Authored by Steve Watson via Modernity.news,

During a hearing Thursday, Senators Rand Paul and Josh Hawley grilled Homeland Security Secretary Alejandro Mayorkas concerning the open border and the murder of Laken Riley.

Mayorkas appeared very uncomfortable as Paul took him to task over the full scale invasion he has overseen at the border.

“You refuse to look at the facts and it’s still, I guess, insulting to all of us and insulting to the memory of Lake and Riley and to the memory of others who have been killed by people who came into this country,” Senator Paul urged.

Secretary Mayorkas SQUIRMS while Senator @RandPaul GRILLS him on Laken Riley's killer for seven minutes straight!

🔥🔥🔥 pic.twitter.com/gvD6WWrt6x

— Townhall.com (@townhallcom) April 18, 2024

Paul reeled off a short list of examples of crimes committed by illegal immigrants recently, that represents a tiny fraction of the true scale of the problem.

He stated, “On March 2nd, an illegal alien who got into the country as a gotaway killed Washington State Trooper Christopher Gadd. A Haitian man who entered the US via the CHNV parole program was arrested for sexual assault of a 15-year-old girl. On March 21st. Illegal aliens in El Paso rushed the fence. You saw that on national television. An illegal alien on March 23rd murdered 25-year-old Michigan resident, Ruby Garcia.”

Paul continued, “A Chinese National, came across the border an illegally breached a military base in California. I mean, the stories go on and on and I think a lot of people in America are going to be appalled that you refuse to answer the questions.”

The Senator then turned to Jose Ibarra, charged with the murder of 22-year-old Augusta University nursing student  Laken Riley. It has emerged that Ibarra was released into the US at the border via parole due to lack of detention space.

Paul asked Mayorkas “was it lawful to parole him? Was it lawful to let him in the country because you say the camp’s full?”

Mayorkas responded, “Ranking member Paul, as a former federal prosecutor for 12 years. I can say with tremendous conviction that individuals who commit criminal acts need to be held accountable for their crimes.”

“Well, that’s not much consolation if you wait until after he is murdered somebody,” Paul fired back.

“See, part of the problem is, and I think people would be aghast to know this, that when you come in, you just give people your name. It’s the honor system,” Paul continued, adding “There may be some databases you check, but certainly most of the domestic crimes in Venezuela probably are not in any kind of international database.”

“So if you waltz into the country through your generous parole programs and say, ‘I’m John Smith from Venezuela,’ you have no way of ascertaining that and you still let ’em go. So you say, ‘well, we’re going to make sure that they’re not a violent criminal.’ You have no way. You look in some databases, maybe they’re not in the database, but you have no way of even knowing that that’s their name,” the Senator further urged.

Paul continued, “Then you give biometric, you give them fingerprints. Now they have a new name and fingerprints. They essentially have been given a new identity by your agency.”

“I am just so sickened and sad by the families who have lost loved ones from this. I don’t see real remorse. I don’t see you’re willing to answer the questions,” he further charged.

“I mean, if it were me, I would be so upset by this. I would be doing everything possible to make sure that another Jose Ibarro doesn’t get in, but apparently you let his brother in too, and his brother’s got a rap sheet 10 times longer than Jose does,” Paul further asserted.

Mayorkas is the first cabinet official in American history to be impeached over high crimes and misdemeanors, including ‘aiding and abetting’ a foreign invasion and committing perjury before Congress, but he has so far managed twice to dodge an impeachment trial.

“All I can express is disappointment and bewilderment that the Democrats let you get away with it,” an exasperated Paul declared.

In a further grilling, Senator Josh Hawley ripped into Mayorkas regarding the release of Ibarra into the country, reading the parole report detailing his criminal history and exposing the amount of times the illegal committed offences and was let go before Laken Riley’s murder.

Mayorkas then had the gall to claim Hawley had “misstated some facts.”

“I have read from the parole file, which you have said you don’t recall,” Hawley shot back, adding “I have just read it into the record. And the reason is you have lied repeatedly to Congress and to the American people about this. They deserve to know. And the only way they’re going to know is if I tell them.”

“I’ve just told them it’s in the record. Now I’ve read it verbatim from the parole file, verbatim. I just want to know, why did you change your story so often? Why didn’t you just answer honestly to Congressman Bishop and Senator Brett?” Hawley further enquired.

Mayorkas glibly responded “Senator, I am I am confident that justice will be vindicated in the criminal prosecution of the case.”

“Well, hopefully he’ll get more of a trial than you got. Otherwise there’ll be no justice for anyone at all,” Hawley blasted back at Mayorkas.

Here is the full exchange:

Can anyone justify why Democrats keep saving this guy’s ass?

*  *  *

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It's been a very ugly week for momentum names, but since these days that really means AI and/or mega tech, we can just saw this has been a very ugly week for the Nasdaq. And sure enough, with the QQQs down 0.4%, the Nasdaq is now pacing for its worst week in over a year - and is down 6 of the past 7 weeks...

... on what Goldman trader Peter Callahan calls a complicated technical backdrop (CTAs, lower retail participation, Nasdaq now testing 100-dma, seasonality), sideways earnings revisions thus far (ASML, TSM and even Sheridan’s NFLX EPS revisions were only 1-2% last night), a tense geopolitical backdrop (overnight headlines) and elevated positioning are testing conviction into a busy week of earnings. The Goldman trader notes that this back and forth has spawned debate "if this all ‘helps’ the set-up into FAAMG prints or if the market is just read to ‘take a breather’ and sell any good news."

Some more observations from the Goldman tech sector specialist:

Top client inbounds yesterday (and this week):

• Why is MSFT leaking lower? Bogeys?
• Are Semis breaking or just a healthy rest?
• Feedback on drawdown stocks (eg LYV or ADSK)
• Bogeys (META, NOW)

Bad = Bad (or not good enough = not good enough) across pockets of cyclicals to start: handful of charts that jump out to me on earnings - KNX & JBHT in Industrials … INFY & EFX in Services .. LVS in leisure / casinos .. TSM & ASML in Semis (admittedly, a secular angle here) .. something to keep in mind ahead of upcoming earnings (esp for areas like Analog Semis)

NFLX -7%: headline numbers were ‘solid’ for Netflix – 1Q subs ~9.3mn (vs expects +HSDs q/q), beat on revs/EPS, raised FY OM guidance .. but, stock sharply lower this morning against the backdrop of elevated positioning & expectations (SI at lows, multiple at local highs). Sheridan/GIR remains NEUTRAL rated  

• BULLS: solid UCAN/EMEA sub growth (2.5-3mn q/q) .. narrative hand-off from Subs -> Ad supported (& Live with WWE) is next story .. no more subs = no more volatility (?!) .. ‘easy’ to own in this (geo)-political climate .. can look at GAAP EPS approaching a 3-handle in ’26 (GIR went to ~$28.30 – stock 20x that number in the pre’) … potential capital returns on a sustained double digit revenue growth compounder .. catalyst = Media Upfronts in mid-May .. 
• BEARS: no more subs disclosure = slower subs growth? (I suppose Apple is a case study?) … choppy revenues despite px’ing efforts (2Q / FY24 Revs guide below GSe) .. continued modest growth of ARM .. lack of visibility into Ad story … tough(er) comps from here (e.g. lapping >20mn subs added in 2H’23) .. long-term debate on ‘competition’ (short form video / A.I.) ..

TSMC: a number of inbounds yesterday.. feedback / action yesterday felt more like tactical de-risking (momentum breaking / profit taking on back or softer 'core' revs outlook and choppy GM cadence re: N3 ramp & costs)... whereas I did not really sense a m shift in long-term Bull views as Bulls remain focused on: 1) cyclical (eventual recovery in job AI workloads + secular (TSMC extended its 50% AI revs CAGR guide to ‘28 - from 2027 prior) growth, 2) multiple expansion on back of geographic manufacturing diversification, 3) upcoming node ramps – TSM noted AI adoption for N2 likely much faster vs that seen in N3/N5 and 4) pricing power (rather than a 'hike', GIR believes TSMC could provide lesser annual price reduction to its customers in 2025 vs typically a 5-10% of annual price reduction).

Finally, some charts from the Goldman trader:

NDX back testing its 100-dma: on this point, it has been a pretty swift drawdown with just ~1 in 5 names in the NDX still sitting above their 50-dma.

And the punchline: after ugly earnings from ASML and TSMC, the semis (SOX) are down ~8.5% in the last 5 sessions, the worst stretch since 2022. 

More in the full Goldman note available to pro subs.

Authored by Simon White, Bloomberg macro strategist,

Implied volatility of traditional havens such as the Swiss franc and US Treasuries remains remarkably subdued despite the situation in the Middle East, even as the former has outperformed most other havens, including the dollar. However, vol is beginning to pick up, in a sign risks are beginning to be more fully priced in.

Volatility is typically episodic. Most of the time it is low or falling, but then punctuated by episodes of extreme fear when it spikes, before beginning to trend lower again. It is a good metaphor for human behavior: ignore a potential risk up until the last minute - either believing it’s not really a danger, or pretending it’s not there at all and hoping it will go away, i.e. the ostrich effect – and then panic when said risk does turn out to be major problem (the UK government’s response to the pandemic is a good example).

Recency bias perhaps explains why markets have been surprisingly calm in the face of the ratcheting up of tensions in the Middle East. The geopolitical backdrop across the world has been increasingly quarrelsome, but it has not so far led to a major multi-regional conflagration. With any luck that persists, but the generally still-contained volatility in most markets is perhaps not fully reflective of the underlying risks.

The chart below shows the implied volatility of bonds, the Swiss franc, the yen and crude oil has barely risen this year (all series are normalized to 100 at the start of the 2024).

We are seeing call skew in oil rising showing tail-risk probabilities are rising, even though at-the-money vol remains low.

The Swiss franc has been catching a bid, but that has so far not led to a significant marking up of its vols, while the yen is not acting as the haven it once did.

The VIX (blue line in top panel of chart) and gold volatility (purple line, bottom panel) have started to rise, but that has been more about inflation rather than geopolitical risks.

Generally, though, assets are not at panic stations, and therefore hedging portfolio risks is still cheap.

A suspected Iranian spy ship that its own government calls an "intelligence and logistics" vessel returned home this week after a three-year mis, as well as more recently lingering near Yemen for months. 

The Iranian 'spy ship' BEHSHAD (9167289), which had a hand in the Red Sea Crisis by assisting Houthis in launching attacks against commercial and naval vessels over the past several months, has now returned to Iran after a 3-year deployment. We were able to verify her in… pic.twitter.com/NqJ3LYdIWY

— TankerTrackers.com, Inc. (@TankerTrackers) April 19, 2024

The MV Behshad entered the Strait of Hormuz on Wednesday and moored off Bandar Abbas, a port city located on the southern coast of Iran, on Thursday. 

Several reports, including one from The Wall Street Journal in December, suggest the vessel was directly assisting Yemen's Houthi forces with targeting commercial ships in the Bab-el-Mandeb Strait and the southern Red Sea. 

"Iran's paramilitary forces are providing real-time intelligence to Yemen's Houthis that the rebels are using to direct drones and missiles to target ships passing through the Red Sea, Western and regional security officials said," WSJ wrote in the report, citing Western intelligence sources. 

In March, we pointed out that Behshad moored near the area where undersea data cables linking several continents were severed. 

Behshad's return to Iran comes as the Israel-Iran conflict deteriorated, with both countries volleying missiles and drones at each other in recent days.

"The ship is likely viewed as one of the targets Israel may hit in the future," said Michael Horowitz, the head of intelligence at Le Beck International, a security and risk management consultancy, in a post on X.

Interesting Bloomberg report about the Iranian intelligence ship, Bershad, which has returned to #Iran since April 1 - incidently we've see a dip in Houthi attacks.

The ship is likely viewed as one of the targets Israel may hit in the futurehttps://t.co/IcRB5bOM4J

— Michael A. Horowitz (@michaelh992) April 18, 2024

Iran's state media hasn't commented on Behshad's movements. 

Authored by Rob Maness via RealClearDefense,

The Port of Baltimore is “closed until further notice” following the Francis Scott Key Bridge tragedy, sending several industries into disarray and jeopardizing national security.

In 2023, the port handled a record amount of international cargo, ranked ninth for both dollar value and tonnage in the United States. Vital for both imports and exports of a variety of commodities, the Port of Baltimore has always had international significance and the impact of its closure will be wide-ranging and long-term for the supply chain in the United States and beyond. Given the seriousness of this issue, Congress must come together to approve the funding to clean up the debris, reopen the channel, and rebuild the bridge.

Having three decades of experience in the United States military, and with foreign affairs and national security issues I can safely say that the reverberations of the disaster will be felt across the globe. The repercussions with regards to energy security are of specific concern and must be addressed.

Domestically, the impacts of these hiccups in the energy supply chain are already being felt. CSX’s Curtis Bay Piers in particular – heavily impacted by the bridge collapse – supplies coal to power the Maryland electric grid and provides metallurgical coal critical for the steel industry. The inability to ship energy supplies from this terminal has created a ripple effect in both sectors. A warning from the Energy Information Administration (EIA), meanwhile, that the bridge collapse and subsequent impact to the port will slow the growth of U.S. coal exports to our allies has also weakened that supply chain of growing importance.

International demand for American coal has been on the rise in the past few years due to Europe’s tightening energy supply, low natural gas reservoirs, and conflict in the region as many countries like Ukraine turned elsewhere to get their energy commodities. As the second-largest exporting hub for coal in the United States, accounting for nearly one-third (28 percent) of total exports in 2023, the Port of Baltimore has helped meet that demand.

While most of the coal exported from the Port of Baltimore was historically destined for locations outside of Europe, it has increasingly been finding its way to countries on the continent dealing with rising Russian aggression, providing them an alternative to forced reliance on Russian energy supplies. But with the port’s unspecified closure and reopening timelines, American allies around the world may be forced to turn back to Vladimir Putin and his cronies. This will give Russia undue power, in Europe in particular, which has historically relied heavily on Russian imports of coal, oil, and natural gas.

China’s rise and efforts to use energy and infrastructure connections to extend their reach and influence around the world have also been a growing concern for years now. Its Belt and Road Initiative includes significant investments in energy infrastructure across Asia, Africa, and Latin America, and has been used to extend its influence by becoming a partner in meeting these regions' energy needs. The disruption in the flow of energy resources that has occurred as a result of the Port of Baltimore’s indefinite closure could subsequently force some U.S. allies to seek alternative suppliers and with the country’s coal output hitting record highs in 2023, it may provide an opening for the Communist Country to further assert itself on the world stage.

Energy independence and security means having enough energy to meet demand, as well as protecting power systems and infrastructure from physical attacks and cyber threats. Given these facts, the United States should be focused on bolstering the resiliency of its own energy supply chain – as well as strengthening connections with allies who are also concerned about the rise of Chinese and Russian influence around the world – by prioritizing the restoration of the Port of Baltimore. This will not only restore a vital link in the nation's energy supply chain but also signal to adversaries that the United States is committed to safeguarding its infrastructure and, by extension, its ability to act freely on the international stage.

Maryland Governor Wes Moore recently highlighted the need for quick cleanup, noting that “we need to make sure that we're actually moving quickly to get the American economy going again, because the Port of Baltimore is instrumental in our larger economic growth." Given the domino effects of its continued closure – most specifically to national security and energy independence across the globe – leaders in Washington must come together to quickly clean up and repair access to the port.

Rob Maness is a Retired Colonel and Founder of Iron Liberty Group.

Update(1049ET): The crisis at the Iranian consulate in Paris appears to be resolved, with a suspect under arrest and being investigated, according to France24:

A Paris police official said the man was seen at about 11am local time (0900 GMT) entering the consulate, carrying what appeared to be a grenade and an explosive vest.

The man later left the consulate and on being searched was found not to be carrying any explosives, a police source said. The man's motives were not immediately clear.

The report further said, "Le Parisien newspaper said on its website that, according to several witnesses, the man had dragged flags on the floor of the consulate and said he wanted to avenge the death of his brother."

* * *

A major police and emergency response is ongoing outside the Iranian consulate in Paris on Friday, where a man is reportedly threatening to blow himself up in what's possibly some kind of hostage standoff.

Police are asking the public to avoid the area and say that security services' intervention in the situation is imminent. "Service was interrupted on a nearby metro line for security reasons," the RATP metro company has alerted the public.

The consulate is at Rue Fresnel in the 16th district of the capital city, and the standoff comes just hours after an overnight Israeli aerial attack on Iran, which involved drones infiltrating Iranian airspace and also possibly Israeli jets firing from over Iraqi airspace. Iran said its anti-air defenses intercepted all threats.

However, the Iran-Israel situation has since avoided tit-for-tat escalation since the overnight assault, with the Iranians saying they do not plan to respond and escalate further.

Currently, few details are known of the consulate standoff, with conflicting reports saying the man may have a suicide vest on, or is carrying several grenades under his belt. French security services have at this point revealed little, and likely themselves possess few verified details of the situation.

#BREAKING: French forces surround Iranian consulate in Paris where man threatens to blow himself up#Iran #France #Paris pic.twitter.com/HSm1JcowaW

— WorldNews (@FirstWorldNewss) April 19, 2024

Local media footage has shown heavily armed police units cordoning off the area where the consulate is located. It remains unclear how many Iranian diplomats and consular workers might be inside.

developing...

According to a first-quarter update on Wednesday from Dutch chip giant ASML - the world's sole producer of equipment needed to make the most advanced chips - chip makers aren't rushing to prepare for the next leg in the AI boom.

This was confirmed on Friday when Taiwan Semiconductor Manufacturing Co. - the world's largest contract chip maker - offered investors a very cautious outlook for the industry despite upbeat first-quarter earnings results.

TSMC reported better-than-expected first-quarter results led by increasing demand for advanced chips. TSMC's quarterly net profit climbed 8.9%, breaking a three-quarter slide. 

Aside from the earnings, TSMC's downshift in this year's industry outlook spooked the market, sending shares down as much as 7.2% in Taipei. 

This was the largest intraday decline in about 18 months. 

Excluding memory chips, TSMC's industry outlook for the year is expected to be about 10%, compared to a growth forecast of "more than 10%" just three months ago.

"Macroeconomic and geopolitical uncertainty persists, potentially weighing on consumer sentiment and end-market demand," Chief Executive Officer C. C. Wei told investors on an earnings call. 

Some Wall Street weren't surprised by TSMC's gloomy outlook.  

Deutsche Bank analyst Robert Sanders told clients in a note that self-driving company Mobileye Global warned not too long ago that a chip supply glut materialized in the auto industry. 

As noted earlier, ASML's 22% miss on first-quarter bookings is one sign that China's frontloading of lithography machines has ended. 

We explained here:

• Behind The Tech Meltup: A One-Time Chinese Chip Buying Frenzy To Frontrun Export Curbs

Followed by this week's proof: 

• Semi Shock: ASML Craters As Orderbook Plummets After China Frontrunning Ends With A Bang

TSMC, AMSL, and Nvidia are likely long-term winners in the AI era. However, the new forecast suggests the AI bubble is waning and risks further deflating. 

Plus, higher for longer interest rates by the Federal Reserve and reaccelerating inflation are bad news for tech valuations. ​​​​​​

Authored by Dave DeCamp via AntiWar.com,

The US has vetoed a UN Security Council resolution that would have granted Palestine status as a full UN member state, a move that goes against President Biden’s claim that he favors a two-state solution.

The US was the only member of the 15-member council to vote against the resolution, while the UK and Switzerland abstained. There were 12 votes in favor from Russia, China, France, Japan, South Korea, Ecuador, Algeria, Malta, Slovenia, Sierra Leone, Mozambique, and Guyana.

A resolution needs nine votes to pass, but the US and the other four permanent members of the council — China, Russia, France, and the UK — have veto power.

Before the Thursday vote, The Intercept reported that the US was lobbying other countries to vote against the resolution so the US wouldn’t have to veto it.

The Biden administration has come under criticism for claiming to favor a peace deal that involves a two-state solution while continuing to provide unconditional military aid and diplomatic support to Israel, while Prime Minister Benjamin Netanyahu has repeatedly stated his opposition to a Palestinian state.

Netanyahu has explicitly stated that he will not allow the creation of a Palestinian state in any future scenario. "In any future arrangement … Israel needs security control all territory west of the Jordan," he said in January. "This collides with the idea of sovereignty. What can you do?"

The Israeli leader has also credited himself for why there is no Palestinian state. "Everyone knows that I am the one who for decades blocked the establishment of a Palestinian state that would endanger our existence," he said in February.

China finds the U.S. decision to veto Palestine's full U.N. membership bid
"most disappointing" pic.twitter.com/H3InQa2sT1

— Johannes Maria (@luo_yuehan) April 19, 2024

The opposition to a Palestinian state is not unique to Netanyahu or his coalition government. Ninety-nine out of the 120 members of the Knesset recently voted against a resolution rejecting the "unilateral" creation of a Palestinian state.

Shares of Trump Media spiked on Friday after the company alerted the Nasdaq to 'potential market manipulation' from 'naked' short selling of its stock.

The warning came as the company, which trades under the symbol $DJT, offered shareholders detailed instructions on how to prevent someone from loaning out their shares to short sellers.

In a Friday morning letter to Nasdaq CEO Adrena Friedman, CEO Devin Nunes noted that as of Wednesday, "DJT appears on Nasdaq’s ‘Reg SHO threshold list,’ which is indicative of unlawful trading activity."

"his is particularly troubling given that ‘naked’ short selling often entails sophisticated market participants profiting at the expense of retail investors," Nunes continued.

$DJT CEO going full “Ape”. Never go full Ape. pic.twitter.com/clicSGJiwJ

— Diogenes (@WallStCynic) April 19, 2024

In his letter, Nunes pointed to circumstantial evidence - including DJT being the most expensive stock to short in the US, which he said would give brokers "significant financial incentive to lend non-existent shares," CNBC reports. The letter also links to a CNBC article which delves into the high premiums brokers were charging short sellers for loans of DJT to sell.

"I write to bring your attention to potential market manipulation of the stock of Trump Media & Technology Group Corp," wrote Nunes. "As you know, ‘naked’ short selling — selling shares of a stock without first borrowing the shares of stock deemed difficult to locate — is generally illegal pursuant to Securities and Exchange Commission (‘SEC’) Regulation SHO," the letter continues.

"Data made available to us indicate that just four market participants have been responsible for over 60% of the extraordinary volume of DJT shares traded: Citadel Securities, VIRTU Americas, G1 Execution Services, and Jane Street Capital," Nunes said, adding: "In light of the foregoing, and Nasdaq’s obligation and commitment to protect the interests of retail investors, please advise what steps you can take to foster transparency and compliance by ensuring market makers are adhering to Reg SHO, requiring brokers to disclose their ’Net Short” positions, and preventing the lending of shares that do not exist."

Shares of DJT began spiking premarket, and were up as much as 11%.

Authored by Paul Joseph Watson via Modernity.news,

A video out of the UK shows a man being visited at home by two police officers and an NHS psychologist after he expressed anger online about the stabbing of a Bishop in Sydney by an Islamist.

Bishop Mar Mari Emmanuel was stabbed by a 16-year-old boy at the Assyrian Christ the Good Shepherd church on Monday night, an attack that was caught on camera.

The teenager walked right up to the bishop as he was giving a sermon and furiously jabbed at him with a knife while shouting “Allahu Akbar” as onlookers desperately tried to wrestle him to the ground.

After the teen was pinned down, he could be seen smirking.

Now a new video has emerged showing how an Orthodox Christian man in the UK received a home visit from police and a psychologist for reportedly posting online, “Christians must stand up.”

The clip shows a female officer explaining how authorities had “a few concerns” about what the man had posted on social media.

“So why are you here today?” asks the man.

British police and a psychologist showed up at this man's home because he had posted on social media "Christians must stand up" after Islamist attack on bishop in Australia. This usually happens in dictatorships. pic.twitter.com/FljQkb4j8c

— RadioGenoa (@RadioGenoa) April 19, 2024

The woman says the police have been told the man “might have a few concerns, a few things that are bothering you at the moment.”

“This is religious discrimination,” responds the man, asserting that the police wouldn’t be knocking on the door of a Muslim if they had made similar statements.

“People raised concerns about your views…about what’s going on in Australia,” the police officer continues.

“Yeah, so I’m an Orthodox Christian, now you’ve turned up at my house because I went and seen my priest,” the man responds.

The NHS psychologist reiterated that there was a report about “some beliefs being expressed” and that he was there to ‘help’ the man.

“So because I’ve questioned about the church not acting on behalf of Christians, you’re now turning up here with mental health nurses assuming I’m some right-wing nutter,” the thought criminal responds.

The video ends at this point.

Presumably, despite rising violent crime and police increasingly incapable of responding to actual crimes like theft and burglaries, they have plenty of resources to visit people’s homes over Facebook posts.

The teenager who stabbed the bishop has been charged with committing a terrorist act and could face lifetime imprisonment.

The attack was followed by a riot outside the church, which prompted more media demonization of the ‘fiery, but mostly peaceful demonstrators’ than the stabbing of the bishop itself.

*  *  *

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There has been no Iranian response against Israel for the overnight Israeli retaliation attack on the Islamic Republic. US officials have since confirmed that it was in fact an Israeli attack, yet all the while Iran's leaders are trying desperately to downplay it, saying it inflicted no damage, and that several reported explosions were actually the result of Iran's air defenses intercepting a few drones, particularly over the city of Isfahan, site of a key nuclear facility. 

Importantly, as we predicted, Tehran is saying it has no plans for further retaliation following the oddly toothless, performative response from Israel. Officially, Iran and its state media are even referring to the attack incident as having been done by "infiltrators" while not readily naming Israel, also declaring that the aggression 'failed'. So far, it is looking like none of Iran's nuclear facilities were actually hit.

Reuters has called Iran's stance "a response that appeared gauged towards averting region-wide war." US Secretary of State Antony Blinken in a fresh statement sought to emphasize that the United States was not involved in any offensive operations against Iran, nor did he confirm Israel was behind it during the remarks, and the West continues to urge restraint by both sides.

The Washington Post is also acknowledging Iranian media's muted response in wake of overnight events:

Iranian state media was muted in its response to the attack, saying its air defense systems had intercepted "three small drones" in Isfahan province. There was no damage to Iran’s nuclear sites, including those in Isfahan, the International Atomic Energy Agency said Friday morning. Isfahan is the site of Iran’s largest nuclear research complex; the area is home to a military base.

Israeli national security officials were cited in the The Jerusalem Post on Friday as saying, "An eye for an eye, a tooth for a tooth. Israel retaliated where they were attacked.”

However, JPost additionally noted some strange qualifiers, suggesting both sides are taking a 'nothing to see here folks' approach:

That said, officially, Israel will not accept responsibility for this attack for strategic reasons. Sources explain that the Iranians claim it was an “explosion at a factory” because they wish to avoid escalation. Israeli sources told the Post that it's unclear why the Pentagon disclosed to the American media that Israel was involved; they could have remained silent, they say. They could have preserved Iran's dignity and avoided escalating the situation on their own.

🎯

— Elon Musk (@elonmusk) April 19, 2024

An earlier Bloomberg report disclosed that Israel had informed the White House on Thursday that a military strike on Iran was being planned in "the next 24-48 hours."

Bloomberg is now reporting Friday morning that "an Iranian military official signaled Tehran doesn’t feel compelled to react to the blasts which US officials say were caused by Israeli strikes, with semi-official Mehr agency quoting Army Commander-in-Chief Abdolrahim Mousavi saying Tehran has already reacted to Israeli threats."

Iran's President Ebrahim Rais made a planned speech on Friday and did not mention the overnight attack on Iranian soil, only the last Saturday offensive operations against Israel: "Operation True Promise led to authority, unity and cohesion in the country," Raisi said.

No Iranian nuclear sites were reported damaged...

"Today, all political groups and factions believe that this response was necessary and a big honour for the country," the Iranian president added, saying nothing further about the Israeli attack just hours prior.

There's only one group at this point that appears to be disappointed that it's over: 

• HAMAS OFFICIAL SAYS ISRAELI AGGRESSION ON IRAN IS AN ESCALATION AGAINST THE REGION
• HAMAS OFFICIAL CALLS FOR EXPANDING ENGAGEMENT AGAINST ISRAEL OVER WAR OF GENOCIDE IN GAZA AND ESCALATION IN THE REGION.

Hamas leadership likely thought this is the start of the 'big war' in Gaza's defense - which still possibly may come - but at this point of "cooler heads" prevailing is no longer looking likely.

Iran and Israel trying to forget all about it but Biden just messed it all up https://t.co/spZeb743c7

— zerohedge (@zerohedge) April 19, 2024

As a further sign of this rapid climb-down, Iran’s Civil Aviation Organization has lifted all prior airspace restrictions imposed the night before. However, German airline group Lufthansa has suspended all of its flights to Israel and Iraq amid the reports of Israel's overnight retaliation. The airline says this will hold till early Saturday.

Via SchiffGold.com,

Peter recently appeared on Market Overtime with Oliver Renick for an interview. In their wide-ranging discussion, Peter speaks on monetary policy, the reliability of inflation data, and reasons to avoid Bitcoin.

Contrary to the popular narrative, gold’s recent rise is not because of world conflicts. Inflation is the driving force behind the metal’s price action:

“This is just the beginning of a massive re-pricing of gold, and people aren’t even buying it yet. You have central banks buying, but investors aren’t even buying gold. Retail investors, the institutions— they’re not in the market at all. They don’t even understand why gold is rising. They’re attributing it to geopolitical risks, but it’s all about inflation. The key is that the markets have the inflation story wrong. The Fed rate hikes up to five and a quarter, five and a half, have not been nearly enough to put the inflation genie back in the bottle.”

As the media and policymakers begin to question the feasibility of a 2% inflation target, their preferred measures of inflation are probably not as accurate as they should be:

“I’d say [inflation’s] at least double what the CPI is. So if the government claims inflation is two, it’s four. And when they claimed it was nine, it was probably 18. People are struggling. It’s a lousy economy. People’s real incomes have been eviscerated by inflation. They’re forced to work multiple jobs. They’re drowning in a mountain of debt, and we’re headed for a major disaster.”

Lurking under the economy’s surface are decades of residual damage from artificially low-interest rates, especially in the housing and banking sectors:

“The entire banking system is insolvent. That’s the big problem— when interest rates were kept at zero, and all these homeowners were refinancing their mortgages at 3%. The banks own all that paper. They’re insolvent now! They own all these treasuries. Thanks to the government— the Fed— the entire US banking system is insolvent. And if the Fed actually raised interest rates to an appropriate level, all the banks would fail, including all the too-big-to-fail banks.”

The omens of economic disaster remind Peter of warnings he made in the early 2000s:

“I kept warning about the mistakes the Fed was making, and the housing bubble, and the financial crisis that was going to hit when the bubble popped. People would say, ‘When, when, when?’ Well, I don’t have a date. I just know that it’s going to happen. I can’t tell you exactly when. It’s the same thing now. But a lot of things have happened now, just like they did in 2007, that indicated that the day of reckoning was getting closer.”

Pivoting to the crypto vs. gold debate, Peter argues gold’s value stems from non-monetary uses that Bitcoin lacks:

“They say, ‘Bitcoin is a store of value,’ but it doesn’t have any value. You can’t store what you don’t have. The reason gold is a store of value is I can take the gold that I have and in a hundred years, I can make a watch with it. I can conduct electricity with it. I can use it in medicine, in dentistry. Gold has a real purpose in the world. It is a commodity that is used throughout industry.”

He thinks Bitcoin’s recent highs are driven by ETF hype, perhaps a prime example of the “greater fool” theory:

“The public was dumping their gold stocks to put their money into these ETFs. But the problem is, when the people who bought these ETFs want to get out, it will be impossible. … There won’t be enough demand for the people who bought to get out. The price is going to crash. We’re going to see the biggest Bitcoin crash we’ve ever seen. … These are paper hands. They’re not diamond hands.”

Bitcoin and gold are categorically different assets, and investing in Bitcoin is a risky bet:

“Look, if you want to go in Bitcoin, take the money that you would have used to buy lottery tickets or if you’re planning a trip to Vegas, instead of playing craps or roulette, you can gamble with Bitcoin. But don’t confuse it with an investment. It’s not even a legitimate speculation. It’s just pure gambling.”

Be sure to check out Peter’s other recent interview on Fox Business, and stay tuned for Peter’s response later this week to Jerome Powell’s remarks made on Tuesday, April 16th.

Authored by Lance Roberts via RealInvestmentAdvice.com,

The latest National Federation of Independent Business (NFIB) survey was an economic warning that departed widely from more robust governmental reports. In a recent analysis of small businesses, we discussed the importance those business owners play in the economy.

“It is crucial to understand that small and mid-sized businesses comprise a substantial percentage of the U.S. economy. Roughly 60% of all companies in the U.S. have less than ten employees.

Small businesses drive the economy, employment, and wages. Therefore, the NFIB’s statements are highly relevant to the economy’s current state compared to the headline economic data from Government sources.”

While recent government data on economic growth and employment remain robust, the NFIB small business confidence survey declined in its latest reading. Not only did it fall to the lowest level in 11 years, but, as far as an economic warning goes, it remained at levels historically associated with a recessionary economy.

The decline in confidence should be unsurprising given the largest deviation of interest rates from their 5-year average since 1975. Higher borrowing costs impede business growth for small businesses, as they don’t have access to the bond market like major companies.

Therefore, as the economy slows and interest rates rise, small business owners turn to their local banks for operating loans. However, higher rates and tighter lending standards make access to capital more difficult.

Of course, given that capital is the lifeblood of any business, decisions on hiring, capital expenditures, and expansion hang in the balance.

Economic Warning – Capital Expenditures

It should be unsurprising that if the economy were expanding as quickly as headline data suggests, business owners would be expending capital to increase capacity to meet rising demand. However, in the most recent NFIB report, the percentage of business owners planning capital expenditures over the 3-6 months dropped to the lowest level since the pandemic-driven shutdown.

Again, given that small businesses comprise about 50% of the economy, there is more than just a casual relationship between their capital expenditure plans (CapEx) and real gross private investment, which is part of the GDP equation.

In other words, if small businesses cut back on CapEx, this will eventually translate into slower rates of private investment and, ultimately, economic growth in coming quarters.

As shown, the correlation between small business CapEx plans and economic growth should not be dismissed. While mainstream economists are becoming increasingly optimistic about an “economic reflation,” the economic warning between real GDP and CapEx suggests caution.

Of course, if small businesses are unwilling to increase CapEx, it is because there is a lack of demand to justify those expenditures. Therefore, if CapEx is falling, we should expect economic warnings from employment and sales.

Something Amiss With Sales

Many reasons feed into a small business owner’s decision NOT to invest in their business. As noted above, tighter bank lending standards and increased borrowing costs certainly weigh on that decision. However, if “business is booming,” business owners will find the capital needed to meet increased demand. However, looking deeper into the NFIB data, we find rising concerns about the “demand” side of the equation.

The NFIB publishes several data points from the survey concerning the “concerns” small business owners have. These cover many concerns, from government regulations to taxes, labor costs, sales, and other concerns confronting business owners. When it comes to the “demand” side of the equation, there are three crucial categories:

1. Poor sales (demand),

2. Cost of labor (the most significant expense to any business), and

3. Is it a “Good time to expand?” (Capex)

In the chart below, I have inverted “Good time to expand,” so it correlates with rising concerns about the cost of labor and poor sales. What should be obvious is that the average of these concerns escalates as economic growth weakens (recessionary periods) and falls during economic recoveries. Currently, these rising concerns should provide an economic warning to economists.

Examining sales and employment figures can help us understand why business owners remain pessimistic about the overall economy. The chart below shows the NFIB members’ sales expectations over the next quarter compared to the previous quarter. The black line is the average of both with a long-term median.

Unsurprisingly, business owners are always optimistic that sales will improve in the next quarter. However, actual sales tend to fall short of those expectations. The two have a very high correlation, which is why the average of both provides valuable information. Sales expectations and actual sales are well below levels typically witnessed during recessions. With sales (demand) weak, there is little need to increase production (supply) substantially.

Here is the economic warning to pay attention to. Real retail sales comprise about 40% of personal consumption expenditures (PCE), roughly 70% of the economic growth rate. The decline in the average of actual and expected sales of small businesses suggests weaker retail sales and, by extension, a slower economic growth rate.

Employment Warning

The demand side of the economic equation is crucially important. If the demand for a business owner’s products or services declines, there is little need to increase employment. Therefore, if economic growth was as robust as headlines suggest, why are small businesses’ plans to increase employment declining sharply?

Furthermore, when demand falls, business owners look to cut operating costs to protect profitability. While cutting future employment is part of that equation, so are plans to raise worker compensation.

The last chart is crucial. The U.S. is a consumption-based economy. However, consumers can not consume without producing something first. Production must come first to generate the income needed for that consumption. The cycle is displayed below.

As employees receive fewer compensation increases (raises, bonuses, etc.) amid rising living costs, they cut consumption, which translates into slower economic growth rates. In turn, business owners cut employment and compensation further. It is a virtual spiral that historically ends in recession.

While this time could certainly be different, the economic warnings from the NFIB survey should not be dismissed. The data could explain why the Fed is becoming more adamant about cutting rates.

While US futures are still modestly in the red, they are not only well off the worst overnight levels, but they are almost unchanged since yesterday's close following a performative Israeli retaliation. which followed a performative Iranian attack, which appears to be the end of the story. For those who missed it, early on Friday local time, explosions echoed over an Iranian city on Friday in what sources described as an Israeli attack, but Tehran played down the incident and indicated it had no plans for retaliation - a response that appeared gauged towards averting region-wide war. The limited scale of the attack and Iran's muted response both appeared to signal a successful effort by diplomats who have been working round the clock to avert all-out war since an Iranian drone and missile attack on Israel last Saturday. And so, after a whole lot of nothing overnight, as of 730am, S&P futures are practically unchanged at 5,045, Brent is actually lower compared to Thursday's close after briefly rising above $90 earlier, gold is unchanged, bonds are modestly firmer though have pared the majority of the overnight advances, and bitcoin is higher after aggressively dumping late on Thursday. There is nothing of significance on today's calendar.

Premarket, megacap tech are mostly lower: TSLA -1.8%, NVDA -1.1%, AMZN -95bp, META -91bp. NFLX tumbled fall 6.6% after the streaming-video company reported its first-quarter earnings. While the results were better than expected, with customer additions especially strong, its second-quarter revenue forecast was a slight disappointment. Here are some other notable premarket movers:

• First Solar shares gain 1.8% after an upgrade to overweight at Wells Fargo.
• Intuitive Surgical shares climb 2.2% after the medical equipment manufacturer reported adjusted earnings per share for the first quarter that beat the average analyst estimate.
• ON Semi shares slip 3.1% after a downgrade to underperform at BNPP Exane.
• Paramount shares jump 11% as Apollo Global and Sony are said to be considering a joint offer for the media company.
• Shopify advances 3.2% after the e-commerce company was upgraded to overweight from equal-weight at Morgan Stanley, which said upmarket share gains “support confidence in the durability of growth against tempered consumer-spending expectations.”

The latest fake escalation cap a dismal week for markets after solid economic readings and hawkish Fedspeak that have overturned Powell's December pivot and have forced investors to revise the timing of a keenly anticipated pivot to easier policy and the scale of potential rate cuts.

“With inflation sticky, central banks don’t have the option to look through spikes in oil prices, should they happen,” said Rajeev De Mello, a global macro portfolio manager at GAMA Asset Management. “They will have to revert to higher for longer rates which at this stage will be a shock to all markets.”

The latest the spook the market was NY Fed President John Williams who said while it isn’t his baseline expectation, even a rate hike is possible if warranted. His Atlanta counterpart Raphael Bostic said he doesn’t think it will be appropriate to ease until toward the end of 2024. The Fed may hold rates steady all year, Minneapolis Fed chief Neel Kashkari told Fox News Channel.

Meanwhile, on the geopolitical front, an Iranian military official signaled Tehran doesn’t feel compelled to react to the blasts which US officials say were caused by Israeli strikes, with semi-official Mehr agency quoting Army Commander-in-Chief Abdolrahim Mousavi saying Tehran has already reacted to Israeli threats. Despite Friday’s moves to allay fears of a wider war in the Mideast, the events are unsettling and will keep investors from taking bold bets, according to Michael Brown, strategist at Pepperstone Group Ltd. in London.

“No one will want to be short of crude and the havens ahead of the weekend,” he said. “From a risk-management perspective you can’t say definitively that geopolitical risk is done and dusted. So we may see another bout of de-risking. Ultimately it’s a case of people being reluctant to take on too much exposure.”

Europe's Stoxx 600 is down 0.4%, but it too reversed most of the overnight losses.  The food, beverage and tobacco sub-index leads gains whlie retail stocks decline the most. In company news, L’Oreal surged after better-than-expected quarterly sales. Here are the most notable European movers:

• L’Oreal (OR FP +4.3%) rises after the cosmetics maker’s like-for-like sales beat in the first quarter, quelling worries over a slowdown in the beauty market
• Royal Unibrew (RBREW DC +12%) soars after the brewer reported preliminary net revenue and Ebit that came ahead of consensus expectations
• Warehouses De Pauw (WDP BB +4.2%) rises after releasing 1Q earnings, with Oddo BHF seeing results broadly in line with expectations
• Sodexo (SW FP +1.9%) advances after the food services firm reported an organic revenue growth beat for the first half and raised its sales growth guidance
• Suess MicroTec (SMHN GY +4.4%) gains after Stifel upgraded its view on the semiconductor equipment maker to buy on its strong preliminary first-quarter
• Volvo (VOLVB SS -4.6%) falls after holder Geely sells the entirety of its class B shares in the truckmaker. Kepler Cheuvreux says the move is not much of a surprise
• Man Group (EMG LN -5.3%) falls after first quarter results showed net outflows of $1.6 billion in the period, mainly from the hedge fund firm’s alternative money pools
• Sartorius Stedim (DIM FP -4.8%) drops following results that disappointed investors. Intron Health cut its price target to the lowest among analysts tracked by Bloomberg
• EssilorLuxottica (EL FP -1.5%) falls after the glasses manufacturer reported revenue for the first quarter broadly in line with market expectations
• Schneider Electric (SU FP -2.6%) falls after announcing discussions with Bentley Systems on a potential strategic transaction. Oddo says it would be a good fit, but flags some questions surrounding the valuation
• Eurocash (EUR PW -4.8%) drops as the food retailer and wholesaler reported a 16% Ebitda deterioration in 1Q due to higher wages and a price war between discounters

In FX, the Bloomberg Dollar Spot Index is little changed while the Swiss franc remains the best performer among the G-10’s, rising 0.4% versus the greenback. The pound gains 0.1% with little reaction shown to weaker-than-expected UK retail sales data.

In rates, treasuries remain richer across the curve after paring the Asia-session advance sparked by reports Israel launched retaliatory strike on Iran. Yields lower by 4bp to 6bp as US trading gets under way, back toward middle of day’s range.  US 10-year yields around 4.58% after briefly dropping below 4.50% during Asia session; inverted 2s10s spread remains near lows of the day as intermediates outperform, flatter by around 2bp.  Fed rate-cut expectations edged higher, with OIS pricing in 41bp of easing by year-end vs 38bp at Thursday’s close. Treasury coupon auctions next week — final ones of the February-to-April financing quarter — include 2-, 5- and 7-year notes Tuesday to Thursday.

In commodities, WTI crude oil futures are down ~1% near $82/bbl after erasing a more than 4% surge above $86/bbl as media in both countries appeared to downplay the severity of the incident. Gold is unchanged around $2377.

Bitcoin rises 2% ahead of the halving event expected later Friday.

US economic data slate empty for the session; Fed speakers include Goolsbee at 10:30am, and Fed releases Financial Stability Report at 4pm.

Market Snapshot

• S&P 500 futures down 0.5% to 5,024.25
• MXAP down 1.7% to 167.50
• MXAPJ down 1.6% to 514.79
• Nikkei down 2.7% to 37,068.35
• Topix down 1.9% to 2,626.32
• Hang Seng Index down 1.0% to 16,224.14
• Shanghai Composite down 0.3% to 3,065.26
• Sensex up 0.7% to 73,010.87
• Australia S&P/ASX 200 down 1.0% to 7,567.28
• Kospi down 1.6% to 2,591.86
• STOXX Europe 600 down 0.7% to 496.11
• German 10Y yield little changed at 2.47%
• Euro little changed at $1.0647
• Brent Futures little changed at $87.12/bbl
• Gold spot up 0.1% to $2,382.51
• US Dollar Index little changed at 106.10

Top Overnight News

• Israel launched a retaliatory strike on Iran less than a week after Tehran’s rocket and drone barrage, according to two US officials. Iran downplayed the incident and said an attack by Israeli drones failed. The IAEA said no nuclear sites were damaged. Iran said it has no plans to retaliate immediately. BBG
• China ordered Apple to remove some of the world’s most popular chat messaging apps from its app store in the country, the latest example of censorship demands on the iPhone seller in the company’s second-biggest market. “We are obligated to follow the laws in the countries where we operate, even when we disagree,” an Apple spokesperson said. WSJ
• China to impose increased fees on imports of propionic acid from the US, a move that comes just days after Biden called for higher tariffs on Chinese steel/aluminum imports. WSJ
• Japan’s national CPI undershoots the Street in Mar, coming in at +2.9% (ex-food/energy) vs. the Street’s +3% forecast (and down from +3.2% in Feb). RTRS  
• Raphael Bostic reiterated his view that the Fed shouldn’t lower rates until closer to the end of the year, while Neel Kashkari raised the prospect of holding all year. BBG
• A full panel of 12 jurors has now been selected to decide Donald Trump’s criminal trial in Manhattan, the first for a former American president and a crucial challenge to his bid to regain the Oval Office. Several more alternate jurors still need to be chosen, but the judge overseeing the case indicated that opening statements could begin on Monday. NYT
• NVDA is the subject of a somewhat cautious cover story in Barron’s, with the article focused on the intense competition facing the company, from both 3rd parties (like AMD) and some of its largest customers. Barron's
• US bank reserves fell by $286 billion in the week through Wednesday — the largest drop in two years — as Americans paid income tax, Fed data show. Total holdings in the banking system were $3.33 trillion, a level Fed officials weighing the path for QT may characterize as abundant, though reserves are pushing nearer to scarcity. BBG
• Tesla recalled 3,878 Cybertrucks, an NHTSA notice showed. It said the accelerator pedal pad may dislodge and become trapped, causing the vehicle to accelerate unintentionally and increasing the risk of a crash. BBG

Earnings

• Netflix Inc (NFLX) Q1 2024 (USD): EPS 5.28 (exp. 4.52), Revenue 9.37bln (exp. 9.28bln), Q1 Subscriber Additions 9.33mln (exp. 5.11mln). Guides Q2 EPS USD 4.68 (exp. 4.54). Guides Q2 revenue USD 9.49bln (exp. 9.51bln). Guides Q2 Subscriber Additions to be lower in Q2 vs Q1 due to typical seasonality (exp. 3.51mln). Guides Q2 operating margin 26.6% (exp. 25.4%).Will stop reporting quarterly member ship number and ARM starting from Q1 2025 earnings. Shares -6.1% pre-market
• L'Oreal shares gained as much as 4.2% in the European session after strong results and making note of strong growth in China.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were lower across the board as the initial tech-related selling stemming from Wall St was exacerbated by reports of explosions in Iran following an Israeli operation although stocks are off today's worst levels as Iran downplayed and later denied the attack. ASX 200 was pressured with losses led by underperformance in tech and amid the bout of geopolitical-related turmoil. Nikkei 225 suffered intraday losses of around 3% and briefly dipped beneath the 37,000 level.
Hang Seng and Shanghai Comp. were lower but with losses only mild compared to the regional counterparts

Top Asian News

• BoJ Governor Ueda said there is a chance weak Yen may affect trend inflation and if so, could lead to a policy shift.
• Nissan (7201 JT) downgrades guidance: revises 2023/24 forecasts (JPY): Net 370bln (prev. 390bln), Operating 530bln (prev. 620bln); revision lower due to lower sales volume from and various cost reliefs made to suppliers e.g. inflation & other factors.
• Japanese Cabinet Secretary Hayashi says continue to closely monitor impact from oil prices on Japanese economy with a sense of urgency.
• South Korean regulator chief says will closely monitor markets and prepare to deploy market stabilising measures as needed

European bourses, Stoxx600 (-0.6%) are entirely in the red, with sentiment hit after Israel conducted an operation against Iran on a military airbase near Isfahan; though Iran later downplayed the attack, which helped to lift sentiment off worst levels, with contracts continuing to pare losses in otherwise quiet newsflow. European sectors hold a strong negative tilt; Industrials is found at the foot of the pile, with Schneider Electric (-1.9%) leading the losses. Autos are also lagging, after Nissan downgraded its guidance citing lower sales volume. US Equity Futures (ES -0.6%, NQ -0.8%, RTY 0.7%) are entirely in the red, though very much off worst levels seen overnight, sparked by the Israeli attacks on Iran. As for stock specifics, Netflix (-6.1%) is lower in the pre-market despite reporting strong headline metrics; however, the Co’s Q2 guidance fell short of expectations.

Top European News

• ECB's Vujcic said so far FX market has been very calm about the risk of Fed-ECB divergence.
• ECB's Kazaks says it is too soon to declare victory on inflation, economy isn't strong by confidence is improving. ECB takes the Fed into account.
• German government expects GDP to grow 0.3% in 2024 (prev. forecast of 0.2%), according to Reuters sources; sees inflation at 2.4% (prev. 2.8%).
• US President Biden weighs more than USD 1bln in new arms for Israel; Considering supply tank shells, mortars and vehicles, via WSJ

FX

• USD is mixed vs peers, with the Dollar softer against safe-havens JPY and CHF but out-muscling risk-sensitive AUD and NZD. DXY went as high as 106.35 before scaling back gains.
• EUR is firmer vs. the USD after recovering geopolitically-inspired losses overnight which dragged the pair to a 1.0611 trough; currently off lows at 1.065.
• Yen slightly firmer vs. the USD despite softer-than-expected Japanese inflation metrics overnight. Safe-haven status is likely playing a role here but ultimately the pair remains on a 154 handle after delving as low as 153.60.
• Antipodeans are both lower vs. the USD and suffering in the current risk environment. AUD/USD printed a fresh YTD trough at 0.6362, though has since pared.
• CBRT Survey: End 2024 CPI 44.16% (prev. 44.19%), 12-month CPI 35.17% (prev. 36.7%), 2024 GDP 3.3% (prev. 3.3%), end-2024 USD/TRY 40.0098 (prev. 40.5344). 12-month Repo Rate 38.18% (prev. 36.96%)

Fixed Income

• USTs have pulled back from overnight geopolitics-induced highs of 108-22+ with newsflow otherwise limited and the docket sparse as we approach the Fed blackout. USTs climbed over 20 ticks during the initial reporting of an Israel strike on Iran, before peaking and beginning to pullback as Iran downplayed the attacks.
• Gilts gapped higher by 20 ticks as the benchmark reacted to overnight developments, though USTs had already pared much of their move by this point hence the somewhat modest open. Further dovish-impetus drawn from another broadly unchanged UK Retail Sales M/M print. Gilts currently around the mid-point of 96.68-97.01 parameters.
• Bund price action has mimicked that of USTs, with little regional catalysts to spark a reaction. Currently just into the green and at the mid-point of the week's 130.97-132.55 range with the 10yr yield similarly holding a few bps shy of the 2.50% mark.

Commodities

• Brent futures rose as much as 4.2% on fears nuclear sites in Iran have been targeted, although as details emerged, the event proved to be much milder than initially reported, and thus crude future backtracked most of the upside. Currently higher by USD 0.50/bbl intraday, with Brent holding around USD 87.60/bbl.
• Precious metals are mixed trade across precious metals with spot gold well off best levels amid an unwind of the geopolitical risk premium after Israel's strike on Iran was found to be limited in nature whilst Iran has no immediate plans to retaliate.
• Base metals are mostly firmer amid the pullback in the Dollar and recovery in risk after Israel's attack on Iran was seemingly non-escalatory. Meanwhile, mainland Chinese markets were somewhat unfazed by geopolitics overnight vs regional peers.
• Commerzbank says for H2, expects Brent price level of USD 90-95/bbl; raises copper, sees year-end USD 9.8k/ton (prev. USD 9.2k).

Geopolitics: Middle East

• IAEA confirms that there was no damage to Iranian nuclear facilities.
• Senior Iranian Official says there is no plan for an immediate retaliation; no clarification on who is behind the incident.
• Israel's Channel 12 says "Army and security services estimate that the attack on Iran is over, but Israel maintains high alert", via Al Jazeera Breaking.
• "Jerusalem Post: Israeli planes fired long-range missiles targeting a facility belonging to Iranian forces in Isfahan", according to Sky News Arabia.
• Israel conducted an operation against Iran which an Iranian official said was on a military airbase near Isfahan. However, Iran's press TV later cited informed sources denying reports of a foreign attack in Iranian cities including Isfahan, according to Reuters.
• Initial reports on social media platform X noted explosions were heard near the city of Isfahan and Natanz in Central Iran where there are nuclear facilities, while Iranian state TV noted 'big explosions' were heard near Isfahan and there were also reports of Israeli strikes in southern Syria and Israeli warplane activity in Iraq. Furthermore, Iran International noted several flights were diverted over the Iranian airspace amid reports of an Israeli attack against a site in Iran and it was also reported that Israel told the US on Thursday it planned to conduct its response against Iran in 24-48 hours. However, it was later reported the explosions in Isfahan were drones being shot down and there were no ground explosions, while a US official noted that Israel conducted a strike on Iran but did not target nuclear facilities.
• Iran's senior commander Mihandoust said 'noise heard in Isfahan overnight was caused by air defence targeting one suspicious object', while he added 'there was no damage caused', according to Reuters.
• Iranian Foreign Minister told the UN Security Council that Iran "had no other option" but to attack Israel, while he added Iran's defence and countermeasures have concluded and Israel must be compelled to stop any further military adventurism against their interests. Furthermore, he warned if there is any use of force by Israel or violation of Iran's sovereignty, Iran's response will be decisive and proper to make Israel regret its actions.
• Senior Iranian Guards Commander said Tehran could review its nuclear doctrine and that nuclear sites are in "total security", while he added "Our hands are on the trigger, Israel's nuclear facilities have been identified". Furthermore, he said they are ready to launch powerful missiles to destroy designated targets in Israel and warned if Israel dares to hit their nuclear sites, they will surely hit back.
• US blocked the Palestinian request for full UN membership, while Israel's Foreign Minister said the 'shameful proposal' was rejected at the UN Security Council and he commended the US for vetoing the proposal. It was also reported that the Palestinian Presidency said it condemns the US veto of full Palestinian membership and Egypt said it regrets the inability of the UN Security Council to pass a resolution enabling Palestine to become a full member of the UN.

Geopolitics: Other

• Ukrainian PM Shmyhal said he welcomes progress on USD 61bln in US aid to Ukraine and is optimistic that the aid bill will soon be supported in the House, while he had important discussions with top US officials about using frozen Russian assets to benefit Ukraine and expect results this year.
• German Chancellor Scholz said NATO partners could deliver a further six patriot systems to Ukraine and Germany at the front.
• FBI Director Wray said Chinese government-linked hackers have burrowed into US critical infrastructure and are waiting for the right moment to deal a devastating blow, according to Reuters.
• North Korea's Deputy Foreign Minister held talks with Belarusian counterparts to improve cooperation, according to KCNA.

US Event Calendar

• Nothing scheduled

Central bank speakers

• 10:30: Fed’s Goolsbee Participates in Q&A

DB's Jim Reid concludes the overnight wrap

Markets are reacting to new developments in the Middle East overnight, as US officials have said that Israel had launched a missile strike against Iran . The news has raised fears that the conflict will escalate further, particularly since Iran had said they would respond to any attack, with the Iranian foreign minister having said they would “give a decisive and proper response” to any further military moves. The full details are still coming through, but Iran’s official news agency IRNA reported that they had activated air defence systems, and that flights in Tehran, Isfahan and Shiraz had been suspended. And the New York Times reported three Iranian officials had said a strike hit a military air base near Isfahan early this morning.

In response, Brent crude oil prices (+2.04%) have spiked up to $88.89/bbl, although they have come down from their peak of $90.75/bbl immediately after the news came through. More broadly, the effects have been clear across global markets, and futures on the S&P 500 are down -0.85% this morning, which would put the index on track for a 6th consecutive decline for the first time since October 2022. In the meantime, investors have moved into safe havens, and the 10yr Treasury yield is down -8.0bps this morning to 4.55%, whilst gold prices are up +0.15%. Asian equities have also seen a decisive move lower overnight, including the Nikkei (-2.37%), the KOSPI (-1.63%), the Hang Seng (-1.23%), the CSI 300 (-0.88%) and the Shanghai Comp (-0.40%).

Before all that, markets followed a familiar pattern yesterday, with an initial stabilisation giving away to further losses once again. That meant the S&P 500 (-0.22%) lost ground for a 5th consecutive session, which hasn’t happened since last October, and the NASDAQ (-0.52%) fell to its lowest level in almost two months. Moreover, the latest declines mean that the S&P 500 is on track to post a third consecutive weekly decline for the first time since September, and the NASDAQ is on track for a fourth consecutive weekly decline for the first time since December 2022. So this marks a big shift from the rapid rally we saw from November up to the end of March, and it now leaves the S&P 500 down -4.63% from its recent peak, even before any moves today that futures are currently indicating.

The selloff wasn’t confined to equities, and before the geopolitical developments overnight, sovereign bonds also fell thanks to strong US data, which led investors to become increasingly sceptical the Fed would cut rates this year. For instance, the weekly initial jobless claims were at 212k (vs. 215k expected) over the week ending April 13, offering further evidence that the labour market was still resilient. Moreover, the Philadelphia Fed’s business outlook moved up to 15.5 in April (vs. 2.0 expected), which is the strongest reading in two years.

That scepticism about rate cuts got added support by comments from New York Fed President Williams, who said “I definitely don’t feel urgency to cut interest rates.” In response to a question, he commented that another rate hike wasn’t his baseline but that “if the data are telling us that we would need higher interest rates to achieve our goals, then we would obviously want to do that”. Meanwhile, Atlanta Fed President Bostic said that “I’m comfortable being patient”, reiterating his view that the Fed “won’t be in a position to reduce our rates until toward the end of the year”. In fact by the close, the amount of cuts priced in by the December meeting fell to 39bps, which is the fewest so far this year, although that’s since risen overnight to 43bps. And in turn, that led to a decent selloff for US Treasuries, with the 10yr yield (+4.6bps) back up to 4.63%, whilst the 2yr yield (+5.4bps) ended the day at 4.99%.

Over at the ECB however, several speakers continued to sound increasingly confident about a June cut. For instance, Finnish central bank governor Rehn said “Provided that we are confident that inflation will continue converging to our 2% target in a sustained way, the time will be ripe in June to start easing the monetary policy stance and to cut rates”. Austria’s Holzmann, one of the most hawkish ECB members, said that “If inflation develops as expected and, above all, the geopolitical problems don’t worsen, there will likely be a majority for an interest rate cut in June”. We also got some hints on what the ECB approach might look like beyond June. Lithuania’s Simkus considered about three rates cut this year as a baseline, while Latvia’s Kazaks saw “no rush in kind of further pace of rate cuts”. By contrast, France’s Villeroy suggested that consecutive rate cuts may be in play, noting that “When we say meeting by meeting, it can be at each following meeting — I don’t think, for example, that we should concentrate our rate cuts at quarterly meetings when we have a new forecast.” All this meant European sovereign bonds saw a smaller rise in yields than US Treasuries, with those on 10yr bunds (+3.1bps), OATs (+2.5bps) and BTPs (+1.4bps) all moving higher.

That backdrop meant that equities had another tough session. Initially they had looked to post a better performance, and the S&P 500 had been up by +0.69% intraday. But that began to reverse around the European close, leaving the index down -0.22%, in its 5th consecutive decline. Tech stocks led the underperformance again, and the Magnificent 7 (-0.49%) lost further ground, led by a -3.55% decline for Tesla . That said, banks (+0.99%) and communication services (+0.66%) outperformed, and over in Europe, which closed earlier in the day, the STOXX 600 advanced +0.24%.

In terms of yesterday’s other data, US existing home sales fell to an annualised rate of 4.19m in March (vs. 4.20m expected). Otherwise, the Conference Board’s Leading Index was down -0.3% in March (vs. -0.1% expected), which took the index down to its lowest level since May 2020. Overnight, we’ve also got the news that Japanese inflation fell to +2.7% in March (vs. +2.8% expected).

To the day ahead now, and central bank speakers include BoE Deputy Governor Ramsden, the BoE’s Mann, the Fed’s Goolsbee, and the ECB’s Nagel. Otherwise, data releases include UK retail sales and German PPI for March.

The Cyberspace Administration of China asked Apple on Friday to remove Meta Platforms' WhatsApp and Threads from its App Store in China due to national security concerns. Signal and Telegram—two foreign messaging apps—were also removed from the Chinese App Store. The removal of the four apps comes as elites in Washington, DC, attempt to ban Chinese app TikTok from US phones. 

"We are obligated to follow the laws in the countries where we operate, even when we disagree. The Cyberspace Administration of China ordered the removal of these apps from the China storefront based on their national security concerns," Apple said in a statement, as quoted by Bloomberg. 

Apple continued, "These apps remain available for download on all other storefronts where they appear."

These four messaging apps allow users to bypass China's Great Firewall through virtual private networks. Beijing finds this troubling as citizens could be subjected to disinformation and misinformation content (created by foreign adversaries) that sparks social unrest or discontent with the communist regime. 

Bloomberg said the orders to nuke the four apps follow a prior "cleanup program Chinese regulators initiated in 2023 that was expected to remove many defunct or unregistered apps from domestic iOS and Android stores, including local ones. In August, China asked all mobile app developers to register with the government by the end of March, or cease operating." 

Rich Bishop, co-founder and chief executive officer of AppInChina, expressed concern that Chinese consumers will now be limited to domestic apps, with only a handful of international ones. He warned that this move by Beijing could further isolate Chinese citizens from the rest of the world.

The removals come at a time when Apple is navigating a delicate balance between complying with China's censorship-industrial complex and maintaining iPhone market share in the world's largest handset market. 

Last year, Apple was China's top smartphone maker, commanding over 17% of the market. However, Huawei is now challenging the US brand with new phone lineups, potentially shifting the dynamics. 

Meanwhile, on Capitol Hill, US lawmakers are actively pursuing a bill that would force Beijing-based ByteDance to divest TikTok or face a nationwide ban from app stores. This move underscores the ongoing tech war between the US and China. 

Speaker Mike Johnson plans to include the TikTok divestiture legislation in an aid package for Ukraine and Israel that can be voted on as early as Saturday. 

Submitted by QTR's Fringe Finance

There are few things I like more about NBA basketball than when a player gets so hot that it seems as though they can't miss a shot, no matter where they are shooting from. The legendary video game NBA Jam captured this beautifully, for those that remember.

A “heat check” is when a hot player takes what would normally be a shot that's borderline absurd because they are feeling so good and confident in their ability that they feel like they can “push it” a little. The difficult shot is supposed to be the determining factor as to whether or not the player is still "hot".

The point is that I'm having the same kind of “heat check” feeling about precious metals and hard money this week — let me explain why.

First off, the movement in gold has been absolutely outstanding — even Goldman Sachs raised their forecast to $2700/oz. this week. But still, the action in the precious metal has really only gotten limited coverage in the news media so far.

And if it isn't obvious by now, gold miner stocks are still extremely unloved. As I mentioned in my portfolio review of my 24 stocks I like for this year days ago, sentiment around miners remains horrific. Gold and the GLD is continually piercing through all-time highs, and miners and GDX are nowhere near all-time highs, let alone 52-week highs.

As the divergence between the gold spot price and miners continues to widen, it feels as though it is getting more and more blindingly obvious that miners remain one of the best places for value in the entire market.

Miners continue to be my top conviction pick, and I still think there is tons of runway. While gold spot prices have gotten a few mentions in financial media, the precious metal miners have gotten very few, if any. The sell signal I'll be looking for will be the days when the GDX performance has been so good that CNBC can do nothing but talk about miners. This is obviously a very, very, very long way off.

The purpose of this article—the reason why it is a “heat check” for gold and sound money assets—is because even though I've never been more bullish on gold, it’s important to understand that if the broader market crashes, gold will sell off with everything else. If the broader market starts to sell off for any reason—political conflict, overvaluation, election results—everything that isn't bolted down is going to be sold as people scramble for liquidity in a 5.5% interest rate environment. Gold, silver, bitcoin, and all commodities will likely be part and parcel with such a sell-off.

For example, on Monday when the market puked midday, it took gold with it. This is the same type of selling that would occur during a crash. The encouraging thing is that it didn't take but an hour or two for investors to realize that the sell-off was nonsensical, as the reason for the crash—escalating tensions in the Middle East—was actually bullish for gold. So, you can see the GLD diverge from the Nasdaq (QQQ) and finish the day positive despite falling with the indices midday.

This move is a microcosm of what I expect to happen when the broader market crashes at some point in the relatively near future as a result of high interest rates and a stretched consumer during an economic contraction: a crash with markets, followed by a recovery as the market remains decimated.

It's not even that the crash that will occur in metals will matter, seeing as how $2000 is likely now going to act as significant support for gold, and that's a price that is still 10 or 20% higher than most miners have modeled for the next couple of years. It's more about just keeping our heads screwed on straight right now, as there appears to be a lot of developments worthy of mixed feelings.

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As a gold investor, I said at the beginning of the year that I liked it not only because it was a commodity but also because it was a fiscal dominance/inflation hedge and a geopolitical hedge. All of the situations I raised at the beginning of the year now seem to be playing out at the same time, which frankly makes me feel a little conflicted. I don't want the US to be in an inflation crisis, nor do I want World War III to break out. However, as I said at the beginning of the year, it just seemed that these would be the most likely situations investors would be responding to this year, unfortunately. That said, it really doesn't make crowing about how right we have been about gold for the last decade enjoyable.

I'm cautiously optimistic about the way things are going, but just remember that it's called volatility because it can shock the market with unexpected outcomes. I personally plan to have cash on the sidelines and plenty of breathing room to be able to navigate whatever choppy waters may be ahead, even as gold rips.

Also on Monday, I sacrificed a couple of brain cells to let Charles Payne onto my TV since he was hosting Natalie Brunell and Peter Schiff debate bitcoin versus gold.

I've been pretty clear that my bitcoin allocation is far less than that of my gold position. I still think the precious metals are top dog when it comes to money. And even I get sick of listening to Peter Schiff crow about gold every time bitcoin is up and gold is down, but he did make some very good points during his appearance.

He noted that relative to one another—if you want to compare them both as types of assets—that bitcoin priced in gold has still not hit new all-time highs:

"Well, you know, gold's probably going to close at a new record high today. It's only a few dollars off now, above $2370. Gold is rising because the dollar, the Euro, and the Yen—fiat currencies—are losing value. Inflation is real, it's here to stay, it's not going anywhere near the Fed's 2% target. We're headed in the wrong direction. We'll probably be in double digits by next year, and eventually, the first digit isn't going to be a one.

Central banks are out in front of this; they're the main buyers. You know, a lot of Americans have been foolishly selling their gold to buy these Bitcoin ETFs. There's nothing elegant about losing your money in Bitcoin. Bitcoin is not going up; in fact, Bitcoin peaked two and a half years ago at about 37 oz. of gold. As we speak now, it's worth less than 27 oz. That's a 27% decline in 2 and a half years. This is a bear market."

On the other hand, Peter was using price to make his case:

"There's nothing sound about Bitcoin. It's losing the race right now. Take a look at your screen. Gold is up $25, $26, and Bitcoin is getting clobbered.”

Using price to make your case is something that when bitcoiners do it, Schiff is quick to remind them that “price is what you pay and value is what you get”. Personally, the price action for me is not an indicator of the fundamentals. On the contrary, the fundamentals are a driver of the price action. Companies don't perform better because their price goes up, for the most part. Usually, companies performed better and then their price goes up.

Natalie also made some points that I didn't particularly agree with, specifically when she claimed that bitcoiners don’t feel the need to attack gold:

“Oh, I know Peter, and you know what? Bitcoiners don't feel the need to constantly attack gold because we're not threatened by gold.”

This (bitcoiners attacking gold) is so prominent it was going to be the topic of an entire article for me this week, but I'm writing this article instead.

Natalie is dead wrong. Bitcoiners absolutely cannot stop infringing on otherwise happy gold and silver investors by constantly telling them they don't own enough bitcoin or that their allocation is too small. I see it every day that I tweet about gold — people respond to me and ask me why I waste my time with it, people are constantly telling me that I need more bitcoin or and bitcoiners are generally not staying out of the business of people who choose to own gold, either by itself or alongside bitcoin.

This is extremely toxic behavior. In my decade of working with short sellers and dealing with scams, a pump like this — where people go out of their way to unprovokedly tell you that you need to own something — always seems to be a common denominator. It just isn't a good look for bitcoin and it's why I wrote the article "Let Bitcoin Cook". In it, I made the argument that the community would be better served by simply shutting the f*** up and letting the asset do the talking.

For example, I'm a gold investor, but I don't tell people that are bitcoin-only that they need to own gold. Instead, I just mind my own business. Bitcoiners seem incapable of this. Natalie also gets it wrong when she says that gold “didn’t work” — yet it is the main reserve asset of many Central Banks, which is a dream scenario for bitcoiners (becoming a Central Bank reserve asset). During the interview, Natalie claims:

“I think the American dream has really been hijacked. We tried gold; it didn't work. It was papered over. That system has failed the American people, and Bitcoin does provide hope for us, the working class. We want to be able to work for something that has to be measured by a free market so that we can see real value emerge, as opposed to being captured by politics and bureaucracy, which ultimately is a system that benefits the few at the expense of everyone else…”

All this did was remind me of Celsius's Alex Minsky—now with his company bankrupt and dealing with criminal liability for running a crypto scheme—who said nearly the same nonsensical argument about gold, claiming in a debate with Peter Schiff that gold had "zero value".

Bitcoin and gold have different properties—each with their own positives and negatives—but anybody telling you that gold has zero value or has failed is either catastrophically misinformed or simply not arguing in good faith, in my opinion.

And so, we forge forward another day, where owning whatever sound money assets we want to own—gold, silver, commodities, housing, etc.—still remains the obvious choice. Tensions in the Middle East are still simmering, and the United States still has the urgency of fiscal dominance. By virtue of those two things alone, pretty much anything that has a fixed supply is going to wind up going up in price, in my opinion. If I had to deliver general advice in one saying it would be “take it easy…but take it”.

What I mean by that is embrace the fact that from an investment perspective, things appear to be moving as we planned, but don’t get cocky or arrogant, and to remember that in a broader market sell-off, nearly everything can drop in value. However, as the only tool in the Fed's toolbox remains printing money—which I believe they will do no matter how bad inflation is if the market crashes—any such crash in sound money would likely be short.

For today, the world hasn’t ended and the US is not experiencing hyperinflation. Treasury auctions haven't failed and the market is still living to fight for one more day. So, onward and upward — take it easy, but take it.

QTR’s Disclaimer: I am an idiot and often get things wrong and lose money. I may own or transact in any names mentioned in this piece at any time without warning. I didn’t double check any numbers or figures in this piece and am generally lazy with my research. Contributor posts and aggregated posts have not been fact checked and are the opinions of their authors. Contributor posts and curated content are posted either with the author’s permission or under a Creative Commons license. This is not a recommendation or solicitation to buy or sell any stocks or securities, just my opinions. I often lose money on positions I trade/invest in. Sometimes I just lose money by misplacing it. I’m generally irresponsible. I may add any name mentioned in this article and sell any name mentioned in this piece at any time, without further warning. These positions can change immediately as soon as I publish this, with or without notice. You are on your own. Do not make decisions based on my blog. Do your research elsewhere. I exist on the fringe. The publisher does not guarantee the accuracy or completeness of the information provided in this page. These are not the opinions of any of my employers, partners, or associates. I did my best to be honest about my disclosures but can’t guarantee I am right; I write these posts after a couple beers sometimes. Also, I just straight up get shit wrong a lot. I mention it numerous times because it’s that important that you know.

DNA-testing company 23andMe soared in the early cash session in New York on news that Anne Wojcicki, the CEO, plans to take the struggling company private after three years on the public markets. The company once sported a $6 billion valuation and has since collapsed to $235 million. 

Wojcicki's big announcement was made in a public filing late Wednesday. The filing stated that she "is considering making a proposal to acquire all of the outstanding shares of 23andMe." 

The filing noted that she would reject any other buyer taking over the company. Her ownership stake is around 20% of the total outstanding shares. This means she controls 49.99% of the company's voting power, making it impossible for anyone to purchase the human genetics and biopharmaceutical company. 

Around 1030 ET, shares of 23andMe jumped 48% to 53 cents a share. On Wednesday, they were at a record low of $0.36. 

Bloomberg data shows 32 million shares, or 10.77% of the float, is short. This leaves room for squeezes. 

In 2021, 23andMe went public through a special-purpose acquisition company sponsored by Virgin Group founder Richard Branson. At the time, the company's value jumped to $5.8 billion. By 2022, the valuation plunged to as low as $1 billion. 

"As sales of its DNA testing kits have slowed in recent years, 23andMe has pivoted to offering subscription products in hopes of creating repeat customers for its consumer business," Bloomberg pointed out. 

There were fears earlier this year that 23andMe would be sold to an overseas PE firm. Thankfully, this has not happened because it would be a national security risk. 

Authored by Jeffrey Tucker via The Brownstone Institute,

Those who involved themselves in Bitcoin markets after 2017 encountered a different operation and ideal than those who came before. Today, no one much cares about what came before, speaking of 2010-2016. They are only watching the upward price momentum and are thrilled for the increase in the asset valuation of their portfolio. 

Gone is the talk of separating money and state, of a market-based means of exchange, of genuine revolution that would extend from money to the whole of politics the world over. And gone is the talk of changing the operation of money as a means of changing the prospects for freedom itself. The enthusiasts around Bitcoin have different goals in mind. 

And during this entire period, the exact time when this digital asset might have protected multitudes of users and businesses from rapacious inflation growing out of the worst and most globalized experience of corporatist statism in modern history, made possible due to the money monopoly of central banks that funded the operation, the original asset that carries the symbol BTC was systematically diverted from its original purpose. 

The ideal was nicely articulated by F.A. Hayek in 1974. Much of his career as an economist was spent arguing for sound monetary policies. At every important turning point, he faced the same problem: governments and the institutions they serve did not want sound money. They wanted to manipulate the currency system to benefit elites, not the public. Finally, he refined his argument. He concluded that the only real answer was a complete divorce of money and power. 

“Nothing can be more welcome than depriving government of its power over money and so stopping the apparently irresistible trend towards an accelerating increase of the share of the national income it is able to claim,” he wrote in 1976 (two years after his Nobel Prize).

“If allowed to continue, this trend would in a few years bring us to a state in which governments would claim 100 per cent of all resources—and would in consequence become literally ‘totalitarian’.”

“It may turn out that cutting off government from the tap which supplies it with additional money for its use may prove as important in order to stop the inherent tendency of unlimited government to grow indefinitely, which is becoming as menacing a danger to the future of civilisation as the badness of the money it has supplied.”

The problem in achieving this ideal was technical and institutional. So long as state money worked, there was no real drive to change it. Certainly the push would never come from the ruling classes who benefit from the present system, which is precisely where every old argument for the gold standard faltered. How to get around this problem?

In 2009, a pseudonymous developer or group released a white paper, written in language for computer scientists and not economists, for a peer-to-peer system of digital cash. For most economists at the time, its functioning was opaque and not quite believable. The proof came in the functioning itself which unfolded over the course of 2010. To summarize, it deployed a distributed ledger, double-key cryptography, and a protocol of fixed quantity to release a new form of money that operationally tied together money itself and a settlement system in one. 

In other words, Bitcoin achieved the ideal about which Hayek could only dream. The key to making it all possible was the distributed ledger itself, which relied on the internet to globalize the nodes of operation, bringing a new form of accountability we had never seen in operation before. The notion of melding together the means of payment plus the mechanisms of settlement on this scale was something that had previously not been possible. And yet there it was, earning its way into the market with ever increasing valuations made possible by the distributed ledger. 

So, yes, I became an early enthusiast, writing hundreds of articles, even publishing a book in 2015 called Bit By Bit: How P2P Is Freeing the World.

I could not have known it at the time, but those were in fact the last days of the ideal and just before the protocol came to be controlled by a consolidated group of developers who jettisoned entirely the idea of peer-to-peer cash to turn it into a high-earning digital security, not a competitor with state-based money but rather an asset designed not to use but hold with third-party intermediaries controlling access. 

We saw all this unfold in real time and many of us were aghast. All that is left to us is to tell the story, which has not been done in a complete form until now. Roger Ver’s new book Hijacking Bitcoin does the job. It is a book for the ages simply because it lays out all the facts of the case and lets readers come to their own conclusion.

I was honored to write the foreword, which follows:

The story you will read here is of tragedy, the chronicle of an emancipationist monetary technology subverted to other ends. It’s a painful read, to be sure, and the first time this story has been told with this much detail and sophistication. We had the chance to free the world. That chance was missed, likely hijacked and subverted.

Those of us who watched Bitcoin from the earliest days saw with fascination how it gained traction and seemed to offer a viable alternative path for the future of money. At long last, after thousands of years of government corruption of money, we finally had a technology that was untouchable, sound, stable, democratic, incorruptible, and a fulfillment of the vision of the great champions of freedom from all history. At last, money could be liberated from state control and thus achieve economic rather than political goals—prosperity for everyone versus war, inflation, and state expansion.

That was the vision in any case. Alas, it did not happen. Bitcoin adoption is lower today than it was five years ago. It is not on a trajectory of final victory but on a different path to gradually increase in price for its earlier adopters. In short, the technology was betrayed by small changes that hardly anyone understood at the time.

I certainly did not. I had been playing with Bitcoin for a few years and was mainly astounded at the speed of settlement, the low cost of transactions, and the ability for anyone without a bank to send or receive it without financial mediation. That’s a miracle about which I wrote rhapsodically at the time. I held a CryptoCurrency Conference in Atlanta, Georgia, in October 2013 that focused on the intellectual and technical side of things. It was among the first national conferences on the topic, but even at this event, I noticed two sides coalescing: those who believed in monetary competition and those whose sole commitment was to one protocol.

My first clue that something had gone wrong came two years later, when for the first time I saw that the network had been seriously clogged. Transaction fees soared, settlement slowed to a crawl, and vast numbers of on-ramps and off-ramps were closing due to high compliance costs. I did not understand. I reached out to a number of experts who explained to me about a quiet civil war that had developed within the crypto world. The so-called “maximalists” had turned against widespread adoption. They liked the high fees. They did not mind the slow settlements. And many were involving themselves in the dwindling number of crypto exchanges that were still in operation thanks to a government crackdown. 

At the same time, new technologies were becoming available that vastly improved the efficiency and availability of exchange in fiat dollars. They included Venmo, Zelle, CashApp, FB payments, and many others besides, in addition to smartphone attachments and iPads that enabled any merchant of any size to process credit cards. These technologies were completely different from Bitcoin because they were permission-based and mediated by financial companies. But to users, they seemed great and their presence in the marketplace crowded out the use case of Bitcoin at the very time that my beloved technology had become an unrecognizable version of itself. 

The forking of Bitcoin into Bitcoin Cash occurred two years later, in 2017, and it was accompanied by great cries and screams as if something horrible was happening. In fact, all that was happening was a mere restoration of the original vision of the founder Satoshi Nakamoto. He believed with the monetary historians of the past that the key to turning any commodity into widespread money was adoption and use. It’s impossible to even imagine conditions under which any commodity could take on the form of money without a viable and marketable use case. Bitcoin Cash was an attempt to restore that. 

The time to ramp up adoption of this new technology was 2013-2016, but that moment was squeezed in two directions: the deliberate throttling of the ability of the technology to scale and the push of new payment systems to crowd out the use case. As this book demonstrates, by late 2013, Bitcoin had already been targeted for capture. By the time Bitcoin Cash came to the rescue, the network had changed its entire focus from use to holding what we have and building second-layer technologies to deal with the scaling issues. Here we are in 2024 with an industry struggling to find its way within a niche while the dreams of a “to-the-moon” price are fading into memory.

This is the book that had to be written. It is a story of a missed opportunity to change the world, a tragic tale of subversion and betrayal. But it is also a hopeful story of efforts we can make to ensure that the hijacking of Bitcoin is not the final chapter. There is still the chance for this great innovation to liberate the world but the path from here to there turns out to be more circuitous than any of us ever imagined. 

Roger Ver does not blow his own trumpet in this book, but he truly is a hero of this saga, not only deeply knowledgeable of the technologies but also a man who has clung to an emancipatory vision of Bitcoin from the earliest days through the present. I share his commitment to the idea of peer-to-peer currency for the masses, alongside a competitive marketplace for free-enterprise monies. This is a hugely important documentary history, and the polemic alone will challenge anyone who believes himself to be on the other side. Regardless, this book had to exist, however painful. It’s a gift to the world.

Does this story seem familiar? Indeed it does. We’ve seen this trajectory in sector after sector. Institutions born and built by ideals are later converted by various forces of power, access, and nefarious intent into something else entirely. We’ve seen this happen to digital tech in particular and the Internet generally, not to mention medicine, public health, science, liberalism, and so much else. The story of Bitcoin follows the same trajectory, a seemingly immaculate conception turned toward a different purpose, and serving again as a reminder that on this side of heaven, there will never be an institution or idea immune to compromise and corruption. 

While we're sure social media sites are busy moderating "misinformation" once again ahead of the all-important 2024 election, one influencer is using Instagram to give his followers tips on sneaking into Britain and making £6,000 a month working illegally in the drug trade.

'You know there are a lot of brothers and sisters in hardship. Can you show how to go there unnoticed, without being detected? How do they do it?' he says in one of his video clips. 

Kozak Braci, an Albanian social media influencer with over 500,000 followers on TikTok and Instagram, has hosted live tours of cannabis farms and offered insights into profiting from criminal activities in the UK during his streams, according to a new profile from the Daily Mail. 

The Daily Mail reported that one image captures Braci standing beside a man in a black SUV, with a house displaying the Union flag in the background. In another photo, the influencer, whose chest and right arm are adorned with tattoos of AK-47s, sports a Chelsea shirt in front of a red Audi.

Braci, who boasts that he earns £25,000 a month from his social media platforms, frequently posts pictures of himself with luxury cars and designer items.

"It's great to stay in the cannabis house. I can live there without a problem," he tells his followers. 

Graham Wettone, an ex-Met Police officer, reacted to the videos shown to him by characterizing them as glorifying drug production in the UK and enticing would-be criminals to come to Britain.

Earlier this year, it was revealed that the Home Office intends to pay Albanian influencers £100,000 to discourage their followers from entering Britain illegally. This modern twist on the public information film aims to reach groups susceptible to traffickers' falsehoods. The initiative, devised by Cass Horowitz of 'Brand Rishi' fame, has been criticized by activists as ineffective 'toy town tinkering.'

A United Nations report indicates that Albanian criminals now dominate the UK's cocaine market, importing the drug via south-east England's ports with the aid of violent European gangs. Among these, the Hellbanianz gang from East London openly flaunts its criminal endeavors on social media.

Additionally, in the first four months of the year, 80 Albanian migrants were collectively sentenced to 130 years in prison.

Tik Tok commented: "TikTok works closely with UK law enforcement, the National Crime Agency and organisations such as STOP THE TRAFFIK to fight this industry-wide issue, and our steadfast efforts helped reduce the number of small boat crossings last year, according to Border Officials. We continue to strictly maintain a zero tolerance approach to human exploitation and proactively find over 95% of content we remove for breaking these rules."

Meta responded: "We have removed the violating content brought to our attention. Buying, selling or soliciting drugs is not allowed on our platforms; our teams use a mix of technology and human review to remove this content as quickly as possible, and we work with the police and youth organisations to get better at detection."

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By Tsvetana Paraskova of Oilprice.com

Europe’s new car sales fell in March for the first time this year, dragged down by a decline in electric vehicle (EV) registrations and the timing of the Easter holidays, the European Automobile Manufacturers’ Association, ACEA, said on Thursday.   

All new car sales in the European Union car market dropped by 5.2% year-on-year to 1 million units in March, while passenger vehicle sales in Europe including non-EU members such as the UK and Norway fell by 2.8%, ACEA’s data showed.

In the EU, new electric vehicle sales slumped by 11.3% to 134,397 units in March, led by a major 29% decline in EV sales in the biggest European market, Germany.

Car sales in Norway, where most new vehicle registrations are EVs, plunged from over 19,000 cars in March 2023 to 9,750 units last month.

As EV sales fell in the EU, their market share shrank from 13.9% in March 2023 to 13% in the same month of 2024.

Among the three largest BEV markets, Belgium (+23.8%) and France (+10.9%) enjoyed double-digit increases, while Germany faced a significant decrease of 28.9%, ACEA said.

The EU saw a total of 332,999 new battery-electric cars registered during the first quarter of 2024, up by 3.8% compared to the same quarter last year.

Despite the general market decline, hybrid-electric car registrations in the EU jumped by 12.6% in March 2024, with France and Italy driving the increase. The share of hybrid car sales rose to 29% of the new sales last month, up from 24.4% in March 2023.

The slowdown in EV sales in recent months has not been limited to Europe.

Tesla, for example, saw its deliveries slump in the first quarter for the first annual drop since the start of the pandemic in 2020, missing analyst forecasts by a mile in a sign that even price cuts haven’t been able to stave off an increasingly heated competition on the EV market.