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Futures Inch To Record High After Walmart Earnings Smash Expectations; Dollar Hits 2 Year Low

Futures Inch To Record High After Walmart Earnings Smash Expectations; Dollar Hits 2 Year Low



Futures Inch To Record High After Walmart Earnings Smash Expectations; Dollar Hits 2 Year Low Tyler Durden Tue, 08/18/2020 - 08:00

Equities reversed initial losses in a morning devoid of economic data, which saw the Eurostoxx 50 turn solidly green after having dropped as much as 0.9% in early trading, while S&P futures also turned lower at first, before following Europe’s rebound to trade in the green. However, it was Walmart blowout earnings report at 7am that pushed the Emini back to the edge of all time highs despite fresh tensions between U.S. and China over Huawei. Elsewhere, treasuries edged higher and gold climbed back above $2,000 an ounce. Iron ore futures rallied to highest since 2014.


Walmart reported non-GAAP earnings per share for the second quarter that beat the highest analyst estimate:

  • Q2 revenue $137.7 million, estimate $135.61 billion
  • Q2 adjusted EPS $1.56, estimate $1.24.
  • Q2 total U.S. comp sales ex-gas +9.9%, estimate +6.2% (CM, average of 11 estimates)

Also of note, Walmart’s U.S. e-commerce sales rose 97% in the quarter, compared with the average analyst estimate of nearly 60%, suggesting that Amazon may be facing some heat as an online retail monopoly. That comes as the coronavirus has catalyzed online purchases, and Walmart has been a primary beneficiary thanks to its revamped website and a new partnership with Shopify to bring more merchants into its fold. Walmart is also planning to introduce a subscription program, dubbed Walmart+, that could challenge Amazon Prime and help it hold onto the millions of new shoppers it has picked up during the pandemic.

U.S. stock index futures edged higher on Tuesday, extending momentum from a tech-fuelled rally in the prior session that saw the Nasdaq hit a record high. Adding to futures upside, Home Depot also rose in pre-market trading after reporting sales growth that was more than double analyst estimates as Americans opened their wallets for home improvement. The home improvement chain rose 2.8% in premarket trade, setting it to hit a record high, after its quarterly comparable same-store sales were much better than expected, as people focused on home repair while staying indoors. Home Depot’s smaller rival Lowe’s and supermarket operator Target will report their quarterly earnings on Wednesday.

In the Stoxx Europe 600 Index, U.K. homebuilder Persimmon Plc was among the biggest gainers after sales reservations increased. The Stoxx 600 erased initial declines, with travel, insurance and banking names leading on the rebound. The FTSE 100 also pared losses to trade flat. The travel subgroup rose 1.1% after falling for two sessions over new travel restrictions imposed on major European countries

Earlier in the session, the S&P 500 futures hit a record high during Asian trade but later lost steam as caution over a Sino-U.S. spat grew after President Donald Trump announced further restrictions on tech giant Huawei Technologies. China firmly opposes the latest U.S. actions against Huawei, Foreign Ministry spokesman Zhao Lijian tells regular news briefing Tuesday in Beijing. Zhao reiterated China’s willingness to retaliate against U.S. actions and said the U.S. move is "nothing short of bullying."

The latest US-China tensions were not enough to spook Asian markets, which gained, led by health care and communications, after rising in the last session despite slumping chipmakers including Taiwan’s MediaTek, which dropped after the U.S. toughened restrictions on Huawei. Markets in the region were mixed, with Jakarta Composite and India's S&P BSE Sensex Index rising, and South Korea's Kospi Index and Taiwan's Taiex Index falling. The Topix was little changed, with Oisix ra daichi rising and Grace falling the most. The Shanghai Composite Index rose 0.4%, with Amlogic Shanghai and Guangdong Rongtai Industry posting the biggest advances.

In rates, despite the latest stock levitation, treasuries also edged higher although they pared gains as E-Minis flirted with record highs. Treasury futures were off the highs of the day into early U.S. session, although yields remain richer across the curve following continued Asia session buying. Yields were lower by as much as 2bp across long-end of the curve in bull flattening move with front-end yields anchored; both 2s10s, 5s30s spreads subsequently tighter by ~1bp. Treasury 10-year yields around 0.677% with gilts and bunds both little changed, slightly underperforming. Bund, treasury and gilt curves bull flatten; 10s trade off best levels, with treasuries outperforming bunds by 1bp.

In FX, the Bloomberg dollar index slid to the lowest level since 2018, weighed down by disappointing U.S. data and a deadlock in stimulus talks. Demand for the British pound in early London trading from corporate and algo accounts fueled broader dollar weakness, according to two traders in Europe. Sterling may gain further if there are positive developments between between U.K. and European Union officials after Brexit talks resumed Tuesday. The U.K. aside, the lack of news and a thin data calendar has kept the lower-dollar narrative going, spurring direct price action in the cash market. That’s pushed the euro and yen to fresh day highs.

In commodities, WTI and Brent front month futures oscillate between gains and losses as prices recover from overnight lows alongside the stock markets’ grind higher. The weekly API Private Inventory report is due today, with forecasts for headline crude inventories to have fallen ~2.9mln barrels over the last week. Elsewhere, spot gold and spot silver trade on a firm footing above USD 2000/oz and 26/oz respectively, aided by a softer USD. Base metals overnight continued to be bolstered by the PBoC’s recent liquidity injection, with Dalian iron ore rising some 3%.

Meanwhile, traders remain preoccupied with the prospect for more government stimulus. Democrats and Republicans have been deadlocked in negotiations over a stimulus package and the S&P 500 has stalled just below its February closing record.

"A lot of investment professionals as well as retail investors are on the sidelines partially because they are waiting for this second stimulus package,” Erin Gibbs, president and chief investment officer at Gibbs Wealth Management, said on Bloomberg TV. "It’s not a full-on risk-on environment just yet."

Looking ahead, investors will get further hints on the state of the U.S. housing market when July housing starts data is published later on Tuesday.  Expected data include housing starts. Home Depot, Kohl’s, Walmart and Agilent are reporting earnings.

Market Snapshot

  • S&P 500 futures little changed at 3,382.50
  • STOXX Europe 600 up 0.1% to 369.79
  • MXAP up 0.3% to 172.06
  • MXAPJ up 0.2% to 568.09
  • Nikkei down 0.2% to 23,051.08
  • Topix up 0.06% to 1,610.85
  • Hang Seng Index up 0.08% to 25,367.38
  • Shanghai Composite up 0.4% to 3,451.09
  • Sensex up 1.1% to 38,463.56
  • Australia S&P/ASX 200 up 0.8% to 6,123.36
  • Kospi down 2.5% to 2,348.24
  • German 10Y yield fell 0.8 bps to -0.459%
  • Euro up 0.2% to $1.1895
  • Italian 10Y yield fell 5.7 bps to 0.805%
  • Spanish 10Y yield fell 0.9 bps to 0.317%
  • Brent futures down 0.1% to $45.33/bbl
  • Gold spot up 1% to $2,005.05
  • U.S. Dollar Index down 0.3% to 92.60

Top Overnight News

  • Face-to-face Brexit negotiations are resuming Tuesday in Brussels. Both sides seek to find an agreement by the start of October, but so far neither the U.K. nor the EU have made enough concessions to reach a breakthrough.
  • Germany recorded its highest number of new daily Covid-19 cases in almost four months. The country’s infection rate held above the threshold of 1.0 -- meaning the spread of the virus is accelerating -- fueling fears about European virus resurgence. South Korea’s prime minister announced worship services and large gatherings are now banned in greater Seoul, as cases are rising in the capital and threatening to spread nationwide.
  • U.K. retailer Marks & Spencer announced plans to cut 7,000 jobs -- a tenth of its workforce -- in the next three months as a result of coronavirus impact.
  • China called the Trump administration’s decision to impose fresh restrictions on Huawei “nothing short of bullying” and said the move can only backfire.

Asian equity markets traded mixed following a similar indecisive performance for stocks on Wall St amid a lack of fresh developments on the macro front and with participants tentative ahead of the risk events later in the week. ASX 200 (+0.8%) and Nikkei 225 (-0.2%) were varied with Australia kept afloat by strength in healthcare, tech and metal miners as gold made its way back closer towards the USD 2000/oz level, although gains were capped for the index by disappointing earnings with financials pressured after Westpac scrapped its dividend citing a highly uncertain outlook and BHP shares were subdued by weaker results. Furthermore, consumer staples suffered after Coles reported a slump in pre-tax profits and with Treasury Wine Estates the worst performing stock due to China launching anti-dumping investigations on imports of Australian wine. Conversely, the Japanese benchmark was negative with exporters hampered by a stronger currency, while Hang Seng (+0.1%) and Shanghai Comp. (+0.4%) remained positive after the PBoC continued its liquidity efforts and with Hong Kong set to announce a 3rd round of COVID-19 relief, although tensions persisted as reports suggested the delay in trade review talks was likely due to a lack of atmosphere and the US also recently tightened restrictions on Huawei's access to US technology and semiconductors. Finally, 10yr JGBs were higher amid weakness in Japanese stocks and following the gains seen in T-notes, but with further gains restricted by mostly weaker results at the 30yr JGB auction in which the bid to cover and accepted prices declined from prior.

Top Asian News

  • Singapore Leads on Libor Replacement in Asia With Note Sale
  • China DNA Firm Unit Said to Consider $1 Billion Shanghai IPO
  • Jack Ma’s Ant Group Is Said to Plan Consumer Finance Firm
  • Turkey’s Lenders May Have to Borrow at Highest Central Bank Rate

European bourses trade mostly firmer [Euro Stoxx 50 +0.5%] after recovering from broad-based losses seen at the cash open, despite a lack of fresh catalysts and against the backdrop of thinner August volumes. The initial defensive bias seen across sectors has somewhat faded, with broader sectors now mostly higher with no clear risk profile to be derived. The detailed breakdown sees Travel & Leisure and Autos the top performers, whilst Banks and Financial Services hold onto losses amid a lower yield environment, whilst ECB’s VP de Guindos also noted that banks are unlikely to fully recovery from the pandemic before 2022. In terms of individual movers, Clariant (+5.2%) holds onto opening gains with traders citing reports yesterday that the group and China’s Chemtex have agreed on a biofuel partnership, in which the two parties will collaborate to market and sell Clariant’s sunliquid technology licenses, as well as services and supplies for advanced biofuel plants in China. Elsewhere, mining-giant BHP (-1.5%) remains subdued post-earnings after missing analyst expectations across a number of metrics, albeit share prices have lifted off lows alongside the broader markets, with BHP losses potentially cushioned by the announcement of thermal coalmine sales within two years. Meanwhile, AstraZeneca (+0.5%) outperforms the healthcare sector as the Co’s Imfinzi has been grated priority review in the US. Finally, the Bank of America August Global Fund Manager Survey showed that investors say long US tech was most crowded trade, then long gold, whilst top tail risks are COVID-19 second wave followed by US-China trade war and the US election.

Top European News

  • EU Is Most Preferred Equity Region Globally, BofA Survey Shows
  • Nordic Capital Said to Raise About $5.9 Billion For New Fund
  • U.K. Hits Online Realtor Purplebricks With Money-Laundering Fine
  • Pandora Sees 2020 Sales Falling as Much as 20% Amid Pandemic

In FX, another retreat in real rates for Gold bugs to embrace and reload long positions to the broad detriment of the Dollar, as the index retreats further to fresh ytd lows (92.469) after a failing to sustain gains above 93.000 in listless seasonal trade. Ahead, US housing data is highly unlikely to alter the landscape before Wednesday’s FOMC minutes, initial claims and flash PMIs, but tomorrow’s 20 year auction could conceivably impact Treasuries after last week’s Quarterly Refunding prompted pronounced bear-steepening with ramifications for the Greenback and other currencies by default.

  • GBP/CAD/JPY – The Pound has recovered from Monday’s lethargy and rebounded to the top of the major ranks, with Cable establishing a firmer base on the 1.3100 handle and within striking distance of early August highs (1.3186), while Eur/Gbp has drifted back down to pivot 0.9050. Elsewhere, the Loonie is extending advances vs its US counterpart beyond 1.3200 ahead of Canadian CPI tomorrow and not showing any real adverse reaction to news of Finance Minister Morneau’s resignation, while the Yen has made a decisive break through 106.00 to expose recent peaks around 105.32-30 in wake of an improvement in Japan’s Tankan index, albeit still deeply negative.
  • EUR/AUD/CHF – Also firmer against the Buck, as Eur/Usd retests resistance above 1.1900, the Aussie eyes loftier levels over 0.7200 amidst more constructive cross-flows down under and hardly a flinch on the RBA minutes that merely reiterated forward policy guidance (accommodation to continue as long as required alongside 0.25% 3 year yield target for progression towards full employment and inflation remit). Similarly, the Franc registered a new multi-year apex circa 0.9038 before Swiss trade and ip data on Thursday.
  • NZD/NOK/SEK – The G10 laggards, with the Kiwi still reeling from COVID-19 2nd wave concerns and also having to contend another dovish RBNZ call after ANZ joined the chorus anticipating further easing to -0.25% by early Q2 next year. Nzd/Usd is straddling 0.6550, but Aud/Nzd has extended to 1.1040+ following brief retracement through 1.1000 overnight. Meanwhile, the Swedish and Norwegian Krona have both lost impetus vs the Euro around 10.3300 and 10.5100 after a decline in industrial inventories and against the backdrop of waning crude prices.
  • EM – Most regional currencies are retrieving losses or appreciating further vs the Dollar, but yet again the Lira is flagging just above 7.4000 awaiting the latest CBRT rate meeting in stark contrast to the Yuan heading towards 6.9100 irrespective of ongoing US-China tensions outside of Phase 1 trade deal terms that Beijing claims will be adhered to even though the meeting to discuss progress has been delayed.

In commodities, WTI and Brent front month futures oscillate between gains and losses as prices recover from overnight lows alongside the stock markets’ grind higher. That being said, news flow has again remained light for the complex ahead of the JMMC meeting tomorrow – where no major surprises are expected. Meanwhile, Russian Energy Minister Novak has contracted the coronavirus, but is showing no symptoms and will tune in to tomorrow’s meeting via videocall. Before that, the weekly Private Inventory report is due today, with forecasts for headline crude inventories to have fallen ~2.9mln barrels over the last week. Elsewhere, spot gold and spot silver trade on a firm footing above USD 2000/oz and 26/oz respectively, aided by a softer USD. Base metals overnight continued to be bolstered by the PBoC’s recent liquidity injection, with Dalian iron ore rising some 3%. Separately, LME copper continues to grind higher as it tracks the stock markets and with falling LME inventories also supportive for the red metal. Finally, BHP’s outlook notes that there was extremely challenging demand in H1 for its products and expects iron ore prices to ease from current spot levels and China’s growth to moderate over time.

US Event Calendar

  • 8:30am: Housing Starts, est. 1.25m, prior 1.19m; Housing Starts MoM, est. 4.97%, prior 17.3%
  • 8:30am: Building Permits, est. 1.33m, prior 1.24m; Building Permits MoM, est. 5.33%, prior 2.1%

DB's Craig Nicol concludes the overnight wrap

It may have been another fairly slow summer Monday but yesterday was the closest yet that the S&P 500 (+0.27%) has come to striking a new all-time high on a closing basis. Just over 4 points separate it from a new record now. Yesterday was one of the more dull Monday’s that we’ve had though with the intraday range on the S&P 500 just 8.4pts points (0.25%) - the tightest daily range since the shortened trading day of Christmas Eve 2019 - while the VIX nudged down another -0.7pts to the lowest since February 21 now at 21.4.

The news that we did get included President Trump praising China’s purchases of corn, beef and soybeans, while Peter Navarro, the Director of the Office of Trade and Manufacturing Policy, said that the Phase One deal reached with China was on track. It’s hard to be upbeat about the progress of fiscal talks however, with Senate majority leader Mitch McConnell saying that although discussions were “still going on”, that “I can’t tell you with certainty we’re going to reach an agreement”. That being said, late last night there were reports that Senate Republicans are planning to introduce a new version of the stimulus bill that is more pared down than the $1tn bill already submitted. Overnight, Bloomberg reported that the pared down legislation would include a $300 a week enhanced unemployment benefit, money for small business aid, additional U.S. Postal Service funding and protection for employers against lawsuits stemming from Covid-19 infections.

Speaking of fiscal stimulus, we did hear yesterday about the prospect of further measures in Germany, where finance minister Scholz has proposed extending the country’s job support scheme from 12 to 24 months, in a move that will cost €10bn. A government spokesman said that Chancellor Merkel was open to the programme continuing in principle, and the proposal is interesting when you consider that Germany is set to undergo a more moderate contraction compared with its European partners this year (DB forecasting -6.4% decline in 2020 vs. -11.0% for both France and Italy).

The focus overnight has turned to the US Commerce Department’s decision to impose further restrictions on Huawei aimed at cutting the Chinese company’s access to commercially available chips. The new restrictions built upon the existing ones announced in May by adding 38 Huawei affiliates in 21 countries to an economic blacklist. Despite that news the Shanghai Comp +0.42% and Hang Seng +0.15% are still higher this morning along with the ASX (+0.74%), however the Nikkei -0.23%, Kospi -0.15% and Taiwan’s TAIEX index -0.42% are down. Meanwhile, futures on the S&P 500 are trading flat and yields on 10y USTs are down -1bp.

Back to yesterday, where talk of further stimulus didn’t dent the performance of sovereign bonds, which made gains on both sides of the Atlantic. By the close, 10yr yields on US Treasuries (-2.1bps), Bunds (-3.0bps) and Gilts (-2.7bps) had all fallen, and the spread of Italian yields over bunds fell by -2.7bps to their tightest in nearly 6 months. That move for Treasuries also saw the curve bull flatten, with 2s10s actually back down -2.7bps to 53.5bps having struck 56.6bps at the highs last week. Meanwhile, European equities similarly moved higher, with the STOXX 600 up +0.32%, while the dollar lost ground for a 4th straight session (-0.31%), putting it close to its 2-year low reached earlier in the month. The drop in yields and the dollar saw precious metals gain sharply. Gold gained +2.07% yesterday after enduring a weekly loss for the first time since the first week of June, while silver similarly rallied +3.93%.

While equities pushed on, credit was a touch weaker yesterday with IG and HY spreads ending +1bp and +3bps respectively in both USD and EUR. There was a milestone of sorts reached in the USD IG market however, with issuance hitting a new record of $1.34tn, and surpassing 2017’s full year total despite only being 8 months into the year.

In other news, the Democratic convention kicked off, though thanks to Covid-19 it was a much more subdued affair than in previous election cycles. There wasn’t a great deal that was newsworthy in the speeches, but we did get a Washington Post/ABC News poll out yesterday showing Biden with a 53-41 lead over President Trump. Overall, the RealClearPolitics polling average of the last two weeks shows the former Vice President 7.7pts ahead of President Trump.

As for data yesterday, the Empire State manufacturing survey for August came in at a lower-than-expected 3.7 (vs. 15.0 expected). However, it’s not worth over-interpreting the decline since this is a diffusion index, where respondents are simply asked whether conditions have improved or worsened, rather than by how much. The other release from the US was the NAHB housing market index for August, which rose to 78 (vs. 74 expected), matching its record.

Finally, looking at the day ahead, the data highlight will be US housing starts and building permits data for July. From central banks, we’ll hear from ECB Vice President de Guindos, and earnings releases include Walmart and Home Depot.

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Economic Death Spiral

Economic Death Spiral

Authored by Robert Stark via Substack,

Fed Trap: Financial Collapse or Hyper Inflation?

With this banking crisis,…



Economic Death Spiral

Authored by Robert Stark via Substack,

Fed Trap: Financial Collapse or Hyper Inflation?

With this banking crisis, which has serious Lehman vibes, it is a good time to revisit my article, Is This The End of The End of History, from March of last year. The article dealt with the theme of collapse vs stagnation, and historical cycles, in light of the Ukraine war, the post-pandemic climate, the onset of inflation, and speculation about economic collapse. A point of mine, that has especially been vindicated, is that “a delay in the Fed raising interest rates, could cause a short term rally in stocks, further expanding the bubble. The bigger the bubble, the worse inflation gets, and the longer the Fed keeps delaying raising rates, the worse the crash will be down the road.” For the most part, most of my geopolitical and economic forecasts have come true, though I actually predicted an economic collapse to occur sooner, which actually vindicates that point, that kicking the can down the road will just create a much worse crisis.

Despite countless signs of economic volatility, the recent bank failures, with shockwaves to the entire financial system, are a turning point, where it is clear that there is going to be a severe economic downturn. For instance, Elon Musk recently said, lot of current year similarities to 1929, and Moody’s cut the outlook on the entire U.S. banking system to negative from stable, citing a "rapidly deteriorating operating environment." Even the perma bulls, mainstream media, and financial “experts,” can no longer deny the obvious signs of economic peril. However, the bullish propaganda was still strong as recently as January, which was really the bulls’ last gasp, with the monkey rally, in response to the Fed only raising interest rates by .25 points, plus economic data showing record low unemployment plus a dip in inflation.

It is important to emphasize that the same figures in media, banking, and government, who were recently shilling a soft landing or mild recession, were previously saying that inflation is transitory. It is especially laughable to think that there are people who take someone like CNBC’s, Jim Cramer, seriously, who in 2008 told his audience don’t be silly on Bear Stearns, right before it crashed, and more recently shilled for Silicon Valley Bank, and is still predicting a soft landing. A lot of the recent propaganda is practically identical to right before the 08 crash, as well as during stagflation in the 70s, and even before the Great Depression, as the media has vested economic and political interests in propping up the markets. The financial YouTuber, Maverick of Wall Street, brilliantly uses this “self-love” gif of  Jack Nicholson, from the film, One Flew Over the Cuckoo’s Nest, as a metaphor for whenever perma-bulls see any data that may signify a Fed pivot, causing stocks to rally. As the desperation really kicks in, expect further talk of a soft landing, as well as more rallies in stocks, as we saw in response to the bailouts, as well as desperate investors switching back and forth between the NASDAQ and S&P500, which happened in 08. So any return to bullish sentiment is actually a sign of greater economic catastrophe. The stock market rallying over bad economy news, as a sign of a potential pivot, just further shows that the markets are not a good metric for the health of the economy. Not to mention that the top 1% own over half of all stocks.

It has always been the case with bubbles, that the greater the size of the bubble, the more copes to deny reality, and the more vested interests there are in preventing the inevitable crash. Certainly many corporations and banks have made economic decisions based upon an assumption of a soft landing or Fed pivot. This also explains the gaslighting to justify that the 2010s economic boom, especially in tech, was based upon productivity and innovation, when it was primary due to Fed monetary policy, plus data mining in the case of Big Tech. While it is silly for conservatives to blame wokeness as the primary culprit of bank failures, wokeness and bullshit DEI jobs, are a symptom of the corruption that Fed policy enabled. 

Fed Balance Sheet: Return to QE


The current banking crisis is triggering more stock buybacks, and a return to Quantitative Easing with the bank bailouts, including plans to inject another $2 Trillion into the banking system, on top of the $300 billion increase in the Fed’s Balance Sheet, in just the last week. This seems counter intuitive, as QE caused inflation, but the economy is so addicted to the “Cocaine,” that is  cheap money. So basically quantitative tightening is being implemented and interest rates raised  to stop inflation, but as soon as the first major economic disruption of raising rates is felt, then a return to financial policies to further prop up the bubble, causing more inflation. Now the Fed is trapped with two bad options, raise rates or pivot, both of which will lead to inevitable economic doom.

Populists can talk about nationalizing the banks into public debt free banking, and Austrian School libertarians can call for ending the Fed, and returning to a gold standard. While it is true that the Federal Reserve is a corrupt system, that is quasi private in how private banks own shares, the reality is that we are stuck with this system of relying upon the Fed’s interest rates, for the incoming economic crisis. If the Fed continues raising rates, there will be a liquidity crisis, with more bank failures. While interest rates were close to zero, banks used uninsured deposits to both invest in securities and purchase bonds, and thanks to fractional reserve banking, banks are only required to hold a fraction of deposits. So when rates rose, bonds fell in value and unrealized losses surged, so the banks were not able to pay off their depositors.


Regional banks make up about half of all US banking, so any contagion in the banking system, as people and businesses move their deposits to mega banks, deemed “too big to fail,” could trigger a Depression. One of the main reasons that the economy has not crashed sooner is because more people have been tapping into their savings and maxing out their credit cards. However, high interest rates will cause many people to default on their credit card debt, which will exacerbate the banking crisis. Not to mention Auto loans defaults wiping out credit unions, and the potential for another mortgage crisis, due to rising mortgage rates. There is a ripple effect, as far as rising interest rates being felt by debt holders, and now is just the tip of the iceberg. This could end up being a multifaceted debt crisis, in banking, corporate debt, personal debt, and government debt.

Besides the Fed likely pivoting soon due to the banking crisis, higher rates will make interest payments on the National Debt too expensive to pay off, risking a default on government debt. Overall levels of debt, both public and private, are much worse than when Fed Chair, Volcker, raised rates very high to successfully quell inflation. Any freeze in Federal spending or a default on the national debt, in response to the debt ceiling, will crash the economy, and any major extension in the debt ceiling will accelerate inflation. There is a good chance that inflation will be tolerated, with the dollar greatly devalued, to make government debt cheaper so that creditors eat the costs.

Source: Peter G. Peterson Foundation

A tight labor market is the main case that the bulls make to prove a strong economy. However, the official BLS jobs numbers are “baked” to exclude those who have given up on seeking employment, as well as counting 2nd or 3rd jobs. Not to mention that the BLS numbers were exposed by the Fed as overstating 1 million jobs during 2022. Even if one accepts the “baked” numbers, layoffs have a lagging effect on unemployment, including by industry (eg. tech layoffs before service sector). Now new jobless claims have grown at the fastest pace since Lehman'. It is also noteworthy that just about every recession has been preceded by low unemployment numbers. The increase in layoffs will put further pressure on the Fed to pivot, which on top of increased unemployment benefits, will cause inflation to surge again. This creates another doom loop, as inflation leads to more unemployment, as consumers are forced to cut back on spending.

Source: ZeroHedge

While bulls can say that this time is different from past crashes, all of the signs are pointing to this crisis being much worse than previous crashes. For instance, the economic recovery, after Volcker was done raising rates to fight inflation, was possible because of lower levels of debt, but the US has never entered a recession with debt/GDP at 125% and deficit/GDP at 7% in at least 85 years. Also the fallout of the 2008 crash was mitigated by a strong dollar, which also minimized the effects of inflation last year, but inflation will surge if the dollar is weakened. Despite signs of a pivot, the Fed has been moving much faster to fight inflation, then in the past, even with Volker. This crisis is also unique in that rates are being raised while entering a severe recession, and inflation could coincide mass layoffs. While the general assumption is that severe economic downturns are deflationary, financial commentator, Peter Schiff, makes a compelling case as for why an Inflationary Depression is a likelihood. Under this nightmare scenario, which would be much worse than even the Great Depression, inflation will negate any of the remedies that ended past crises, such as the New Deal, quantitative easing in 08, and the covid stimulus. Other signs of economic peril include, the steepest yield curve inversion since the early 80s recession, which is a barometer that has predicted just about every single recession, a major decline in ISM manufacturing sales, a big decline in savings rates, and Americans’ credit card debt approaching a record $1 Trillion.


This is the perfect storm with inflation, stagflation, recession, a potential debt crisis, as well as energy and supply chain issues. With this bubble to end all bubbles or too big to fail on steroids, the Fed has two choices, cause a liquidity crisis by shrinking the money supply, or letting inflation rip. While raising rates appears to be the least bad of these two options, further rate hikes are futile with the return of QE. A combo of QE plus interest rates having to remain high, is what could lead to that scenario of inflationary financial collapse, that Peter Schiff warned about. Though most likely it will either be long term stagflation or a deflationary Depression. This is not a hyperbole, nor clickbait, but a Depression is a very real possibility, especially if policy makers continue to kick the can down the road, to prop up the bubble.

*  *  *

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Tyler Durden Tue, 03/21/2023 - 17:25

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Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

Authored by Jordan Schachtel via ‘The Dossier’…



Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis

Authored by Jordan Schachtel via 'The Dossier' Substack,

Last Thursday marked the three year anniversary of the infamous “15 Days To Slow The Spread” campaign.

By March 16, yours truly was already pretty fed up with both the governmental and societal “response” to what was being baselessly categorized as the worst pandemic in 100 years, despite zero statistical data supporting such a serious claim.

I was living in the Washington, D.C. Beltway at the time, and it was pretty much impossible to find a like-minded person within 50 miles who also wasn’t taking the bait. After I read about the news coming out of Wuhan in January, I spent much of the next couple weeks catching up to speed and reading about what a modern pandemic response was supposed to look like.

What surprised me most was that none of “the measures” were mentioned, and that these designated “experts” were nothing more than failed mathematicians, government doctors, and college professors who were more interested in policy via shoddy academic forecasting than observing reality.

Within days of continually hearing their yapping at White House pressers, It quickly became clear that the Deborah Birx’s and Anthony Fauci’s of the world were engaging in nothing more than a giant experiment. There was no an evidence-based approach to managing Covid whatsoever. These figures were leaning into the collective hysteria, and brandishing their credentials as Public Health Experts to demand top-down approaches to stamping out the WuFlu.

To put it bluntly, these longtime government bureaucrats had no idea what the f—k they were doing. Fauci and his cohorts were not established or reputable scientists, but authoritarians, charlatans, who had a decades-long track record of hackery and corruption. This Coronavirus Task Force did not have the collective intellect nor the wisdom to be making these broad brush decisions.

Back then, there were only literally a handful of people who attempted to raise awareness about the wave of tyranny, hysteria, and anti-science policies that were coming our way. There were so few of us back in March in 2020 that it was impossible to form any kind of significant structured resistance to the madness that was unfolding before us. These structures would later form, but not until the infrastructure for the highway to Covid hysteria hell had already been cemented.

Making matters worse was the reality that the vast majority of the population — friends, colleagues, peers and family included — agreed that dissenters were nothing more than reckless extremists, bioterrorists, Covid deniers, anti-science rabble rousers, and the like.

Yet we were right, and we had the evidence and data to prove it. There was no evidence to ever support such a heavy-handed series of government initiatives to “slow the spread.”

By March 16, 2020, data had already accumulated indicating that this contagion would be no more lethal than an influenza outbreak.

The February, 2020 outbreak on the Diamond Princess cruise ship provided a clear signal that the hysteria models provided by Bill Gates-funded and managed organizations were incredibly off base. Of the 3,711 people aboard the Diamond Princess, about 20% tested positive with Covid. The majority of those who tested positive had zero symptoms. By the time all passengers had disembarked from the vessel, there were 7 reported deaths on the ship, with the average age of this cohort being in the mid 80s, and it wasn’t even clear if these passengers died from or with Covid.

Despite the strange photos and videos coming out of Wuhan, China, there was no objective evidence of a once in a century disease approaching America’s shores, and the Diamond Princess outbreak made that clear.

Of course, it wasn’t the viral contagion that became the problem.

It was the hysteria contagion that brought out the worst qualities of much of the global ruling class, letting world leaders take off their proverbial masks in unison and reveal their true nature as power drunk madmen.

And even the more decent world leaders were swept up in the fear and mayhem, turning over the keys of government control to the supposed all-knowing Public Health Experts.

They quickly shuttered billions of lives and livelihoods, wreaking exponentially more havoc than a novel coronavirus ever could.

In the United States, 15 Days to Slow The Spread quickly became 30 Days To Slow The Spread. Somewhere along the way, the end date for “the measures” was removed from the equation entirely.

3 years later, there still isn’t an end date…

Anthony Fauci appeared on MSNBC Thursday morning and declared that Americans would need annual Covid boosters to compliment their Flu shots.

So much of the Covid hysteria era was driven by pseudoscience and outright nonsense, and yet, very few if any world leaders took it upon themselves to restore sanity in their domains. Now, unsurprisingly, so many elected officials who were complicit in this multi-billion person human tragedy won’t dare to reflect upon it.

In a 1775 letter from John Adams to his wife, Abigail, the American Founding Father wrote:

“Liberty once lost is lost forever. When the People once surrender their share in the Legislature, and their Right of defending the Limitations upon the Government, and of resisting every Encroachment upon them, they can never regain it.”

Covid hysteria and the 3 year anniversary of 15 Days To Slow The Spread serves as the beginning period of a permanent scar resulting from government power grabs and federal overreach.

While life is back to normal in most of the country, the Overton window of acceptable policy has slid even further in the direction of push-button tyranny. Hopefully, much of the world has awakened to the reality that most of the people in charge aren’t actually doing what’s best for their respective populations.

Tyler Durden Tue, 03/21/2023 - 18:05

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From the bed sheets to the TV remote, a microbiologist reveals the shocking truth about dirt and germs in hotel rooms

The filthy secrets of hotel rooms and why you might want to pack disinfectant on your next trip.




Relaxing in filth? Pexels/Cottonbro studio

For most of us, staying in a hotel room is either something of a necessity – think business travel – or something to look forward to as part of a holiday or wider excursion.

But what if I told you there’s a large chance your hotel room, despite how it might appear to the naked eye, isn’t that clean. And even if it’s an expensive room, that doesn’t necessarily mean it’s any less dirty.

Indeed, whoever has stayed in your room prior to you will have deposited bacteria, fungi and viruses all over the furniture, carpets, curtains and surfaces. What remains of these germ deposits depends on how efficiently your room is cleaned by hotel staff. And let’s face it, what is considered clean by a hotel might be different to what you consider clean.

Typically, assessment of hotel room cleanliness is based on sight and smell observations –- not on the invisible microbiology of the space, which is where the infection risks reside. So let’s take a deep dive into the world of germs, bugs and viruses to find out what might be lurking where.

It starts at the lift

Before you even enter your room, think of the hotel lift buttons as germ hotspots. They are being pressed all the time by many different people, which can transfer microorganisms onto the button surface, as well back onto the presser’s fingers.

Communal door handles can be similar in terms of germ presence unless sanitised regularly. Wash your hands or use a hand sanitiser after using a handle before you next touch your face or eat or drink.

The most common infections people pick up from hotel rooms are tummy bugs – diarrhoea and vomiting – along with respiratory viruses, such as colds and pneumonia, as well as COVID-19, of course.

Hotel door opening.
Welcome to germ paradise. Pexels/Pixabay

Toilets and bathrooms tend to be cleaned more thoroughly than the rest of a hotel room and are often the least bacteriologically colonised environments.

Though if the drinking glass in the bathroom is not disposable, wash it before use (body wash or shampoo are effective dishwashers), as you can never be sure if they’ve been cleaned properly. Bathroom door handles may also be colonised by pathogens from unwashed hands or dirty washcloths.

Beware the remote

The bed, sheets and pillows can also be home to some unwanted visitors. A 2020 study found that after a pre-symptomatic COVID-19 patient occupied a hotel room there was significant viral contamination of many surfaces, with levels being particularly high within the sheets, pillow case and quilt cover.

While sheets and pillowcases may be more likely to be changed between occupants, bedspreads may not, meaning these fabrics may become invisible reservoirs for pathogens – as much as a toilet seat. Though in some cases sheets aren’t always changed between guests, so it may be better to just bring your own.

Less thought about is what lives on the hotel room desk, bedside table, telephone, kettle, coffee machine, light switch or TV remote – as these surfaces aren’t always sanitised between occupancies.

TV remote lying on pink bedding.
Handle with care: the TV remote is often one of the dirtiest items in a hotel room. Pexels/Karolina grabowska

Viruses such as the norovirus can live in an infectious form for days on hard surfaces, as can COVID-19 – and the typical time interval between room changeovers is often less than 12 hours.

Soft fabric furnishings such as cushions, chairs, curtains and blinds are also difficult to clean and may not be sanitised other than to remove stains between guests, so washing your hands after touching them might be a good idea.

Uninvited guests

If all those germs and dirty surfaces aren’t enough to contend with, there are also bedbugs to think about. These bloodsucking insects are experts at secreting themselves into narrow, small spaces, remaining dormant without feeding for months.

Small spaces include the cracks and crevices of luggage, mattresses and bedding. Bed bugs are widespread throughout Europe, Africa, the US and Asia – and are often found in hotels. And just because a room looks and smells clean, doesn’t mean there may not be bed bugs lurking.

Woman making bed in hoteroom.
Get those cushions off the bed straightaway. Pexels/Cottonbro studio

Fortunately, bed bug bites are unlikely to give you a transmissible disease, but the bite areas can become inflamed and infected. For the detection of bedbugs, reddish skin bites and blood spots on sheets are signs of an active infestation (use an antiseptic cream on the bites).

Other signs can be found on your mattress, behind the headboard and inside drawers and the wardrobe: brown spots could be remains of faeces, bed bug skins are brownish-silvery looking and live bed bugs are brown coloured and typically one to seven millimetres in length.

Inform the hotel if you think there are bed bugs in your room. And to avoid taking them with you when you checkout, carefully clean your luggage and clothes before opening them at home.

As higher-status hotels tend to have more frequent room usage, a more expensive room at a five-star hotel does not necessarily mean greater cleanliness, as room cleaning costs reduce profit margins. So wherever you’re staying, take with you a pack of antiseptic wipes and use them on the hard surfaces in your hotel room.

Also, wash or sanitise your hands often – especially before you eat or drink anything. And take slippers or thick socks with you so you can avoid walking barefoot on hotel carpets – known to be another dirt hotspot. And after all that, enjoy your stay.

Primrose Freestone does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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