Category: zerohedge

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

The conservative advocacy group America First Legal (AFL) filed a complaint with the Pennsylvania Department of State, seeking to end a directive that allows noncitizens to vote in state and federal elections.

The Help America Vote Act (HAVA) of 2002 requires that an individual applying to vote must mention a current and valid driver’s license and the last four digits of their Social Security number on the voter application form.

HAVA mandates that local election officials confirm the numbers are valid and current by using available databases.

“However, the Commonwealth of Pennsylvania maintains a voter registration system that blatantly violates this federal law,” the May 21 complaint alleges.

HAVA prohibits a state from accepting or processing a voter application registration that does not fulfill its identity proof provisions.

In 2018, the Secretary of the Commonwealth issued a “HAVA Matching Directive” which states that a voter registration application “may not be rejected” solely based on the fact that an applicant’s driver’s license and Social Security number do not match any database.

Under the directive, the Secretary of the Commonwealth asked “all 67 county boards of election to ignore HAVA’s verification mandate and to register any applicant” to vote even if the individual does not fulfill identification requirements.

“This lawless directive does not just violate federal law; it creates a regime where an untold number of ineligible voters, including non-citizens, can register to vote in all state and federal elections in the Commonwealth,” the lawsuit said.

In the HAVA directive, the Pennsylvania Department of State cited a previous case to argue that HAVA’s data comparison process was intended only for storing and managing the official list of registered voters. HAVA was not supposed to be used as “a restriction on voter eligibility,” it stated.

The department asked counties to ensure their procedures “comply with state and federal law” while implementing the HAVA directive.

This meant that if there are “no independent grounds” to reject a voter application other than a non-match of identification, the application cannot be rejected and should be “processed like all other applications.”

AFL asked to repeal the HAVA Matching Directive and replace it with a regulation in compliance with HAVA.

Gene Hamilton, America First Legal executive director, pointed out that Americans across the nation have “legitimate concerns” about the security of elections.

And yet, he said, Pennsylvania adopted and maintained a voter registration process that “clearly and unambiguously violates basic federal law intended to provide a minimum baseline of security.”

He called on the Secretary of State to abandon the “unlawful practice” and comply with the federal rules to ensure fraud doesn’t occur.

The Pennsylvania State Department responded in an emailed statement to The Epoch Times: “All voters in Pennsylvania must be United States citizens in order to register to vote, and no directive or guidance from the Department says otherwise. Residents seeking to register to vote must prove their citizenship.”

Noncitizen Voting Issue

According to the Public Interest Legal Foundation (PILF), foreign nationals registering to vote in U.S. election races is not uncommon.

PILF data show that Pima County, Arizona, canceled 186 voter registrations due to citizenship issues between 2021 and 2023, with seven having voting histories.

Similarly, 222 voter registrations in Maricopa County, Arizona, were canceled between 2015 and 2023 for similar issues, with nine people having a history of casting votes.

“The National Voter Registration Act of 1993 (Motor Voter) provides the most common pathway for foreign nationals to get registered to vote. The 24 states plus D.C. which automate Motor Voter, not giving the immigrant the chance to decline registration, exacerbate the problem,” PILF said.

On May 8, Sen. Mike Lee (R-Utah) and Rep. Chip Roy (R-Tex.) introduced the Safeguard American Voter Eligibility (SAVE) Act, or S.4292, which seeks to ensure that only American citizens take part in federal elections.

The Act requires proof of citizenship during voter registration, outlining acceptable documentation to prove citizenship. States are required to set up alternative verification processes for citizens who do not have standard documents.

The legislation also mandates that states purge noncitizens from their voter rolls. Penalties would be instituted for knowingly registering noncitizens as voters.

Sen. Lee pointed out that illegal immigrants and other noncitizens are being improperly registered as voters, allowing them to cast votes in federal elections.

This “foreign election interference” must be stopped, especially since trust in the voting process is now more important than ever, he said.

“Voting is both a sacred right and responsibility of American citizenship, and allowing the people of other nations access to our elections is a grave blow to our security and self-governance.”

Multiple left-leaning groups like the American Civil Liberties Union, American Humanist Association, Democracy Matters, National Action Network, and Stand Up America oppose the SAVE Act.

In a May 16 letter to Rep. Bryan Steil (R-Wis.) and Rep. Joe Morelle (D-N.Y.), members of the Committee on House Administration, the organizations called the SAVE Act a “dangerous departure” from ensuring that all Americans have the freedom to vote.

Requiring documentation of American citizenship is aimed at “fear-mongering and divisive rhetoric,” they claimed.

Voters in every state are already required to verify their citizenship status when registering to vote, they said. As such, the SAVE Act is “unnecessary and dangerous.” The purpose of the Act was to make voting “more difficult, particularly for voters of color.”

A congressional hearing on noncitizen voting was held on May 16. Rep. Joe Morelle (D-N.Y.) said there was no proof of noncitizens voting in elections and that there should be a focus on “MAGA Republicans howling about this nonissue.”

Rep. Bryan Steil (R-Wis.) pointed out that 100 noncitizens were recently identified in voter rolls in Ohio. He called for strict policies to ensure that only Americans vote in elections considering that 7 million illegal immigrants have entered the United States under the Biden administration.

Authored by Victor Davis Hanson via American Greatness,

Sometimes unexpected but dramatic events tear off the thin veneer of respectability and convention. What follows is the exposure and repudiation of long-existing but previously covered-up pathologies.

Events like the destruction of the southern border over the last three years, the October 7 massacre and ensuing Gaza war, the campus protests, the COVID-19 epidemic and lockdown, and the systematic efforts to weaponize our bureaucracies and courts have all led to radical reappraisals of American culture and civilization.

Since the 1960s, universities have always been hotbeds of left-wing protests, sometimes violently so.

But the post-October 7 campus eruptions marked a watershed difference.

Masked left-wing protestors were unashamedly and virulently anti-Semitic. Students on elite campuses especially showed contempt for both middle-class police officers tasked with preventing their violence and vandalism and the maintenance workers who had to clean up their garbage.

Mobs took over buildings, assaulted Jewish students, called for the destruction of Israel, and defaced American monuments and commentaries.

When pressed by journalists to explain their protests, most students knew nothing of the politics or geography of Palestine, for which they were protesting.

The public concluded that the more elite the campus, the more ignorant, arrogant, and hateful the students seemed.

The Biden administration destroyed the southern border. Ten million illegal aliens swarmed into the U.S. without audit. Almost daily, news accounts detail violent acts committed by illegal aliens or their surreal demands for more free lodging and support.

Simultaneously, thousands of Middle Eastern students, invited by universities on student visas, block traffic, occupy bridges, disrupt graduations, and generally show contempt for the laws of their American hosts.

The net result is that Americans are reappraising their entire attitude toward immigration. Expect the border to be closed soon and immigration to become mostly meritocratic, smaller, and legal, with zero tolerance for immigrants and resident visitors who break the laws of their hosts.

Americans are also reappraising their attitudes toward time-honored bureaucracies, the courts, and government agencies.

The public still cannot digest the truth that the once respected FBI partnered with social media to suppress news stories, to surveil parents at school board meetings, and to conduct performance art swat raids on the homes of supposed political opponents.

After the attempts of the Department of Justice to go easy on the miscreant Hunter Biden but to hound ex-president Donald Trump for supposedly removing files illegally in the same fashion as current President Biden, the public lost confidence not just in Attorney General Merrick Garland but in American jurisprudence itself.

The shenanigans of prosecutors like Fani Willis, Letitia James, and Alvin Bragg, along with overtly biased judges like Juan Merchant and Arthur Engoron, only reinforced the reality that the American legal system has descended into third-world-like tit-for-tat vendettas.

The same politicization has nearly discredited the Pentagon. Its investigations of “white” rage and white supremacy found no such organized cabals in the ranks. But these unicorn hunts likely helped cause a 45,000-recruitment shortfall among precisely the demographic that died at twice their numbers in the general population in Iraq and Afghanistan.

Add in the humiliating flight from Kabul, the abandonment of $50 billion in weapons to the Taliban terrorists, the recent embarrassment of the failed Gaza pier, and the litany of political invective from retired generals and admirals. The result is that the armed forces have an enormous task to restore public faith. They will have to return to meritocracy and emphasize battle efficacy, enforce the uniform code of military justice, and start either winning wars or avoiding those that cannot be won.

Finally, we are witnessing a radical inversion in our two political parties.

The old populist Democratic Party that championed lunch-bucket workers has turned into a shrill union of the very rich and subsidized poor. Its support of open borders, illegal immigration, the war on fossil fuels, transgenderism, critical legal and race theories, and the woke agenda are causing the party to lose support.

The Republican Party is likewise rebranding itself from a once-stereotyped brand of aristocratic and corporate grandees to one anchored in the middle class.

Even more radically, the new populist Republicans are beginning to appeal to voters on shared class and cultural concerns rather than on racial and tribal interests.

The results of all these revolutions will shake up the U.S. for decades to come.

Soon we may see a Georgia Tech or Purdue degree as far better proof of an educated and civic-minded citizen than a Harvard or Stanford brand.

We will likely jettison the failed salad bowl approach to immigration and return to the melting pot as immigration becomes exclusively legal, meritocratic, and manageable.

To avoid further loss of public confidence, institutions like the FBI, the CIA, the Pentagon, and the DOJ will have to re-earn rather than just assume the public’s confidence.

And we may soon accept the reality that Democrats reflect the values of Silicon Valley plutocrats, university presidents, and blue-city mayors, while Republicans become the home of an ecumenical black, Hispanic, Asian, and white middle class.

A new law in Louisiana makes it illegal to approach a police officer within 25 feet in certain situations, ostensibly the state’s way of keeping officers executing their duties free from swarms of woke camera-wielding liberals offering up their scholarly legal takes in the midst of official business. 

Critics argue that the new law, criminalizing approaching a police officer within 25 feet under certain conditions could restrict the public’s ability to film police, a key method for ensuring accountability.

The law, which takes effect on August 1, imposes penalties of up to $500 and/or 60 days in jail for those convicted of knowingly or intentionally nearing an officer after being told to stop. Although the law does not explicitly mention filming, opponents contend it could interfere with observational rights and potentially violate First Amendment freedoms.

Those advocating for the law say it would “create a buffer-zone to help ensure the safety of officers and that bystanders would still be close enough to film police interactions,” according to AP.

AP notes that cellphone videos by bystanders, notably in cases like George Floyd’s 2020 death, have been pivotal in highlighting police misconduct and prompting discussions on police transparency.

Similar legislative efforts to restrict filming distances have been seen, such as a 2022 Arizona law that tried to ban filming police within 8 feet upon request, which was blocked by a federal judge as unconstitutional after challenges from media groups and the ACLU. This ruling underscored the established right to film police in action.

The author of the measure, State Rep. Bryan Fontenot, said: “At 25 feet, that person can’t spit in my face when I’m making an arrest. The chances of him hitting me in the back of the head with a beer bottle at 25 feet — it sure is a lot more difficult than if he’s sitting right here.”

Gov. John Bel Edwards, a Democrat, has spoken out against the law: “Each of us has a constitutional right to freely observe public servants as they function in public and within the course and scope of their official duties.”

He added: “Observations of law enforcement, whether by witnesses to an incident with officers, individuals interacting with officers, or members of the press, are invaluable in promoting transparency.”

Authored by Sophie Li via The Epoch Times,

A bill that would allow students who are illegal immigrants to work at California colleges and universities passed the state Assembly on May 22.

Currently, students must obtain a work permit to hold jobs on campus. That would change under Assembly Bill 2586, introduced by Assemblyman David Alvarez of San Diego.

“America has always promised that if you work hard, you will have the opportunity to succeed,” the lawmaker said May 24 in a statement.

“Creating these pathways to secure employment is essential.”

The bill passed on a vote of 59-4.

Under the bill, schools cannot disqualify a student from employment for failing to provide proof of a federal work authorization unless it is required specifically for a position by federal law or as a condition of a grant funding the position.

If the bill were to become law, the University of California (UC), California State University (CSU), and California Community College (CCC) systems would not enforce the federal ban on hiring illegal immigrants.

The legislation is based on the premise that California’s public colleges and universities should be exempt from the 1986 federal Immigration Reform and Control Act, which prevents employers from knowingly hiring illegal immigrants.

When Congress passed the act, it “did not curtail states’ historic power to determine the employment qualifications of state employees. As a result, [the act’s] prohibition on hiring undocumented persons does not bind state government entities,” UCLA Center for Immigration Law and Policy wrote in a 2022 memorandum it published.

If passed, the three systems will begin implementing the change by Jan. 6, 2025.

An analysis of the bill cited the U.S. Census Bureau’s American Community Survey from 2023 estimating that California has the most illegal immigrant college students in the nation, with around 83,000 across its higher education systems.

“These students have fulfilled their obligation and are ready to be our future teachers, scientists, doctors, and public servants,” Mr. Alvarez, the assembly member, said.

While the UC did not take a stance on the bill, President Michael Drake issued a statement in January declaring it not feasible for several reasons.

According to Mr. Drake, employees might face criminal or civil prosecution for knowingly engaging in practices prohibited by federal law, and the UC could incur civil fines, criminal penalties, or be barred from federal contracting for violating the immigration reform act. It could also lose billions of dollars in federal contracts and grants contingent on compliance.

“We have concluded that the proposed legal pathway is not viable at this time, and in fact carries significant risk for the institution and for those we serve,” the president said.

The bill is currently awaiting assignment to a committee in the state Senate.

Update (1710ET): Former President Donald Trump has been found guilty on all 34 counts in his New York ‘hush money’ trial. The outcome makes him the first former president to become a convicted felon.

The trial centered on allegations that Trump falsified business records in order to conceal a hush money payment to porn star Stormy Daniels ahead of the 2016 US election.

Trump reportedly stared ahead motionless as the verdict was read.

They are polling the jury now. There was not response from Trump. Merchan is thanking the jury.

— Jonathan Turley (@JonathanTurley) May 30, 2024

Such bullshit.

— Donald Trump Jr. (@DonaldJTrumpJr) May 30, 2024

You will remember where you were today for the rest of your life.

America just passed a rubicon.

There’s no turning back.

— End Wokeness (@EndWokeness) May 30, 2024

Developing…

*  *  *

The jury empaneled in the NY v. Trump case said it has reached a verdict.

The 12-person jury – which has requested 30 minutes to fill out the paperwork  – will soon enter the courtroom and announce what it has decided. Manhattan District Attorney Alvin Bragg charged former President Trump with 34 counts of falsifying business records in the first degree, and Trump pleaded not guilty to all counts.

Judge Juan Merchan will invite the jury in to read its verdict.

Prior to receiving the jury’s note around 4:20 p.m., Merchan had indicated he would excuse the jury for the day at 4:30 as a growing number expected a mistrial due to a hung jury however the presence of a verdict means that we will shortly know if the jury has found Trump “guilty” or “not guilty.”

Prosecutors needed to prove beyond a reasonable doubt that Trump falsified business records to conceal a $130,000 payment to Stormy Daniels, a pornographic performer, in the lead-up to the 2016 election to silence her about an alleged affair with Trump in 2006.

Michael Cohen, Trump’s former attorney, was the prosecution’s “star witness.”He testified that he personally made the $130,000 payment to Daniels using a home equity line of credit in an effort to conceal the payment from his wife.

Cohen said he did this because Trump told him to “handle it” and prevent a negative story from coming out ahead of the election.But Trump’s defense attorneys maintained that the president never directed Cohen to do so.

We all know the verdict already, because this thing was rigged from the beginning. A dirty prosecutor ran an illegal case using a corrupt judge and a jury pool of left-wing Biden voters to convict and sideline the ruling regime’s top political opponent. You don’t hate these…

— Sean Davis (@seanmdav) May 30, 2024

 

A month ago, the Danish ambassador to Ukraine vowed that Kiev would receive F-16 fighter jets from Denmark this summer. “Don’t worry; there will definitely be airplanes for Ukraine,” Ambassador Ole Egberg Mikkelsen told Ukrainian media at the time. As of 2023, Denmark had 44 total F-16AM and F-16BM fighters, and intended to decommission its entire fleet, in a plan that would see all of them in the end transferred to Ukraine.

But already, at the start of the summer when the aircraft are being prepped for delivery, Denmark is signaling further escalation against Russia. Danish Foreign Minister Lars Løkke Rasmussen on Thursday announced that Ukraine is authorized to use Danish-supplied F-16 fighter jets to strike targets inside of Russia territory.

Rasmussen was fielding questions by reporters in Brussels and was asked whether his government would greenlight this. “The short answer is yes,” Rasmussen responded.

“This is not a new position, it is part of the transfer. We made it clear from the very beginning when we discussed this with our Foreign Affairs Committee in the Danish Parliament that this is part of self-defense so that it would also be possible to attack military targets on the aggressor’s territory,” the Danish foreign minister explained.

Belgium, Norway, and the Netherlands are among other NATO allies who have pledged their US-made F-16s to Ukraine as well, pending an ongoing training program for Ukrainian pilots – part of which is taking place in the US. Belgium, for example, will deliver 30 total aircraft and recent reports have indicated deliveries could start “within weeks”.

While the policy could change, Belgian Prime Minister Alexander De Croo at the start of this week stipulated that the jets it gives Ukraine can only be used against Russia within Ukrainian territory.

“Everything which is covered by this agreement is very clear: it is for utilization by the Ukrainian defense forces on Ukraine territory,” De Croo said in response to a journalist’s question. President Zelensky was in Brussels to sign a defense pact with the Belgian government worth nearly €1 billion.

On the same day, the EU’s foreign policy chief Josep Borrell urged Western allies to allow Ukraine to use externally supplied weapons to attack inside Russia. “According with the law of war, it is perfectly possible and there is no contradiction,” Borrell said.

Today in Brussels, Prime Minister @AlexanderDeCroo and I signed a bilateral security and long-term support agreement between Ukraine and Belgium.

The document includes at least €977 million in Belgian military aid to Ukraine this year, as well as Belgium’s commitment to…

— Volodymyr Zelenskyy / Володимир Зеленський (@ZelenskyyUa) May 28, 2024

“I could retaliate, or I could fight against the one who fights against me from his territory,” Borrell told a meeting of EU defense ministers. “You have to balance the risk of escalation and the need for Ukrainians to defend.”

Of course, he didn’t mention the part about severely upping the ante of nuclear-armed confrontation with Russia or the possibility of sparking WW3. 

* * *

Meanwhile some Russian military analysis channels are currently claiming that Western-supplied F-16s are already in combat over the skies of Ukraine…

Authored by James Rickards via DailyReckoning.com,

We all know about the non-stop lawfare attacks on Donald Trump. You might like Trump or hate him, but it shouldn’t matter. Every American who cares about justice and the rule of law should be concerned about them.

It corrodes the system of justice that’s long been a source of national pride.

Besides being a financial analyst, I’m also an attorney with a deep understanding of constitutional law. And what they’re trying to do to Trump is unconstitutional in many cases, and in some instances egregiously so.

I’m not a fan of Joe Biden to put it mildly. But I’d be equally appalled if Republicans used the same type of lawfare against him based on specious legal grounds. It shouldn’t happen in the United States, period, regardless of political orientation. It shouldn’t be a partisan issue.

But unfortunately, Democrats have chosen to open Pandora’s box. Beyond the current lawfare, Democrats moved against Trump from the very beginning, in cooperation with the deep state.

Get Trump at Any Cost

It began with the Russian collusion hoax orchestrated by Hillary Clinton in 2016 followed by Operation Crossfire Hurricane run by the FBI and CIA that tied the Trump administration in knots (as intended) from 2017–2019.

This was followed by two impeachments (2019 and 2021) on bogus charges, then the Jan. 6 setup where Trump urged a peaceful demonstration at the Capitol, but Nancy Pelosi refused to deploy the National Guard (as Trump requested) or to notify the Capitol Police (standard operating procedure) in order to precipitate the riot helped along by lots of undercover FBI agents egging the protesters on.

Once Trump decided to enter the 2024 presidential race, he was hit with an “insurrectionist” label to kick him off state ballots in Maine and Colorado, then with the Jan. 6 case in Washington; the classified documents case in Palm Beach; the RICO conspiracy charge in Fulton County, Georgia; and most ridiculous of all, the loan application and “hush money” cases in New York City that threaten to bankrupt Trump or put him in jail.

That’s quite a list but the lawfare freaks have a few more tricks up their sleeves between now and the next election.

Serve Trump, Pay the Price

What’s not as well-known are the other targets of Democratic lawfare, including Trump-affiliated lawyers and advisers.

These include the 73-year-old Harvard-trained economist Peter Navarro, who is now in federal prison; former Trump campaign manager and adviser Steve Bannon, who is now awaiting imprisonment on federal charges; former New York City Mayor Rudy Giuliani, who was hit with a summons at his 80th birthday party; and John Eastman, a prominent lawyer and constitutional scholar who was arrested in Arizona on 2020 election charges despite having had no involvement in contesting the Arizona election results.

Lawfare is being used against candidates, advisers, members of Congress, judges and others who in any way support Trump or his policies

The purpose of this is clear. Lawfare fanatics not only want to disable Trump, but they also want to disable his advisers and intimidate any other qualified professionals from helping Trump. This is not just lawfare; it’s warfare.

Even if the charges are completely bogus, which is almost always the case, you have to hire attorneys to defend you in court. That could potentially cost hundreds of thousands of dollars — or more in Trump’s case.

Donald Trump might be able to afford to hire all these expensive lawyers to defend him. But most others can’t. So lawfare is designed to ruin them financially. And that’s the point. Even if you win in court, you still lose because you’ve been ruined financially, or at least badly damaged.

Anyone on Team Trump who doesn’t understand the stakes will get run over or worse. But is it really new?

Nixon and Watergate

Lawfare is a good way to understand what happened to Richard Nixon during the Watergate scandal in 1972–1974 that resulted in his being driven from office. First, some context is required.

Nixon was elected in a close election in 1968 and then reelected in one of the greatest landslides in U.S. history in 1972. (Nixon carried 49 of the 50 states. Nixon’s opponent George McGovern carried only Massachusetts and Washington, D.C.).

It should be noted that Nixon had an impactful presidency. He opened relations with China after a 25-year freeze, ended the Vietnam War (started by John F. Kennedy and escalated by Lyndon Johnson) after 10 years of combat and over 50,000 Americans killed, created the Environmental Protection Agency (for better or worse) and was president when the first men landed on the moon. Nixon also negotiated the first nuclear arms limitation treaty with the Soviet Union.

To this day, there is no evidence that Nixon knew about the Watergate break-in in advance or had any hand in authorizing it. But as is often said, the cover-up is worse than the crime.

The Long Knives Were out for Nixon

Once the break-in participants were arrested, the White House went into damage-control mode. There’s no doubt Nixon broke the law by authorizing payments to the burglars and their families. He was also aware of perjury by some of his aides. Still, these were not momentous crimes relative to what almost all of his predecessors had done.

Nixon’s acts could arguably be viewed as in the national interest to preserve what had been a successful administration in both domestic and foreign policy. The scandal could have ended with some criminal trials of both campaign officials and some White House officials involved in the cover-up.

But the FBI, liberal media and Democrats were out for blood. Using leaks from Mark Felt (deputy director of the FBI also known as Deep Throat), friendly media outlets like The New York Times and The Washington Post and hearings in the Democrat-controlled Senate (summer of 1973) and House (summer of 1974), Nixon’s enemies raised the temperature and, in the end, made Nixon’s resignation almost inevitable due to the threat of impeachment.

Donald Trump has been through this and more; he’s been impeached twice. The point is Trump should study the Watergate playbook to avoid some of Nixon’s mistakes and for guidance on how to stand up to the wolf pack behavior of the progressive media.

He’s going to need all the help he can get.

‘Mixed’ – markets, macro, and micro – today

GDP‘s secondary print showed weaker consumption and a slight decline in growth and PCE from the primary print (bad is good). Then the 4-week moving average of jobless claims printed at 8 month highs (bad is good). And then Pending Home Sales puked hard (bad is good).

But all that ‘bad is good’ was dominated by the ‘bad is bad’ from earnings narratives around software (CRM) and the consumer (KSS).

And that prompted rate-cut expectations to increase modestly…

Source: Bloomberg

…and dragged Treasury yields lower (with the 2Y now lower on the week)…

Source: Bloomberg

 Late in the day this HL scrolled across BBG: – *US IS REINING IN AI CHIP SALES TO MIDDLE EAST BY NVIDIA, AMD – and NVDA tanked…

And that dragged the majors to the lows of the day.

Small Caps were squeezed higher (+1%) but the rest of the majors were red with NVDA smashing Nasdaq to be the underperformer (-1%)…

This was Small Caps best day relative to Nasdaq in six weeks (outperforming by 200bps!), seemingly stalling at resistance once again…

Source: Bloomberg

As Goldman’s trading desk confirmed, stock markets were grinding lower despite move lower in 10yr yields: seeing tug of war between risk-positive macro data (inline GDP, weak home sales) and negative micro stories in tech space.

• ALL ABOUT SOFTWARE… Very challenging price action across the board, with the sector -5% (worst session   in ~2 years), CRM -21% (worst session in ~20 years), PATH -35%, OKTA -6%   (despite beat/raise)

• Heavy day of earnings in consumer space… FL (+18%), BURL (+18%), BIRK (+10%) standouts to upside while AEO   (-6%) missed higher expectations and KSS (-22%) challenged   across board. This morning continues trend of a ‘choppier’ consumer vs last   year though still stable enough to have both winners and losers.

• LOs are much better for sale for their second   session (-20%) led by supply in Hcare and tech, vs small demand in consumer discretionary.

• HFs better to buy today led by tech and Hcare.   We are beginning to see players step in to defend software.

The equal-weighted S&P 500 is getting hit hard and the cap-weighted index is starting to crack…

Source: Bloomberg

The dollar fell on the day, erasing most of yesterday’s gains…

Source: Bloomberg

…and crude oil prices plunged on growth fears (GDP) and a smaller crude build than API reported…

Source: Bloomberg

But apart from that, traders were buying gold…

Source: Bloomberg

…and buying bitcoin…

Source: Bloomberg

…but selling silver…

Source: Bloomberg

Finally, as stocks were tumbling this morning, all of a sudden, S&P and Dow Jones Indices ‘glitched’ and while individual stocks were still trading (and futures), there was no feed for the cash indices…

Source: Bloomberg

…and sure enough, that corresponded with a sudden interest in buying stocks and reversed the morning’s losses. Are they getting desperate?

Shares of Nvidia fell late in the cash session Thursday after a Bloomberg report said the US government “slowed the issuing of licenses to chipmakers such as Nvidia Corp. and Advanced Micro Devices Inc.” for “large-scale” AI accelerators, otherwise known as deep learning processors or neural processing units. 

The report, based on ‘people familiar with the matter,’ highlights the uncertainty surrounding a national security review based on AI development. The lack of a clear definition of what constitutes a large shipment further adds more uncertainty.

Sources said US government officials are focused on high-volume sales. This comes as Saudi Arabia and the United Arab Emirates ramp up AI data center spending and import massive amounts of chips. 

“With regards to the most cutting-edge technologies, we conduct extensive due diligence through an interagency process, thoroughly reviewing license applications from applicants who intend to ship these advanced technologies around the world,” a US government official told Bloomberg, adding,  “As always, we remain committed to working with our partners in the Middle East and around the world to safeguard our technological ecosystem.” 

A slowdown in the export of AI chips to the Middle East could be problematic for chip companies, especially Nvidia, which was recently thrown into an AI chip price war with Chinese tech giant Huawei. 

Translation: The US government reining in chip exports to the Middle East, plus intensifying competition in China, serves as a cautionary sign for investors following a strong earnings report last week. 

So much for those 77% margins

Nvidia cuts China prices in Huawei chip fighthttps://t.co/vptpEb8dYE

— zerohedge (@zerohedge) May 24, 2024

Nvidia shares dropped more than 2.5% on the report. 

How does this end well? 

Broader equity markets followed Nvidia lower into the late session.

This is terrible news for all those hedge funds piling into Nvidia (chart courtesy of GS): 

Great job, Biden. This will only mean the Chinese, i.e. Huawei, will flood the region with cheap AI chips. 

By Tsvetana Paraskova of OilPrice.com

Canada’s oil industry is booming, but companies in its top oil-producing province, Alberta, are struggling to hire and retain skilled talent to seize the opportunity of greater market access that the expanded Trans Mountain oil pipeline provides.  

Canadian oil production is rising and could rise by the most among all producers this year, analysts say. 

But a shortage of talent could make Canada’s renewed oil boom more difficult to sustain.  

As Boomers and Generation X are retiring, the next generations of the workforce – Millennials and Gen Z – are looking at the oil and gas industry as a dirty thing from the past, wrecking the climate and not worth their attention as job seekers. 

The University of Calgary in Alberta, where most Canadian energy companies are based, has recently heard from industry contacts that firms are struggling with staffing skilled positions. And the university now plans to restart its oil and gas engineering program, which was suspended three years ago due to very low interest and a downturn in the industry during COVID. 

“Some of our industry contacts and industry partners have been telling us increasingly over the recent months and years that they are having trouble finding qualified engineers to hire into the energy industry,” Anders Nygren, vice-dean of the Schulich School of Engineering at the University of Calgary, told The Canadian Press‘ Amanda Stephenson in an interview last week. 

The University of Calgary suspended in the summer of 2021 admission for its oil and gas engineering bachelor program due to plummeting demand as only 10 students had registered for the course in the two years prior to the suspension. 

The university didn’t abandon oil and gas-related studies – it continues to offer petroleum-specific specializations within the fields of mechanical and chemical engineering. Currently, there are about 1,800 students enrolled in these programs, Nygren told The Canadian Press.

The decision to revive the oil and gas engineering program is indicative of the talent crunch the industry has faced in recent years, but also of an uptick in interest in petroleum-related courses, following years of younger generations thinking of the sector as the villain in the fight for curbing climate change. 

Following the energy crisis of 2022, energy security has become more prominent among companies and consumers as many started to realize that the world will continue to use oil and gas for decades and the energy transition is not happening overnight. 

Changing Workforce  

Moreover, the rise of AI and digitalization in the oil and gas industry has shifted the perception that the sector is offering only blue-collar jobs where the young people would get their hands dirty and contribute to rising global emissions. 

Yet, while these two factors may have attracted some of the young generation to work in the energy sector, the cyclical boom-and-bust nature of the industry is putting off many others, and so are the working hours and a relative lack of the work-life balance that Gen Z crave. 

Jobs in the oil and gas industry are well-paid in Canada and elsewhere, but the next generation of talent is looking for well-paid jobs in other fields. For example, data centers are poaching computing, engineering, and data science specialists from the oil patch. 

An executive at an exploration and production (E&P) firm commented in one of Dallas Fed’s energy surveys last year, 

“Labor is hard to find. Dirty-fossil-fuels stigma drives younger talent away.”

Some of the U.S. talent who are not driven away by the “dirty business” stigma are being poached by technology firms, data centers, Tesla, SpaceX, and other jobs in computing and engineering. This leaves fewer workers available for the oil and gas industry, driving up labor costs and overall project costs, potentially setting the stage for project delays.

Yet, according to Tristan Goodman, president of industry group the Explorers and Producers Association of Canada, the “bad narrative” that has driven talent away from pursuing university degrees in oil and gas studies has started to change. 

“Of course, we need to continue to reduce greenhouse gas emissions, but at the same time, this is a product that everybody in the world is using. And I think a bit more pragmatism around that is entering the system now,” Goodman told The Canadian Press. 

Canadian industry associations are looking to promote jobs in the sector with new initiatives. 

For example, Canadian energy services association Enserva launched in March its THINK Energy campaign, a national awareness strategy to showcase lucrative careers available within the energy services sector.  

According to Enserva, formerly Petroleum Services Association of Canada, its newly-launched Working Energy portal will address talent shortages. 

“There is currently a 3,000-4,000-person labour shortage in the energy services sector that is made up of labourers, drivers, tradespeople and more, and Enserva is hoping to connect those looking for jobs with companies who need positions filled and create a long-term solution to this shortage,” Enserva CEO Gurpreet Lail said. 

“Our sector also has to address this ridiculous idea that Canadian energy is a dying industry. That’s simply not the case,” Lail notes. 

“The world is going to need our energy for a very long time, and we need talented people to help us innovate and produce it responsibly.”