Month: March 2024

Via The Cradle

The Israeli Army Spokesperson’s Unit, led by Lt Col Daniel Hagari, has witnessed a large wave of resignations.  Among those who resigned are Hagari’s second in command, Colonel Butbol, as well Colonel Moran Katz and the army’s International Spokesman Lieutenant Richard Hecht.

“A large number of officers recently announced their retirement from the unit responsible for the military’s information system,” Hebrew news outlet Channel 14 reported on Saturday. 

A number of female officers were also among those who resigned. The resignations came “after things did not work out ‘professionally and personally,'” Channel 14 correspondent Tamir Morg said. 

Several officers have reportedly complained about not moving up in the ranks, the Hebrew outlet explained. “The picture is complex, since it is a military system and sometimes people reach retirement age and leave for no particular reason, but despite this, the number of people who retire at once during a war is unusual,” the correspondent said. 

The Israeli military has not responded to requests for comment. The resignations come as significant tension has overtaken Israel’s military establishment. 

Israeli Defense Minister Yoav Gallant has been calling for an end to draft exemptions for Israel’s ultra-Orthodox community, citing a severe manpower crisis in the army. Gallant said he would only support legislation to settle the issue if certain members of the ruling coalition backed it.

“The army is in need of manpower now. It’s not a matter of politics, it’s a matter of mathematics,” the defense minister said on Sunday. 

Gallant’s position is causing tension with ultra-Orthodox parties in the coalition, viewed as integral to the current government’s survival, according to Hebrew media. 

Israel is reportedly taking severe losses from its war in Gaza which has caused mass civilian casualties and amid its attempt to eradicate Hamas and Palestinian Islamic Jihad (PIJ). 

Important: Israeli army faces a ‘dramatic manpower crisis’

Tel Aviv is still scrambling to mitigate the “shock that befell the IDF following almost 150 days of fighting, which began with heavy losses on 7 October.” https://t.co/JvXFVQlTR1

— Sharmine Narwani (@snarwani) March 1, 2024

While Israel claims that Gaza’s southernmost city of Rafah is the final Hamas stronghold, the group’s military wing, along with several other factions, continue to fiercely confront Israeli troops across the strip.

“The situation is simply not good and does not match the threat map,” Ynet reported on March 1. 

The 30-year fixed mortgage rate is edging closer to 7%, having stayed below 6.6% since May 2023. With mortgage rates remaining high, we ask this very simple question: Will the high rate environment deter homebuyers from listing their homes as the spring home-buying season fast approaches? 

Let’s take a look at the latest inventory data from residential real estate brokerage Redfin, which shows new home listings jumped 13% year-over-year for the four weeks ending Feb. 25, the most significant increase in three years. 

“Total inventory is also improving: Active listings are flat from a year ago, marking the first time in nine months the total number of homes for sale hasn’t declined,” the report said. 

The increase in new listings is a welcoming sign as 2023 headwinds in the housing market will persist this year. This includes elevated mortgage rates, an affordability crisis, and record-low housing stock – this makes for a perfect unaffordability recipe. 

The good news is buyers are getting more homes to choose from despite elevated housing costs. As of Feb., the average homebuyer’s mortgage payment was around $2,671, just $47 shy of last October’s record high. 

In a separate report, the real estate news website HousingWire noted:

“Inventory is very seasonal, and we are about to start our seasonal increase in inventory. But even before that seasonal boost, we are showing year-over-year growth in inventory despite higher rates. Most home sellers are buyers of homes, so the action we are seeing this year is a healthy step in the right direction to get more balance in the housing market.” 

Another report from Realtor.com also showed an increase in housing inventory for the week ending Feb. 24: 

“Active inventory increased, with for-sale homes 17.8% above year ago levels. For a 16th straight week, active listings registered above prior year level, which means that today’s home shoppers see more for-sale homes. In fact, the January Realtor.com Housing Trends Report showed that 2024 had the most abundant level of inventory in the most recent four years. Nevertheless, the number of homes on the market is still down nearly 40% compared to what was typical in 2017 to 2019.”

Meanwhile, new home sales in January disappointed as mortgage rates are back on the rise. We shared with readers last month that new home supply ticked higher. 

The increase in housing supply might indicate a slower rise in home prices this year compared to recent years. 

Chief economist at First American Financial Corporation Mark Fleming recently noted a “flat stretch” for home prices is ahead:

“If the 2020-2021 housing market was too hot, then the 2023 market was probably too cold, but 2024 won’t yet be just right.” 

The problem with the housing market is that if rates cool too quickly, it could ignite another buying wave. So if rates bounced between 6.5% – 7%, inventories could continue building, pressuring prices lower. 

By Benjamin Picton of Rabobank

We’re going to build a (tariff) wall…

Crude oil prices spiked on Friday evening following news that OPEC+ and Russia will extend production cuts through to June of this year. Brent closed 2% higher at $83.55/bbl, which means that prices have now risen by more than $6/bbl since the start of the year. Gold also caught a bid on Friday night to close the week at $2,082/ounce. This followed weaker than expected ISM survey data out on the United States that saw 2-year yields fall 9bps to 4.53% and the S&P500 hit fresh all-time-highs. Meanwhile, the Bitcoin surge continues apace after prices for ‘digital gold’ finished the week slightly above $62,500.

Judging from the price action last week, the everything rally remains resilient to the effects of monetary tightening. Have we sprung a monetary leak somewhere that is providing mysterious liquidity into markets? Or is this all just a huge lag effect as the Covid-era torrents of easy money continue to wash through the economy and the US deficit remains close to 6.5% of GDP?

Whatever the case, some of the moves are very interesting. News has emerged of a crypto whale dubbed ‘Mr 100’ who has been quietly accumulating a $3.1bn stash of Bitcoin. Decrypt.co reports that the mysterious whale is unlikely to be US-domiciled, and unlikely to be one of the new Bitcoin ETF operators since those have already disclosed their blockchain addresses. Could a central bank somewhere be buying crypto assets?

There is plenty on the calendar this week for markets to digest, but of particular interest is the National Party Congress of the Chinese Communist Party. The meeting begins on Tuesday and will include an updated growth target for the Chinese economy. Last year’s ‘modest’ 5% target was exceeded by two-tenths of a percentage point after helpful base effects and data revisions helped the economy over the line. The speculation is that the CCP will again set 5% as the official goal, although our own China watcher, Teeuwe Mevissen, expects growth of just 4.6% in the Middle Kingdom this year.

In the United States we have the non-farm payrolls report at the end of the week, but on a longer view the possibility of universal tariffs will have much more structural bearing on who produces  what and where, and for how much, and to be sold to who. This Daily last week canvased the possibility of outright bans on Chinese auto imports into the United States as the Biden White House attempts to outbid Donald Trump on America First protectionism. Trump’s threats of 10% universal tariffs, with tariffs of 60% or more on Chinese goods, would be certainly be a big structural change that, in our view, could reignite inflation. It also (by design) poses risks to the Chinese growth model.

With real-estate and infrastructure investment already reeling from heavy debt loads, a loss of confidence and Xi Xinping’s Common Prosperity initiatives to rein-in speculation on house prices, the China model will be even more reliant on production and exports. It’s worth asking the question whether that can still work in a world where the world’s biggest market is potentially slapping a 60% tax on your exports. Of course, Chinese goods could flow into other markets like Europe, but if the Trump tariffs are enacted it would take all of 5 minutes before European leaders follow suit in an effort to protect their own sputtering industry from Chinese competition.

So where does this leave China? The worst case would be massive oversupply, deflation and economic depression as China fails to escape the Middle Income Trap. The alternative might be economic reorganization away from a production-led economy toward a more balanced growth model that emphasises internal consumption. Such a reorganization would also start to address one of the major (but not the only) impediment to the adoption of CNY as a reserve currency: China’s enormous trade surplus, but it would stand at odds with Xi Xinping thought that sees consumerism as decadent and production as virtuous. That’s a vicious circle to square, but if it is to ever happen, we should expect to see early signs this week.

This week will be important for other reasons. We are now one week out from the date at which the Fed will cease issuing new loans under the BTFP program. Regular readers will remember that this was the liquidity facility put in place during the mini banking crisis last year. Under the terms of the program, the Fed accepts collateral from the banking system while paying out the par value (!) of the securities in cash. Questions remain over what will happen to US regional banks with a large share of commercial real estate loans on the balance sheet (many due for refinance shortly!) once the banking system can no longer pretend that those loans are not underwater.

It may be the case that the Fed had hoped that they would be cutting rates by now and the capitalisation rates on commercial real estate would look less bad as a result. Unfortunately, last week’s PCE data did little too further the case for imminent cuts. PCE rose by 0.3% in January, but if you move the decimal a couple of places it becomes obvious how close we came to a 0.4% reading instead. One Swallow does not make a summer, but the January PCE result marks a substantial acceleration compared to December, November and October. That’s despite being helped by lower fuel prices that are unlikely to be replicated in February. The +0.4% core reading was the highest since January of last year, and the +0.6% services ex housing and energy reading was the highest since December of 2021.

In Europe last week the inflation story was similar. Eurozone preliminary CPI for February rose at the fastest pace since April last year. It was up 0.6% m-o-m, which translates to a 2.6% y-o-y figure. That was a little below the 2.8% figure for January but higher than the consensus estimate of 2.5%. The core reading printed at 3.1% versus an analyst consensus of 2.9%. So the direction is right, but progress is slow, and as our Head of Macro Research, Elwin de Groot, pointed out in a piece last week, the Red Sea shipping disruptions could pose a substantial upside risk to Eurozone price pressures.

So, for the moment at least we have encountered a bump in the road back to low and stable inflation. Central banks ought to be cognizant of the risks in cutting rates while loads of asset classes are already making new highs every other day, and the spectre of geopolitics looms as a potential spoiler for markets that think only in terms of free-flowing trade and capital. In a world of rapid change, the ability to think outside accepted paradigms is becoming more and more important.

In a episode that underscores the tensions straining Israel’s wartime unity government, Israeli Prime Minister Benjamin Netanyahu is reportedly irate over a senior cabinet minister’s unauthorized trip to Washington this week to meet with US officials. 

Benny Gantz, a relative centrist and one of Netanyahu’s principal political rivals, arrived in Washington on Sunday afternoon. He’s slated to meet on Monday with Vice President Kamala Harris and National Security Advisor Jake Sullivan. On Tuesday, he’ll talk with Secretary of State Antony Blinken, and he will also meet senior Congressional leaders during his stay. There’s some possibility that President Biden will opt to join one of the White House sessions, sources tell Israeli outlet Ynet News. 

The first Netanyahu heard of the trip was when Gantz called him on Friday to spring the news and ask for Netanyahu’s input about what to communicate to American officials, the Times of Israel reports. The call grew heated, with Netanyahu scolding Gantz, and telling him that “The State of Israel has only one prime minister.”   

The prime minister’s office doesn’t consider Gantz’s trip to be an official one, since it’s happening without Netanyahu’s permissions. Consistent with that view, Netanyahu ordered Israel’s US ambassador, Michael Herzog, to refrain from providing any assistance to Gantz during his visit. He also blocked government financing of Gantz’s travel, which will take him to the United Kingdom next. 

Four days after the Oct. 7 Hamas invasion of southern Israel, Gantz joined Netanyahu in forming an emergency unity government. Nearly five months into the war, Netanyahu is embattled and deeply unpopular. Many Israelis say he’s to blame for the Israel Defense Forces being caught off-guard by the Hamas attack. Families of Israelis taken hostage have mounted protests demanding Netanyahu approve a prisoner swap. 

A February poll found that, were an election to be held, an opposition block anchored by Gantz’s National Unity party would clobber Netanyahu’s far right coalition — by a 75- to 45-seat margin in the Knesset.  That makes Gantz a seeming prime minister-in-waiting, which helps explain why his self-initiated trip to Washington would leave Netanyahu fuming.  

Netanyahu returned to the prime minister’s office last January by assembling a coalition of religious and ultra-nationalist extremists unlike any seen in the country’s history. With many Democrats angry over Biden’s backing of Israel’s retaliatory destruction in Gaza and the resulting humanitarian catastrophe, the White House would clearly prefer to deal with a more centrist, Gantz-led government. In late February, Biden fired a shot during a late-night television appearance:

“Israel has had the overwhelming support of the vast majority of nations. If it keeps this up with this incredibly conservative government they have, and [National Security Minister Itamar] Ben Gvir and others… they’re going to lose support from around the world, and that is not in Israel’s interest.”

Over the weekend, Israel opted out of sending a delegation to ceasefire discussions in Cairo, sharply contradicting rosy White House statements that Israel had already “basically accepted” a six week ceasefire proposal in Gaza. 

While in DC, Gantz will also meet with leaders of AIPAC — the American Israel Public Affairs Committee. The enormously influential group acts as a de facto lobbying arm of the Israeli government, but without having to register its members as agents of a foreign government, as would otherwise be required by the Foreign Agents Registration Act. 

On Sunday, Politico reported that AIPAC unveiled a $100 million war chest it will use in America’s 2024 elections to defeat candidates of either party who are guilty of not backing Israel to extent AIPAC finds acceptable.  

Authored by Jim Quinn via The Burning Platform blog,

“She’s so transparently weak and sort of ridiculous and doesn’t know anything, and just thinks that jumping up and down and making these absurd blanket statements, and repeating bumper stickers, is just like leadership. A self-confident advanced society would never allow Nikki Haley to advance.”

– Tucker Carlson

The most highly educated people in this world are often the most willfully ignorant of what is really happening. The college credentialed crowd, especially those who “earned” them within the last twenty years, are more likely than not far less intelligent than the supposed “conspiracy theorists” who have questioned every narrative spun by the masters of the universe and their regime media propagandists over the last two decades.

The skeptics among us who assess every Deep State engineered event, designed to create outrage, fear, anger, and obedience, with the necessary suspicion and doubt, are conscious of how the real world operates and are taking precautions to navigate through the coming storms.

Among the dozens of false narratives spun by the black widow spider psychopaths, which include the Ukraine war, Gaza genocide, safe & secure border, safe and effective vaccines, safe and secure elections, the armed insurrection where no one was armed, Russiagate, declining inflation, and strong growing economy, the continuation of Nikki Haley’s ridiculously pathetic campaign for the Republican nomination. If you haven’t noticed, Trump has trounced this warmongering RINO, Liz Cheney wannabe in every primary/caucus thus far. All the other candidates dropped out, as instructed, leaving only Nimarata as the chosen option of the Deep State and their deep pocketed billionaire donors.

When something makes no sense and the behavior of a feckless politician seems irrational, there is something wicked going on behind the curtain and will not be revealed until those running the show decide it will benefit them financially, politically and increase their power over the masses. As Haley continues to pretend to be a viable candidate, with her coffers being filled by shadowy figures meeting in smokey backrooms, I was reminded of another pitiful excuse for a candidate in 2020.

A senile, old, corrupt, child sniffing coot, who was nothing more than a laughingstock on the national scene as Obama’s token establishment white guy, making a living as the Big Guy in his crackhead son’s worldwide shakedown operations in Ukraine, China and wherever he could make a buck. In case you didn’t remember, he wasn’t even an afterthought in the 2020 Iowa Caucus and New Hampshire primary.

Bernie the commie and mayor buttplug crushed slow Joe.  He was even losing to Pocahontas.

Anyone with some self-respect and self awareness would have dropped out, but for some unexplainable reason he stayed in the race and miraculously “won” the nomination with his inspirational speeches and glorious vision for the country. Or was he selected by those who knew they could rig the election while the basement dummy spent his days shitting his pants and taking naps? Biden was a Trojan horse installed by the Deep State controllers of this farce of an empire. Now this drooling dementia ridden pedophile is barely functional and would clearly get trounced by Trump in the general election, even with the Democrat election rigging machine in full steal mode.

Nikki will be trounced on Super Tuesday.

If she does not drop out, you know something evil is being planned.

I see only two possibilities for the Deep State funding of Haley’s continued national embarrassment.

They either plan to assassinate Trump or imprison him, therefore needing a useful idiot on par with Bush to continue their wars, destruction of our civil society, ultimate demise of our country, and transfer of power to a totalitarian global regime.

Nikki is just the neo-con, low IQ, diversity stooge for the job. Their efforts to imprison Trump seem to be failing, so the CIA, FBI, and rest of the Surveillance State traitors are likely planning a false flag assassination of Trump they can pin on a patsy who furthers one of their other false narratives.

They need Nikki, because Biden’s VP is an honest to God moron, seen as a cackling joke by 95% of Americans. Biden is finished. They will not run him in November. He will step down at the convention and be replaced by Michelle Obama, Hillary Clinton, or Gavin Newsom.

All I know for sure is the next nine months will be an epic shitstorm, with potential assassinations, civil war, global war, financial chaos and collapse, and possibly the end of our nation as we know it.

Buckle up, the ride is about to get bumpy.

The woke movement is not a civil rights movement fighting for equality, it’s a political/cult movement fighting for supremacy.  Once this fact is understood every other agenda being pursued by the political left today becomes crystal clear. 

When a movement claims to be “fighting for equality” the insinuation is that the people involved do not have equal rights under the law.  Yet, whenever these activists are asked to give examples of rights they want that others have, they stutter and stumble.  The great trick used by the political left is that by simply saying they are fighting for equality, this is a way to automatically justify every one of their actions no matter how antagonistic and insidious.  By simply saying they are fighting for equality, they paint themselves as the “good guys” even when they are the bad guys.

But what is the true leftist vision for “diversity, equity and inclusion?”  What do they think equal rights looks like since equal rights under the law are apparently not enough? 

We have been seeing examples of what they really want it in towns and cities across the US and Canada – They want total saturation of their ideology in every corner of society.  “Equality” for them means that no one is allowed to escape.  Everyone must be bombarded with activist propaganda everyday and everywhere, from movies to commercials to news media to local parades to public schools and even crosswalks and flagpoles. 

No other group, political or religious, gets this kind of special treatment in America or Canada.  No other group is offered so much privilege and protection.     

The holy grail for the woke movement today is the saturation of woke symbols in public spaces protected by government force.  In other words, they want pride flags to become as ubiquitous on the streets and in government buildings as the American flag in America or the Canadian flag in Canada.  Why is it acceptable that the woke movement is given precedence over all other ideals?

A small town in Alberta (Westlock) asked this very same question after their leftist council and mayor supported a campaign to raise pride flags on public flag poles and paint a pride flag mural on a primary crosswalk.  A motion was offered to make Westlock’s public spaces politically neutral, which the council promptly shot down.  So, instead, the public put the decision to a vote.  

In a narrow win of 663 to 639 votes a rule banning all displays of political messaging from public land was passed, and  leftists across Canada are furious.  The Canadian media quickly moved to admonish the vote in an attempt to shame the town.  In the interview below, the Mayor of Westlock, Jon Kramer, repeats DEI mantras, arguing that “inclusion is non-negotiable” as if brainwashed.  The propaganda message?  Not putting far-left symbols on display on public land in your town is a sign that your town is hateful.  In other words, signal your virtue at all times or else… 

In response, activists in Canada have falsely portrayed the Westlock vote as a decision to ban all pride flags.  The disinformation is obviously designed to provoke outrage by leftists across the country.  Though progressives often worship at the altar of pure democracy, they still refuse to accept any majority decision that does not go their way.  Leftists seem to assert that the close nature of the vote negates the outcome of the vote.  Groups say they will send pride banners to residents of the town to be placed on their lawns.  If they can’t have saturation on public property, then they want saturation on private property.

                 

Even if you aren’t conspiracy minded in the slightest, you are probably beginning to wonder if this is an attempt by a political group to overwhelm the existing culture and take over?  Yes, that is exactly what is happening.  If any other political movement tried to force their symbols on a target population the way pride activists do, they would be run out of these towns on a rail and no one would be surprised.  But, when woke people are shown the door, the narrative is that “bigots” are waging a war on change.  Of course, not all change is good or positive or warranted.  

Authored by James Howard Kunstler via Kunstler.com,

“How many of these places where polite society turns out to be provably insane do we have to see before we stop taking their judgment on anything as significant?”

– Bret Weinstein

The USA is a runaway train with a dead man in the engineer’s seat. The conductor goes through the cars assuring the passengers that everything is fine. . . never mind the screeching wheels on the curves. . . or the blinding strobe effect of low sunlight passing through the trees out the window at a hundred and forty mph. . . or the bump that made half the stuff in the overhead luggage rack jump out. More than half the people on-board are at tachycardia levels of fright — some are screeching — but the other less than half just remain fixed on their phones and laptop screens. They can’t be bothered to look out the window…

Okay, that’s a metaphor.

But if you’re a citizen of our country and care about it, these are the matters you’d better pay attention to, because they are all going off the rails:

The war in Ukraine. We started it in 2014 to mess with Russia and Russia is going to finish it. Who knows what our real motives were. A resource grab? A desperate ploy to erase our national debt by creating a global fiasco? Sheer psychopathic hatred of this Putin fellow? We can’t bring ourselves to acknowledge the failure of this ill-conceived venture. Instead, our feckless allies in Europe are foolishly rattling their sabers, apparently forgetting that you don’t bring a sword to a nuclear missile fight.

Mr. Macron in France affects to offer up his army for slaughter on the blood-soaked plains of Ukraine, just as the Ukrainians offered up a half a million of their young men so that Victoria Nuland could feel good about herself. Mr. Macron is insane, but the society he presides over is collectively insane, so perhaps he represents them well. Similarly, Olaf Scholz in Germany, whose top generals were caught on a leaked recording last week discussing their plan to blow up the Kerch Bridge that connects Crimea to Russia. Do you understand that this would be a direct attack on Russia, an act of War by NATO? And what the obvious consequence would be?

The phantom government of “Joe Biden” is too weak and mindless to join any negotiation. Ukraine and Russia are up to some kind of cross-talk down in Riyadh with Prince MBS. Even Mr. Zelensky went down for a day, though video appears to show him coked-up, sniffling and snarfling, not a good sign. If ever there was a time to end this stupid conflict, it’s now, before the Russian election. After that, terms will only be more difficult for Ukraine, up to direct custodial supervision instead of remaining a nation. It was never any of our business (though the Biden family, BlackRock, and the CIA saw fabulous opportunity to profit there).

Next is the border. You saw last year how the blob elite greeted the transfer of illegal immigrants to their happy little island of Martha’s Vineyard. (They were not amused by Governor DeSantis’s prank, and off-loaded the mutts post-haste.) But that same smug demographic doesn’t care if hundreds of thousands are distributed to the big cities, which are now fiscally destabilized by them to an extreme, probably to bankruptcy.

Of course, that is not the main thing to worry about with what altogether amounts to millions of border-jumpers flooding our land. The main reason to worry is what the blob that invited them here intends for them to do, which, you may suspect, is to unleash mayhem in the streets, malls, stadiums, and upon our infrastructure just in time to derail the election — perhaps even to make war on us right in our homeland. The US government is paying for this whole operation, you understand, funneling our tax money to international cut-out orgs who set up the transfer camps in Panama, and buy the plane tickets for the mutts to cross the ocean, and coordinate with the Mexican cartels to shuttle this horde of mystery people among us to work their juju for the Democratic Party. The pissed-off-ness of the public has passed the red line on this.

A third FUBAR is the lawfare campaign of the Democratic Party and its regime in power against the citizens of this land. This folder includes overt and obvious political prosecutions by DA’s and AG’s who make election promises to “go after” individuals without such niceties as probable cause. It includes the gigantic new scaffold of inter-agency censorship and propaganda. It includes the psychopathic struggle sessions mandated by “diversity and inclusion” policy. It includes election-rigging directed by the likes of Marc Elias and Norm Eisen, getting states to fiddle laws on voter ID and mail-in ballots. It includes the political protection of rogue groups ranging from looter flash-mobs to Antifa anarchists who bust up things and people and burn buildings down. It includes state officials who peremptorily kick candidates off the ballot. It includes a nakedly biased judiciary, and especially the use of the DC federal district court to punish people extralegally, unjustly, extravagantly, and cruelly. In short, lawfare is the complete perversion of law, and we-the -people are entreated by reprobate officials such as Merrick Garland and Letitia James to accept it.

A fourth item on this list is the US economy which has been overwhelmed by maladministration of an overgrown monster bureaucracy, and the gross (perhaps fatal) mismanagement of the government’s money. The people of this land are not being allowed to do business, to find a livelihood, to transact fairly. “Joe Biden’s” shadow string-pullers are messing as badly with the oil and gas producers as they have messed with Ukraine. And they are doing it in pursuit of a laughable mirage: their “green new deal.”

John Podesta, the “clean energy czar” who replaced the Haircut-in-search-of-a-brain called John Kerry, sits on a $370-billion slush fund that can be used to just dole out to anyone and everyone a political patronage payoff, especially to janky “community” orgs and NGOs with fake agendas. This really just amounts to an asset-stripping operation that will leave the American people busted and with broken supply chains for everything. Instead of annual budgets, Congress raises the US debt ceiling by “continuing resolutions” to keep the government from shutting down. The national debt races to the $35-trillion mark. As interest rates on debt rise, our debt payments now exceed our military spending. You can be sure that our country will break down financially very soon.

The capper on today’s list is the nation’s health, the racketeering system we’ve set up to care for it, and the public health agencies of the government that enabled the Covid-19 operation to happen. The CDC continues to push vaccines that have killed millions of Americans and more millions around the world, and has probably compromised the well-being of millions more going forward. Corporate medicine — that is, your doctor, and your hospitals — is a sinking Titanic of grift and chaos. Try to get an appointment to even see a doctor for an emergency. Try to avoid being bankrupted by your treatment. Try to get out of a hospital alive. Yeah, it’s that bad.

The doctors have surrendered your trust in them with their lying and their bullshit. The current director of the CDC, Mandy Cohen and her predecessor, Rochelle Walensky, have knowingly presided over the mass killing and injuries imposed on the mRNA vaccinated. Hundreds of their deputies should be liable for prosecution, and so should many of the other prominent characters in the Covid Saga: Fauci, Birx, Collins, Baric, Bourla, Daszak, Califf, Woodcock, Hahn, and many more.

What are we going to do about any of this? Return to the metaphor. The runaway train is still picking up speed. You can’t just jump off at 150 mph. If you’re one of the passengers watching this in horror, maybe you can decouple your car, or get the conductor to do it by any means necessary. Let’s say that each car behind the engine of this train is a state of the United States. Let the engine up front with the dead man at the controls ride that runaway to its terrible conclusion. Cut loose the cars behind it to take care of themselves, to slow down, get a grip on their situation, and make plans to find a better engine to pull the train. Decouple. Cut loose. It’s the only way.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

A quiet macro day let the grown-ups play… and today saw gold and bitcoin roar up to record closing highs (amid rising breakevens and falling rate-cut expectations) as all eyes and ears and algos remain glued to any further hints of QE (Reverse Twist) as Waller revealed last week, and Fed’s Bostic didn’t help today.

In a commentary published on the Atlanta Fed website Monday, Bostic said he was worried that businesses have too much exuberance and could unleash a burst of new demand after a rate cut that adds to price pressures.

“This threat of what I’ll call pent-up exuberance is a new upside risk that I think bears scrutiny in coming months,” he said.

“ As my staff and I have talked to business decision-makers in recent weeks, the theme we’ve heard rings of expectant optimism.”

That could be another reason not to cut rates at a rushed pace, he told reporters in a press briefing.

“I would probably not anticipate they would be back to back” cuts, Bostic said.

“Given the uncertainty, I think there is some appeal to acting and then seeing how participants in the markets, businesses leaders and families respond to that.”

2024 rate-cut expectations drifted (hawkishly lower) to barely three cuts priced in for 2024 now…

Source: Bloomberg

But breakevens are soaring in the face of disinflationary delusion…

Source: Bloomberg

And it appears gold got the hint…

Source: Bloomberg

…soaring to a new record closing high (just shy of its intraday record high)…

Source: Bloomberg

And the other alternative currency also soared, Bitcoin topping $67,000…

Source: Bloomberg

…up to its record closing high (yes, we know bitcoin doesn’t ‘close’)…

Source: Bloomberg

…amid another high volume day in BTC ETFs…

Source: Bloomberg

Ethereum also caught a bid, topping $3600 for the first time since

Source: Bloomberg

Still has some room to go its record highs…

Source: Bloomberg

Elsewhere, stocks ambled along with Small Caps pumped (at the European open) and dumped back to unchanged-ish. A late-day sell program dragged the Nasdaq to the lows of the day and the ugliest horse in today’s glue factory…

VIX continued to decouple from stocks here (and this time it was not call-buying FOMO malarkey as skews ticked higher)…

Source: Bloomberg

As NYCB collapsed to 28 year lows…

Source: Bloomberg

Bonds were sold with the short-end underperforming….

Source: Bloomberg

Which prompted bear-flattening in the yield curve…

Source: Bloomberg

The dollar limped lower but remains broadly speaking in its recent range…

Source: Bloomberg

Oil prices declined, apparently not enthralled by the idea of The Fed printing money to buy short-dated bills anymore, round-tripping Friday’s gains…

Source: Bloomberg

Finally, NVDA just refuses to drop, up another 6% today…

…overtaking Aramco as the 3rd most valuable company in the world…

Source: Bloomberg

It’s different though this time…

Source: Bloomberg

…probably nothing.

Authored by Mike Shedlock via MishTalk.com,

Fed Chair Jerome Powell meets with Congress this week. He will face pressure on two different fronts.

Image courtesy of Mortgage News Daily, annotations by Mish

Pressure on Two Fronts

Bloomberg reports Powell to Face Pressure on Rates From Democrats, Bank Rules From Republicans

The Fed chair heads to Capitol Hill on Wednesday and Thursday for his semiannual testimony before Congress, two years after the central bank began its aggressive battle against surging inflation. With the economy powering along and inflation inching toward the Fed’s sweet spot, Powell will make the case for why officials are in no rush to lower rates.

In a Jan. 30 letter, Senator Sherrod Brown urged Powell to cut rates “early this year,” arguing that high rates are hurting small businesses and putting homeownership out of reach for many Americans. That missive from the Senate Banking Committee chair, an Ohio Democrat who is running for reelection this year, could give cover to other committee Democrats who want to press Powell on rates.

Housing

Maryland Democrat Chris Van Hollen, in an interview last week, said the Fed needs to focus on housing costs “and taking actions necessary to make things more affordable for more Americans.”

“Right now those high interest rates are actually increasing costs for families because one of the big parts of costs for families is housing,” Senator Elizabeth Warren, a persistent Powell critic, said in a Bloomberg Television interview. “It’s time to get those interest rates down.”

Capital Rules

Republicans will use Powell’s appearance to grill him on the Fed’s proposal to ramp up capital requirements for big banks by almost 20%.

Election Year

Powell has repeatedly said the looming election plays no role in policy decisions, but some Fed watchers worry rate cuts this year — investors are betting the first reduction will come in June — could be perceived as the Fed giving a boost to Democrats.

Elizabeth Warren Hoot of the Day

Home prices are at record highs. Just what does she think will happen to home prices and inflation if Powell cuts rates too early?

Small businesses are struggling but why is that?

The answer is Biden’s free money to students, Biden’s regulatory madness, Biden’s union push, and massive minimum wage hikes, especially in places like California are all highly inflationary.

The Fed’s Big Problem

On average, the economy looks OK. But averages are misleading. Several large groups of people are struggling. They all have one thing in common.

Case-Shiller home price index, CPI rent index, and the index of hourly earnings for production and nonsupervisory workers.

The Fed’s Big Problem is There Are Two Economies But Only One Interest Rate

Who’s Unhappy?

Those looking to buy a home but cannot afford the record high prices, are not faring well in this economy.

The last great time to buy a home was in 2012. Over the next eight years, home prices moved further and further away from wages.

When the Covid pandemic hit in 2020, we had record QE, record fiscal stimulus, mortgage rates hit record lows, and inflation hit the highest levels in 40 years.

When the Fed slashed interest rates to zero, mortgage rates fell below 3.0% for an extended period allowing everyone to refinance at 3.0 percent or below. Most did.

Winners and Losers

• The homeowners are generally doing OK. The home ownership rate is 65.7 percent.

• The 34.3 percent who rent are generally not doing OK.

The study did not break things down by home owners vs renters, but I suspect most of the use is by renters.

According to the latest CPI report, rent was up at least 0.4 percent for the 29th straight month. Shelter, a broader category, rose 0.6 percent. Food rose 0.4 percent.

CPI data from the BLS, chart by Mish

Credit Card and Auto Delinquencies Soar

Credit card debt surged to a record high in the fourth quarter. Even more troubling is a steep climb in 90 day or longer delinquencies.

Record High Credit Card Debt

Credit card debt rose to a new record high of $1.13 trillion, up $50 billion in the quarter. Even more troubling is the surge in serious delinquencies, defined as 90 days or more past due.

For nearly all age groups, serious delinquencies are the highest since 2011 at best.

Auto Loan Delinquencies

Serious delinquencies on auto loans have jumped from under 3 percent in mid-2021 to to 5 percent at the end of 2023 for age group 18-29.

Age group 30-39 is also troubling. Serious delinquencies for age groups 18-29 and 30-39 are at the highest levels since 2010.

For further discussion please see Credit Card and Auto Delinquencies Soar, Especially Age Group 18 to 39

Generational Homeownership Rates

Home ownership rates courtesy of Apartment List

The above chart is from the Apartment List’s 2023 Millennial Homeownership Report

Those struggling with rent are more likely to Millennials and Zoomers than Generation X, Baby Boomers, or members of the Silent Generation.

The same age groups struggling with credit card and auto delinquencies.

On Average Everything is Great

Average it up as Fed and all the clueless economic and political writers do, and things look great.

This is why we have seen countless stories attempting to explain why people should be happy.

Hello Mr. Powell

There are two economies (the homeowners/asset holders and everyone else). However, there is only one interest rate. Patience please says Powell.

Lowering rates risks risks fueling the housing bubble and the most expensive stock market in history.

It’s Powell’s move. No matter what he does Elizabeth Warren will howl.

She wants lower interest rates, but that will stoke inflation and it will not do a damn thing for renters who don’t have a down payment and cannot a house no matter what the mortgage rate is.

This is a dilemma of the Fed’s making and there is no solution.

The Federal Aviation Administration’s six-week audit of the clowns running Boeing and Spirit AeroSystems has revealed “multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements.”

The non-compliance issues were found in the Boeing 737 Max program’s manufacturing process control, parts handling and storage, and product control, the FAA said, adding these details have been released to the public as an investigation is ongoing following the near-catastrophic accident when a door plug ripped off an Alaska Airlines 737 Max 9 plane earlier this year. 

The audit is one of the immediate oversight actions the FAA took after a left mid-cabin door plug blew out of Alaska Airlines Flight 1282 on January 5 while in flight. At a meeting at FAA Headquarters in Washington, DC, last week, Administrator Mike Whitaker informed Boeing’s CEO and other senior leaders that the company must address the audit’s findings as part of its comprehensive corrective action plan to fix systemic quality-control issues. The plan must also address the findings from the expert review panel report that examined Boeing’s safety culture. The FAA has given Boeing 90 days to outline its action plan. -FAA

While Boeing is held accountable for quality control issues that led to the 737 Max 9 plug door mishap, the FAA has halted production expansion of the Max jet.

There is word that Boeing might hire a third party to conduct independent reviews of quality systems at its Renton, Washington plant and Spirit AeroSystems facilities in Wichita, Kansas. 

Meanwhile, European aerospace giant Airbus SE has been pulling ahead of Boeing regarding aircraft deliveries, soaking up an increasingly more significant market share of narrow-body planes. 

Wall Street thinks so… 

With Boeing remaining under FAA scrutiny, it was also announced Monday that three passengers on the Alaska Airlines flight in January have filed a billionaire dollar lawsuit against the planemaker.