Solwd

Tyson Foods CEO Donnie King spoke at the BMO Global Farm to Market Conference in Toronto on Wednesday, expressing much uncertainty about when US ranchers will rebuild tight cattle herds meaningfully. 

Reuters was the first to report King’s comments at BMO’s farm conference. He stated ranchers had been pressured in recent years to offload cattle due to high grain costs and drought, which, in return, sent the nation’s beef cattle herd plunging to the lowest in more than half a century. 

King provided some encouraging news, citing slightly lower grain costs and improved grazing conditions in the Midwest as factors in increasing the US herd. However, he noted that a high-interest rate environment is a significant headwind. 

All in all, King’s comments did not provide confidence that the nation’s beef cattle herd would reverse from seven-decade lows as ranches continue offloading cows to slaughterhouses. The latest figures from the US Department of Agriculture show that the nation’s cattle herd is 87.2 million head (as of Jan. 1), the lowest level since 1951. Data from USDA in the chart below only goes back to 1974. 

Shrinking herds means fewer cows, as the latest slaughter price per 100 pounds is around $186, the highest ever and in breakout territory. 

We have explained that ranches have been culling more cows for several years because of droughts, surging feed costs, and high interest rates. 

Dwindling US Cattle Herd Implies Supermarket Beef Prices May Rise Even More
Hamburger Prices Might Continue To Rise As US Cattle Herd Shrinks
US Cattle Prices Hit Nine-Year High As National Herd Drops To Half-Century Low
US Beef Prices Hit Record High As Nation’s Cattle Herd Expected To Shrink Through 2025

This perfect storm has sent beef prices at the supermarket to record highs. 

Lane Broadbent, president of KIS Futures Inc. in Oklahoma City, told Bloomberg earlier this year that herds aren’t expected to rebound before at least 2026. 

We suspect retail prices will go higher until demand destruction is achieved. Seasonally, outdoor cookouts ignite an upswing in beef demand in the coming weeks. 

Can the Fed just print more beef? Oh wait, no, but you know who can: Bill Gates.

By John Kingston of FreightWaves

With the benchmark diesel price used for most fuel surcharges down for the fifth week in a row, diesel consumers should be reveling in the fact that market trends appear to have completely thrown out concerns about the Middle East conflict and are focused on the markets for both diesel and gasoline as primary drivers.

The Department of Energy/Energy Information Administration average weekly retail diesel price fell 4.6 cents Monday to $3.848 a gallon. The five consecutive declines have taken that price down 21.3 cents a gallon during, and the price is now at a level not seen since the end of January.

Whatever impact that oil markets may have felt from the conflict in Gaza, the Iran-Israel back-and-forth and the diversions of shipping away from the Red Sea (which may have faded from the news but continue) are apparently having no impact on oil prices. A reaction to those developments would tend to be macro in nature and would generally impact crude more than products.

But market weakness continues to show up in products markets, including diesel. And diesel in particular is getting a great deal of focus of late. 

Diesel is increasingly being viewed as one of the primary reasons for the gradual fall in oil markets that has been occurring since early to mid-April. Whereas a few months ago, the rising price of oil was primarily attributed to a tight market for gasoline, the more recent weakness in oil overall is being laid firmly at the feet of the diesel market.

In his weekly report released Sunday, energy economist Philip Verleger noted that diesel weakness is becoming more structural because of the growing role of renewable diesel, which is made not from petroleum but from feedstocks such as plant oils and animal fats, including those captured in grease traps at restaurants.

In the report, Verleger noted that weekly EIA data on distillate consumption in the U.S., which is about 90% diesel, has been running anywhere from 400,000 to 600,000 barrels per day less than pre-pandemic levels. While some analysts are looking at that and concluding it is the function of a slow trucking market, Verleger’s report cited the fact that the data isn’t capturing the consumption of renewable diesel. 

“Taxes and regulations promulgated by the US Environmental Protection Agency have prompted refiners to convert crude oil processing facilities to produce renewable diesel, making more renewable fuel available,” Verleger wrote. “The higher renewable diesel use will cut US petroleum consumption. At this juncture, it seems that none of the … most-quoted forecasts of global oil demand have been adjusted to account for this replacement.”

Refining company earnings calls with analysts often feature management discussion of renewable diesel and its impact on the refiners’ bottom line. For example, on the latest Phillips 66 call, CEO Mark Lashier reviewed the company’s expanding renewable diesel operations and said that as a result of them, “we have gained valuable operational experience and market knowledge that positions us for success in our expanding renewable fuels business.”

But on the latest round of calls, talk about the weak diesel market — its crack spread against Brent crude is down about 20 cents a gallon in two months — did arise. 

The view that diesel demand is weak was rejected by Gary Simmons, the executive vice president and chief operating officer at Valero. He said on the company’s first-quarter earnings calls that diesel sales at Valero are about 2% higher than those of a year ago. 

But he added that he expects diesel demand will be “flat to slightly down compared to last year.” “However, some of the freight indices appear to be turning, and indicate we could start seeing better demand,” Simmons said. 

Brian Mandell, executive vice president of marketing and commercial for Phillips 66 (NYSE: PSX) said on the company’s call that even though Ukraine’s attacks on Russian refining capacity have probably taken about 200,000 barrels per day of Russian diesel supplies off the market, diesel prices have been suppressed by the warm winter in the northeastern U.S. — where heating oil, a distillate, is heavily used for home warmth — and by refiners coming out of maintenance season strong.

But the result has been reduction in refinery operating rates in Europe and Asia because of refining margins for distillates, which he said are around breakeven.

The weak market for products relative to crude is most visible in the 3-2-1 crack spread, a basic indicator of refinery probability. It is calculated by taking the price of two barrels of gasoline plus one barrel of diesel, converting it to a price per barrel and subtracting the price of crude, either Brent or West Texas Intermediate.

The Brent 3-2-1 on Monday, based on CME prices, fell to close to $21 a barrel. Two months ago, in mid-March, it was approximately $29.

Russian President Vladimir Putin has for the first time explained the rationale behind this week’s major cabinet reshuffling, which for the first time of the Ukraine operation saw Sergey Shoigu removed as defense minister (and ‘promoted’ to head of the national security council), and former minister for economic development Andrey Belousov moved into the defense chief spot. He described the decision as due to the dramatic rise in the defense budget and military spending.

Putin said of Belousov: “He understands perfectly well what needs to be done in order for the economy of the entire security complex – and the Ministry of Defense as its key component – to fit into the overall economy of the country,” according to state media translation.

Getty Images

The Russian president was addressing a gathering of top military officers. “This is extremely important and relates to the innovative development of industry and taking into account the capabilities of the economy and the budget,” he said, explaining further: 

“This relationship between ‘guns’ and ‘butter’, so to speak, must be organically integrated into the overall development strategy of the Russian state,” Putin said. “I hope that Andrey Removich [Belousov] will handle this task in the best possible way.”

Putin noted that Russia’s military spending has grown to approximately 8.7% of GDP in 2024. While not quite the 13% that the Soviet Union was spending in the 1980s at the height of the Cold War, “these are significant resources, and we have to use them very efficiently and effectively,” the president explained. 

The appointment had raised eyebrows inside and outside Russia given Belousov has no military experience, nor has he been involved in strategic decision-making regarding the war in Ukraine. Instead, Belousov has always been a ‘numbers guy’ and Russian central bank planner.

The United States was among those countries claiming that the big shake-up points to a destabilizing trend in the Kremlin due to significant losses suffered by Russia in the context of Ukraine, as well as the sometimes devastating cross-border attacks on Russian soil.

The Biden administration on Monday said it shows signs of “desperation” for Moscow sustaining the high costs of the Ukraine invasion, also amid unprecedented Washington sanctions aimed at Moscow (but which have by and large backfired).

Putin has just spelled out clearly what many observers had already posited – Andrei Belousov’s appointment as defence minister is “linked not least to the fact that spending on the military is growing” pic.twitter.com/j3IsKQbg7o

— Francis Scarr (@francis_scarr) May 15, 2024

“Our point of view is that this is further indication of Putin’s desperation to sustain his war of aggression against Ukraine, despite it being a major drain on the Russian economy and the heavy losses of Russian troops, with some estimates as high as 315,000 casualties,” State Department spokesman Vedant Patel said to a press briefing.

Authored by Alan Lash via The Brownstone Institute,

Prepare for total control of your economic life. That is the message from Brownstone Fellow Aaron Day at his 4-hour workshop in San Jose, California last Saturday, May 11th.

Day has written the excellent book The Final Countdown, which carefully describes the increasingly aggressive assaults on our freedoms by our government and by the global elites. He has just begun a series of workshops around the country to deliver that message and to show us a way to resist. The book was published just last year, but Day acknowledges during the presentation that he had to make alarming updates to his slides from current news, not even weeks old – more government intrusion, more legislation, and more spurious arrests, all attacking our ability to interact freely and transact our business.

As in the book, the presentation begins with a fictional account of a family set in the near future in a Western democracy, but perhaps all too familiar to current denizens of China, with their controlled currency and social credit scores. The image is easy to dismiss; it could never happen here. And yet, Day goes on to show how it actually is happening here. With a litany of article after article, official statement after statement, and video after video he makes his case. It is happening – he leaves no doubt.

Day gives ample historical reference points as well. How did we get here? It has been a long time coming. The constant push of globalist powers to remove our freedoms and control all resources has been in the works for a century. Perhaps it has never been different; the powerful seek more power, and the levers of technocracy make that easier than ever. The difference now is that the reach is truly global. There has been ever-increasing control over food, water, energy, and even the space we occupy and the air we breathe. 

The particular focus of the workshop is on CDBCs in America and throughout the West. Our central bank has been developing digital currency for some time, hoping to eliminate our ability to keep our business to ourselves. In this new world, all our actions can be easily monitored, tracked, and nudged into whatever direction the elites deem right or beneficial to their wealth and status. 

Within the two hours of historical facts, somber reflections, and sometimes horrifying news, the audience did not sit quietly and take the emotional beating. On the contrary, there was already much knowledge of these events, grunts of awareness, gasps of disbelief – we all knew it, but perhaps didn’t know it was this bad, with all the detail that Day presented. 

Digital currency is in the works, folks, and it is undoubtedly coming, sooner than we all think. One more emergency is all it could take for the government to say we are all doing this now. 

The audience was generally older, probably retired, or with a nest egg they were hoping to protect from debasement. A lively bunch, clearly committed to freedom, voiced their questions often in the quickly paced session. Each query exhibited a tacit but palpable urgency from the attentive crowd, who are all fully aware that what Day exposits is not some futuristic dystopian fantasy, but soon to be the new reality as he predicts.

The age of the audience is to be expected, perhaps: with time and money on their hands, they are probably more aware of the unfolding events with a perspective of history and have more wealth to lose. Indeed, many of the questions the audience asked centered around their ability to maintain their legacy when a CDBC replaces the dollar – how do I protect my assets when the currency falls and centralized control follows? 

But that is not the point, says Day. The point is not that our money is a store of value; the point is that it is a medium of exchange. It is not the inherent value of gold or crypto that is important, whether it goes up or goes down; its importance is its utility and its freedom from tracking by the State.  

Viewing the importance of money through this lens of freedom and impact on the future, we could easily see that those with truly the most to lose were largely not present at the workshop. The young adults – whose lives will be impacted the most gravely should the economic stranglehold ensue – will not make their financial decisions freely according to their own obligations, their own goals, and their own dreams. 

Every purchase will ultimately have to pass the test of the State’s agenda: did they use too much gas or too much water? Did they say something against the State? Will it be possible for them to attain the kind of comfort that their parents attained, out of the State’s watchful eye? If Day’s CDBC roadmap to economic tyranny is deployed, he clearly demonstrates what follows, and he proves it by citing recent events. 

The second part of the workshop focuses on what can possibly be done to counter this insidious march into economic slavery. Unfortunately, as Day describes, it is not possible to simply pack up and move out. Even with ample wealth and mobility, escape is not possible. Day recounts the stories of several colleagues who tried a different way – many of them arrested for saying too much and being too influential. Live in a different country? Doesn’t matter. We’ll call our people there and have you picked up. 

No, the only true way to beat this movement into CDBC tyranny is to stand in the light and refuse to participate. Use other methods to transact your business wherever you can and get others to do likewise. See which businesses will accept payment in crypto, and get yourself a wallet. Giving the waiter a tip? Give her a Goldback. 

As Day also makes clear, no one such solution will work; we have to use them all, as the effort to undermine the options is well underway. You may have heard that the largest threat to the dollar, Bitcoin, has been subverted into a system to be controlled by insiders, who are ultimately influenced by the State. Roger Ver’s recent book, Hijacking Bitcoin, tells this story. Tellingly, Ver, a citizen of St. Kitts since 2014, was arrested in Spain at the behest of the US just weeks ago.

Day explains that this is the point of using every way possible to sidestep the use of the dollar. If one method gets too big it becomes compromised by attacks of the State. 

The other important takeaway from the workshop is the idea of self-custody. Any crypto account you keep, or any asset anywhere, should be kept under your own custody, where only you have the keys. This is not possible with many cryptocurrencies by their construction, and not possible if you leave custody with a bank. It’s a lot harder for the State to go after millions of anonymous accounts than to go after one central repository that has the keys. Day notes which cryptos do and don’t allow self-custody. If you trade crypto through a large exchange, they too will most likely keep the keys.

I have only touched on the depth and breadth of Aaron Day’s workshop. It is well worth the time to understand the evil before us and practical ways to combat it. We will all need to work together to keep our financial freedom. Get in touch with Aaron via email and ask him to visit your city and present his workshop, or sign up to receive information through his website. Share those valuable lessons with your family and friends, and pay particular attention to the youth. It is their world being taken from them before they even get the chance to call it their own.   

Every attendee walked out of the workshop empowered with practical tools for resisting the move to CBDC. We each had a crypto wallet set up on our phone, to which one of Aaron’s sponsors donated $5 in self-custody crypto. We also left with a New Hampshire Goldback, currently worth $5, and a Citizens for Sound Money 1/5 oz round of silver worth about $5. As Aaron explained, there is growing acceptance of these forms of payment everywhere. Goldbacks can be used in Utah, Nevada, Wyoming, New Hampshire, and South Dakota. The workshop also included a signed copy of Aaron’s book.

On my drive back home after the workshop I met some friends at a local pub. I tried out my newfound power as I attempted to buy a beer with the Goldback, going through all the waiters all the way up to the owner. He looked the gold foil leaf up and down examining the obvious care and purpose in its making. He scowled. “I don’t think so,” he said. 

We have a ways to go in California. I for one will keep trying, and encourage all to join me in the pursuit of economic freedom.

As the Bill Hwang trial began making its way through its first week, prosecutors described the family office manager as someone attempting to “become a legend on Wall Street” to jurors, according to the Financial Times. 

The trial of Hwang in Manhattan began this with hopes of uncovering motives behind his historic collapse that caused $100 billion in collateral damage.

Prosecutor Alexandra Rothman told the court in her opening statement: “From the inside these two men turned an investment business into a crime business, all because the defendant Bill Hwang wanted to become a legend on Wall Street…”

Hwang’s defense argued, meanwhile, that he was merely a committed investor who backed companies like ViacomCBS and Discovery.

One of his lawyers, Barry Berke, told the court Monday: “Mr. Hwang . . . most certainly put his money where his mouth is.” 

On Tuesday, testimony was heard from UBS risk manager Bryan Fairbanks, who revealed that UBS was startled to discover Archegos’ main investments were in less liquid firms like Viacom, Discovery, and Tencent Holdings, contrary to earlier assurances of stable tech holdings like Apple and Google, according to Bloomberg.

This revelation made UBS anticipate significant losses, he said. Concerns grew as UBS felt Archegos prioritized other banks during portfolio liquidation to meet margin calls.

On a crucial call on March 25, Hwang unsuccessfully tried to reassure his major prime brokers by claiming he could stabilize Archegos’ positions quickly, despite alarming loss figures.

“They weren’t trying to do anything to meet the margin call,” Fairbanks wrote in an email on March 25.

Meanwhile, Hwang’s defense highlighted UBS’s financial motives and attempted to expose potential biases in testimony, suggesting that UBS overlooked risks due to lucrative fees from Archegos.

The charges in Hwang’s trial come from the 2021 collapse of the $36 billion dollar Archegos and Reuters has said that testimony could last up to 8 weeks. Prosecutors have said that Archegos’ collapse led to $100 billion in shareholder losses at companies he held.

The trial is set to shed a light on how major Wall Street players accommodated, and potentially turned a blind eye, to risky tactics from a wealthy client. Hwang is being accused of using total return swaps to take massive positions in companies without holding their underlying stock. 

As Reuters notes, the company faced crippling margin calls in March 2021 due to falling stock prices. This, in turn, led to significant losses for Archegos and its lenders, including Credit Suisse and Nomura Holdings.

Archegos founder Bill Hwang and CFO Patrick Halligan, charged with racketeering conspiracy and multiple counts of fraud and market manipulation, have pleaded not guilty.

They contest the prosecutors’ claims of market manipulation, which some legal experts view as a challenging case for the government. The trial is expected to feature testimony from Archegos’s guilty-pleading head trader and Chief Risk Officer, alongside potential appearances from bank executives.

Hwang was arrested in April 2022 and charged with racketeering conspiracy, securities fraud and wire fraud in connection with a scheme to manipulate the share prices of public companies in order to boost profits. He was then released on $100 million bail. 

According to the 40-page indictment, Hwang engaged in a “fraudulent scheme” that included “interlocking deceptive acts and misconduct, through false and misleading statements to security-based swap (“SBS”) counterparties and prime brokers and manipulative trading designed to artificially move the market, which, in tandem, increased Archegos’s assets under management from around $4 billion to over $36 billion in just under six months.”

Authored by Charles Hugh Smith via OfTwoMinds blog,

As a result, a significant percentage of households that are considered middle-class are one misfortune away from insolvency.

We can summarize the changes in our economy over the past two generations with one word: precarity, as life for the bottom 90% of American households has become far more precarious over the past 40 years, despite the rising GDP and “wealth” as measured in phantom capital.

This reality is expressed in the portmanteau word precariat, combining proletariat (someone whose livelihood comes from their labor) and precarious: outside of government employment, work has become far more precarious. Where it was still common 40 years ago to work for a company for much or most of one’s career and have a private-sector pension, now private-sector pensions have vanished, replaced by self-managed 401K funds, and private-sector work is characterized by a series of not just job changes but career changes.

The source of one’s livelihood can dry up and blow away almost overnight, and to fill the hole many turn to gig-work with zero benefits that saddles the worker with self-employment taxes (15.3% of all earnings, as the “self-employed” gig worker must pay both the employee and the employer shares of Social Security-Medicare payroll taxes).

This isn’t true self-employment, of course, as true self-employment means the owner-worker can hope to extract the full value of their labor; in contrast, much of the value of the gig work is skimmed off by corporate platforms (Uber et al.). The gig worker is a precariat wage-slave, not a self-employed owner of their own labor and enterprise.

Forty years ago, households with healthcare insurance being driven into bankruptcy by medical bills was unknown. Now this is commonplace. We’re forced to ask, what exactly does “insurance” even mean if our share of the medical bills is so burdensome that we’re forced into insolvency?

This is just one of many examples of the increasing precarity of life in America. Need dental work? “Insurance” covers only the basics; the rest requires savings, an inheritance, a line of credit or a top 10% income.

Speaking of income, even a substantial earned income doesn’t go that far nowadays. Consider what a typical family spends on what we consider middle class birthrights: eating out, going to a movie, etc.

This budget of a household earning a top 1% income (top 2% in high-income states) of $500,000 is interesting on several fronts. Those living in lower-cost states may view it as bloated beyond belief, while those living in NYC, Los Angeles, San Francisco et al. will view it as entirely realistic: yes, property taxes are $20,000, “enrichment” childcare costs $42,000, and so on.

What’s not realistic is $5,000 for home maintenance and $18,000 for three vacations a year. Given the age of American houses (40 years being average), the poor quality of a significant portion of recent construction and the soaring cost of labor, $5,000 doesn’t buy much in the way of maintenance. A more realistic estimate for pretty much anything serious is $20,000, and $50,000 is remarkably commonplace for even modest kitchen makeovers. The $18,000 in charitable donations may be sucked up by a new roof.

As for vacations, unless it’s a very short trip, a camping trip or travel to a low-cost destination, $6,000 per vacation may not be realistic.

The point of this exercise is to examine the buffers needed to survive a serious misfortune, such as losing one’s job or a medical crisis. Two generations ago, costs were lower and households generally had enough savings or credit to cover the emergency expense or survive a bout of unemployment. With costs now prohibitive, modest savings are no longer enough.

As a result, a significant percentage of households that are considered middle-class are one misfortune away from insolvency. The concentration of income and wealth into the top 10% isn’t just a statistical abstraction; in the real world, it means the buffers of the bottom 90% have thinned while the buffers of the top 10% have increased: for the family holding hundreds of thousands of dollars in 401K accounts and sitting on $1 million in home equity, a $25,000 medical or home repair bill is an inconvenience, not a push off the cliff into insolvency.

This precariousness extends into small business as well. Costs have soared and buffers have thinned. A great many small enterprises are one misfortune away from closing / insolvency.

As the tide of precarity rises, the apologists and cheerleaders of the status quo are cheerily predicting a “Roaring 20s” of widespread prosperity ahead. Correspondent David E. forwarded this cartoon which captures the current zeitgeist perfectly:

*   *   *

Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free

Crypto-libertarian Erik Voorhees, fresh off his passionate defense of crypto in the ‘Gold vs. Bitcoin’ debate recently hosted by ZeroHedge, spoke with crypto news site Unchained’s Laura Shin and Venice’s COO Teana Baker-Taylor about the alarming honeypots of user search history data on AI chatbot platforms that could potentially be harvested. 

Venice is one of Voorhees’ latest crypto ventures. It is a private, uncensorable, open-source competitor to OpenAI’s ChatGPT, powered by a decentralized crypto network.

Around the 25-minute mark, Shin asked Voorhees about the risks that OpenAI, Anthropic, and or other big AI companies could be doing with user search data. 

Voorhees responded: 

“Great question that’s really like the most important question. So status quo today is you’re using anthropic or OpenAI chat – you send in your question and it goes to that company and they store it forever and it’s attached to your identity – right so they know that Lura Shin asked this question – um and they know that the AI responded back to you and they know what that is – and not only do they know that that question that conversation but they know your entire history of all conversations that you asked yesterday last year tomorrow and 10 years from now. All of it is associated with your identity. 

“In the best case that’s not that big of a deal, but in reality, what it means is – all your information – and essentially like parts of your mind like think your intellectual inquiries that you pursue – the things you think – the things you want to debate – the questions you have about life – and like big topics um can be known by Third parties.” 

“Advertisers for example, like that’s not a huge deal if an advertiser knows something about you. But what if like uh a government knows something about you. What if um what if the Biden Administration learns that you are like uh you know orchestrating uh Trump’s re-election campaign. What is what is the pressure on uh Biden Administration and OpenAI to use that information for something that people would consider corrupt and dangerous.”

“These are very slippery slope arguments, um and it does not really matter what, like you know Anthropic’s privacy policy says. If they have your information it will be shared with other parties today or tomorrow and probably both. And you can never get it back. So um that’s the status quo – uh for people that are comfortable with that like keep using those services. that’s okay.”

Voorhees then explained how Venice AI prides itself in user sovereignty: “But like Venice was like well, um let’s make a service that’s just as easy” OpenAI and others, “but instead of like spying on you and recording all your information and attaching it to your identity forever let’s just not do that.” 

*   *   * 

Here’s the full interview:

Via SchiffGold.com,

This week on the Peter Schiff Show, Peter covers a week of dismal economic reports. Both jobless claims and consumer sentiment came in worse than expected last week, with both figures missing predictions by a wide margin. Peter also discusses public statements made by both Joe Biden and Donald Trump on the nature and origin of inflation.

The Fed faces a difficult choice. Does it prioritize fighting inflation or keep rates low for consumers?

“If Powell looks at these numbers and decides we need to raise rates because consumers are worried and they’re pessimistic about inflation, that’s going to make the high-interest rate problem worse. Consumers are upset about both high inflation and high interest rates. So how is the Fed going to do something about that? Because if it raises interest rates, it’s going to make that problem worse. And if it doesn’t raise interest rates, or cuts interest rates, it’s going to make the inflation problem worse.”

In a recent interview, President Biden took to blaming private companies for inflation. Peter explains how absurd this explanation is:

“He immediately changed the subject to shrinkflation and then started blaming greedy corporations. And he said, ‘We have a problem of corporate greed. That’s why everything is so expensive now.’ As if corporations weren’t greedy until Joe Biden became president. All of a sudden, Biden’s president and these corporations decide, ‘You know, let’s stick it to the consumer. We can make some extra money if we really jack up the price of food.’ Where were all these greedy corporate officers a few years back?”

Peter rebuts Biden further. If anything, corporations initially took losses in the hopes that inflation was temporary:

“Inflation is driving up the cost of doing business, and so to stay in business, companies have no choice but to raise prices. And they’re all raising prices because they’re all facing rising costs. So it’s not greed. It’s got nothing to do with greed! In fact, and I’ve pointed this out from the beginning, corporations were reluctant to raise prices originally because they were hoping it was transitory. They were being told it was transitory. … That’s why a lot of those consumer type companies were originally taking some earnings hits— because their costs were going up and they weren’t raising prices.”

He also gives his thoughts on a recently viral clip of Jared Bernstein, chairman of the Council of Economic Advisors, bumbling through an explanation of government debt. Such a council is completely unnecessary and arguably harmful to the economy:

“If I was ever to be president of the United States, I would fire all of the economic advisors. I wouldn’t even want any. I would just save the taxpayers the money and get rid of them all. We didn’t even have the Presidential Council of Economic Advisors until 1946. … You may want to ask yourself, well, how did America make it for over 150 years? That we had 32 presidents who didn’t have any economic advisors. Yet we did fine! We got to 1946. We went through the Second World War. I would argue that the economy did much better before presidents had any economic advice.”

Biden and Bernstein are clueless when it comes to monetary policy, but Trump isn’t perfect either:

“He’s blaming [inflation] all on Biden. It’s not all Biden. A lot of the inflation that we’re dealing with has its origins in Trump because huge deficit spending happened. All of the COVID stimulus money, the whole idea that people should stop working but spend more—that started with Trump, it just was expanded with Biden. And all of this operates with a lag. So there was a huge inflation tax when Trump was president. You know, he was bragging during this speech about his huge tax cuts that were bigger than Ronald Reagan’s. But the problem with these huge tax cuts is that they didn’t come with huge spending cuts. They came with spending increases. … So Donald Trump imposed an inflation tax.”

There aren’t any major politicians who take inflation and government debt seriously enough:

“You can’t talk about inflation and be critical of inflation unless you’re going to propose real solutions. Now, I guess Donald Trump is a better politician than to want to propose real solutions because that’s going to piss somebody off. No, he’d rather say, ‘Social Security is not going to get touched. Medicare is not going to get touched. And I’m going to cut your taxes.’ Well, that just means we’re going to have a lot more inflation. And that’s what I’ve been saying. Doesn’t matter!”

For more of Peter’s commentary, check out a recent debate he had with Steve Hanke on inflation and de-dollarization.

Nothing good – all bad… and new record highs for stocks.

SuperCore CPI hotter than expected (but headline and core CPI in-line/small miss), Retail sales way uglier than expected (but gas station spending surged), homebuilder sentiment slumped, and Empire Fed Manufacturing ugly…

Source: Bloomberg

Both ‘soft’ and ‘hard’ data is now falling…

Source: Bloomberg

…and the stagflationary threat continues to grow…

Source: Bloomberg

…but the market doesn’t care about growth – it spiked rate-cut expectations on the ‘cool’ CPI (two cuts fully priced in for 2024 and three more cuts – at least – in 2025)…

Source: Bloomberg

And that lifted stonks across the board with Nasdaq leading the way to new record highs (Dow & S&P first new record close since March)

Market volumes were dramatically elevated today, according to Goldman’s trading desk (+45% vs the trailing 20 days), as hedge funds (on an illustrative basis) recovered half the losses from the last two nasty days…

Source: Bloomberg

Goldman trader John Flood highlighted the fact that it feels like sentiment during the last  “meme” craze was one of confusion and bewilderment where some funds were willing to hold on and trying to wait out the retail crowd. This time around, HFs collectively are just not nearly as exposed to high SI/float stocks as they used to be, so the risk is a lot more manageable, and funds tend to react much more quickly given past lessons.

Source: Goldman Sachs

‘Most Shorted’ stocks dumped back yesterday’s gains today as the meme-stock mania stalled…

Source: Bloomberg

VIX plunged back to a 12 handle today…

Source: Bloomberg

Treasuries were bid today with yields down 8-10bps across the curve (with the belly slightly outperforming the wings)…

Source: Bloomberg

With the swing lower in 10Y yields erasing all the increase in yields since April’s CPI print…

Source: Bloomberg

The dollar followed a similar pattern to yields, erasing all of the post-April CPI gains…

Source: Bloomberg

Gold surged back near record closing highs ($2392).  Interestingly, gold was trading at exactly the same level it was before April’s CPI ahead of today’s CPI…

Source: Bloomberg

Bitcoin soared back above $66,000 – this was Bitcoin’s best day since March 2023!…

Source: Bloomberg

Crude prices rebounded strongly today after early weakness (following inventory draws). The 100DMA once again acted as support with WTI closing back above it…

Source: Bloomberg

Finally, we noted at the start how ugly the US Macro data was, but there is a potential silver lining…

Source: Bloomberg

The Citi US Macro Surprise Index has a very regular seasonal pattern and 2024 is following it closely… with the positive surprises set to come from here as fiscal year-end looms. Is the ‘no landing’ narrative about to be realized?

As the Biden administration continues funneling billions of dollars to Ukraine and with Secretary of Transportation Pete Buttigieg nowhere to be found, America’s infrastructure continues deteriorating. Earlier today, a large barge crashed into a bridge in Galveston, Texas, causing a partial collapse. 

At approximately 10:00am, a barge owned by Martin Petroleum collided with the Pelican Island Bridge that connects Galveston Island to Pelican Island. Power was temporarily interrupted to Pelican Island, which is home to Texas A&M Galveston. Secondary power has been restored. pic.twitter.com/5zTOs2ODIb

— Galveston County OEM (@galvcountyoem) May 15, 2024

Fox 7 Austin reports that a barge crashed into the Pelican Island Bridge, causing a section to collapse. There were no reports of injuries. However, it’s the only bridge in and out of the island. 

BREAKING: Barge strikes bridge in Galveston, Texas, partially collapsing rail line and closing the only road to a small island – AP pic.twitter.com/0vLlWRyqEK

— Breaking911 (@Breaking911) May 15, 2024

The island is home to approximately 9,000 people, along with the campus of Texas A&M University at Galveston. 

The university told students that “all vehicular traffic” is closed on the bridge. 

Engineers from the Texas Department of Transportation have been dispatched to the bridge and will “inspect the roadway and determine if there is damage.”

People are once again panicking about a barge hitting a bridge in Galveston, Texas.

1) The Pelican Island Causeway isn’t a significant piece of infrastructure, per se. It connects Galveston to Pelican Island which houses two museums and the maritime academy for Texas A&M, but… pic.twitter.com/AFuVrpQK17

— Art Candee 🍿🥤 (@ArtCandee) May 15, 2024

The incident comes nearly two months after a massive container ship lost power and rammed the Francis Scott Key Bridge in the Port of Baltimore, paralyzing the entire port. The vessel has yet to be removed. 

BREAKING: Explosives are now being used to attempt to free the ship that crashed into the Key Bridge in Baltimore

It has been stuck for 48 days in Baltimore harbor pic.twitter.com/ERPR3Hvjgm

— Jack Poso 🇺🇸 (@JackPosobiec) May 13, 2024

The footage on X shows that the bridge connecting Pelican Island to Galveston did not have timber shields or any bumper system to deflect a direct blow from a vessel. The New York Times recently reported that dozens of bridges across the nation are vulnerable to ship strikes. After today, that threat remains clear. 

Here’s a map of America’s vulnerable bridges via NYTimes. 

America’s foreign enemies are getting a lot of ideas from these bridge strikes. It’s time for taxpayers to demand the government protect critical infrastructure instead of squandering the nation’s wealth in foreign lands.