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Key Events This Week: GDP Revised Lower; PCE And Durables On Deck

Key Events This Week: GDP Revised Lower; PCE And Durables On Deck

This week one of the main highlights will take markets through what DB’s…

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Key Events This Week: GDP Revised Lower; PCE And Durables On Deck

This week one of the main highlights will take markets through what DB's Jim Reid calls "a full on Back to the Future and Quantum Leap (his favorite show as a teenager) moment" as the-every-5-years US GDP revisions take place on Thursday alongside the final Q2 2023 revisions (unch at 2.4% expected). GDP will be revised (lower) from Q1 2005 through Q1 2023, although revisions prior to the first quarter of 2013 will be offsetting across industries within each period. Gross domestic income (GDI) and select income components will be revised from Q1 1979 through Q1 2023. As Reid showed in a recent Chart of the Day, the current big gap between US GDI and GDP could be explained by erroneous recent data showing that net interest payments have been going down in the US as rates and yields have been soaring in the last 2 years.

While it's possible that revisions could make GDI look more healthy (interest payments add income to parts of the economy) but also make interest costs in the economy look more realistic and hurt fundamental models of interest cover for those indebted. Anyway, the revisions are potentially an important event and could make us think differently about the US economy in the recent past and therefore the future.

Outside of the downward GDP revision, the core PCE deflator on Friday is as important. DB economists point out that the data from the August CPI and PPI releases point to a slightly softer reading (+0.20% vs. +0.22% last month), which would have the effect of lowering the year-over-year growth rate by a little over 30bps (to 3.9%). As they highlight, the Fed's latest SEP forecast for Q4/Q4 core PCE inflation last week was 3.7%, which implies a modest re-acceleration in the monthly prints. This is one reason why they - and many others - believe that the bar is relatively high for the Fed to hike again before year-end.

Staying with inflation, over in Europe, the flash September CPIs kick off with prints from Germany on Thursday. The numbers for the Eurozone, France and Italy will be out on Friday. Friday also sees Tokyo CPI which is an important economy wide lead indicator as the BoJ considers more radical changes to its monetary policy soon.

Elsewhere in the US we have new home sales and consumer confidence tomorrow, durable goods on Thursday with trade numbers and personal income and consumption numbers on Friday.

In Europe, Germany sees the Ifo survey today, consumer confidence on Wednesday and labour market data on Friday. In France, consumer confidence will be out on Wednesday and consumer spending data is due Friday. Sentiment gauges will also be out in Italy and the Eurozone on Thursday.

Here is a day by day summary of key events this week courtesy of DB:

Monday September 25

  • Data: US September Dallas Fed manufacturing activity, August Chicago Fed national activity index, Japan August nationwide department store sales, Germany September Ifo survey
  • Central banks: Fed's Kashkari speaks, ECB's Villeroy speaks

Tuesday September 26

  • Data: US September Conference Board consumer confidence, Richmond Fed manufacturing index, business conditions, Philadelphia Fed non-manufacturing activity, Dallas Fed services activity, August new home sales, July FHFA house price index, Japan August services PPI
  • Central banks: Fed's Bowman speaks, ECB's Lane speaks
  • Earnings: Costco

Wednesday September 27

  • Data: US August durable goods orders, China August industrial profits, Germany October GfK consumer confidence, France September consumer confidence, Eurozone August M3
  • Central banks: BoJ minutes of July meeting
  • Earnings: H&M, Micron

Thursday September 28

  • Data: US September Kansas City Fed manufacturing activity, August pending home sales, initial jobless claims, Italy September manufacturing confidence, economic sentiment, consumer confidence, August PPI, Germany September CPI, Eurozone September services confidence, industrial confidence, economic confidence
  • Central banks: Fed's Powell, Cook and Goolsbee speak, ECB's Holzmann speaks
  • Earnings: Nike, Accenture, BlackBerry

Friday September 29

  • Data: US September MNI Chicago PMI, Kansas City Fed services activity, August personal income and spending, PCE deflator, advance goods trade balance, wholesale and retail inventories, UK September Lloyds business barometer, August net consumer credit, mortgage approvals, M4, Q2 current account balance, Japan September Tokyo CPI, consumer confidence index, August retail sales, jobto-applicant ratio, jobless rate, industrial production, housing starts, Italy September CPI, July industrial sales, Germany September unemployment claims rate, France September CPI, August PPI, consumer spending, Eurozone September CPI, Canada July GDP
  • Central banks: Fed's Williams and Barkin speak, ECB's Lagarde speaks

* * *

Finally, looking at just the US, Goldman writes that the key economic data releases this week are the durable goods report on Wednesday and the core PCE report on Friday. There are several speaking engagements from Fed officials this week, including chair Powell, governors Bowman and Cook, and presidents Kashkari, Goolsbee, Barkin, and Williams.

Monday, September 25

  • 10:30 AM Dallas Fed manufacturing activity, September (consensus -13.0, last -17.2)
  • 06:00 PM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Fed President Neel Kashkari will participate in Q&A at University of Pennsylvania’s Wharton School. A Q&A with audience is expected. On September 22, Kashkari said, “Consumer spending continues to exceed our expectations. I would have thought with 500bp or 525bp of interest rate increases we would have slammed the brakes on consumer spending, and it has not.”

Tuesday, September 26

  • 09:00 AM FHFA house price index, July (consensus +0.4%, last +0.3%)
  • 09:00 AM S&P Case-Shiller 20-city home price index, July (GS +0.8%, consensus +0.65%, last +0.92%)
  • 10:00 AM New home sales, August (GS -3.0%, consensus -2.2%, last +4.4%)
  • 10:00 AM Conference Board consumer confidence, September (GS 105.7, consensus 105.5, last 106.1)
  • 10:00 AM Richmond Fed manufacturing index, September (consensus -7, last -7)
  • 01:30 PM Fed Governor Bowman speaks: Fed Governor Michelle Bowman will deliver welcoming remarks at a Fed Communities event on rental housing affordability. Speech text is expected. On September 22, Bowman said, “Inflation is still too high, and I expect it will likely be appropriate for the (Federal Open Market) Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2% goal in a timely way…Progress on inflation is likely to be slow given the current level of monetary policy restraint.”

Wednesday, September 27

  • 08:30 AM Durable goods orders, August preliminary (GS -1.5%, consensus -0.5%, last -5.2%); Durable goods orders ex-transportation, August preliminary (GS +0.6%, consensus +0.1%, last +0.4%); Core capital goods orders, August preliminary (GS +0.6%, consensus +0.1%, last +0.1%); Core capital goods shipments, August preliminary (GS +0.4%, consensus -0.1%, last -0.3%): We estimate that durable goods orders fell 1.5% in the preliminary August report (mom sa), reflecting a further decline in commercial aircraft orders. We forecast stronger details however, including a 0.6% rise in core capital goods orders and a 0.4% rise in core capital goods shipments, reflecting a pickup in global industrial activity.

Thursday, September 28

  • 08:30 AM Initial jobless claims, week ended September 23 (GS 215k, consensus 215k, last 201k): Continuing jobless claims, week ended September 16 (consensus 1,675k, last 1,662k)
  • 08:30 AM GDP (third), Q2 (GS +2.1%, consensus +2.2%, last +2.1%); Personal consumption, Q2 (GS +1.7%, consensus +1.7%, last +1.7%): We assume no revision on net in the third vintage of the Q2 GDP report (previously reported at +2.1% qoq ar).
  • 09:00 AM Chicago Fed President Goolsbee (FOMC voter) speaks: Chicago Fed President Austan Goolsbee will deliver a speech on economic policy at the Peterson Institute for International Economics. A moderated Q&A is expected. On September 7, Goolsbee said, “We’ve seen a lot of components of inflation coming down. But the overall level of inflation is still above where we want it to be. And you would need to see [the slowing in inflation] continue with some persistence, to really be feeling like...we’re going to get all the way down.”
  • 10:00 AM Pending home sales, August (GS -5.0%, consensus -1.0%, last +0.9%)
  • 11:00 AM Kansas City Fed manufacturing index, September (consensus -2, last 0)
  • 01:00 PM Fed Governor Cook speaks: Fed Governor Lisa Cook will deliver closing remarks at the Minorities in Banking Forum. Speech text is expected. On September 22, when discussing the potential impact of AI on the economy and monetary policy, Cook said, “Empirical evidence is still patchy, but there is work showing that generative AI improves productivity in a variety of settings…Any large change in the labor force will generate disruptions and challenges that will need to be addressed to help workers adapt and thrive.”
  • 04:00 PM Fed Chair Powell speaks: Fed Chair Jerome Powell will host a town hall with educators. He will respond to questions from the in-person audience and participants who join the event virtually. In his post-FOMC press conference on September 20, Powell volunteered that neutral might have risen and that the short-run neutral rate could be higher than the longer run rate shown in the dot plot. We viewed the meeting as raising the bar for rate cuts next year and pushed the first cut in our forecast back from 2024Q2 to 2024Q4.
  • 07:00 PM Richmond Fed President Barkin (FOMC non-voter) speaks: Richmond Fed President Tom Barkin will deliver a speech on the monetary policy outlook at a Money Marketeers of New York University event. The event is open to media. On August 22, Barkin said, “the reacceleration scenario has come onto the table in a way that it really wasn't three or four months ago… If I got convinced that inflation was remaining high and demand was giving no signal that inflation was going to come down, that would make the case [for a higher fed funds rate].”

Friday, September 29

  • 08:30 AM Advance goods trade balance, August (GS -$89.5bn, consensus -$91.4bn, last -$90.9bn)
  • 08:30 AM Wholesale inventories, August preliminary (consensus -0.2%, last -0.2%)
  • 08:30 AM Personal spending, August (GS +0.5%, consensus +0.4%, last +0.8%); Personal income, August (GS +0.6%, consensus +0.4%, last +0.2%); PCE price index, August (GS +0.37%, consensus +0.5%, last +0.2%); Core PCE price index, August (GS +0.12%, consensus +0.2%, last +0.2%): We estimate personal spending decreased 0.3pp and personal income increased 0.4pp. We also estimate August core PCE inflation was +0.12% (mom) and headline PCE inflation was +0.37% (mom), corresponding to year-over-year rates of +3.79% and +3.38%, respectively.
  • 10:00 AM University of Michigan consumer sentiment, September preliminary (GS 67.9, consensus 67.7, last 67.7); University of Michigan 5–10-year inflation expectations, September preliminary (GS 2.8%, last 2.7%): We estimate consumer sentiment edged up 0.2pt and that the report's measure of long-term inflation expectations rebounded by 0.1pp to 2.8%, reflecting higher gasoline prices.
  • 12:45 PM New York Fed President Williams (FOMC voter) speaks: New York Fed President John Williams will speak at an event hosted by the Long Island Association. Speech text and a moderated Q&A are expected. On September 7, Williams said, “I think we’ve gotten monetary policy in a very good place in terms of we have a restrictive stance of policy…We’ll have to keep watching the data carefully analyzing all of that and really asking ourselves the question: is this sufficiently restrictive. Do we need to maybe raise rates again to make sure that we’re keeping that steady progress in terms of shrinking imbalances in the labor market and bring inflation back down?” He added, “all that talk about we're about to have a recession has vanished.”

Source: DB, Goldman, BofA,

Tyler Durden Mon, 09/25/2023 - 10:30

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Are Voters Recoiling Against Disorder?

Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super…

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Are Voters Recoiling Against Disorder?

Authored by Michael Barone via The Epoch Times (emphasis ours),

The headlines coming out of the Super Tuesday primaries have got it right. Barring cataclysmic changes, Donald Trump and Joe Biden will be the Republican and Democratic nominees for president in 2024.

(Left) President Joe Biden delivers remarks on canceling student debt at Culver City Julian Dixon Library in Culver City, Calif., on Feb. 21, 2024. (Right) Republican presidential candidate and former U.S. President Donald Trump stands on stage during a campaign event at Big League Dreams Las Vegas in Las Vegas, Nev., on Jan. 27, 2024. (Mario Tama/Getty Images; David Becker/Getty Images)

With Nikki Haley’s withdrawal, there will be no more significantly contested primaries or caucuses—the earliest both parties’ races have been over since something like the current primary-dominated system was put in place in 1972.

The primary results have spotlighted some of both nominees’ weaknesses.

Donald Trump lost high-income, high-educated constituencies, including the entire metro area—aka the Swamp. Many but by no means all Haley votes there were cast by Biden Democrats. Mr. Trump can’t afford to lose too many of the others in target states like Pennsylvania and Michigan.

Majorities and large minorities of voters in overwhelmingly Latino counties in Texas’s Rio Grande Valley and some in Houston voted against Joe Biden, and even more against Senate nominee Rep. Colin Allred (D-Texas).

Returns from Hispanic precincts in New Hampshire and Massachusetts show the same thing. Mr. Biden can’t afford to lose too many Latino votes in target states like Arizona and Georgia.

When Mr. Trump rode down that escalator in 2015, commentators assumed he’d repel Latinos. Instead, Latino voters nationally, and especially the closest eyewitnesses of Biden’s open-border policy, have been trending heavily Republican.

High-income liberal Democrats may sport lawn signs proclaiming, “In this house, we believe ... no human is illegal.” The logical consequence of that belief is an open border. But modest-income folks in border counties know that flows of illegal immigrants result in disorder, disease, and crime.

There is plenty of impatience with increased disorder in election returns below the presidential level. Consider Los Angeles County, America’s largest county, with nearly 10 million people, more people than 40 of the 50 states. It voted 71 percent for Mr. Biden in 2020.

Current returns show county District Attorney George Gascon winning only 21 percent of the vote in the nonpartisan primary. He’ll apparently face Republican Nathan Hochman, a critic of his liberal policies, in November.

Gascon, elected after the May 2020 death of counterfeit-passing suspect George Floyd in Minneapolis, is one of many county prosecutors supported by billionaire George Soros. His policies include not charging juveniles as adults, not seeking higher penalties for gang membership or use of firearms, and bringing fewer misdemeanor cases.

The predictable result has been increased car thefts, burglaries, and personal robberies. Some 120 assistant district attorneys have left the office, and there’s a backlog of 10,000 unprosecuted cases.

More than a dozen other Soros-backed and similarly liberal prosecutors have faced strong opposition or have left office.

St. Louis prosecutor Kim Gardner resigned last May amid lawsuits seeking her removal, Milwaukee’s John Chisholm retired in January, and Baltimore’s Marilyn Mosby was defeated in July 2022 and convicted of perjury in September 2023. Last November, Loudoun County, Virginia, voters (62 percent Biden) ousted liberal Buta Biberaj, who declined to prosecute a transgender student for assault, and in June 2022 voters in San Francisco (85 percent Biden) recalled famed radical Chesa Boudin.

Similarly, this Tuesday, voters in San Francisco passed ballot measures strengthening police powers and requiring treatment of drug-addicted welfare recipients.

In retrospect, it appears the Floyd video, appearing after three months of COVID-19 confinement, sparked a frenzied, even crazed reaction, especially among the highly educated and articulate. One fatal incident was seen as proof that America’s “systemic racism” was worse than ever and that police forces should be defunded and perhaps abolished.

2020 was “the year America went crazy,” I wrote in January 2021, a year in which police funding was actually cut by Democrats in New York, Los Angeles, San Francisco, Seattle, and Denver. A year in which young New York Times (NYT) staffers claimed they were endangered by the publication of Sen. Tom Cotton’s (R-Ark.) opinion article advocating calling in military forces if necessary to stop rioting, as had been done in Detroit in 1967 and Los Angeles in 1992. A craven NYT publisher even fired the editorial page editor for running the article.

Evidence of visible and tangible discontent with increasing violence and its consequences—barren and locked shelves in Manhattan chain drugstores, skyrocketing carjackings in Washington, D.C.—is as unmistakable in polls and election results as it is in daily life in large metropolitan areas. Maybe 2024 will turn out to be the year even liberal America stopped acting crazy.

Chaos and disorder work against incumbents, as they did in 1968 when Democrats saw their party’s popular vote fall from 61 percent to 43 percent.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Sat, 03/09/2024 - 23:20

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The…

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Veterans Affairs Kept COVID-19 Vaccine Mandate In Place Without Evidence

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

The U.S. Department of Veterans Affairs (VA) reviewed no data when deciding in 2023 to keep its COVID-19 vaccine mandate in place.

Doses of a COVID-19 vaccine in Washington in a file image. (Jacquelyn Martin/Pool/AFP via Getty Images)

VA Secretary Denis McDonough said on May 1, 2023, that the end of many other federal mandates “will not impact current policies at the Department of Veterans Affairs.”

He said the mandate was remaining for VA health care personnel “to ensure the safety of veterans and our colleagues.”

Mr. McDonough did not cite any studies or other data. A VA spokesperson declined to provide any data that was reviewed when deciding not to rescind the mandate. The Epoch Times submitted a Freedom of Information Act for “all documents outlining which data was relied upon when establishing the mandate when deciding to keep the mandate in place.”

The agency searched for such data and did not find any.

The VA does not even attempt to justify its policies with science, because it can’t,” Leslie Manookian, president and founder of the Health Freedom Defense Fund, told The Epoch Times.

“The VA just trusts that the process and cost of challenging its unfounded policies is so onerous, most people are dissuaded from even trying,” she added.

The VA’s mandate remains in place to this day.

The VA’s website claims that vaccines “help protect you from getting severe illness” and “offer good protection against most COVID-19 variants,” pointing in part to observational data from the U.S. Centers for Disease Control and Prevention (CDC) that estimate the vaccines provide poor protection against symptomatic infection and transient shielding against hospitalization.

There have also been increasing concerns among outside scientists about confirmed side effects like heart inflammation—the VA hid a safety signal it detected for the inflammation—and possible side effects such as tinnitus, which shift the benefit-risk calculus.

President Joe Biden imposed a slate of COVID-19 vaccine mandates in 2021. The VA was the first federal agency to implement a mandate.

President Biden rescinded the mandates in May 2023, citing a drop in COVID-19 cases and hospitalizations. His administration maintains the choice to require vaccines was the right one and saved lives.

“Our administration’s vaccination requirements helped ensure the safety of workers in critical workforces including those in the healthcare and education sectors, protecting themselves and the populations they serve, and strengthening their ability to provide services without disruptions to operations,” the White House said.

Some experts said requiring vaccination meant many younger people were forced to get a vaccine despite the risks potentially outweighing the benefits, leaving fewer doses for older adults.

By mandating the vaccines to younger people and those with natural immunity from having had COVID, older people in the U.S. and other countries did not have access to them, and many people might have died because of that,” Martin Kulldorff, a professor of medicine on leave from Harvard Medical School, told The Epoch Times previously.

The VA was one of just a handful of agencies to keep its mandate in place following the removal of many federal mandates.

“At this time, the vaccine requirement will remain in effect for VA health care personnel, including VA psychologists, pharmacists, social workers, nursing assistants, physical therapists, respiratory therapists, peer specialists, medical support assistants, engineers, housekeepers, and other clinical, administrative, and infrastructure support employees,” Mr. McDonough wrote to VA employees at the time.

This also includes VA volunteers and contractors. Effectively, this means that any Veterans Health Administration (VHA) employee, volunteer, or contractor who works in VHA facilities, visits VHA facilities, or provides direct care to those we serve will still be subject to the vaccine requirement at this time,” he said. “We continue to monitor and discuss this requirement, and we will provide more information about the vaccination requirements for VA health care employees soon. As always, we will process requests for vaccination exceptions in accordance with applicable laws, regulations, and policies.”

The version of the shots cleared in the fall of 2022, and available through the fall of 2023, did not have any clinical trial data supporting them.

A new version was approved in the fall of 2023 because there were indications that the shots not only offered temporary protection but also that the level of protection was lower than what was observed during earlier stages of the pandemic.

Ms. Manookian, whose group has challenged several of the federal mandates, said that the mandate “illustrates the dangers of the administrative state and how these federal agencies have become a law unto themselves.”

Tyler Durden Sat, 03/09/2024 - 22:10

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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