from the last two days of aerial attacks, Kiev is likely to press its Western backers even harder at this point for more advanced anti-air systems.

Tyler Durden
Mon, 05/01/2023 – 10:50

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Bernie Sanders: Government Should Confiscate All Wealth Over $999 Million

Bernie Sanders: Government Should Confiscate All Wealth Over $999 Million

Authored by Thomas Lifson via AmericanThinker.com,

No billionaires at all!

Not American ones, at least.

That’s the newly proclaimed policy of Bernie Sanders, who most definitely is not challenging the Democrats to nominate him for president in 2024, as he did in 2020. Nope, Bernie is perfectly comfortable with the policies being followed by President Biden’s handlers.

Presumably, in exchange for not rocking the boat as he did in 2020, forcing the party’s controllers to pick an already senescent Joe Biden just because he was easy to control with all these bribes that could be exposed when needed (cough! Stay tuned as Biden’s desire for re-election now appears to be a kamikaze mission), Bernie has assurances that the hard left vector will continue no matter who is leading the party as presidential nominee in 2024.

Bernie Sanders’s choice of $999 million as the permissible level of wealth and no more brings to mind Barack Obama’s words: “I mean, I do think at a certain point you’ve made enough money.”

Of course, once such a wealth confiscation is announced, billionaires will depart for friendlier shores, there will be very little left to confiscate, and entrepreneurs will be creating jobs and wealth elsewhere.

That’s what happened when France tried a wealth tax, and that’s why it was repealed. 

Watch as Bernie defines ”enough” to Chris Wallace of CNN:

WALLACE: “Sir, you’re saying that billionaires should not exist. So, are you basically saying that once you get to $999 million, that the government should confiscate all the rest?”

SANDERS: “I’m saying that we should go back to a very progressive tax policy like what we had under Dwight D. Eisenhower.”

WALLACE: “Which would mean that — that — over a billion, basically it all goes to the government?”

SANDERS: “You may disagree with me, but — fine, yeah, I think people can make it on $999 million.”

Bernie, who is himself worth $3 million, according to GoBankingRates, previously criticized both millionaires and billionaires, but now only opposes those worth over a billion dollars.

Sanders, alongside Sen. Elizabeth Warren (D-Mass.) and Rep. Jimmy Gomez (D-Calif.) had introduced new legislation in April, called the “For the 99.5 Percent Act,” which was announced on Sanders’ Senate website.

Tyler Durden
Mon, 05/01/2023 – 10:30

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ISM Manufacturing Screams Stagflation, Still Contracting With “Reigniting Inflationary Pressures”

ISM Manufacturing Screams Stagflation, Still Contracting With “Reigniting Inflationary Pressures”

Following S&P Global’s manufacturing survey’s surprise jump in the flash data, the 50.4 print has dropped intra-month to 50.2 (still back in expansion)

  • S&P Global US Manufacturing final April print of 50.2, down from 50.4 flash, up from 49.2 in March – highest since Oct 2022

  • ISM US Manufacturing April print of 47.1, up from 46.3 prior (and betyer than the expected 46.8) – but still in contraction (sub-50).

Given the notable slide in the US macro surprise index

Source: Bloomberg

Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, said:

US manufacturing output has regained some encouraging momentum at the start of the second quarter, having stabilised in March after four months of decline.

“While the upturn is in part linked to greatly improved supply chains, helping reduce backlogs of orders, April also saw a welcome upturn in new order inflows for the first time since last September.

“Although only modest, the rise in new orders hints at a tentative revival of demand, notably from consumers but there are also signs that fewer customers are deliberately winding down their inventory levels.

“The brightening demand picture was accompanied by a lifting of business confidence about the outlook and increased hiring. The downside was a reigniting of inflationary pressures, with a stronger order book encouraging more firms to pass through higher costs to customers.”

Economic activity in the manufacturing sector contracted in April for the sixth consecutive month following a 28-month period of growth, say the nation’s supply executives in the latest Manufacturing ISM Report.

“Of the six biggest manufacturing industries, two – Petroleum & Coal Products; and Transportation Equipment – registered growth in April.”

New order rates remain sluggish as panelists remain concerned about when manufacturing growth will resume. Panelists’ comments registered a 1-to-1 ratio regarding optimism for future growth and continuing near-term demand declines. Supply chains are prepared and eager for growth, as panelists’ comments support reduced lead times for their more important purchases. Price instability remains and future demand is uncertain as companies continue to work down overdue deliveries and backlogs. Seventy-three percent of manufacturing gross domestic product (GDP) is contracting, up from 70 percent in March.

However, fewer industries contracted strongly; the proportion of manufacturing GDP with a composite PMI® calculation at or below 45 percent — a good barometer of overall manufacturing weakness — was 12 percent in April, compared to 25 percent in March,” says Fiore.

Prices Paid back above 50…

Source: Bloomberg

So ISM screams stagflation – no growth and higher prices.

Tyler Durden
Mon, 05/01/2023 – 10:05

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GM Shares Pop 3% After Morgan Stanley Upgrade To Overweight, Raised Price Target

GM Shares Pop 3% After Morgan Stanley Upgrade To Overweight, Raised Price Target

Shares of General Motors are starting off the new month up more than 3% on Monday, after auto analysts at Morgan Stanley upgraded the company to “overweight” from “equal weight”.

Morgan Stanley also raised its price target on GM from $35 per share to $38 per share, saying they believe the stock is oversold and that it offers an “attractive risk-reward skew with the well-tested $30 support level.” 

Despite the beat on earnings – as Morgan Stanley points out – the stock is only back to levels it was at prior to earnings. 

The bank said that sentiment on GM was currently too low as a result of EV names all pulling back – but that GM should buck this trend:

We note that first quarter results beat consensus expectations by 15 to 20% yet the stock has declined over 5% following the print. We believe the market  is understandably focused on the recent price action in the electric vehicle market (by Tesla and other competitors), the auto/EV slowdown in China, continued uncertainty within the consumer lending market, and other macro economic uncertainties. However, this does not diminish the very strong performance during the first quarter including a nearly 11% EBIT adjusted margin in North America, which we estimate would be into the mid-teens % excluding EV expenditure and other inefficiencies.

“At our updated PT of $38, GM is trading at 6.6x 2023 EPS vs7.1x previously. We note that our PT is based on a normalized earnings analysis above, supported by DCF and SOTP. Our new earnings framework assumes 2030 EV penetration of 26%, supporting $153bn of ICE revenue at 8.7% margins,” the bank wrote. 

MS also updated its estimates on GM:

Units: We now forecast GM’s FY 23 vehicle deliveries at 6.3mn units total vs 6.5mn prior. Our FY24 estimate moves to 6.1mn vs. 6.2mn prior.

Revenue: Our updated FY23 revenue estimate sits at $158.6bn vs $159.2bn prior. The reduction is largely driven by reduced lower auto units offset by increased avg. auto ATPs and slightly increased GMF revenue. Our FY24 estimate moves to $148.6bn vs $149.2bn prior on the same drivers.

Auto EBIT: We increase our FY23 auto EBIT estimate to $11.5bn from $10.5bn. The increase is driven by an improvement in our view on new vehicle prices which are holding up better than expected, slightly offset by a decrease in our mix assumption.FY24 auto EBIT is now $9.9bn vs $9.3bn prior, driven by the same reasons.

GM Financial: We tweak our GMFestimate,FY23revenue now sits at $12.1bn vs $11.7bn prior.FY23 EBIT is slightly reduced however driven by building in increased negative effect from spreads and risk loss. For FY24 GMF revenue we now forecast $12.1bn vs $11.8bn prior and EBIT of $1.7bn vs $1.8bn prior.

The investment bank also pointed out the company’s recent earnings report, which beat expectations, stating: “We expect a more gradual de-adoption of internal combustion in the US market versus expectations and a materially higher level of free cash flow conversion over the course of the internal combustion runoff vs. history due to lower investment burden and a more targeted/premium approach.”

“We have increased belief that the forward capital allocation strategy (specifically the EV and EV investment strategies) will be approached with great discipline in a nimble and flexible fashion,” the bank also said.

The note continued:

“Our previous Equal-weight recommendation was partially driven by our concerns that GM would potentially launch too aggressively into high volume EV markets without fully developing its production and supply chain architecture. We have been concerned at the potential for large competitors to exert aggressive downward pressure on industry pricing faster than GM had planned for. If such a situation were to occur at a time when GM had already launched and scaled up its EV production, the results would have been detrimental to the earnings power of the company. However, we believe the company may be exercising a more gradual ramp strategy as well as a more nimble strategy to be able to tack higher or lower its EV offering based on 1) what the customer can afford;2) its ability to supply economically; and 3) broader conditions that affect supply and demand in the EV market (including competitive pricing actions).”

MS also put General Motors within the top 5 of 29 auto related stocks that it covers, Investing.com noted Monday morning, and praised the company’s capital discipline:

GM has taken a number of disciplined actions this year and demonstrated further cost cutting initiatives during the quarter. Following the first quarter we are increasingly convinced that GM is focused on capital discipline (potentially austerity, if needed) during an uncertain environment. GM CEO Mary Barra has a long track record of making tough decisions such as exiting the European and Korean (Daewoo) businesses, return of cash to shareholders, and a series of restructuring actions.

Recall, most recently, GM was in the news when it announced it was halting production of the Chevrolet Bolt EV and Bolt EUV. This aligns with the GM’s plan to transition the Bolt production line in Orion, Michigan, into manufacturing electric trucks. 

CEO Mary Barra confirmed the seven-year run of the Bolt would come to an end and be retooled for electric truck production last week: 

“We’ve progressed so far that it’s now time to plan the end of Chevrolet Bolt EV and EUV production, which will happen at the end of the year.”

In 2023, GM has three new EV models for mass-market across the Chevrolet brand, including the Silverado truck, Blazer, and Equinox. The new models might rekindle GM’s EV growth strategy after the Bolt fizzle.

As we noted this week, Morgan Stanley has also said it sees a ‘great productivity race’ that will benefit some sectors but challenge others.

“Efforts in the US to re-, friend-, and near-shore critical industries have strong political support. But these initiatives narrow the geographical options for US multinationals, making cheap labor – particularly for skilled manufacturing – harder to find and exacerbating an underlying US economic challenge,” the bank wrote.

“Similar historical conditions have pressed companies to focus on improving productivity through the development, diffusion, and integration of new technologies. We expect US companies to invest in infrastructure and new technologies, AI in particular, to boost productivity. Companies that rely on labor and lack substantial financial resources will likely be challenged by this dynamic.”

Tyler Durden
Mon, 05/01/2023 – 09:15

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Regulators Seize First Republic Bank and Sell It to JPMorgan Chase


people walking by a branch of First Republic Bank

Another Silicon Valley bank fails. The California Department of Financial Protection and Innovation (DFPI) took possession of San Francisco–based First Republic Bank, accusing the institution of conducting business “in an unsafe or unsound manner.” It appointed as receiver the Federal Deposit Insurance Corporation (FDIC), which then sold the bank to JPMorgan Chase Bank.

JPMorgan Chase will “assume all deposits, including all uninsured deposits, and substantially all assets of First Republic Bank,” per a press release from the California DFPI. As part of the sale deal, the FDIC “will share losses with JPMorgan on First Republic’s loans,” reports The Wall Street Journal. “The agency estimated that its insurance fund would take a hit of $13 billion in the deal. JPMorgan also said it would receive $50 billion in financing from the FDIC.”

As of mid-April, First Republic Bank held about $103.9 billion in deposits and $229.1 billion in total assets. Its failure marks the second-largest failed bank in U.S. history, following Washington Mutual, which collapsed in 2008.

The good news is that this isn’t necessarily another 2008-style situation.

Yes, First Republic got caught in the Silicon Valley Bank (SVB) failure spiral. (In March, First Republic lost $100 billion in deposits after SVB collapsed.) And yes, the collapse of SVB and New York-based Signature Bank (which also failed in March) reverberated widely.

But Steven Kelly, a senior researcher with the Yale Program on Financial Stability, argues that “this is the last stages of that initial panic,” according to the Journal. And “First Republic’s failure seems unlikely to spur another crisis of confidence in the Main Street lenders that serve a large chunk of America’s businesses and consumers,” the newspaper suggests. “Regional lenders uniformly lost deposits during the first quarter, but the declines were modest compared with First Republic’s $100 billion outflow.”

While First Republic’s immediate problems may stem from the failure of SVB and Signature, the roots of its problems go deeper than that. Like Silicon Valley Bank, First Republic’s managers made poor decisions that failed to account for changing interest rates.

“Ultralow interest rates and a pandemic savings boom supercharged the bank’s growth,” comments the Journal:

When the Fed began raising interest rates last year to cool inflation, customers began demanding higher yields to keep their money at First Republic. Rising rates also dented the value of loans the bank made when rates were near zero.

First Republic’s badly damaged balance sheet left it with few good options.

In a dismal quarterly-earnings report last week, the bank disclosed the extent of the deposit run and said it had filled the hole on its balance sheet with expensive loans from the Federal Reserve and Federal Home Loan Bank. An untenable future, in which it earned less on its loans than it paid on liabilities, appeared all but certain.

The earnings report sent the bank’s stock down nearly 50% in one day.

Today, “First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank,” according to the FDIC. “All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits….Customers of First Republic Bank should continue to use their existing branch until they receive notice from JPMorgan Chase Bank, National Association, that it has completed systems changes to allow other JPMorgan Chase Bank, National Association, branches to process their accounts as well.”


FREE MINDS 

Twitter complies with government censorship requests. Twitter CEO Elon Musk claims that he is bringing more free speech to the platform. But “Twitter’s self-reported data shows that, under Musk, the company has complied with hundreds more government orders for censorship or surveillance—especially in countries such as Turkey and India,” reports the tech news outlet Rest of World.

The data, drawn from Twitter’s reports to the Lumen database, shows that between October 27, 2022 and April 26, 2023, Twitter received a total of 971 requests from governments and courts. These requests included orders to remove controversial posts, as well as demands that Twitter produce private data to identify anonymous accounts. Twitter reported that it fully complied in 808 of those requests, and partially complied in 154 other cases. (For nine requests, it did not report any specific response.)

Most alarmingly, Twitter’s self-reports do not show a single request in which the company refused to comply, as it had done several times before the Musk takeover. Twitter rejected three such requests in the six months before Musk’s takeover, and five in the six months prior to that.

More broadly, the figures show a steep increase in the portion of requests that Twitter complies with in full. In the year before Musk’s acquisition, the figure had hovered around 50%, in line with the compliance rate reported in the company’s final transparency report. After Musk’s takeover, the number jumps to 83% (808 requests out of a total of 971).

These numbers are drawn from the Lumen database, which is maintained by Harvard’s Berkman Klein Center for Internet & Society. The public database keeps track of “legal complaints and requests for removal of online materials.”


FREE MARKETS 

Judge allows antitrust suit against Google to go forward. A federal court nixed Google’s motion to dismiss a lawsuit that claims it has an illegal monopoly in online ad sales. (Find more on that lawsuit, filed by the U.S. Department of Justice and eight states, here.)

Google contended that the case should be dismissed, in part because the government’s complaint defined the relevant market too narrowly. “Google’s lawyers contend the lawsuit does not account for advertisers’ ability, for example, to advertise on huge social media platforms like Facebook and TikTok that run their own advertising platforms independent of Google,” reports the Associated Press.

Judge Leonie Brinkema of the U.S. District Court for the Eastern District of Virginia doesn’t agree. She said Friday that the suit against Google may move forward—the second ruling in the government’s favor from Brinkema in this case. Last month, she ruled that the case could be heard in Virginia and rejected Google’s request to consolidate the case with similar lawsuits being heard in New York.


QUICK HITS 

• How pro-lifers in Nebraska and South Carolina pushed too far and doomed two pieces of anti-abortion legislation.

• David French explains “why Gov. Ron DeSantis of Florida should lose in his quest to punish Disney for the high crime of publicly disagreeing” with him.

• Mike Masnick writes about the Senate’s moral-panic-fueled “unconstitutional age verification bill.”

• Kansas lawmakers voted last week to decriminalize fentanyl test strips.

• Oregon’s HB 3501, introduced last week in the state House of Representatives, would decriminalize homeless encampments by allowing homeless people to use public spaces “without discrimination and time limitations.” The bill would also allow homeless people to sue if they were told to leave a public space.

• “A bill to decriminalize marijuana in Louisiana was short-lived, swiftly dying in committee Tuesday before ever reaching the House floor for debate this legislative session,” reports the Associated Press.

• “Ideas like ‘racial justice’ and ‘creating a more equitable world'” are not “inherently leftist concepts,” writes Matt Zwolinski. “There has always been a significant (albeit inconsistently applied) egalitarian streak to libertarian thought, especially in its 19th century origins.”

• A home baker shouldn’t have to make a choice between her dog and her work.

The post Regulators Seize First Republic Bank and Sell It to JPMorgan Chase appeared first on Reason.com.

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Peter Schiff: We Can’t Afford To Let Biden “Finish The Job”

Peter Schiff: We Can’t Afford To Let Biden “Finish The Job”

Via SchiffGold.com,

President Biden has announced he will run for a second term in 2024. Peter Schiff recently appeared on the Ingraham Angle on Fox News to talk about what will happen if we keep going down the Biden road. In a nutshell, Peter said we can’t afford to let Biden “finish the job.”

Peter opened the interview by saying he couldn’t help but laugh as Laura Ingraham played clips of Biden administration shills touting all of the president’s “accomplishments.”

He hasn’t accomplished anything other than running up the debt, weakening the economy, and strengthening inflation.”

In fact, the Biden administration managed to run a budget deficit of over $1 trillion in just the first six months of fiscal 2023. Meanwhile, the GDP numbers for the first quarter of this year were extremely weak. Peter said the worst part of the GDP report was the inflation numbers that go into that calculation.

In Q1 of this year, inflation actually strengthened over the fourth quarter of last year. So, not only is the economy weakening, but inflation is strengthening. You have the worst of both worlds. This is stagflation and it’s going to get worse.

Laura brought up the following quote by Paul Krugman.

The economy is in better shape than I suspect most pundits or even generally well-informed readers may realize… America has experienced remarkably fast and essentially complete job market recovery. … Inflation has subsided substantially. The overall situation is, well, not so bad.”

Peter said the problem is Paul Krugman still has a job.

If you look at the jobs that have been created, they’re low-paying service-sector jobs. So, what’s happened during the Biden presidency is people have lost good jobs, high-paying jobs with benefits, and they’ve been forced to replace them with two or three low-paying part-time jobs. That’s where all the jobs are coming from. That’s what the numbers show. The only reason we’re creating jobs is because we’re destroying so many good jobs, and you need to cobble together two or three part-time jobs to try to replace your lost income. That means we have more jobs, but they’re not good jobs. They’re bad jobs. People would rather have the jobs they lost than the crappy jobs that they’re forced to work.”

Tyler Durden
Mon, 05/01/2023 – 09:45

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May Day Protests In France Turn Violent As Unions Fume Over Macron’s Pension Reform

May Day Protests In France Turn Violent As Unions Fume Over Macron’s Pension Reform

Nationwide protests are expected in France on Monday, with annual May Day demonstrations coinciding with ongoing discontent over President Emmanuel Macron’s unpopular pension overhaul in March. 

As reported by NYTimes, French authorities estimate 500,000 to 650,000 protesters across the country – with as many as 100,000 or more in Paris. A flare-up in demonstrations today comes after months of unrest due to France’s Constitutional Council approving Macron’s unpopular pension reform that raised the retirement age from 62 to 64. 

Despite the decision, some of France’s most powerful unions say they will fight on. The question is whether this anger will stick around for the rest of Macron’s presidential term or eventually fades. 

Several top union leaders have made it clear they’re not giving up. 

“I don’t accept the 64 years. I will never accept them,” said Laurent Berger, the head of France’s largest and most moderate major union, the CFDT. He expects “hundreds of thousands” and or even “1 million or 1.5 million” demonstrators on the streets today. 

“Macron is trying to move forward no matter what, but people are standing still,” said Antoine Bristielle, the head of the polling department at the Fondation Jean-Jaurès research institute. He said, “About 60 percent of the population say they don’t want to move on from the pension reform.”

“There will be no return to normal unless the reform is withdrawn,” Sophie Binet, the head of the General Confederation of Labor, France’s second-largest labor union, told local media outlet RTL. 

Despite months of demonstrations, unions show no signs of backing down and continue to exert pressure on the government.

Tyler Durden
Mon, 05/01/2023 – 09:30

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It’s Not Funny Because It’s True: Biden Jokes About Never Taking Questions And Doing Nothing

It’s Not Funny Because It’s True: Biden Jokes About Never Taking Questions And Doing Nothing

Authored by Steve Watson via Summit News,

Joe Biden attempted to do stand up comedy over the weekend, and it went much as you would expect.

Biden was appearing at the annual White House Correspondent’s dinner, which bizarrely seems to have become the only time where everyone just drops the bullshit and says what they really think.

“In a lot of ways, this dinner sums up my first two years in office — I’ll talk for ten minutes, take zero questions, and cheerfully walk away,” Biden declared.

There’s something profoundly disturbing about a senile decrepit President being ordered to read from a telepromter for laughs that he is incapable of performing the job.

Report: Biden Has Spent 40% Of His Presidency On Vacation

Video: Biden Mocks Reporters For Trying To Ask Him Questions

Here are more ‘jokes’ that Biden’s handlers made him do. He clearly has no idea what any of it means, he’s just doing what he’s told to.

From there Roy Wood Jr. ‘joked’ about drag queens grooming children and kids getting murdered in mass shootings:

Lovely stuff.

*  *  *

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Tyler Durden
Mon, 05/01/2023 – 09:15

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Futures Flat On First Republic Failure Day

Futures Flat On First Republic Failure Day

US stock futures were flat to start the busy new week in subdued trading with much of the world close for May 1 celebrations, as investors assessed the government-backstopped intervention which saw JPMorgan Chase acquire First Republic Bank ahead of this week’s Federal Reserve rates decision. Contracts on the S&P 500 were unchanged at 4,187 after the underlying benchmark gained sharply on Friday, rising 0.8% on the back of another painful gamma squeeze. The dollar dropped, alongside Treasuries which edged lower after a muted session in Asia. There was no trading in much of Europe to observe the May 1 holiday, with markets also shut in Asian centers like Hong Kong, Singapore and mainland China.

In premarket trading, First Republic tumbled 39% while JPMorgan advanced 2.9% as the already largest US bank became even bigger courtesy of billions in taxpayer funding.  JPMorgan will take over First Republic’s assets, including about $173 billion of loans and $30 billion of securities, as well as $92 billion in deposits. JPMorgan and the Federal Deposit Insurance Corp., which orchestrated the sale, agreed to share the burden of losses, as well as any recoveries, on the firm’s single-family and commercial loans. But really the losses, which will be funded by US taxpayers leaving JPM with the best assets which it bought for pennies on the dollar and is why JPM stock is up 3% premarket. Here are the other notable premarket movers:

  • Alignment Healthcare Inc. shares are up 4.8%, as Raymond James upgrades the health care software company to outperform from market perform.
  • Carvana shares rise as much as 18% after Bloomberg reported late Friday that the online auto retailer’s creditors, who hold about 90% of CVNA’s bonds, have been pitching to the company ways to pare down debt and improve liquidity, including a proposal for a debt-for-equity swap.
  • Top Financial Group Ltd. pulls back after rallying 1,510% over the last two trading sessions.
  • Iveric Bio Inc. jumps 18% after Japan’s Astellas Pharma Inc. agrees to buy it for about $5.9 billion.
  • General Motors shares rise as much as 2.9% Monday after the carmaker was upgraded to overweight from equal-weight at Morgan Stanley which says the stock looks oversold.
  • Manchester United Plc slides 5.2% Monday, amid a looming decision by the Glazer family over the sale of the football club.
  • Teradata advances 3.3% after Guggenheim Securities raised the database-management company to buy from neutral, saying channel checks signal that it may be at a positive inflection point with customer retention and revenue expansion through its cloud strategy.

Meanwhile, investors are anticipating the Fed to hike interest rates for a 10th consecutive – and final – time on Wednesday as it combats still-stubborn inflation. The benchmark S&P 500 has climbed in the past two months even amid banking sector turmoil and recession concerns, as investors take comfort in better-than-feared earnings and expect any slowdown to be mild. However, “if the message delivered at this meeting is more hawkish, it could provide a near-term negative surprise for equities,” Morgan Stanley’s permabear Michael Wilson wrote in a note, really scraping the bottom of the barrel on this one.

Shares in First Republic bank were halted after tumbling 46% in premarket trading. Regulators had worked into the evening on Sunday in Washington before announcing JPMorgan won the bidding to acquire the lender in an emergency government-led intervention. The collapse of First Republic was the second-biggest bank failure in US history. Private rescue efforts had failed to undo the damage from wrong-way investments and depositor runs that have roiled regional lenders.

As described earlier, JPMorgan acquired about $173 billion of First Republic’s loans, $30 billion of securities and $92 billion in deposits. JPMorgan and the FDIC which orchestrated the sale, agreed to share the burden of losses, as well as any recoveries, on the firm’s single-family and commercial loans, the agency said early Monday in a statement. JPMorgan shares rose 3.9% in premarket trade.

There was no trading in most of Europe to observe the May 1 holiday, with markets also shut in Asian centers like Hong Kong, Singapore and mainland China. What Asian markets were open saw stocks rise: benchmarks in Japan and Australia climbed, lifting the MSCI Asia Pacific Index 0.2% higher, with Japanese technology names NEC and Keyence among the top contributors to gains.

NEC surged 14% on strong results, helping boost the benchmark Topix to its highest since September 2021 even as Sony fell following disappointing guidance. Australia’s key gauge rose amid expectations the central bank will keep interest rates on hold when it meets Tuesday. The regional benchmark capped a 1.1% loss in April as geopolitical tensions and an uneven economic recovery spurred losses in Chinese equities. However, stocks in Japan capped a fourth-straight month of gains amid renewed investor interest, optimism over earnings and the central bank’s decision to maintain loose policy.

“The yen is trending somewhat toward depreciation, and we expect a somewhat positive impact on Japanese stocks, with scope for buying of bank stocks that were sold” recently, JPMorgan equity strategists led by Rie Nishihara wrote in a note Monday. Chinese stocks listed in Hong Kong will be in focus when trading resumes Tuesday, after data showing consumer spending surged while the housing market continued to rebound. Still, an unexpected contraction in manufacturing activity in April confirmed that the broader economic recovery remains uneven. Onshore markets will be shut through Wednesday

In FX, the Bloomberg dollar index dipped even as the slide in the yen continued following last week’s dovish BOJ announcement.

  • USD/JPY advanced as much as 0.5% to 136.98, the highest since March 10, before paring gains to trade around 136.81. The BOJ indicated it has more confidence in wage increases for this fiscal year, according to its full quarterly economic report released Monday
  • EUR/USD fell as much as 0.3% to 1.0992, a third day of declines
    • This week’s interest-rate decision by the European Central Bank is going down to the wire as officials await two key economic reports arriving just one day before they convene.
  • GBP/USD dropped 0.4% to 1.2517, paring last week’s advance
    • The extra bank holiday for King Charles III’s coronation on May 8 could help tip the economy into a minor contraction in the second quarter, economists say

Treasuries fell after a Friday rally. A sudden drop for Bitcoin dragged the cryptocurrency further below $30,000 after a stellar run this year.

Looking at the week ahead, interest rate decisions will be in focus this week. The Federal Reserve is expected to increase borrowing costs by 25 basis points to a range of 5% to 5.25%, a level not seen since 2007. The European Central Bank is also forecast to raise its key lending rates by 25 basis points. The Reserve Bank of Australia will likely keep interest rates on hold when it meets Tuesday.

Apple Inc. headlines another busy week of earnings that includes Advanced Micro Devices Inc. and Ford Motor Co. In Asia, banks including HSBC Holdings Plc and Macquarie Group Ltd. will deliver their profit reports. In Europe, Volkswagen AG and energy giants BP Plc and Shell Plc are on the docket.

Top Overnight News

  • JPMorgan Chase & Co. won the bidding to acquire First Republic Bank in an emergency government-led intervention after private rescue efforts failed to fill a hole on the troubled lender’s balance sheet and customers yanked their deposits.
  • China’s NBS PMIs for April fall short of expectations, with manufacturing falling back into contraction territory for the first time since Dec (49.2, down from 51.9 in Mar and below the Street’s 51.4 forecast) while services cool (56.4, down from 58.2 in Mar and below the Street’s 57 forecast). BBG
  • China’s consumer spending and travel activity surge during the opening days of the May Day holiday period. Some 19.7 million railway trips were made across the country on Saturday, the highest on record for a single day. Shoppers were out in force on Saturday too, with major retail and catering companies seeing sales jump 21% from a year ago. BBG
  • China is clamping down on allowing critical data about the economy to leave the country as Xi focuses on national security amid growing concerns in the gov’t that the US poses an existential threat to the Communist Party. WSJ
  • The recovery in Macau’s casino sector gained traction in April, with gaming revenue climbing 449.9% to hit a three-year high as Chinese tourists continue to flock to the gambling hub. Gross gaming revenue reached 14.7 billion patacas ($1.8 billion). The result was better than the median analyst estimate of a 393% year-on-year increase, and is the highest monthly taking since January 2020. It was still more than a third below the 2019 level. BBG
  • The debt ceiling situation in Washington is even worse than many appreciate as substantive negotiations still aren’t even taking place (the next major event will be the new “X date” estimate from the Treasury). WaPo
  • JPMorgan won the bidding to acquire First Republic Bank in an emergency government-led intervention. It will take over First Republic’s assets, but agreed to share the burden of losses, as well as any recoveries, on the firm’s single-family and commercial loans with the FDIC. JPMorgan said it expects to recognize an upfront, one-time, post-tax gain of about $2.6 billion as a result of the deal. Its stock rose premarket while First Republic’s plunged. BBG
  • Deutsche Bank is planning a hiring spree and significant expansion of its investment bank advisory team, as the German lender positions itself for a dealmaking rebound and to take advantage of market dislocation after the collapse of rival Credit Suisse. FT
  • The central challenge for the Fed is that the economic outlook is souring at the same time that progress on reining in inflation is stalling out. Economic growth in the first quarter decelerated more than expected, data out this past week showed, while the Fed’s preferred inflation gauge is down less than a full percentage point from its peak and still more than double the bank’s 2% inflation target. The risk of a misstep is growing, and the consequences of over- or undershooting would be severe. Barron’s
  • PFE (Pfizer)/BNTX (BioNTech) are in talks w/the EU to sell the region ~70M COVID vaccine doses annually until 2026, a deal that would block other firms (MRNA, NVAX, and Sanofi) from the market. FT
  • On GS’s US Prime book, Health Care was net bought for the 2nd straight week and has now been net bought in 8 of the past 10 weeks. Nearly all subsectors were net bought, led by Pharmaceuticals, Life Sciences Tools & Services, and Biotech. The US Health Care L/S ratio now stands at 2.40, still near 1-year lows in the 3rd percentile, and in the 37th percentile vs. the past five years.

Market Snapshot

  • S&P 500 futures little changed at 4,185.75
  • MXAP up 0.2% to 160.70
  • MXAPJ little changed at 514.96
  • Nikkei up 0.9% to 29,123.18
  • Topix up 1.0% to 2,078.06
  • Hang Seng Index up 0.3% to 19,894.57
  • Shanghai Composite up 1.1% to 3,323.28
  • Sensex up 0.8% to 61,112.44
  • Australia S&P/ASX 200 up 0.3% to 7,334.56
  • Kospi up 0.2% to 2,501.53
  • STOXX Europe 600 little changed at 466.89
  • German 10Y yield little changed at 2.31%
  • Euro down 0.2% to $1.0994
  • Brent Futures down 2.0% to $78.76/bbl
  • Gold spot down 0.6% to $1,978.17
  • U.S. Dollar Index up 0.24% to 101.90

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks were positive in a holiday-quietened start to the risk-packed week with most indices in the region
closed for the Labour Day holidays, while weekend news flow was very light although the latest Chinese PMI data
showed the nation’s factory activity unexpectedly contracted last month.
ASX 200 (+0.6%) traded higher with energy leading the gains although further advances were capped after weak manufacturing PMI data from Australia and its largest trading partner, China, while the Albanese government is set to conduct a review whereby hundreds of the prior Coalition government’s infrastructure projects could be scrapped. Nikkei 225 (+0.7%) climbed above the 29,000 level for the first time since August last year after Friday’s dovish reaction to BoJ Governor Ueda’s first policy meeting and as participants digested more earnings results, with SoftBank shares also among the notable gainers amid reports the Co.’s Arm unit filed confidentially for a US IPO on the Nasdaq. Elsewhere, US equity futures were steady and took a breather following their recent rally into month-end, with price action contained amid the mass holiday closures on Monday and ahead of this week’s key events including the RBA, FOMC and ECB rate decisions, Apple earnings and the latest NFP jobs data

Top Asian News

  • US President Biden and Philippines President Marcos are expected to reach agreements on issues including business engagement and military enhancements at the summit on Monday. Philippines President Marcos will have discussions at the Pentagon about joint maritime patrols and the Philippines is increasingly concerned  about provocative diplomacy by China and seeking stronger ties with allies and partners. Furthermore, the US State Department called on Beijing to stop its harassment and intimidation of Philippine vessels in the South China Sea and US Commerce Secretary Raimondo will lead a presidential business delegation to the Philippines to enhance commercial and business ties, according to a senior US official cited by Reuters.
  • Japanese PM Kishida said nothing concrete is decided yet when asked about reports of a summit in May with South Korean President Yoon, according to Reuters

European markets closed for Labour Day.

Top European News

  • EU’s tech regulation chief Vestager said that they will have a political agreement on the EU’s Artificial Intelligence Act this year, according to Reuters.
  • Fitch downgraded France from AA to AA-; Outlook Stable and Moody’s affirmed Belgium at AA3; Outlook Stable.
  • UK employers are pushing to suspend scheduled pension contributions totalling tens of millions of pounds after
  • many retirement schemed reached unexpected surpluses, according to FT.
  • UK Citi/YouGov Inflation Expectations: 12-months: 5.2% (prev. 5.4%); 5-10yrs 3.6% (prev. 3.7%).
  • NBP’s Maslowska says CPI could hit single digits at end-May, maybel early autumn., via PAP.

Geopolitics

  • Russia’s Defence Ministry said its forces took four blocks in western Bahkmut, according to RIA. In relevant news, Twitter sources on Sunday reported that over a dozen of Russian Tu-95Ms bombers took off on Sunday.
  • Russian Defence Ministry said there forces struck Ukrainian military facilities overnight, all designated targets hit.
  • Wagner group’s Prigozhin said, in a letter to Russian Defence Ministry Shoigu broadcast on Telegram, that they are immediately requesting ammunition and if this isn’t provided immediately they will complain to President Putin. Adding, this issue alongside increasing casualties could result in them withdrawing from Bakhmut.
  • Ukrainian military intelligence official said over 10 tanks of oil products with capacity of around 40k tonnes were destroyed in an explosion in Sevastopol on Saturday, while the fuel was intended for use by Russia’s Black Sea fleet and is ‘God’s  punishment’ for the Russian air strike on the Ukrainian city of Uman on Friday, according to Reuters.
  • Pope Francis said the Vatican is involved in a peace mission in Ukraine with the details to be released in due course, while they are willing to do everything that has to be done to bring peace to Ukraine and he discussed Ukraine peace with Hungarian PM Orban and the Russian Orthodox Church representative in Budapest, according to Reuters.
  • Twitter source noted that air raid sirens are sounding in Ukraine’s capital Kyiv and that sirens are beginning to spread across Ukraine amid Russian missile launches; subsequently, Twitter source notes explosions in the Dniproletrovsk Oblast and Kyiv Oblast with air defence activity reported.
  • North Korean leader Kim’s sister said agreement from the South Korea-US summit will make insecurity worse and North Korea must further perfect the nuclear deterrent, according to KCNA. Iranian President Raisi is to visit the Syrian capital of Damascus, according to IRNA

US Event Calendar

  • 09:45: April S&P Global US Manufacturing PM, est. 50.4, prior 50.4
  • 10:00: March Construction Spending MoM, est. 0.1%, prior -0.1%
  • 10:00: April ISM Employment, prior 46.9
  • 10:00: April ISM Prices Paid, est. 49.0, prior 49.2
  • 10:00: April ISM New Orders, prior 44.3
  • 10:00: April ISM Manufacturing, est. 46.8, prior 46.3

Tyler Durden
Mon, 05/01/2023 – 09:03

via ZeroHedge News https://ift.tt/nZqAH9t Tyler Durden