Gold Flowers Amid April ‘Stagflation’ Showers; Stocks, Bonds, & Crypto Crushed

Gold Flowers Amid April ‘Stagflation’ Showers; Stocks, Bonds, & Crypto Crushed

The final day of April was really ugly: ECI way hotter than expected (spooked markets), Case-Shiller home prices soared far more than expected (spooked markets more), Chicago PMI puked (while prices paid increased), Consumer Confidence crashed, and Dallas Fed Services slumped… all of which left stocks, bonds, gold, crude oil, and bitcoin all languishing into month-end while the dollar rallied.

Stocks puked into the month-end close today ahead of AMZN earnings…

April was a disaster from a macro perspective…

Source: Bloomberg

…with soft survey data collapsing while ‘hard’ data limped modestly higher…

Source: Bloomberg

…and worse still growth surprises slumped as inflation surprises soared – screaming stagflation so loud no one could ignore it…

Source: Bloomberg

Against the backdrop of US 10Y yields up ~45 bps in the month of April…

Source: Bloomberg

… and the market taking another rate-cut off the board…

Source: Bloomberg

…price action in April is perhaps not overly surprising with Equities broadly lower, albeit, with NDX / Quality / Mag7 continuing to outperform.

Source: Bloomberg

Goldman’s Peter Callahan notes that since 2006, the S&P 500 has fallen by an avg of 4% when real yields rose by more than 2 stdev in a month.

April was the first down-month for stocks since The Fed Pivot (Oct 2023). This was the worst month for The Dow since Sept 2022. Nasdaq suffered its worst month since Sept 2023.

Interestingly, while US majors and sectors were red (broadly speaking) in April, Chinese Internet stocks soared back to life (+9.5% vs US MegaCap -2%)…

Source: Bloomberg

Sectors were very mixed in April with Energy and Utilities outperforming (the latter on AI energy use, since its typical relationship to rates decoupled) and Real Estate lagged (along with Tech)…

Source: Bloomberg

The basket of Magnificent 7 stocks saw red in April for its first monthly loss since October and worst monthly loss since September. The last week has been tempestuous to say the least as TSLA (win), META (lose), MSFT and GOOGL (win) all hit…

Source: Bloomberg

Still, stocks have a long way to catch down to the new reality priced into the short-end of the bond market…

Source: Bloomberg

As we noted above, the TSY curve was up relatively uniformly on the month, but perhaps most notably was the 2Y yield which tested 5.00% numerous times and broke out today…

Source: Bloomberg

One more notable event in April was the tightening of financial conditions (admittedly only marginally), but definitely more what The Fed wants relative to the extreme ‘easiness’ that had been priced in after Powell’s pivot…

Source: Bloomberg

The dollar rallied for the fourth month in a row with the big gains coming mid-month….

Source: Bloomberg

Despite taking a battering today, Gold managed solid gains on the month, topping $2400 at its record highs…

Source: Bloomberg

Oil prices ended the month marginally lower, thanks to today’s selloff…

Source: Bloomberg

Copper was the outstanding commodity in April, soaring around 14% to two year highs with practically no drawdown as the reflation trade came back to life (on the back of AI demand)…

Source: Bloomberg

Bitcoin had an ugly month, down 15% after seven straight months of gains…

Source: Bloomberg

As BTC ETF flows started to ebb  – Net Flows (including GBTC): April -$183mm, March +$4.62bn, February +$6.03bn, January +1.47bn…

Source: Bloomberg

Finally, the ultimate analog remains in play…

Source: Bloomberg

…with NVDA bouncing back, just like CSCO did.

And bear in mind, as Goldman’s Peter Oppenheimer points out, US equity market valuation is currently at an extreme level relative to history

…also a condition that typically means higher rates weigh more heavily on stocks.

And while April showers are over…

The S&P 500’s vol term structure suggests the storm is not over yet.

 

Tyler Durden
Tue, 04/30/2024 – 16:00

via ZeroHedge News https://ift.tt/kv9nws7 Tyler Durden

What To Look For When Amazon Reports

What To Look For When Amazon Reports

After the solid results from Microsoft – the world’s largest company whose market cap is now flirting with $3 trillion – investors have been incrementally more positive on the Amazon’s AWS cloud setup into today’s earnings, with the investment thesis driven by ecommerce share, margin expansion and the potential for AWS growth recovery through the year.

Of course, since everyone is well-aware of this thesis, UBS trader Kelsey Perselay notes that “the amount of debate/dialogue has really died down.

Not surprisingly, everyone and their kitchen sink, is long the stock: according to Goldman, client positioning is a 9 on the bank’s 1-10 scale, and “most investors feel relaxed/confident into this quarter.”

Goldman thinks that people expect a beat and further acceleration on AWS (vs cons ~13% y/y and ~13% y/y last qtr), a slight beat on online sales (vs cons 7%) and a solid beat on EBIT vs cons ~$11bn (for ref, AMZN been beating by $2-4bn last few qtrs). Looking ahead, investors looking for high-end of guide to land near street numbers for Revs (cons ~$150 bn) / OI (~$12.5 bn).

Summarized, here are the top bogeys for the quarter:

  • Q1 Total Sales: high end of guide $138-$143.5 bn

  • Q2 Total Sales: $150 bn high end

  • Q1 AWS Growth: 15%-16%+

  • Q1 EBIT: $13 bn

  • Q2 EBIT: $14 bn high end

Key questions for the 1Q call include:

  1. overall EBIT for 2Q as they are expected to show ongoing efficiency this year;

  2. cadence of enterprise cloud optimization efforts and signs of growth acceleration for AWS in 2Q;

  3. pace of retail margin improvement and medium-term targets for retail;

  4. capex outlook for 1Q and for 2024;

  5. impact of Amazon Bedrock and any disclosures around growth contribution from GenAI workloads;

  6. margin improvements from regionalization of fulfilment operations and broader cost control efforts;

  7. the outlook and incremental margins associated with video advertising in Prime content and advertising more generally; and

  8. competitive dynamics from Shein, Temu, TikTok, etc.

Catch-Up or Catch-Down…

 

Tyler Durden
Tue, 04/30/2024 – 15:00

via ZeroHedge News https://ift.tt/LwxYnE0 Tyler Durden

Cannabis Bears Squeezed On Report DEA Is Preparing To Reclassify Marijuana

Cannabis Bears Squeezed On Report DEA Is Preparing To Reclassify Marijuana

The Associated Press has learned the US Drug Enforcement Administration is moving to reclassify marijuana to a less dangerous drug category. Shares of cannabis-related companies erupted on the news. 

Here’s more from AP news: 

The DEA’s proposal, which still must be reviewed by the White House Office of Management and Budget, would recognize the medical uses of cannabis and acknowledge it has less potential for abuse than some of the nation’s most dangerous drugs. However, it would not legalize marijuana outright for recreational use. 

The agency’s move, confirmed to the AP on Tuesday by five people familiar with the matter who spoke on the condition of anonymity to discuss the sensitive regulatory review, clears the last significant regulatory hurdle before the agency’s biggest policy change in more than 50 years can take effect. 

Once OMB signs off, the DEA will take public comment on the plan to move marijuana from its current classification as a Schedule I drug, alongside heroin and LSD. It moves pot to Schedule III, alongside ketamine and some anabolic steroids, following a recommendation from the federal Health and Human Services Department. After the public-comment period the agency would publish the final rule.

Following the news, Tilray Brands Inc. shares jumped 22%, while Canopy Growth Corp shares are up 26%. 

Tilray’s float is about 15% short, equivalent to about 118 million shares short. 

Canopy’s float is 12% short, equivalent to 9 million shares short. 

Meanwhile, AdvisorShares Pure US Cannabis ETF and Amplify Alternative Harvest ETF are broadly higher and appear to be rounding a multi-year bottom. 

It’s an election year, and the Biden administration is getting desperate. 

Tyler Durden
Tue, 04/30/2024 – 14:40

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

Want To Know What Is Really Going On In Biden’s Economy, Read This

Want To Know What Is Really Going On In Biden’s Economy, Read This

One can listen to, and believe, the government’s lies about the miraculous growth of the economy and the stellar job that Bidenomics is doing… or one can listen to the truth straight from the countless small companies that make up the economy. We prefer the latter, which is why we love the monthly responses to the Dallas Fed survey, where unlike the other regional Feds, the respondents actually get a fair forum.

So without further ado, here are all the comments in the April Dallas Fed Service Sector Outlook Survey presented unedited and without commentary. Trust us, none is needed (but the highlights are ours).

Truck transportation

  • We repair long-haul trucks. The volume just keeps going down, which means everyone is holding back on repairs, so we have no work. Inflation keeps driving our costs up. It’s not looking pretty for trucking.

Support activities for transportation

  • We are seeing an uptick in rates and activity. The excess capacity slowly bleeding out of the market is causing this.

Publishing industries (except internet)

  • Momentum is still based on intuitive smarter software revisions. Commercial interest is also finally increasing with better relationship contacts to speed credible traction and interest for adoption going forward. We are more focused now on marketing and sales.
  • The impact of the higher rate environment seems to be catching up, with general purchase intent among customers flattening out. At the same time, budget cuts and political uncertainty have impacted our public sector business as well, creating additional uncertainty across our business.

Credit intermediation and related activities

  • The stress of an election year adds to the concern citizens have about the direction of our economy.
  • We recently renegotiated our $600 million debt facility. Our cost of funds went from 9 percent to 14 percent—that’s a pretty big hit to our bottom line and resulted in us increasing prices to our customers.  Our business focus has been on forecasted easing; however, the reality of rates staying higher longer is creating uncertainty.
  • Commercial real estate transactions are down by 70-80 percent according to the brokers we talk to, and our loan origination volume reflects that as well. Borrowers are concerned about future business prospects. We recently had a client decide not to take a loan to refinance a warehouse used in their business because they were concerned about their future business prospects. At the same time, the cost of everything we buy, from paper to electricity, is rising.
  • The Federal Reserve signaling it will hold the rate at the current level for longer has affected our outlook negatively. One of our biggest issues with inflation is the cost of housing. These high rates do not help that, and prices of everything else are not declining or remaining stable.

Securities, commodity contracts and other financial investments and related activities

  • Recent movement in long-term rates, combined with the Fed holding rates longer, have delayed the expected value of investment recovery until 2025 or later.

Insurance carriers and related activities

  • We are recruiting experienced insurance professionals, and there is a small pool to draw from, unfortunately. We will keep looking.
  • Property insurance and affordability are slowing our growth opportunities.

Real estate

  • The increase in treasury yields since last fall has negatively impacted deal-making activity in the income property industry
  • We are a real estate broker company and we have about 350 agents. They are independent agents not salaried employees. Our business slows during election years, and high interest rates have hurt first-time buyers.
  • Cost of capital is weighing on our customers and decreasing volume.

Rental and leasing services

  • We are a construction machinery and material handling dealership. Our business in the first quarter of 2024 was down 2 percent, and the industry was down 12.3 percent. Our manufacturing clients seem almost on the verge of panic, and there is stuff in inventory. We need a guest-worker program to meet our skilled-labor needs long term.

Professional, scientific, and technical services

  • Persistent inflation and the Fed potentially delaying rate cuts are causing uncertainty for the second half of 2024.
  • We are still worried about the election causing uncertainty in our clients and prompting a slowdown later this year. Some clients are still worried about inflation and are stalling projects because of the volatility in the supply market. Overall, it is tough to make any forecast right now. Our backlog is strong for the next couple of months, but not as far in the future as we would like.
  • The market was slower in the first quarter, but it is now in recovery.
  • We are increasingly seeing small professional firms shrinking or simply closing up shop. The labor shortage is a major reason for giving up the fight. There’s plenty of demand for professional services, but there is not enough trained staff. Retaining staff is a major headache. Owners nearing retirement are giving it up sooner rather than later.
  • Burdensome federal regulations are increasing the cost to do business, such as the so-called “Corporate Transparency Act” and minimum wage increases that just continue to drive inflation.
  • General outlook has improved primarily due to our increased investment in marketing and an increase in general business activity.
  • We see a slight uptick in transactional matters.
  • Trying to factor in how remote-work scheduling impacts the need for space and resources is challenging.
  • Competitive labor market remains; it’s harder to recruit great talent; health insurance is increasing.
  • We have not been this slow since the Great Recession. This includes Covid. We cannot understate how terrible the prospective real estate market is. People are not filing zoning cases, meaning in two years there will not be construction. Volumes have gone down in the automotive industry. It seems they are beginning to turn around, so we’re hoping.
  • This real estate market is hard to figure out. With the 10-year rate still moving in the wrong direction, and the likelihood of a rate cut not coming this year due to inflation and the strength of the economy, we just can’t see the market improving until next year.
  • The Fed is now unlikely to cut interest rates; concerns over recession continue.

Management of companies and enterprises

  • Overregulation takes away a lot of time and money.

Administrative and support services

  • Continued high interest rates, inflation and general economic malaise has caused employers to be very reluctant to hire professional level talent. They may replace talent if they have attrition, but in general, they are very slow to make any new hire decisions.
  • There has been a marked decline in requests for quotes for the month. This decline does not fit in our normal seasonal changes.
  • The intensity of international conflict and increasing long-term rates certainly raise concerns.
  • Geopolitical tensions are creating an uncertain environment. Also, upcoming elections and how this may affect the Fed’s monetary policy is a concern.
  • High interest rates have drastically hindered our ability to grow our business, and it looks like a rate cut is not likely happening in 2024.

Texas Retail Outlook Survey

Accommodation

  • Between increasing inflation, high interest rates and instability in the Middle East, we are growing more concerned that the upcoming summer travel season will be depressed compared to prior years.
  • March 2024 is viewed as a contradiction in that we had several areas perform at or close to expectations and others that were far below. That seems to be the same in April. Difficult to understand what is happening.

Food services and drinking places

  • The stalled return to office and the decline of weekday business travel to downtown remain drags on revenue. We see a softening in other meal periods, and we believe it is due to the increase in menu prices. Hiring experienced staff with knowledge remains very difficult. Where did seasoned workers go? Cost of goods sold continues to increase.
  • We are still hanging on by a thread after closing one business last month.
  • The energy sector continues to be strong, which positively affects my business. Midland continues to attract a younger population.

Motor vehicle and parts dealers

  • The margin on new vehicles sold per unit declined 50 percent year over year in March 2024, which was a direct benefit to the consumer.
  • We are continuing to see labor shortages in the workforce and a lack of effort to pursue the positions available from those applicants responding to open positions.

Electronics and appliance stores

  • Building activity is down still and looks to be getting worse.

Tyler Durden
Tue, 04/30/2024 – 14:25

via ZeroHedge News https://ift.tt/sX1oRYK Tyler Durden

China Threatens To Retaliate Against US Over Taiwan Aid And TikTok Ban

China Threatens To Retaliate Against US Over Taiwan Aid And TikTok Ban

Authored by Eric Lundrum via American Greatness,

On Monday, the Chinese government threatened to retaliate against the United States after a $95 billion foreign aid package was signed into law, which included aid for Taiwan and a provision to ban the Chinese social media app TikTok.

As reported by Fox News, the bill signed into law by Biden on Wednesday included $2 billion to restock American weapons provided to Taiwan and other allies in the Indo-Pacific, in a direct attempt to deter Chinese aggression in the region. Additionally, the law demands that TikTok’s parent company ByteDance sell the popular app to another company within nine months, or else the app will be banned from use in the United States.

“China firmly rejects the U.S. passing and signing into law the military aid package containing negative content on China,” said Chinese Foreign Ministry spokesman Lin Jian in a briefing.

“We have lodged serious representations to the U.S.”

“This package gravely infringes upon China’s sovereignty. It includes large military aid to Taiwan, which seriously violates the one-China principle, and sends a seriously wrong signal to ‘Taiwan independence’ separatist forces,” Lin continued.

“The legislation undermines the principles of market economy and fair competition by wantonly going after other countries’ companies in the name of ‘national security,’ which once again reveals the U.S.’s hegemonic and bullying nature.”

The issue of Taiwan has remained a contentious point in U.S.-China relations, with some considering Taiwan to be a free and independent nation, while others believe it to be part of China. The federal government has never taken a clear stance on the question, thus highlighting the significance of the decision to provide direct aid to Taiwan.

TikTok has faced widespread scrutiny from both sides of the political aisle, with Republicans pointing out its threat to national security by virtue of it being a Chinese company preying on American users, while Democrats have raised concerns about users’ private information being easily accessed and sold by the company.

TikTok is most popular among younger Americans such as Generation Z, or “Zoomers,” and the ban being signed into law has sparked outrage against Biden among younger voters.

Tyler Durden
Tue, 04/30/2024 – 14:05

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

WeWork Snubs Co-Founder Neumann As It Targets Quick Turnaround From Bankruptcy

WeWork Snubs Co-Founder Neumann As It Targets Quick Turnaround From Bankruptcy

After years of enriching himself to the tune of billions from his failed company WeWork, co-founder Adam Neumann is finally getting a small dose of karmic payback.

It was reported yesterday by Bloomberg that WeWork and its main backers, including SoftBank, have reached a new agreement to pull the struggling workspace provider out of bankruptcy, rejecting a rival proposal from co-founder Adam Neumann to buy back the company.

Under the deal, senior lenders will provide about $450 million in financing, gaining equity in the reorganized business. Additionally, SoftBank and other creditors may convert their debt into stock post-bankruptcy. This marks a significant step for WeWork, aiming to emerge from court protection with reduced debt and more efficient leases.

And to not be at the behest of, or enriching, Adam Neumann, will really mark a shift in strategy for WeWork…

A lawyer backing the deal told Bloomberg the deal  “is some of the best news we’ve had in this case,” and said the company is on a “fast and reliable path out of bankruptcy.”

WeWork aims to exit bankruptcy swiftly due to the high costs and unsustainable administrative expenses of the Chapter 11 proceedings. The proposed restructuring, backed by most senior debt holders and unsecured creditors, sidelines co-founder Adam Neumann’s bid to repurchase the company.

Neumann’s offer, valued at $650 million, hinges on winning support from senior lenders, who are crucial to the deal’s success. However, WeWork’s advisors have rebuffed Neumann’s attempts to negotiate and have proceeded with the restructuring without public bidding on the company’s assets.

Bloomberg reported that US Bankruptcy Judge John K. Sherwood emphasized the lenders’ prerogative to decide on negotiations with Neumann based on their economic interests. If executed, the restructuring would result in majority ownership by Yardi’s investment arm and involvement from WeWork bondholders.

SoftBank would retain ownership stake, initially at least 16.5%, potentially increasing to 36% depending on the treatment of letters of credit. WeWork must finalize the proposed deal into a contract and seek creditor approval for its broader reorganization plan.

The report notes that Neumann could still contest the deal by petitioning Sherwood to reject the reorganization proposal. 

And, normally taking the punchbowl away from someone who has already “earned” billions he didn’t deserve shouldn’t be of any concern, but we’re sure Neumann’s ego won’t let that be the case. We’re certain protest and prolonged litigation from Neumann will come from this, claiming he was “unfairly” snubbed…

Tyler Durden
Tue, 04/30/2024 – 13:45

via ZeroHedge News https://ift.tt/JU4WTPk Tyler Durden

Bullish Sentiment Index Reverses With Buybacks Resuming

Bullish Sentiment Index Reverses With Buybacks Resuming

Authored by Lance Roberts via RealInvestmentAdvice.com,

Over the last two weeks, the bullish sentiment index has reversed from extreme greed to fear. The composite net bullish sentiment index, comprised of professional and retail investors, fell from 38.15 to 9.9 in two weeks. The previous drop between July and October last year was similar and marked the bottom of the correction.

While the bullish sentiment index can indeed fall further, what is notable is the sharp reversal of market “exuberance” in such a short span. However, as discussed in “Just A Correction,” there was a significant gap between buyers and sellers.

However, at some point, for whatever reason, this dynamic will change. Buyers will become more scarce as they refuse to pay a higher price. When sellers realize the change, they will rush to sell to a diminishing pool of buyers. Eventually, sellers will begin to “panic sell” as buyers evaporate and prices plunge.”

Like clockwork, that correction came quickly, with the market finding initial support at the 100-DMA. With solid earnings from GOOG and MSFT, the market rallied to initial resistance at the convergence of the 20- and 50-DMA. It would be unsurprising if the market failed this initial resistance test and ultimately retested the 100-DMA soon. Such a pullback would solidify that support and complete the reversal of the bullish sentiment index.

In early April, we wrote:

“Whatever trigger causes a reversal in the bullish signals, we will act accordingly to reduce risk and rebalance exposures. But one thing is sure: investor sentiment is extremely bullish, which has almost always been a good “bearish signal” to be more cautious.

While we have warned of a potential correction over the past few weeks, it reminds us much of June and July last year, where similar warnings for a 10% correction went unheeded. We are now seeing many individuals ‘jumping into the pool’ in some of the most speculative areas of the market. Such is usually a sign we are closer to a market peak than not. As such, we want to make adjustments before the correction comes.”

Very quickly, as supported by the bullish sentiment index, those bulls are turning bearish and are now calling for a more profound decline.

While such is possible, I suspect most of this correction is complete for two reasons.

Earnings Continue To Remain Strong

The first reason is that despite higher interest rates, earnings growth continues to remain robust, at least among the “Magnificent 7,” where Google (GOOG) and Microsoft (MSFT), in particular, exceeded estimates by a wide margin. However, overall, and most importantly, earnings growth has continued since the October lows of 2022. Notably, the support for improving earnings comes from the increased fiscal policies such as the Inflation Reduction Act and CHIPS Act.

While those policies will eventually fade, making forward estimates subject to downward revisions, the current earnings environment remains relatively robust. Furthermore, forward estimates remain optimistic that the Federal Reserve will cut rates later this year, lowering borrowing costs and supporting economic activity.

Notably, the increase in earnings, at least for now, remains a strong indicator of rising asset prices. The risk of a deeper market correction (greater than 10%) is significantly reduced during previous periods of improving earnings. While such does not mean a deeper correction can not happen, historically, corrections between 5% and 10% in an earnings growth environment tend to be buying opportunities and limit deeper reversal in the bullish sentiment index.

Improving earnings also precedes improving CEO confidence, which has provided pivotal support to financial markets since 2000.

Buybacks Returning

We discussed the most critical reason we expected a market correction in mid-March. To wit:

“Notably, since 2009, and accelerating starting in 2012, the percentage change in buybacks has far outstripped the increase in asset prices. As we will discuss, it is more than just a casual correlation, and the upcoming blackout window may be more critical to the rally than many think.” – March 19, 2024

Furthermore, the “blackout” of corporate buybacks coincided with more extreme readings in the bullish sentiment index. Buybacks are crucial to the market because corporations have accounted for roughly 100% of net equity purchases over the last two decades.

Here is the math of net flows if you don’t believe the chart:

  • Pensions and Mutual Funds = (-$2.7 Trillion)

  • Households and Foreign Investors = +$2.4 Trillion

    • Sub Total = (-$0.3 T)

  • Corporations (Buybacks) = $5.5T

    • Net Total = $5.2 Trillion = Or 100% of all equities purchased

Unsurprisingly, that blackout window coincided with a sharp contraction of more than $367 billion in buybacks over the last 4-weeks. Consequently, when you remove a critical “buyer” from the market, the ensuing correction is unsurprising.

However, corporate share buybacks will resume in the next couple of weeks, and with more than $1 trillion slated for 2024, many buybacks remain to complete. Such is particularly the case with Google adding another $70 billion to that total.

As noted above, improving earnings and a decent outlook for the rest of this year also boost CEO confidence. (If you don’t understand why buybacks benefit insiders and not shareholders, read this.)

With robust economic activity supporting earnings growth, that improvement boosts CEO confidence. As CEOs are more confident about their business, they accelerate share buybacks to increase executive compensation.

The liquidity boost from buybacks and stronger earnings will likely provide a floor below the market. This doesn’t mean the current correction doesn’t have more work to do. However, it is unlikely that it will resolve into something more significant.

At least for now.

Tyler Durden
Tue, 04/30/2024 – 13:25

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

Your Tax Dollars At Work: US To Buy Ukrainian-Made Weapons For Ukraine

Your Tax Dollars At Work: US To Buy Ukrainian-Made Weapons For Ukraine

It’s not just US and Western defense contractors and arms makers that have been raking in the billions as a result of Washington’s mammoth defense aid handed over to Ukraine, but Ukrainian defense companies are also enjoying the largesse at US taxpayers’ expense.

“A total of $1.6 billion of the recent US aid to Ukraine would go to the purchase of Ukraine-made weapons, said a senior Kyiv official,” Defense Post reports of the $61 billion in US aid just approved.

Image via Reuters

G7 countries have been planning broader assistance to Ukraine which would develop and prop up a Ukrainian domestic military-industrial complex for the long-term, in order to ensure the country’s independence from Russia well into the future.

Ukraine parliamentarian and foreign policy committee member Arseniy Pushkarenko has said, “This is very important today, because it is about the creation of joint defense enterprises that will be located on the territory of Ukraine or in neighboring countries, taking into account security aspects.”

The funds will be taken from the $14 billion apportioned by Congress for the Ukraine Security Assistance Initiative (USAI), allowing the DoD to purchase new weapons for Ukraine.

Interestingly, Pushkarenko admitted that all of this is about more than just defending Ukraine from the Russian military onslaught, but is also about ‘testing’ new weapons systems in real combat.

“This is one of the factors in the development of the Ukrainian economy. Today, the military technologies that we have are tested in combat conditions, which makes our military-industrial complex attractive enough for many countries of the world,” he said.

Other Western countries, including the United Kingdom and Denmark, are expected to establish programs ensuring the purchase of Ukrainian-made weapons.

As we’ve long documented, over the course of more than two years of war in Ukraine, American defense firms are making a killing, with four US-based companies having been ranked as among the world’s five largest military companies.

The legendary early 20th century US Marine Corps Major General Smedley Butler said it best:“War is a racket. It always has been… It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”

Tyler Durden
Tue, 04/30/2024 – 13:05

via ZeroHedge News https://ift.tt/eDS0N2K Tyler Durden

New Biden Energy Rules Will Raise The Cost Of A New Home By $31,000

New Biden Energy Rules Will Raise The Cost Of A New Home By $31,000

Authored by Mike Shedlock via MishTalk.com,

New HUD energy rules will raise the cost of home construction by imposing stricter building codes. Payback time is 90 years

Homes To Become Even More Unaffordable

The Wall Street Journal comments on Biden’s New Plan for Unaffordable Housing.

The Department of Housing and Urban Development is mandating costly new energy standards for new homes insured by the Federal Housing Administration (FHA), which will become de facto nationwide building codes.

HUD last Thursday announced that it will require new homes financed or insured by its subsidy programs to follow the 2021 International Energy Conservation Code standard.

Many governments have declined to adopt the 2021 standards because of their higher costs. The National Association of Home Builders says the energy rules can add as much as $31,000 to the price of a new home. It can take up to 90 years for a buyer to realize a payback on the higher up-front costs through lower energy bills.

Not to worry, HUD says taxpayers will help cover the cost. It “is anticipated that many builders will take advantage” of numerous tax incentives in the Inflation Reduction Act “as well as rebates that will become available in 2025 or earlier for electric heat pumps and other building electrification measures,” the rule says.

These incentives include a $5,000 per unit tax credit for “zero energy” multifamily construction that meets prevailing-wage requirements that also raise building costs. HUD adds that builders may also “take advantage of certain EPA Greenhouse Gas Reduction Fund programs, especially the Solar for All initiative” and an investment tax credit that can offset 50% of a solar project’s cost.

Even with the subsidies, HUD estimates the price of a new home will go up by $7,229.

You get a $5,000 credit but only if the builder pays union wages for everything. How much will that cost?

My general rule of thumb is to take government estimates and triple them. That’s for short projects like building a home. But 10x would not be surprising. And this is with subsidies.

Generational Homeownership Rates

Home ownership rates courtesy of Apartment List

Who Are the Renters?

The answer is younger voters and blacks.

Generation Z homeownership is dramatically lower than the home ownership rate of millennials.

And according to the National Association of Realtors, the homeownership rate among Black Americans is 44 percent whereas for White Americans it’s 72.7 percent.

That’s the largest Black-White homeownership rate gap in a decade.

Home Prices Hit New Record High

Case-Shiller, OER and CPI data from St. Louis Fed, chart by Mish

The latest Case-Shiller housing data shows home prices hit a new record high. Adding insults and costs, the 30-year mortgage rate ended last week at 7.50 percent

Youth Poll

On April 20, I commented People Who Rent Will Decide the 2024 Presidential Election

Q: What is it that young voters really have on their minds?
A: Rent

Many with rent as their top concern will switch to Trump. They are fed up with rising inflation. Rent is up at least 0.4 percent per month for 30 months.

Young voters propelled Biden over the top in 2020. Things look very different today. Many voters who do not like either Trump or Biden will sit this election out.

Tyler Durden
Tue, 04/30/2024 – 12:45

via ZeroHedge News https://ift.tt/GAVSp63 Tyler Durden

Columbia University is looking like a terrorist training camp

Columbia, Yale, and NYU are nothing compared to the violence and radicalism that the medieval University of Frankfurt reached in the 1500s.

Violence and chaos had become a major problem at nearly all universities across central Europe– especially the German ones– ever since Martin Luther had famously published his Ninety-Five Theses in the year 1517.

Practically overnight, life in Europe had become extremely divisive. People lost the ability to disagree with each other rationally or to discuss ideas with an open mind. And universities became ground zero for intellectual oppression.

Professors led the charge to stir conflict on campus and divide students into warring tribes. Ravenous mobs bullied ideological opponents and labeled them ‘traitors to the cause’. Violence, coercion, and intimidation soon became commonplace.

Students in the 1500s attacked vendors who sold books and pamphlets that espoused ideas they disagreed with. Teachers and pupils alike were attacked for wrongthink. Even local townspeople were victims to the violence and property damage. Yet university administrators seldom did anything about it.

In 1572, the town physician in Frankfurt complained that his clinic had been filled with too many victims of assault at the hands of local students. Yet, he stated, “the gentlemen at the university allow this to go on unpunished.”

Town officials set up cannons to protect their citizens from angry university students who were bent on waging ideological violence.

It wasn’t until 1578 that an obscure professor named Caspar Hofmann had the courage to speak up.

Hofmann was a professor of medicine and philosophy in Frankfurt… so he most likely had witnessed a tremendous amount of violence and perhaps even been victim of it himself.

He gave a public speech– a daring thing to do under the circumstances– in which he said:

“They defend their own opinions with the greatest fierceness and attack all others, seeking to overwhelm all who think differently from themselves with ridicule and shame; hatred and envy, malice and evil-speaking, slander and calumny are the results of such envenomed strife, and it is inevitable that the learned institutes should be corrupted by all these influences.”

Though Hofmann’s comments were made well over four centuries ago, they could just as easily describe the state of western universities today. Ridicule. Shame. Hatred. Malice. Slander.

And let’s not forget about the violence prevalent in both eras.

Today is not the first time that universities have descended into intolerance and assault. Nor is it the first time that hapless, out of touch university administrators refuse to do anything about it.

In fairness, we’re talking about a small percentage of students and universities. But it’s enough that it has become a major problem.

Just like prison long ago became a finishing school for criminals, universities are becoming training grounds for coercive activism.

Students show up and become radicalized. Rather than study science, engineering, or business, they learn how to mobilize flash mobs, doxx their opponents, hijack and deface private property, create propaganda, engage in censorship, and intimidate innocent people.

And they’re gaining real world experience in how to use fear and intimidation to capture headlines and broadcast their message.

Does this sound familiar? It does to me. I spent a good chunk of my career as an Army intelligence officer studying terrorist organizations and how they train their foot soldiers.

And, not to be dramatic, but what’s happening at some of these universities now is similar to what goes on at terrorist training camps.

Another similarity: terrorists are completely ignorant and understand very little about their cause. It takes a real intellectual dolt to blow oneself up.

I think about this whenever I hear these students chanting, “from the river to the sea”; how many of these Inspired Idiots can even name the river or sea? Probably not too many.

But such are the consequences of these universities’ woke admissions policies. Instead of accepting the best candidates based purely on merit and potential, they have selected students who espouse their extreme leftist ideology.

Stanford University famously admitted a student who, in response to an admissions essay question, “What matters to you, and why”, wrote “#BlackLivesMatter” 100 times.

In its acceptance letter, the university praised the student for his passion and inspiration and said, “you are, quite simply, a fantastic match with Stanford.” He went to Yale instead.

In many respects, it’s been the same trend across many of Americas biggest cities; voters chose elected officials who espouse their extreme leftist ideology. And just like the universities, the big cities have suffered the consequences.

The bright side is that this might actually be rock bottom… because we are starting to see a number of self-correcting mechanisms kick in.

Wealthy donors who fund these universities are withholding money until administrators clean house. Heads are starting to roll.

And, as more voters become fed up with brazen crime sprees in their neighborhoods, leftist politicians are starting to take action. Even the Governor of New York recently made it a crime to assault a retail shop worker. What a novel idea!

Businesses too are starting to retreat from their holy mountains of wokeness. Google, the company whose AI refused to depict white people, has also had enough. It recently not only fired dozens of employees who protested for Gaza at work, but also had some of them arrested.

Even the high priest of the World Economic Forum, Blackrock Chairman Larry Fink, has walked back his environmental fanaticism and demands to to block oil investments, and started working towards retirement solutions— an actual problem that desperately needs fixing.

And just yesterday, the First Minister of Scotland resigned, after his recent racist tirade against white people, because he knew he was going to fail a no confidence vote.

We’re starting to see a trend forming— some of the world’s silliest leaders are beginning to lose their grip on power.

Does that mean there is the potential that sensible politicians will be elected and prioritize what’s in the best interest of the nation? Could we actually see them cut deficits, boost productivity, and make sound decisions?

Perhaps. One can hope this trend continues.

But regardless, it will be a long, long road ahead. And even under the best circumstances, it still makes sense to have a Plan B.

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