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[l] at 6/30/22 10:45am
As G7 Quietly Shelves Russian Oil Price Cap Idea, Biden Will Beg Mideast Allies To Pump More To be honest we haven't spent much time discussing the timesink idiocy of the Biden/G7 "Russian oil price cap" idea because well, it is idiotic as Rabobank explained... The ‘oil cap’ is simple in theory: the G7 will refuse to provide insurance to any vessel that carries Russian oil unless the cargo is sold with an agreed price cap. Yet it won’t work and will just push oil prices higher. Russia will never agree. China and India will never agree either. Russia and China may offer their own underwriting services, which would force the West into physically blocking cargoes and confronting China - as a Russian-oil carrying ship is stopped in the US, says the Wall Street Journal. Plus, the G7 are already not taking Russian oil: they are taking Russian oil from India and China that is being on-sold. ... and it appears that finally even the dumbest people on earth, i.e. career politicians and economics, have figured it out. Reuters reports that according to EU officials, the biggest price cap proponents - the governments of Germany and other European Union countries - voiced "caution" in a closed-door meeting about price caps on Russian oil, a day after the Group of Seven economic powers agreed to urgently start work on the matter, Here is the truncated timeline for those who missed it: on Tuesday G7 leaders agreed to explore “the feasibility of introducing temporary import price caps” on Russian fossil fuel, including oil, and tasked ministers to evaluate the proposal urgently. But just one day later, Germany’s envoy to the EU told his counterparts in a restricted meeting that the world should be “realistic” about the proposal, which he said was added to the G7 statement after “intense pressure” from Washington, according to one official who attended the meeting. And then, the envoy also said an agreement on whether to apply caps was not expected to come anytime soon... or any time for that matter as it is impossible. Then there are the holdouts: Hungary and Belgium also raised concerns at the meeting about the G7 statement on sanctions, the official said, with Hungary explicitly backing Berlin’s caution on oil price caps. A second EU official familiar with the talks confirmed that Germany and others had expressed wariness about oil price caps. A German government official said on Thursday that “success of this plan depends on international cooperation", which is precisely what we said. Of course, neither China nor India will ever agree to cooperate with the G7 if it means losing out on access to extremely cheap oil (the alternative is Russia just halting exports and sending the price of oil to $200+). Stefano Sannino, secretary general of the EU’s diplomatic service said on Thursday that a price cap would only be effective if universally applied, and so agreement would be needed across the G20 countries, not just the G7. “You need to be sure you do not have distortion of trade and then the only thing that is happening is that essentially oil goes to other places with other carriers and insured by other companies - and so the price remains the same,” Sannino told an EU-UK Forum conference. Hilariously, the world's most powerful - and stupid - people are still trying to come up with a price cap idea even as they are all facing an even worse fate in just 6 months: under already passed EU sanctions that will become effective in December, insurance and other financial services crucial for Russian oil shipments will be banned worldwide. Critics of this fear it could lead to higher global oil prices because of the key role EU companies play in shipping insurance, bringing a benefit to Moscow. A cap, if agreed, would effectively make it possible for companies to trade Russian oil, instead of facing a total ban. However, the EU sanctions on Russian oil, which took weeks to agree, would have to be tweaked and reopening the debate on this measure could be controversial, officials said. Indeed, as Rabobank cynically concluded, instead of buying Russian oil directly, European nations will instead buy Russian oil from India and China paying a much higher price in the process. Meanwhile, realizing that his latest attempt to finally outsmart Putin has just gone up in a puff of crack cocaine smoke and his brilliant energy plan - perhaps concocted by Ukraine energy expert Hunter Biden - this morning Joe Biden turned his attention away from the economically impossible and toward diplomacy instead, and has set his sights on a promise of higher production from Gulf allies. As discussed previously, Saudi Arabia and the United Arab Emirates are the only countries with significant spare capacity to pump crude, although as Reuters' John Kemp wrote, "it is unlikely to be much more than around 1 million barrels per day (bpd) based on historic production rates." Bloomberg added the following: Aramco’s maximum capacity is a mystery because it hasn’t ever been tested for an extended period. In April 2020, Riyadh reported its highest ever monthly average, at 11.55 million barrels a day. Back then, Aramco briefly — for a few days, I hear — pumped 12 million barrels a day. Aramco executives, including Chief Executive Officer Amin Nasser, took selfies in front of a giant screen wall showing production hitting the record level. At one point, it surged to 12.3 million barrels. Smiles all round. Behind closed doors, however, things were more complicated. In private, Saudi oil industry executives describe that effort as a real challenge and express concern about having to sustain that output. It’s one thing to briefly hit the target, quite another to keep pumping and pumping at that level for a year, the internal thinking goes.  In any casem without a pledge from the two OPEC members to boost production, the president would lose what may be his last tool for alleviating the economic and political pain caused by high fuel prices. That is, of course, unless Biden does the obvious thing and encourages more domestic production. But since the 79-year-old is being handled by a bunch of "green" puppetmasters, this has zero chance of passing. As such, the coming trip to Saudi Arabia puts Biden in an awkward position, especially after he vowed during his campaign to make the kingdom a “pariah” over its human rights record. The president said he wouldn’t specifically ask Saudi King Salman or Crown Prince Mohammed Bin Salman to raise oil production when he sees them on July 16. The broader Gulf Cooperation Council, a forum of largely oil-rich countries along the Persian Gulf, is a more appropriate setting for such a request, he said. “All the Gulf states are meeting. I have indicated to them that I thought they should be increasing production,” Biden said Thursday at a news conference in Madrid following a NATO summit. “I hope we see them, in their own interest, concluding that makes sense to do.” REPORTER: If you were to see the [Saudi] Crown Prince…would you ask them to increase oil production? BIDEN: No…all the Gulf states are meeting. I've indicated to them that I thought they should be increasing oil production generically, not to the Saudis particularly. pic.twitter.com/VpHlWnXTVD — JM Rieger (@RiegerReport) June 30, 2022 And as noted above, even if Saudi Arabia and the UAE are willing to assist the US - which they aren't since the coming recession will likely send oil prices sharply lower -  just how much extra oil the two countries could provide has been questioned by this week by Shell Plc Chief Executive Ben van Beurden and French President Emmanuel Macron. While official data indicates the duo have almost 3 million barrels a day of spare production capacity, deploying this would require them to pump at levels rarely sustained before, if ever. To avoid humiliation, Biden has repeatedly said that his Mideast trip is about more than energy - he cited concerns over the war in Yemen, among other issues. But everyone knows what's the primary goal: the surge in gasoline prices in the US has added pressure on the president and Democrats heading into the November mid-term elections. In Madrid, Biden reiterated his view that the price increase is entirely due to “Russia, Russia, Russia” as a result of the war in Ukraine. Biden said he sees a number of ways to alleviate some of those increases, including through a temporary repeal of the federal gas tax, a measure that would need congressional approval. But he also said that Americans may have to continue enduring higher-than-usual fuel prices for a time. Separately, as reported earlier, on Thursday OPEC+ ratified their plan to boost oil production by a further 648,000 barrels a day in August, completing the return of supplies halted during the pandemic. The group, which is led by Saudi Arabia, deferred discussions about its next move for another day, with the next meeting scheduled for Aug. 3. True to form, the US sees the OPEC+ supply hikes, which were expanded by 50% at the group’s previous meeting on June 2, as a first step that will be followed by a further production increase, Amos Hochstein, the State Department’s senior adviser for energy security, said in a Bloomberg Television interview on Wednesday. “Announcing additional supplies a few weeks ago was step one,” Hochstein said. “I’m very hopeful that you and I can have this conversation about step two sometime in the near future.” The problem, however, as the chart below shows is that OPEC+ is simply incapable of pumping as much as it used to in the recent past due to lack of capital spending. Oil fell after Biden’s comments, with West Texas Intermediate futures sinking 3.9% to $105.50 a barrel around 11am. We expect oil to resume its surge in the coming days. Tyler Durden Thu, 06/30/2022 - 12:45
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[l] at 6/30/22 10:27am
Biden Announces Support For Ending The Filibuster To Pass Pro-Abortion Legislation Authored by Jack Phillips via The Epoch Times, President Joe Biden announced Thursday he would support ending the 60-vote Senate filibuster to pass bills to allow abortions at the federal level. During his campaign, Biden said that he wanted to keep the filibuster. When he entered office, Biden affirmed his support for the Senate rule. Biden was asked during the NATO summit in Spain on Thursday about keeping the rule in the midst of the Supreme Court’s decision to overturn Roe v. Wade. He said that the only way to respond is by Congress passing a law. “The foremost thing we should do is make it clear how outrageous this decision was,” Biden said. “I believe we have to codify Roe v. Wade in the law, and the way to do that is to make sure that Congress votes to do that.” “And if the filibuster gets in the way, it’s like voting rights, we should require an exception to the filibuster for this action,” added Biden, who has threatened to use the filibuster on several occasions for bills when he was a senator. In January of this year, Biden said he would support ending the filibuster to pass what Democrats have described as a voting-rights bill. Democrats currently have a razor-thin, 50–50 majority in the Senate, with Vice President Kamala Harris serving as a tie-breaker. And last week, Biden called on Congress to codify Roe v. Wade after the Supreme Court decision and called on Americans to turn up en masse at the polls to vote in favor of ostensibly Democrat candidates who favor allowing abortions. The Supreme Court, in a 5–4 ruling, overturned the 1973 Roe decision, which argued that women have a constitutional right to obtain an abortion. Writing for the majority, Justice Samuel Alito last week said that it is only legislatures—not courts—that have the power to dictate laws around abortions and noted that the Constitution doesn’t make mention of the procedure. The filibuster, which was first used in 1837, was established in the Senate to protect the interests of the minority party and takes advantage of a rule that 60 votes are needed to stop debate on a bill. Debate on a bill can last indefinitely. In the current Congress, it appears unlikely that the filibuster will be removed. Several Democrat senators, including Sens. Joe Manchin (D-W.Va) and Kyrsten Sinema (D-Ariz.), have signaled they don’t want the rule to be scrapped, and no Republicans have said they would vote to end it. Manchin, however, has said that he favors codifying Roe v. Wade but has not signaled whether he wants to abolish the filibuster to do so. Tyler Durden Thu, 06/30/2022 - 12:27
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[l] at 6/30/22 10:20am
Biden Announces Permanent US Base In Poland, America's First On NATO Eastern Flank Authored by Dave DeCamp via AntiWar.com, President Biden announced Wednesday during the NATO summit in Madrid steps that the US will take to increase its military presence in Europe, including the establishment of a permanent base in Poland. The base in Poland will mark the first time the US will establish an official permanent military facility in the area known as NATO’s "eastern flank." The US military presence elsewhere in Eastern Europe and in the Baltic states is technically on a rotational basis, although Washington has no plans to scale back its presence in the region. Via AP Under the 1997 NATO-Russia Founding Act, NATO agreed not to establish a permanent military presence east of Germany. US officials insist the base in Poland does not violate the act since it is only a permanent facility, and the troops will be deployed rotationally, but it’s unlikely Moscow will see it that way. Other measures Biden announced include sending a "rotational brigade" of 5,000 troops to Romania, stepping up rotational deployments to the Baltics, sending two additional F-35 squadrons to the UK, and stationing more air defenses in Germany in Italy. A day earlier, Biden announced the US was sending two more Navy Destroyers to Spain. "I said Putin’s looking for the Finlandization of Europe," Biden said on Wednesday. "He’s going to get the NATOization of Europe. And that is exactly what he didn’t want, but exactly what needs to be done to guarantee security for Europe. And I think it’s necessary." The deployments are a step towards keeping US troops levels in Europe at over 100,000. Before the US began reinforcing its military presence in Europe around the time Russia invaded Ukraine, about 80,000 US troops were assigned to the continent. Poland is getting a permanent American military base before Americans get health care. https://t.co/3iMcMKqOFB — آرش (@thekarami) June 29, 2022 While building up military forces in Eastern Europe and pouring billions of dollars worth of weapons into Ukraine, Biden has abandoned diplomacy with Russia altogether. As a result, the risk of a direct conflict between the two powers, which could quickly spiral into nuclear war, is at its greatest height since the Cold War. Tyler Durden Thu, 06/30/2022 - 12:20
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[l] at 6/30/22 10:08am
Welcome To The Recession: Atlanta Fed Slashes Q2 GDP To -1%, Pushing First Half Into Contraction A day after Fed Chair Powell crowed once again how the US economy was strong enough to cope with his hawkish rate-hike cycle (and President Biden told the world this morning that the US economy is the strongest in the world), the Atlanta Fed just stole the jam out of everyone's donut by confirming the recession has started. If you were curious why bond yields are plunging and rate-hike expectations are falling, then here's your answer, courtesy of the Atlanta Fed, which just confirmed the economy is in technical recession. I may be the only person besides Jay Powell who believes we are not going to have a recession. At least i hope Jay thinks that way! — Jim Cramer (@jimcramer) June 3, 2022 The continued erosion in economic data has prompted The Atlanta Fed to slash its forecast for Q2 GDP growth from 0.0% to -1.0%+0.9% to 0.0%, meaning the US is now right on the verge of a technical recession (after Q1's confirmed 1.6% contraction yesterday). According to the Atlanta Fed's GDPNow model estimate for real GDP, growth in the second quarter of 2022 has been cut to a contractionary -1.0%, down from 0.0% on June 15, down from +0.9% on June 6, down from 1.3% on June 1, and down from 1.9% on May 27. As the AtlantaFed notes, "The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -1.0 percent on June 30, down from 0.3 percent on June 27. After recent releases from the US Bureau of Economic Analysis and the US Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 2.7 percent and -8.1 percent, respectively, to 1.7 percent and -13.2 percent, respectively, while the nowcast of the contribution of the change in real net exports to second-quarter GDP growth increased from -0.11 percentage points to 0.35 percentage points." In short: the US consumer is getting tapped out, just as we have been warning repeatedly. Which also fits with Jamie Dimon's recent "downgrade" of the economy from "storm clouds" to "hurricane"... and also makes some sense given the recent collapse in macro data relative to expectations... And longer-term, the trend towards stagflation could not be clearer... And this is increasingly problematic for The Fed, as the market is now betting Powell and his pals won't get close to hiking as much as they hope... And in fact the market is now expecting rate-cuts to start in Q1 2023... Will The Fed adjust to the market once again? Meaning The Fed is now hiking rates into a recession... Today https://t.co/MmfB76vWpB — zerohedge (@zerohedge) June 30, 2022 ...and the market is already pricing in more than 3 rate-cuts to address that recession. Get back to work Mr.Powell. Tyler Durden Thu, 06/30/2022 - 12:08
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[l] at 6/30/22 10:00am
German Energy Giant Crashes On Russian NatGas Supply Crunch, Triggering Bailout Talks Shares in German gas and power utility Uniper crashed, plunging as much as a fifth on Thursday after the company slashed its outlook and sought a possible bailout from the German government after Russia reduced natural gas deliveries to Europe, according to Financial Times.  Uniper said earnings before interest and taxes would be "significantly below" previous years, considering it only received 40% of the NatGas from Russia's Gazprom PJSC. The recent decline in NatGas flows to Europe forced Gazprom's largest customer into covering purchases in spot markets at a massive premium versus its long-term NatGas contracts. At the same time, Berlin has capped the prices it charges households and businesses to control inflation, resulting in the utility losing tens of millions of euros a day (RBC and Citigroup analysts estimate the utility is losing 30 million euros per day) -- and the risk of the utility company imploding.  Bloomberg's Javier Blas said Uniper's NatGas losses could be a staggering 11 billion euros on a yearly basis if it has to continue buying on the spot market. He then pointed out that contagion risks could be emerging as other utilities are likely doing the same.  One number to consider. Uniper probably is paying currently ~€30 million extra for the gas it's buying in the spot market. Multiply that for 365 days: ~€11 billion. And that's one single European utility. Now think about other big buyers of Russian gas. And start multiplying. https://t.co/6hKzinI7Pw — Javier Blas (@JavierBlas) June 30, 2022 "Uniper currently procures substitution volumes at significantly higher prices," Uniper said Wednesday, adding that since it "cannot yet pass on these additional costs, this results in significant financial burdens." The Economy Ministry confirmed that Berlin and Uniper are discussing "stabilization measures." Uniper also said talks were underway with the government to secure liquidity which could include "equity investments" and an increase of a 2 billion euro credit facility with state-owned KfW bank.  News that Uniper is in dire straits sent shares down as much as 23% to five-year lows.  German Economy Minister Robert Habeck recently warned that declining NatGas from Russia could trigger a Lehman Brothers-like moment.  Since mid-June, Gazprom reduced NatGas deliveries through Nord Stream to Europe by 40% and blamed the decline on Canadian sanctions over the war in Ukraine, preventing German partner Siemens Energy from delivering critical overhauled equipment for a compressor station on the pipeline. The crunch is also impacting France, Italy, and Austria as NatGas prices have jumped more than 40% in the past two weeks.  John Musk, an analyst at RBC Europe Ltd., said the focus would be on contagion and if "other utilities with gas supply exposure" will be affected by the supply crunch.  The situation may worsen when Nord Stream halts Nord Stream flows for ten days in July for planned maintenance. There are mounting concerns Russia might not resume the pipeline to full capacity after the outage.  Habeck said last week Germany should prepare for further cuts. Europe's largest economy has declared the second "alarm stage" of its NatGas-emergency plan, allowing utility companies to pass on higher power prices to industry and households to curb demand.  "Europe should be ready in case Russian gas is completely cut off," IEA head Fatih Birol told FT News last week.  Tyler Durden Thu, 06/30/2022 - 12:00
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[l] at 6/30/22 9:39am
Why The Housing Bubble Bust Is Baked-In Authored by Charles Hugh Smith via OfTwoMinds blog, Putting this all together, it's clear that the source of the current housing bubble is the explosion of financial speculation fueled by central bank policies. Those benefiting from speculative bubbles have powerful incentives to deny the bubble can bust. Rationalizations abound as bubbles inflate, and the continued ascent of speculative bets seems to "prove" the rationalizations are correct. But bubbles arise from speculative excesses, and once these reach extremes and reverse, bubbles burst and all the self-serving rationalizations are revealed as rationalizations. Let's start with some caveats I've already covered in Is Housing a Bubble That's About to Crash? (May 2, 2022): 1. Housing is local, so there may be locales where prices are still rising due to unquenchable demand and low supply and other places where demand is low and supply ample where prices plummet. 2. The wealthiest 1% on a global scale is a very large number, and wealthy buyers seeking a safe haven in North America come with cash and don't care about mortgage rates. Desirable enclaves could see home prices climb even as the national bubble pops. (World population: 7.8 billion X 1% = 78,000.000 or roughly 30,000,000 households.) 3. Wealthy investors are holding a large number of dwellings off the market as investments. These empty units consequentially reduce the supply in desirable locales, and create an artificial scarcity that would not exist if central banks hadn't inflated the Everything Bubble. 4. The number of homes bought by corporations has soared. This has driven demand in many markets, but if rents dive due to recession, corporate buyers become corporate sellers. With those caveats out of the way, let's look at the foundation of home ownership for the bottom 95%: income and mortgage rates. As mortgage rates rise, more income must be devoted to the monthly payment. If household income lags the increase in housing prices, price eventually exceed what the bottom 95% can afford once mortgage rates rise. The first chart below is the national Case-Shiller Index.  Note that housing prices have soared 63.6% since the previous housing bubble peak in 2007, outpacing inflation (up 41%) and median household income (up 34%), the second chart. The third chart shows mortgage rates have broken out of a 37-year downtrend. It is noteworthy that mortgage rates were in the 7% to 8% range in previous economic booms (late 1960s, the 1990s) but now 6% mortgages are considered the end of the world. That suggests a dependence on cheap money / low rates is the primary support of the current bubble rather than an organic economic expansion such as we enjoyed in the 1990s. Courtesy of my colleague CH at Econimica, the next three charts shed light on housing fundamentals. The first Econimica chart shows the rate of growth in population, employment and housing units. The U.S. population increased by a scant 1.5 million since 2019, the number of employed was flat and the number of housing units increased by 2.8 million. The second Econimica chart shows the Fed Funds Rate (FFR), the staggering increase of mortgage-backed securities purchased by the Federal Reserve to keep mortgage rates low (from zero to $2.7 trillion), declining rate of population growth year-over-year and the remarkable rise in the number of housing units under construction. The third Econimica chart shows housing units per capita (per person), which has reached the same level as the previous housing bubble peak in 2007-08. As CH observed: "Housing units (per capita) against US population should suggest not a shortage of housing units but a surplus of dollars with which to buy them." Putting this all together, it's clear that the source of the current housing bubble is the explosion of financial speculation fueled by central bank policies. Housing prices that far exceed the growth of household incomes are not sustainable, and neither are housing prices that rose solely on the basis of unprecedentedly low mortgage rates. It's also clear that those with access to the (temporary) wealth created by central banks' trillions in new credit have poured many of these "free money" trillions into housing globally as a hedge against inflation, a safe-haven investment or for corporations, for rental income. All of these factors exacerbate an artificial demand and equally artificial scarcity. As I've noted in the past, bubbles typically manifest a symmetry in their ascent and decline. All the gains are eventually reversed, and if the system is destabilized by the bubble bust, then prices drop far below previous lows. Setting aside rationalizations in favor of fundamentals, the housing bubble's bust is already baked in. *  *  * My new book is now available at a 10% discount this month: When You Can't Go On: Burnout, Reckoning and Renewal. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Tyler Durden Thu, 06/30/2022 - 11:39
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[l] at 6/30/22 9:20am
In Landmark Ruling, Supreme Court Deals Massive Blow To Biden's Climate Change Agenda At the same time as it give the Biden admin a token victory by overturning Trump's "remain in Mexico" rule, the US Supreme Court also struck a major blow to Biden's fight against climate change, when in a landmark ruling, the SCOTUS also curbed the ability of America’s top environmental regulator to limit greenhouse gas emissions. In a majority opinion authored by chief justice John Roberts, the justices ruled that in the latest example of Democratic overreach, the Environmental Protection Agency was not specifically authorized by Congress to reduce carbon emissions when it was set up in 1970. The ruling leaves the Biden administration dependent on passing legislation if it wants to implement sweeping regulations to curb emissions. The opinion from the court's conservative majority said that “a decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body”. The justices added they doubted Congress intended to delegate the question of “how much coal-based generation there should be over the coming decades, to any administrative agency”. The dissenting opinion authored by justice Elena Kagan and joined by the court’s other two liberal justices said the EPA had the authority to regulate “stationary sources” of polluting substances that are harmful to the public, adding that curbing the output of greenhouse gas emissions was “a necessary part of any effective approach for addressing climate change”. In other words, the usual green tripe that has sent the country to the edge of a hyperinflationary commodity disaster. “This Court has obstructed EPA’s effort from the beginning,” Kagan wrote. “The limits the majority now puts on EPA’s authority fly in the face of the statute Congress wrote.” As the FT reports, at the heart of the case is a disagreement over how broadly the EPA should be allowed to interpret portions of the 1970 Clean Air Act, particularly the sections that direct the EPA to develop emissions limitations for power plants. Dubbed West Virginia vs EPA, the case was brought by a host of Republican attorneys-general and the coal industry. Their argument centres on a regulation that never took effect: an Obama-era proposal known as the Clean Power Plan, which would have mandated that power plants make 32 per cent reductions in emissions below 2005 levels by 2030. The Supreme Court ordered that rule to be suspended in 2016. That rule was later torn up by the Trump administration in favor of its Affordable Clean Energy rule, designed to support the coal industry. The Trump administration’s regulation, however, was struck down by the US Court of Appeals for the DC Circuit last year. Challenging the lower court’s reversal of Trump’s rule at the Supreme Court, West Virginia has argued that the Obama-era Clean Power Plan relied on an overly broad interpretation of the Clean Air Act and gave the EPA excessive and “industry transforming” power. West Virginia argued that the lower court’s interpretation of the law granted the EPA “unbridled power” to issue significant rules that would reshape the US electricity grid and decarbonise sectors of the economy. It said the EPA should only have very limited authority to regulate emissions inside “the fence line” of power plants, and cannot apply broader industry-wide measures like carbon credit trading or biomass co-firing. Defending the case, Biden’s EPA has said that nothing in the Clean Air Act makes a distinction between inside the fence line measures and broader, industry-wide regulatory measures. It added that West Virginia’s “real concern” was that the agency might introduce some elements of Obama’s Clean Power Plan into a future rule. But the EPA said that the Supreme Court is not authorised to issue an advisory opinion on the types of measures a future rule could contain. Dick Durbin, the Democratic whip in the Senate, predictably said the decision was “a dangerous step backwards and threatens our air and our planet”, adding it “sets a troubling precedent both for what it means to protect public health and the authority regulatory agencies have to protect public health”. What he means is that the US may once again be on the path to becoming self-sufficient in energy, and not peddling money to corrupt "green" lobbies and interests. The ruling by the court’s conservative majority is the latest in a string of dramatic decisions that have challenged established legal precedents, including the recent reversal of Roe vs Wade. Last week, it also struck down a century-old New York state law requiring an individual to show “proper cause” to carry a concealed gun in public, deeming the statute unconstitutional. The court on Monday also ruled in favour of a former high school coach dismissed for praying at football games, fuelling the fraught debate on the separation of church and state. Tyler Durden Thu, 06/30/2022 - 11:20
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[l] at 6/30/22 9:05am
Biden Admin Inks $3.2 Billion Deal With Pfizer For 105 Million COVID-19 Vaccines Authored by Tom Ozimek via The Epoch Times (emphasis ours), The Biden administration said it has signed a new agreement with Pfizer and partner BioNTech for 105 million doses of their COVID-19 vaccine for a fall vaccination campaign, with the deal worth $3.2 billion. President Joe Biden receives a third dose of the Pfizer/BioNTech COVID-19 vaccine in the South Court Auditorium in the White House in Washington, Sept. 27, 2021. (Anna Moneymaker/Getty Images) The contract includes doses for both adults and children, as well as supplies of a retooled Omicron-adapted vaccine that is currently pending approval by federal health authorities, the Department of Health and Human Services (HHS) said in a statement. “We look forward to taking delivery of these new variant-specific vaccines and working with state and local health departments, pharmacies, health care providers, federally qualified health centers, and other partners to make them available in communities around the country this fall,” said HHS Assistant Secretary for Preparedness and Response Dawn O’Connell. Pharmaceutical firms have been developing vaccines for the Omicron variant that the Centers for Disease Control and Prevention (CDC) says is the dominant strain in the United States. “This agreement will provide additional doses for U.S. residents and help cope with the next COVID-19 wave. Pending regulatory authorization, it will also include an Omicron-adapted vaccine, which we believe is important to address the rapidly spreading Omicron variant,” Sean Marett, Chief Business and Chief Commercial Officer of BioNTech, said in a statement. The Food and Drug Administration (FDA) is expected to issue a decision in the coming days following a Tuesday meeting in which external advisers recommended modifying the vaccines to better target Omicron. Under the new Pfizer contract, the U.S. government has the option to buy an additional 195 million doses, bringing the total up to 300 million, HHS said. “Over the past 18 months, we have procured and delivered more than 750 million doses of COVID-19 vaccine nationwide, contributing to two-thirds of American adults being fully vaccinated,” O’Connell said. Read more here... Tyler Durden Thu, 06/30/2022 - 11:05
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[l] at 6/30/22 8:49am
10Y Yields Tumbles Back Below 3.00%, Stocks Slammed Just when investors were hoping for a month- and quarter-end rebalancing uptick in stocks after the carnage of the last few months, US equity markets are ending the first half of the year on an ugly note with Nasdaq leading the charge lower... And recession fears have sent the 10Y Yield back below 3.00% for the first time since June 10th's CPI print... Interestingly, rate-hike expectations are fading and subsequent rate-cut expectations are rising... But for now it appears stocks are more worried about The Fed driving us into recession than the post-recession easing and QE rebound. Tyler Durden Thu, 06/30/2022 - 10:49
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[l] at 6/30/22 8:45am
Must Watch: Tucker Carlson Exposes Biden DOJ Targeting Of Political Dissidents Tucker Carlson has done it again. On Thursday night, the Fox News host laid bare the Biden administration's escalating war against political enemies. "Here's a list of the things they've done, because no one has assembled them," said Carlson. First on the list is Douglass Mackey - who was arrested for allegedly creating memes aimed at trolling Hillary Clinton voters by convincing them they could cast their ballots by phone. Next, Tucker notes the FBI raid on the homes of two men who lawfully organized a permitted January 6th political rally. Tucker continues, reminding us of the time the feds seized Rudy Giuliani's attorney-client privileged records, as well as the arrest of InfoWars journalist Owen Shroyer for telling the J6 crowd that they were marching against the 2020 "stolen election" - which Carlson notes is protected free speech. He then notes the raid of Project Veritas founder James O'Keefe and associates over how they obtained Ashley Biden's "inappropriate showers with Joe" diary. The list goes on and on, with Carlson noting the DOJ's double standards and gestapo tactics against political opponents. Watch: (h/t The Last Refuge) Tyler Durden Thu, 06/30/2022 - 10:45
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[l] at 6/30/22 8:29am
Supreme Court Grants Biden Victory Over Remain-In-Mexico Asylum Rule The Supreme Court ruled in favor of the Biden administration on Thursday, which sought to end the Trump-era "Remain in Mexico" policy that requires asylum seekers to wait in Mexico until their case is heard, instead of being allowed to await their hearings in the United States. The court ruled 5-4, with Chief Justice John Roberts and Justice Brett Kavanaugh joining the three liberal judges in the majority. Kavanaugh cucked on defending our border https://t.co/GmfPIwmylY — Jack Posobiec ?? (@JackPosobiec) June 30, 2022 The program, officially known as Migrant Protection Protocols (MPP), resulted in a 75% drop in illegal crossings according to former acting commissioner of Customs and Border Protection, Mark Morgan, calling it "the most significant game-changer" in immigration policy at the time. “That’s on the outer limits of the estimates, [which] are coming from the American intelligence community. … This is what they’re expecting,” Bensman said. “They’re saying it could be as low as 12,000 a day. But to give you some context, we’re at [6,000] and 7,000 a day right now, which is just too big to handle at present.” President Joe Biden had suspended the MPP on his first day in office in January 2021 and the Department of Homeland Security (DHS) officially terminated it in June. But the administration restarted the policy in early December 2021, in El Paso, Texas, after it was ordered by a lower court to do so. U.S. District Judge Matthew Kacsmaryk had ruled on Aug. 14, 2021, that the Biden administration had to revive the program, after Texas and Missouri sued the administration for having ended the MPP, saying that the decision worsened conditions at the border. The Supreme Court had declined to intervene on Aug. 24 after the Biden administration filed an emergency motion requesting a stay of Kacsmaryk’s order, only to change their mind after the Biden DOJ asked them to hear the case on the grounds that the appeals court decision was made in error. Meanwhile, a federal judge ruled in May that the Biden administration must pause plans to ditch a similar Trump-era policy known as Title 42, which requires US Border agents to expel any noncitizens stopped at the border without proper travel documents. The rule has resulted in an estimated 1.8 million people having to remain outside the US while awaiting an immigration trial. As the Epoch Times noted in April, Title 42 is a federal health statute that allows the government to impose health control measures to limit the number of people seeking asylum from entering the country during a health emergency. It’s slated to end on May 23. During the Trump presidency, “everybody [who] gets caught crossing the border goes back immediately to Mexico. That drove the numbers down to kind of historic low levels,” Bensman said. He said that although Biden was forced to keep Title 42, he carved out “huge exemptions in it for family groups and unaccompanied minors, that … created the mass migration crisis that we have today.” With the Biden carve-outs, record numbers of illegal immigrants are entering the United States, but intelligence officials are predicting that after Title 42 is lifted, between 12,000 and 18,000 illegal immigrants will flood the southern border each day. “That’s on the outer limits of the estimates, [which] are coming from the American intelligence community. … This is what they’re expecting,” Bensman said. “They’re saying it could be as low as 12,000 a day. But to give you some context, we’re at [6,000] and 7,000 a day right now, which is just too big to handle at present.” Tyler Durden Thu, 06/30/2022 - 10:29
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[l] at 6/30/22 8:20am
Biden Says Turkey Will Get New F-16 Jets, Claims "No Quid Pro Quo" With Erdogan President Joe Biden in his Thursday press conference from the Madrid NATO summit claimed that he's never waivered on supporting a new F-16 sale to Turkey, also emphasizing in response to a reporter's question that there was "no quid pro quo" with Erdogan regarding Finland and Sweden's entry into NATO. "Biden at press conference says the United States should sell Turkey the F-16 fighter jets but adds there was no quid pro quo in relation to Ankara's lifting of its veto for Finland and Sweden," a Reuters correspondent writes of his latest statements. "Says Congress approval needed for sale but he's confident that can obtained." The day prior, the US assistant secretary of defense for international security affairs Celeste Wallander previewed the White House stance in saying, "Strong Turkish defense capabilities contribute to strong NATO defense capabilities." She added, "The US Department of Defense fully supports Turkey’s modernization plans for its F-16 fleet." Via Reuters  Concerning the assertion that there was "no quid pro quo", the statements come the day after Biden and Erdogan met on the sidelines of the two-day NATO summit. One regional report emphasized of that meeting: On the same day, Biden thanked Erdogan profusely for revoking his opposition to the entry of Finland and Sweden into NATO. "I want to particularly thank you for what you did putting together the situation with regard to Finland and Sweden," Biden told Erdogan at a meeting on the sidelines of the NATO summit in Madrid. So it looks precisely like Turkey's sudden flip on the NATO membership question was centered on the US offering to grease the wheels and fully back and expedite approval for the F-16 transfer. Starting in October, Turkey said it formally requested of Washington approval to buy 40 Lockheed Martin-made F-16 fighter jets and nearly 80 modernization kits, which would upgrade its current fleet of fighter jets.  Erdogan's government had been consistent in denouncing Swedish and Finish "support" for Kurdish "terrorist" groups, namely the outlawed PKK and its affiliates, for example in northern Syria. The two countries agreed this week to designate it a terrorist organization, while agreeing to other demands of Ankara regarding things like extraditing alleged terror operatives back to Turkey. Was the F-16 deal Erdogan's "reward" for lifting objections over Finland and Sweden's accession? It certainly appears so. Tyler Durden Thu, 06/30/2022 - 10:20
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[l] at 6/30/22 8:05am
Rabobank: It's Lenin's Ideas That Sadly Explain Where We Are All Drifting Today By Michael Every of Rabobank I-Bear-Ian Apart from a downwards revision to Q1 GDP that made an already bad number look really ugly, most of yesterday’s main action took place in Iberia: and everything there was even worse. As a result, markets are truly I-Bear-ian. After the Fed’s Mester (in the US) stated policy tightening was only getting started, is likely to mean 75bps in July, getting to 3-3.5% Fed Funds by year end, and to over 4% by early 2023, we also got the usual collection of central-bank warblers-in-chief in Sintra, Portugal. Powell stated the global economy is in a “new world”, which is something this Daily has been trying to tell people like him for a long time. He also admitted, “We understand how little we understand inflation,” which is something covered here recently. He underlined fears that inflation will stay above 2% for a long time as we transition into a higher inflation regime, and that his job “is literally to prevent that from happening. And we will prevent that from happening.” That appears to be a response to Mohamed El-Erian warning of the dangers of the Fed doing something the market is not considering: cutting --which the market is pricing in, and ever sooner-- and then having to *hike* rates again. Indeed, either the Fed don’t understand how little they understand about inflation, and a deflationary crash looms - Powell was closer to admitting a recession lies ahead; or the market doesn’t understand how little they understand about inflation, and after deflation, a further wave of inflation returns, as during previous high inflation regimes. Once retailers have slashed inventory at fire-sale prices they have to restock. Those goods are going to cost much more due to the commodity price increase we are already seeing, despite the drop from the peak in most of them. Cut rates now and watch commodities go straight back up again. For now the focus is on the euphemism of ‘demand destruction’, meaning missing out, going hungry, or risking death by starvation: the mildest version is US citizens driving less, or, alongside warnings of July 4 airport chaos to match that in Europe, flying less. Yet in time the focus might shift back to the structural inflation built into this “new world”.     For example, few in Sintra are following the geopolitical angle properly. Russia just said it is considering buying the FX of “friendly countries” to alleviate upwards pressure on RUB, which due to a collapse in imports and high commodity prices is very strong, albeit in virtually non-existent USD- and EUR- cross markets. On crosses nobody looks at now but soon may, CNY/RUB has gone from around 12 to 24 to 8 this year, and RUB/INR from 1.0 to 0.50 to 1.5. That doesn’t mean Russia is ‘strong’, but it does mean the West is weak; and that a friend/foe FX dynamic is playing out. Indeed, Reuters reports an Indian firm is buying Russian coal and paying in CNY to avoid the US dollar, something unseen in 25 years. It may be just one case: but is it ‘monkeypox’ or ‘Covid’? In short, the Fed has more work to do, and pain to cause, to keep the dollar top dog vs. rising commodities and rivals. Cutting rates might boost global dollar liquidity, but not geopolitics. As such, the US is geostrategically better off hiking until things break in the Eurodollar space, and then offering swap lines only to friends. Which takes us back to Sintra again. There, the ECB’s Lagarde didn’t understand how little she understands about inflation or what is about to happen in the Eurodollar space. As Spanish CPI hit 10% and Germany’s only dipped to 7.6% due to subsidies that last three months, Lagarde admitted a low inflation environment is unlikely to return, and the post-Covid and Ukraine world “is going to change the framework and the scenario in which we operate.” That means changing the ECB’s interest rates too: which is going to hurt a lot. Especially when Lagarde added states shouldn’t hand out broad fiscal stimulus to cushion inflationary blows, and another ECB voice implied the more fiscal stimulus seen, the more hawkish monetary policy will have to be. We also got hints about the ECB’s new anti-fragmentation tool (AFT) about to go live. Yet our ECB team conclude AFT “can only disappoint. The announcement in July could be pretty empty if the ECB wants to maintain as much ambiguity as we expect.” Moreover, it implies a flatter curve because “If the ECB manages to strike the right balance, this probably enables more rate hikes, shifting the short-end of the curve higher. If the AFT disappoints, renewed safe-haven demand should depress long-dated yields.” (See here for more.) You think that was all I-Bear-ian? It gets worse. In Madrid, the NATO summit saw the US announce a massive permanent increase in its military deployment to Europe, from Spain and the UK to Romania and the Baltics. Europe, for all of the talk of re-arming, is still mostly doing the catering - and Ukraine’s President Zelenskiy also stated he needs $5bn a month to keep the lights on and the war going. Much, MUCH more needs to be spent, by Europe, on arms – NOW. The 2% of GDP NATO target was designed for a fully-functioning military during peacetime, not a paper tiger during wartime. Yet isn’t that fiscal stimulus, and so higher rates? With economies slumping, money tight, and people deeply unhappy, it’s the political cliché the neoliberal/Bloombergian/QE generation of market participants have never even heard of: “guns or butter”. How do you tell your people you need guns when they can’t afford butter? Perhaps by telling them they will never be able to afford butter again if they don’t have guns. But let’s see Europe try to do that: and we will all see what happens to them in time if they can’t. One thing is for sure: more things are going to have to change in this “new world” than rates. And it gets far worse than that. NATO’s updated Strategy Concept says: “The Euro-Atlantic area is not at peace. The Russian Federation has violated the norms and principles that contributed to a stable and predictable European security order. We cannot discount the possibility of an attack against Allies’ sovereignty and territorial integrity. Strategic competition, pervasive instability and recurrent shocks define our broader security environment. The threats we face are global and interconnected.” Is that message clear enough for markets? Russia “is the most significant and direct threat to Allies’ security and to peace and stability in the Euro-Atlantic area. It seeks to establish spheres of influence and direct control through coercion, subversion, aggression and annexation. It uses conventional, cyber and hybrid means against us and our partners. Its coercive military posture, rhetoric and proven willingness to use force to pursue its political goals undermine the rules-based international order.” ‘Don’t do business with Russia’ is the market message. China’s “stated ambitions and coercive policies challenge our interests, security, and values. The PRC employs a broad range of political, economic, and military tools to increase its global footprint and project power, while remaining opaque about its strategy, intentions, and military build-up. The PRC’s malicious hybrid and cyber operations and its confrontational rhetoric and disinformation target Allies and harm Alliance security. The PRC seeks to control key technological and industrial sectors, critical infrastructure, and strategic materials and supply chains. It uses its economic leverage to create strategic dependencies and enhance its influence. It strives to subvert the rules-based international order, including in the space, cyber and maritime domains. The deepening strategic partnership between the PRC and the Russian Federation and their mutually reinforcing attempts to undercut the rules-based international order run counter to our values and interests.” Yet ‘keep doing business with China’ is still the market message(?) How much louder does NATO’s geopolitical signal get before markets suddenly wake up in shock, as with Russia? We shall see. On a related note, as Xi Jinping prepares to visit Hong Kong, which gets the top headline on Bloomberg, the Financial Times just underlined that the must-have university degree in China right now is Marxism. Those who have studied Marx are being snapped up left, left, and not center to help firms navigate their way through the increasingly ideological local landscape of historical materialism, dialectics, labor surplus value, the reserve army of labor, the circulation of commodities, M C C(MP) C+ M+, constant vs. variable capital, and fictitious vs. productive capital. (As you can see, I’m covered for an alternative career path: are you?) This ideological trend was covered last year in ‘Pro-Fund or Profound Revolution?’, which underlined that common prosperity is not “regulatory change”, as almost every other analyst bravely opted to call it. Regardless of the bottom-picking game in Chinese assets, which can deliver rich pickings to some, claims of things being “uninvestable” might ultimately mean more against the political and geopolitical backdrop described above. Or the US FCC calling to ban TikTok “because it harvests swathes of sensitive data.” People have known that for ages but chose not to act on it “because markets”: now welcome to a “new world”. Consider doing extra political-economy reading round Marx. Not as a geopolitical Cold War hedge, because that is being done by TikTok users, hedge-fund billionaires, ‘I wish both sides well’ types, ‘we don’t do politics’ technocrats, and ‘I’d like to teach the world to sing in perfect harmony’ choir members. Rather because if we keep mismanaging the Western economy, there are going to be lots more Marxists here too. Or worse, as Martin Wolf was saying. The best Marxist analysis such as Kalecki also got big calls like negative rates right when the smartest quant guys got it totally wrong. However, it’s Lenin’s ideas on what happens during the ‘highest stages of capitalism’ that better match where we are all sadly drifting today. He was also the one who said, “The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.” "you look for the person who will benefit, and uh, you know"https://t.co/OohPP2z7mt pic.twitter.com/eihUEmmi1V — zerohedge (@zerohedge) June 27, 2022 And, today, via lower asset prices, driven by a necessary drying up of fictitious capital. Crypto appears to be heading for the crypt, despite Bloomberg TV coverage like in this link: did anyone really understand any part of it? And in New Zealand, the RBNZ just said its housing market fundamentals may be changing, and that house prices will likely move back towards more sustainable levels. In May they had forecasted a 15% drop in house prices from their peak. Imagine if that is seen everywhere globally. Imagine if that is optimistic given higher rates, higher inflation, lower real wages, and lower employment. So, “Asset speculators of the world, unite!” - in the hope we can ignore geopolitics and cut rates again soon with no side effects. They will take heart from Japanese industrial production -7.2% m-o-m this morning vs. -0.3% consensus. Not so much from China’s PMIs, where manufacturing was up to 50.2 vs. 50.5 consensus, but services leaped from 47.8 to 54.7, also vs. 50.5 consensus. Either all those pictures of empty Chinese streets are fake news, or service centers dealing with emigration inquiries are working triple shifts (as the term ‘runxue’, or running away, massively trends). I-Bear-ian indeed, as we scramble for month- and quarter-end re-positioning. Tyler Durden Thu, 06/30/2022 - 10:05
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[l] at 6/30/22 7:40am
Russia In "Goodwill" Withdrawal From Ukraine's Snake Island To Free Up Grain Exports Russia has taken a major step in trying to demonstrate to Western powers that it's serious about freeing up grain passage off Ukraine's coast and in the Black Sea, with on Thursday its military announcing the complete withdrawal of forces from Ukraine's Snake Island. The Russian Defense Ministry (MoD) said in a statement that the purpose is to free the passage of Ukraine's grain exports in a "goodwill" measure. "On June 30, as a step of goodwill, the Armed Forces of the Russian Federation completed their tasks on the Snake Island and withdrew from the garrison stationed there," the MoD said. Snake Island file, via Ukrinform "Thus, it was demonstrated to the world community that the Russian Federation does not hinder the efforts of the UN to organize a humanitarian corridor for the export of agricultural products from the territory of Ukraine," it stated further. The statement then called on Ukraine's government to clear its mines earlier placed on the sea coast and in ports which the Kremlin says is the major impediment blocking sea transit. The northwest Black Sea island has been under control of the Russian military since the start of the conflict, making the retreat of Russian forces a rare and significant battlefield de-escalation there. However, Ukraine disputed Russia's version of events, rejecting that it was a voluntary "goodwill" withdrawal initiated by the Russian side, instead claiming that it was Ukraine's military that drove the Russians from the island. The head of Ukraine’s army, Valeriy Zaluzhny, stressed his forces had liberated the island. "I thank the defenders of Odessa region who took maximum measures to liberate a strategically important part of our territory," he said on Telegram. Kiev has said its forces mounted a major series of strikes. And a representative of Ukrainian President Volodymyr Zelensky’s office, Andriy Yermak, confirmed that Russian forces have indeed exited the island, writing on Twitter: "KABOOM! No Russian troops on the Snake Island anymore. Our Armed Forces did a great job." Image source: Bloomberg News, June 8, 2022. Bloomberg noted that upon the announcement Chicago wheat futures fell as much as 1.3%, and then pared the loss to trade higher on the day. Russia has consistently claimed it's not responsible for establishing 'safe passage' corridors on Ukraine's coast due to the presence of thousands of Ukrainian sea mines. The crisis has stoked global prices for vital food products from grains to cooking oils, and fertilizer and fuel. As hundreds of millions of people come under threat of near future famine conditions due to Ukraine not exporting its grains, particularly in the Middle East and Africa, the United Nations has scrambled to broker a deal with the help of Turkey, which controls access to Black Sea waters through its straits. Ukraine says that it forced Russia to withdraw from Snake Island on two speedboats Clashes between Ukrainian and Russian forces continue even though Russia claims it left voluntarily to facilitate grain exports — Samuel Ramani (@SamRamani2) June 30, 2022 Meanwhile, hours after the Russian withdrawal announcement, there are emerging conflicting reports that there could still be clashes on Snake Island. Tyler Durden Thu, 06/30/2022 - 09:40
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[l] at 6/30/22 7:20am
Elon Musk Silent On Twitter For A Week Authored by Gary Bai via The Epoch Times, As Elon Musk’s Twitter following sprinted past the 100-million mark this week - a milestone the billionaire shares with Barack Obama, Justin Bieber, Rihanna, Katy Perry, and Cristiano Ronaldo - his followers are noticing atypical behavior: he is not posting. The Tesla and SpaceX CEO, while vocal on some of the most contentious headlines—such as the Clinton campaign’s Spygate scandal, media silence on Jeffrey Epstein’s sex trafficking case, and union influence on the Democratic Party—stayed uncharacteristically quiet on Twitter for a week amid several high profile events his followers would normally expect him to comment on. These events include the most consequential ruling impacting the abortion debate in the United States in half a century, plus other things more relevant to Musk himself—his June 28 birthday and cuts to the Tesla workforce, and the closure of its California office. 145 Tweets Per Week According to Axios, the rocket-and-automotive engineer-in-chief posted an average of 145 tweets and retweets per week over the five weeks leading up to June 16, the day SpaceX employees sent a letter to the company’s executive board complaining about their CEO’s Twitter posts. Musk’s Twitter streak slowed down after June 16, Axios reported. “Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” the letter reads, first reported by The New York Times on June 16. Some of the complaining employees were fired a day after the publishing of the New York Times article, reported the news agency. Musk alluded to the firing decision in response to another Twitter user’s post on June 17. ?? — Elon Musk (@elonmusk) June 17, 2022 Musk’s last posts were tweeted on the same day as the Twitter board unanimously approved his 44-billion-dollar offer on June 21. Not long after, Musk told attendees of the Qatar Economic Forum that there were a few “unresolved matters” before he could seal the deal, including fake accounts, shareholder approval, and debt financing. Tyler Durden Thu, 06/30/2022 - 09:20
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[l] at 6/30/22 7:06am
Oil Rebounds As OPEC+ Confirms Expected Supply Hike The OPEC+ coalition ratified an oil-production increase that completes the return of supplies halted during the pandemic, while deferring discussions on its next move for another day. The 23-nation group led by Saudi Arabia rubber-stamped plans to add 648,000 barrels a day in August, restoring the final tranche of the 9.7 million barrels a day that was shuttered just over two years ago But with most members besides the Saudis and their neighbors unable to raise output, the decision is largely symbolic. As a reminder, OPEC+ is falling further and further behind its production goals... Is Macron right and OPEC+ producers are at or near their capacity limits? “Spare capacity is very low, demand is still recovering,” Shell Plc Chief Executive Officer Ben van Beurden said in Singapore on Wednesday. “There is a fair chance we will be facing a turbulent period.” WTI rallied back Full OPEC+ Statement: The 30th OPEC and non-OPEC Ministerial Meeting was held via video-conference on 30 June 2022. In view of current oil market fundamentals and the consensus on its outlook, the OPEC and participating non-OPEC oil producing countries agreed to: Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12th April 2020 and further endorsed in subsequent meetings including the 19th OPEC and non-OPEC Ministerial Meeting on the 18th July 2021. Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th and 29th OPEC and non-OPEC Ministerial Meetings and the decision to adjust upward the monthly overall production for the month of August 2022 by 0.648 mb/d. Reiterate the critical importance of adhering to full conformity and to the compensation mechanism. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting. Hold the 31st OPEC and non-OPEC Ministerial Meeting on 3 August 2022. So given all that, what will the Saudis and Emiratis do next month when Biden visits to beg for more production? Tyler Durden Thu, 06/30/2022 - 09:06
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[l] at 6/30/22 6:57am
Biden Holds Post-NATO Press Conference President Biden will deliver final remarks from Madrid following his trip to Europe to meet with NATO leaders amid Russia's invasion of Ukraine: Watch: Biden and NATO leaders held a highly consequential summit on Thursday aimed at responding to the war in Ukraine, during which they agreed to take steps such as new sanctions against Russia and increased military aid. During today's press conference, Biden is expected to provide an update on the state of the war, after his top spy on Wednesday called the situation "grim." Biden may also address NATO's formal membership invitation to Finland and Sweden, a path which was cleared after Turkey dropped its objections. The alliance has also made major enhancements to NATO's eastern edge forces, increasing the number of high-alert troops sevenfold, while Biden announced rotational deployments of US troops in the baltics and Romania. The US is also sending planes to the UK, and new ships to Spain, and will be establishing a permanent Army garrison headquarters in Poland for the first time. NATO also updated its mission statement to read that Russia now poses the "most significant threat to Allied security," and said that strengthening relations between the Kremlin and Beijing "runs counter to our values." "He wanted less NATO," NATO Secretary General Jens Stoltenberg said earlier in the week. "Now President Putin is getting more NATO on his borders." Tyler Durden Thu, 06/30/2022 - 08:57
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[l] at 6/30/22 6:55am
Watch: Biden Climate Advisor Seems Happy About American Job Losses Authored by Steve Watson via Summit News, One of Joe Biden’s senior advisors bragged this week about how the administration’s forced transition to green energy is causing people working in the fossil fuels industry to lose their jobs. Speaking from the Aspen Ideas Festival, Biden’s climate advisor Gina McCarthy stated “We have opportunities now to transfer to clean energy in a way that grows thousands of jobs. We just had a recent report that is showing that all of the energy and the employment stats from last year. Clean energy is winning. Fossil fuels losing jobs.” Watch: Biden climate advisor Gina McCarthy brags about “fossil fuels losing jobs" under Joe Biden. pic.twitter.com/cHs9zIvw33 — RNC Research (@RNCResearch) June 29, 2022 McCarthy is referring to a Department of Energy (DOE) report that reveals American oil producers lost more than 31,000 jobs last year, while American coal producers lost over 7,000 jobs. McCarthy bragged that jobs had been created in green energy sectors, without explaining that those sectors fulfil less than 20 percent of the country’s energy needs. McCarthy previously called for anyone criticising the green energy transition to be silenced and censored. Top Biden advisor Gina McCarthy says social media companies should censor content that is critical of their green energy "transition" pic.twitter.com/qfh1Cxe7NG — RNC Research (@RNCResearch) June 14, 2022 The administration has spent two years trying to “end” the fossil fuel sector, and is openly bragging about it, meanwhile Biden is threatening oil companies in an effort to try to get them to produce more. Independent Petroleum Association of America spokesperson Jennifer Marsteller reacted to the DOE report by saying it “is not only reflective of the broader pandemic slowdown, but also highlights an Administration that has worked overtime on restricting American natural gas and oil production.” Meanwhile, in the midst of a supply chain crisis, Biden’s climate czar John Kerry is pushing for ‘green shipping’, the infrastructure for which also does not even exist. Biden Climate Czar John Kerry: “We need to spur the transition to green shipping.” pic.twitter.com/hGUkAAd6qt — RNC Research (@RNCResearch) June 29, 2022 Kerry made the comments from a conference in Portugal. Presumably he got there on a private jet as per usual. Kerry has also previously called the loss of jobs in the fossil fuels energy sector a necessary ‘sacrifice’: John Kerry on Joe Biden’s agenda destroying American energy jobs: it's “what needs to be done”https://t.co/1DN7lhenK6 pic.twitter.com/Z2dAgULHFD — RNC Research (@RNCResearch) January 27, 2021 *  *  * Brand new merch now available! Get it at https://www.pjwshop.com/ In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support our sponsor – Turbo Force – a supercharged boost of clean energy without the comedown. Also, we urgently need your financial support here. Tyler Durden Thu, 06/30/2022 - 08:55
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[l] at 6/30/22 6:43am
Fed's Favorite Inflation Indicator Dips, US Spending Slows In May The headline-maker from this morning's macro melange is The Fed's favorite inflation indicator - Core PCE Deflator - printed lower than expected at +4.7% YoY (vs +4.9% expected and +4.9% prior). The headline May PCE printed +6.3%, equal to the April data Source: Bloomberg As a reminder, however, this is May data, and gas prices have soared in June. Americans pace of spending slowed significantly in May to just +0.2% MoM (half the expected +0.4%) while incomes rose +0.5% MoM (as expected)... Source: Bloomberg Americans spending rose slower than their incomes for the first time since December. Adjusting for inflation, spending actually dropped 0.4% MoM in May... Source: Bloomberg On the incomes side, private wage growth slowed to 11.9% YoY, the lowest since Dec 2021 while government workers wage growth rose to 5.8% YoY, up from 5.7% in April... On a year over year basis, incomes grew at 5.3% but spending rose at 8.5%... Source: Bloomberg The BEA revised historical data which lifted April's savings rate from 4.4% to 5.2% and May's print upticked to 5.4% - the highest since February... So this is good news - inflation rolling over and Americans pulling back from over-spending? The question is - will the former re-accelerate in June while the latter continues? Tyler Durden Thu, 06/30/2022 - 08:43
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[l] at 6/30/22 6:34am
Initial Jobless Claims At 5-Month Highs As Layoffs Accelerate The number of Americans filing for jobless benefits for the first time was 231k last week (down very modestly from an upwardly revised 233k) leaving the 4-week average at the highest since January 2022. There were 1.328 million continuing claims, very modestly below an upwardly revised 1.331 million last week, but an upward trend remains... Source: Bloomberg As a reminder, Deutsche Bank has noted that continuing claims is the best early recession indicator. In the past week, companies including Netflix Inc. and Tesla Inc. have laid off hundreds of employees amid concerns about the economic outlook. On an unadjusted basis, initial claims rose to 207,421 last week. That reflected large increases in New Jersey and Massachusetts, while applications in Texas and Georgia declined. Tyler Durden Thu, 06/30/2022 - 08:34
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[l] at 6/30/22 6:22am
Don't Rely On Unbridled Optimism To Divine Profits' Path By Simon White, Bloomberg Markets Live Commentator and Reporter Earnings estimates start falling too late and stop falling too early in recessions. Macro-driven indicators are much more reliable indicators of the profit outlook, with the majority currently pointing to much weaker earnings through the rest of this year. In a recent post, I showed that earnings estimates are most wrong in recessions. We can see what actually happens in the chart below. Typically earnings and their forward estimates track each other quite closely in the run up to a recession but, when one starts, things go a bit haywire. Earnings themselves don’t start to fall for several weeks, while forward earnings have one last burst of optimism, jumping higher, before reflecting reality and falling. Earnings estimates cease falling long before the median recession ends, even while trailing earnings have much further to fall. Stock analysts miss recessions as they are not really looking for them. They are experts in their field, and are generally able to intuit when and whether their sector is about to face a pervasive fall in earnings. But recessions are different. A macro-focused strategist or even a housing expert may have been able to tell you the severity of the hurricane about to hit in 2007, but it is unlikely, say, a telcos analyst would have been in a position do do. Today, the macro warnings for a recession are mounting, leaving earnings looking increasingly exposed. China is one clear example, but there are several others. The country has yet to fully open up as it battles with Covid, while there is a continued reluctance to return to “flood-like” stimulus. As a result, liquidity in China is struggling, which has historically posed a significant headwind for US tech earnings (which despite their recent fall are still 43% of S&P 500 earnings). Tyler Durden Thu, 06/30/2022 - 08:22

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