tybs
morning
Q1 GDP Unexpectedly Misses Despite Stimmy-Funded Spending Surge
With the US economy overheating in virtually every aspect, with inflation scorching hot and with retail spending at record highs, all funded of course by trillions in fiscal stimulus, it was actually a surprise to see that annualized Q1 GDP was reported at "only" 6.4%, which while an improvement to the 4.3% in Q4 missed consensus expectations of 6.6%, and certainly missed the whisper numbers some of which were even in the double digit range. Is this all the growth that $2 trillion in stimulus can buy?
The highlight of the report is surely that personal consumption soared 10.7% in 1Q after rising 2.3% prior quarter, and contributed more than 100% of the final GDP print. This was the 2nd biggest jump in consumption since the 1950s with just the stimulus-frenzy fueled Q3 2020 coming in higher. Final sales to private domestic purchasers q/q rose 10.6% in 1Q after rising 5.5% prior quarter, while nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 9.9% in 1Q after rising 13.1% prior quarter.
According to the BEA, the jump in Q1 growth reflected the "continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. In the fourth quarter of 2020, real GDP increased 4.3 percent."
The BEA also noted that real disposable personal income (DPI)—personal income adjusted for taxes and inflation—increased 61.3% in the first quarter after decreasing 10.1% in the fourth quarter of 2020. The increase in current-dollar DPI primarily reflected an increase in government social benefits related to pandemic relief programs, notably direct economic impact payments to households established by the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. Personal saving as a percent of DPI was 21.0 percent in the first quarter, compared with 13.0 percent in the fourth quarter of 2020.
Finally for those keeping tabs on PCE, the GDP price index rose 4.1% in 1Q after rising 2.0% prior quarter while core PCE q/q rose 2.3% in 1Q after rising 1.3% in the prior quarter.
Prices of goods and services purchased by U.S. residents increased 3.8% in the first quarter of 2021 after increasing 1.7% in the
fourth quarter of 2020. Energy prices increased 46.7% in the first quarter while food prices decreased 0.1% (check back on that in a few weeks). Excluding food and energy, prices increased 3.1 percent in the first quarter after increasing 1.6 percent in the fourth quarter of 2020.
https://www.zerohedge.com/markets/q1-gdp-unexpectedly-misses-despite-stimmy-funded-spending-surge
Shakeup in Iran's presidential office after leaked FM tape
Iran's president on Thursday replaced the head of a government think tank after a recording of a conversation with the country’s foreign minister leaked out this week. The tape, meant for government records, provided a rare glimpse into the theocracy’s power struggles and set off a firestorm in Iran.
The conversation took place as an interview with Foreign Minister Mohammad Javad Zarif by Saeed Leilaz, an economist. The tape was to be kept by the Strategic Studies Center, the think tank associated with Iran’s presidency. In the recording, Zarif offers a blunt appraisal of diplomacy and his constricted role in the Islamic Republic.
Iran's presidency announced Thursday that Hessameddin Ashena, head of the Strategic Studies Center, had resigned and that Cabinet spokesman Ali Rabiei replaces him. Ashena was also reportedly present during the interview with Zarif.
The audio tape, leaked earlier this week to London-based, Farsi-language news channel Iran International, set off political controversy across Iran ahead of the country’s June 18 presidential election. While Zarif has said he does not want to run in the election, some have suggested him as a potential candidate to stand against hard-liners in the vote.
On Wednesday, President Hassan Rouhani, who after eight years in office is restricted by term limits from running in the June election, lashed out over the recording's release. He said the interview was part of a wider project with government officials and also urged for an investigation into how the tape was leaked. Zarif can be heard saying at various points in the tape that it was not meant for release. The recording runs a total of some seven hours.
Also Thursday, the semi-official ISNA news agency reported, citing an informed source in the judiciary, that 15 people connected to the interview have been banned from leaving the country.
Zarif’s leaked remarks included cutting references to the limits of his power and those of Gen. Qassem Soleimani, a top commander in Iran’s paramilitary Revolutionary Guard who was killed in a drone strike in Baghdad.
Earlier this week, Zarif expressed regret over the affair, saying his remarks had been misinterpreted. Rouhani portrayed the breach as intended to derail ongoing talks over the return to Iran's tattered nuclear deal with world powers.
https://www.seattlepi.com/news/article/Shakeup-in-Iran-s-presidential-office-after-16138049.php
Russian FM Lavrov: US Relations Now Worse Than Cold War
Russian Foreign Minister Sergei Lavrov warned that the state of US-Russia relations is now even worse than during the Cold War. His Wednesday comments during a televised interview might be easily dismissed as hyperbole, given there's not something that's quite equivalent to the Cuban missile crisis happening right now, but it does accurately convey things in terms of lack of simple communications at a diplomatic level. He said it was the "lack of respect" in the current climate that makes things worse.
Lavrov explained Moscow has a desire to normalize ties with Washington but that should the Biden administration refuse respectful dialogue, "we would live in conditions of a ‘Cold War’ or worse."
"During the Cold War, the tensions were flying high and risky crisis situations often emerged, but there was also a mutual respect," he said as cited in The Associated Press. "It seems to me there is a deficit of it now." Whether or not this dangerous trajectory in lack of "respect" and communications will continue is likely to be determined on whether the proposed Biden-Putin summit actually takes place this summer. In the past days there's been multiple reports from both sides signaling the meeting is in preparation for a European country for mid-June.
The latest on Russia's view on summit progress comes via the AP as follows: Speaking in an interview with Russian state television, Lavrov noted that Moscow has had a "positive" attitude to U.S. President Joe Biden’s proposal to hold a summit with Russian President Vladimir Putin, but added that Russia still needs to analyze all aspects of the initiative.
Indeed US-Russia relations have reached a low point arguably even when compared to the height of the Ukraine and Crimea crisis of 2014 and 2015...Amid a flurry of claims that Russia was building up troops in preparation for some kind of Ukraine action or offensive last month into this month (claims that Kiev officials have been pushing hard), the White House slapped sanctions on Moscow for the SolarWinds hack and 'interference'-related charges, while also expelling ten Russian diplomats.
The Kremlin responded in kind with the expelling of American officials, including a blacklist of top government and intelligence officials who are banned from travel to Russia.
https://www.zerohedge.com/geopolitical/russian-fm-lavrov-us-relations-now-worse-cold-war
roger dat
Taiwan bans recruitment from China to combat chip talent poaching
Taiwan has told staffing companies to remove all listings for jobs in China, a drastic move to prevent the outflow of vital tech talent to the mainland amid rising tensions between Taipei and Beijing.
The Labor Ministry said that all Taiwanese and foreign staffing companies on the island as a general rule may no longer post openings for jobs located in China, especially those involving critical industries such as integrated circuits and semiconductors, according to a notice seen by Nikkei Asia. The move comes as Beijing seeks to build up the mainland's semiconductor industry -- a goal that has intensified demand for Taiwanese engineers.
"Due to geopolitical tension between the U.S. and China, China's semiconductor development has suffered some setbacks and as a result China has become more aggressive in poaching and targeting top Taiwanese chip talent to help build a self-sufficient supply chain," the ministry said in the notice.
Recruitment platforms and headhunters are barred from helping or representing any company in efforts to hire individuals for work in mainland China. Violators face fines from the ministry. "If the recruitment involves semiconductors and integrated circuits, the penalty will be even higher," the notice said.
Taiwan's biggest recruitment platform, 104 Job Bank, told clients in a letter Wednesday to "please close your job vacancies in China as soon as possible to avoid violating the law," citing the ministry notice. 104 Job Bank confirmed to Nikkei Asia that it is contacting clients individually via email and phone to help them avoid breaking the regulations. The platform said that job listings in China already have fallen by half as of Thursday night, from 3,774 vacancies to 1,872. "We don't foresee impact on us, but it is likely to affect enterprises seeking talents on the platform, as there's not enough grace period for these new regulations," a spokesperson at the platform said. Taiwan's Labor Ministry did not respond to Nikkei Asia's request for comment as of publication.
The new rules apply not only to mainland and foreign companies, but also Taiwanese businesses such as iPhone assemblers Foxconn and Pegatron that have massive manufacturing bases in China, a 104 Job Bank spokesperson said.
Companies like Foxconn "will also have to remove all of their job listings on the platform first, and then put them back on under their Chinese subsidiaries, which are already approved by Taiwan's Investment Commission for operating in China," according to the spokesperson.
https://asia.nikkei.com/Business/Tech/Semiconductors/Taiwan-bans-recruitment-from-China-to-combat-chip-talent-poaching
Feeding Chickens Is So Costly It’s Changing Global Trade Flows
Feeding the world’s chickens, pigs and cows has gotten so expensive it’s upending global trade flows.
As grain prices surge, American chicken giant Perdue Farms Inc. took the rare step of buying soybeans, an American staple, from rival Brazil. BRF SA, Brazil’s top poultry producer, turned to neighboring Argentina for corn, while feed makers in China and the U.S. are buying wheat more commonly used for bread.
These tactics and others by the world’s top food companies highlight how tight the global market has become. A gauge of grain prices is at an eight-year high, boosting the cost of feeding animals and signaling higher meat prices could be coming for consumers. Still, keeping up with rising meat demand as the world recovers from the pandemic has industry executives saying the rally is far from over. “The meat and chicken industries still have good margins, so higher prices are yet to curb their appetite,” said Brian Williams, a senior vice president at Macquarie Group Ltd. in New York. “However, corn prices have risen enough that in some parts of the U.S. wheat is being dialed in.”
It may all seems simple, but changing the diet of animals comes with some risk: wheat shouldn’t be fed to younger cattle and cows can get bloated if they eat too much of it. Researchers at North Dakota State University recommend that wheat make up no more than 15% of an animal’s diet when it’s being introduced. The color of a bird’s skin can also vary depending on what it eats, with corn-fed chicken looking yellowish, a trait shunned in some countries. “You can’t switch a cattle’s diet, or any animal’s diet really very abruptly,” said Tyler Beaver, a founder of brokerage Beaf Cattle Co. in Arkansas. “They stagnate on their growth when you change anything very much.”
Perdue is importing 31,450 metric tons of Brazilian soybeans as U.S. supplies dwindle, with vessel Four Turandot set to sail from the northern port of Barcarena next month. Concerns about a smaller corn crop in Brazil known as safrinha has sent prices surging in the South American nation, opening up the opportunity for BRF to purchase two cargoes from Argentina. “When prices get high and supplies are tight you tend to get out of the ordinary moves,” said Stephen Nicholson, a senior grain and oilseed analyst at Rabobank. “Importing soybean into the U.S. is a psychological blow to the market and sometime backs price down.”
China is buying wheat from several countries as corn prices rise, and Brazil is also picking up some, said Juan Luciano, chief executive officer of Archer-Daniels-Midland Co., one of the world’s biggest agricultural commodities traders. American corn arriving in China will soon be more expensive than wheat, he said in an earnings call this week. High prices are starting to cut into margins for poultry and pig producers in Brazil, but prices aren’t yet high enough to curb demand, said Paulo Sousa, chief executive officer of Cargill Inc. in Brazil. Any feed switching in the South American nation will be limited as Brazil is already a wheat importer. “Corn and soybean meal are the big components of animal feed, so there aren’t a lot of options,” he said.
In the U.S., some feed makers in the southern Plains bought up wheat in March and April, when prices were close to that of corn, said Joe Nussmeier, a broker at Frontier Futures in Minneapolis. Feed makers and meat packers could soon get some relief. While U.S. acreage estimates disappointed the markets earlier this year, prices have surged since the survey was carried out. That will likely spur more plantings. Supplies may be bigger than expected if farmers held back on providing their full planting intentions to prevent prices from falling. Also, growers renewing agreements with the agency to keep land aside for environmental purposes are now bringing these areas back into production due to higher prices, agri-tech startup Farmers Business Network said in March. “We see the possibility of new acres to be found” as farmers respond to price gains, said Fabio Sandri, chief executive officer of second-biggest U.S. chicken producer Pilgrim’s Pride Corp. Higher feed prices compressed the company’s profit margins even as demand for chicken was rising.
For now, the world is still facing a shortage of feed grains, while wheat supplies are expected to be more ample. If corn prices continue to rally, it won’t take much to keep more wheat moving into animals’ diets. Corn futures climbed to $6.84 a bushel this month, the highest since 2013.
https://www.bnnbloomberg.ca/feeding-chickens-is-so-costly-it-s-changing-global-trade-flows-1.1597023
b-b-but inflation is transitory according to Jerome
>>49049 pb
BOXER41 USAF C-40C departed Hattiesburg, MS after an overnight
97-0401 USAF G5 departed JBA west (this AC was SAM2A on 0423 and was used for kneepads visit to NH transporting the press to Laconia Airport NH instead of the 757-There was AF2 SAM2A and SAM3A
N22PP National Park Police (Dept. of Interior) Bell 412 back to the Eagle's Nest from over JBA and environs
SCORE77 US Navy P-8 Poseiden up from Pax River and over C-Bay and western MD
DRAGO51 USAF KC-135 tanker on the track just se of JBA with a run nw and sw nao
Still no Joe visible yet
>>47697 pb Federal Reserve Bank of New York Reverse Repo(s) April 8-23: $625.35B
US Sells Treasury Bills At 0% For The First Time Since The Covid Crash
While 4-week Treasury Bill rates had dipped negative on occasion over the past several months, the last time the 4-Week Bill priced at a 0.000% investment rate was during the post-covid crash scramble, when the 4-Week printed at 0.000% on the March 26 auction.
Until today that is, because moments ago, the Treasury sold $40BN in 4-week bills at a price of 100.000% representing a rate of 0.00%. To be sure, Bills had printed at 0.000% at auction previously, but that was largely during the reserve glut days of 2015. So why now? The same reason usage of the Fed's Reverse Repo facility has soared in recent weeks for nothing to over $100 billion....as investors choose to directly transact with the Fed - where only positive rates are allowed - rather than the open market where collateral rates have frequently been negative in recent weeks, as Curvature's Scott Skyrm explains in this note from April 26:
Overnight rates are low. Too low by all normal standards. The fed funds rate is well below the mid-point of the fed funds target range and the Repo GC rate is at zero; often trading negative. Zero percent interest rates are forcing billions of dollars of cash into the Fed's RRP facility; a total of $100.9 billion went there today.
While this This is a delightful case of deja vu irony - the Fed is taking Treasurys out of the market through QE purchases and putting them right back in via the RRP - it is also distorting the Repo market, and although the Fed can fix this aberration by hiking the IOER or RRP rates, it has so far refused to do so.
If the Fed wants to push Repo rates higher, an IOER hike would help. Raising the IOER will move fed funds, which, in turn, will put upward pressure on Repo rates. As an alternative, the Fed could increase the RRP rate - currently at zero. This is most favored by economists. However, increasing the RRP will mean cash investors sending more cash to the Fed each day.
This is also having a knock-on effect on Treasury bills, which have been under pressure as the government is reducing its issuance of short-term securities in order to draw down its mammoth cash balance so it can comply with a possible debt-ceiling reinstatement and to cover expenses. As Bloomberg writes, in its survey of dealers ahead of the next refunding announcement, the Treasury Department has asked about “the impacts that reinstatement of the debt limit could have on the Treasury market as well as on broader financial markets.” Related to that, it has also asked about for expectations for bill supply over the next three months and adjustments in issuance.
The good news is that negative bill rates at auction are not possible (yet). The bad news is that as the Treasury continues to draw down on its cash, the rate on 4-week (and soon 8-week and so on) auctions will be 0.000% while secondary market yields will dip negative again, encouraging the return the infamous ZIRP/NIRP auction arbitrage trade which we observed a year ago.
https://www.zerohedge.com/markets/us-sells-treasury-bills-0-first-time-covid-crash
they'll get there soon as these will get tossed back and forth cause nobody wants 'em.
as far as wut does that mean for markets?
The issue will be the counterparties not having the ability to make these purchases and that will force them to sell assets to come up with the amounts to do it.
A similar thing started the 2008 market event in September.
FRBNY hammering away until the system couldn't produce enough cash to transact so they started selling everything to do it and eventually lost that battle and down the markets went.
Totally triggered by the FRBNY
As long as you've had that discussion once or twice it's no longer up to you.
wish moar did but it's a language thing for most and intimidating so they always go to the 'experts' for help.
You know that story.
they can manage it moar nao with the HFT and darkpools but retail is gonna get fleeced yet again-if they HODL.
same here..woulda been gone longer but it got hot quick.
Amazon has made more profit during pandemic than previous 3 years of earnings in total
The pandemic has been very profitable for Amazon Inc.
Amazon AMZN, +0.37% reported first-quarter earnings of $8.11 billion Thursday afternoon, trouncing expectations yet again as it continues to provide services greatly needed during the COVID-19 pandemic, namely e-commerce and cloud computing. In the 12 months ending March 31, comprising most of the pandemic’s effects in the U.S. and areas other than China, Amazon collected net income of about $26.9 billion.
That is more than Amazon’s profits from the previous three full years, 2017 through 2019, which totaled roughly $24.7 billion. And those three years were Amazon’s most profitable in its history, after the company focused more on growth than earnings for decades as it built out its warehousing and logistics systems for delivering goods sold on its website as well as its data-center network for Amazon Web Services’ cloud-computing offering. Through the end of 2019, Amazon had collected total profit in its history of $29.62 billion, according to Dow Jones Market Data.
Amazon reported first-quarter earnings of $15.79 a share, more than triple the $5.01 a share recognized in the same period a year ago, when the COVID-19 pandemic had just started causing shelter-in-place restrictions in the U.S. Sales grew to $108.52 billion from $75.45 billion the year before. It was Amazon’s second consecutive quarter of more than $100 billion in revenue, after never previously hitting that mark, and the company expects to top the mark again in the current quarter.
https://www.marketwatch.com/story/amazon-has-made-as-much-profit-during-pandemic-as-previous-three-years-of-earnings-in-total-11619726844
Mexico finance ministry says rise in inflation doesn't appear permanent
Mexican Deputy Finance Minister Gabriel Yorio on Thursday told a news conference on public finances that a recent rise in inflation due to the coronavirus pandemic does not seem to be permanent. Speaking at the the same event, another finance ministry official said the Mexican central bank had room to hike interest rates without pressuring public finances.
https://www.reuters.com/article/mexico-economy-inflation/mexico-finance-ministry-says-rise-in-inflation-doesnt-appear-permanent-idUSE1N2JR020
>>49078 pb SEC Enforcement Chief Alex Oh Resigns Just Days After Taking Job
Alex Oh: The Strange Case of the SEC Enforcement Chief Who Beat a Hasty Exit After Six Days on the Job
Less than seven hours after Wall Street On Parade ran our negative critique on SEC Chairman Gary Gensler’s pick to be the top crime fighter at his agency, Alex Young K. Oh abruptly resigned that position after just six days on the job.
Corporate media is now attempting to blame the sudden exodus of the 20-year veteran of the law firm Paul, Weiss, Rifkind, Wharton & Garrison (one of the go-to law firms for the mega Wall Street banks) over her and/or her Paul Weiss colleagues saying something rude in a deposition where they were defense counsel for Exxon Mobil. (If you’ve ever sat for a deposition represented by Big Law on both sides, you know that rudeness is often de rigueur.) According to reporting at Politico, lawyers for plaintiffs in the case told the court that the Paul Weiss lawyers “had characterized them as ‘agitated, disrespectful and unhinged.’ ” After four years of the highest officer in the land, President Donald Trump, Tweeting every manner of insult against elected officials and foreign dignitaries, that actually sounds rather tame to us. We can assure you, without hesitation, that something far more insidious is going on here.
Paul Weiss represents the most powerful mega banks on Wall Street. And yet, this law partner with more than two decades at the firm and a Yale law degree was representing petty drug dealers and bank robbers in the U.S. District Court for the District of Columbia according to federal court records. We decided to take a look at cases in which Oh served as an attorney in the U.S. District Court for the Southern District of New York, since that is where most cases involving the serial crimes on Wall Street are conducted. Looking at both open and closed cases dating back to 1997, we found 187 cases where Alex Oh had served as an attorney in the District Court for the Southern District of New York. Numerous cases involved securities fraud and occurred when Oh was an assistant U.S. Attorney for the Justice Department in that region. Oh served in that capacity for three and one-half years, from January 1997 to June 2000, according to her LinkedIn profile. But here is where things get curious. The court records show that Oh was to receive notifications from the court not at the U.S. Attorney’s office, but as follows:
Alex Young Kyong Oh
Paul, Weiss, Rifkind, Wharton & Garrison, LLP (DC)
2001 K Street, N.W.
Washington, DC 20006
(202) 223-7334
Fax: (202) 223-7474
Email: aoh@paulweiss.com
We thought perhaps the Court updates the addresses of attorneys after the cases are closed. We checked for other former U.S. Attorneys in the Southern District of New York who are now with Big Law firms. Their court records showed them employed at the U.S. Attorney’s office when they were supposed to be employed there.
This raises the question as to whether Alex Oh was simply “loaned” to the U.S. Attorney’s office by Paul Weiss. If that sounds strange to you, consider that in February, long-tenured Paul Weiss law partner, Mark Pomerantz, took a leave to assist Manhattan District Attorney, Cy Vance, in his investigation into the finances of Donald Trump. The New York Times reported that Pomerantz had been “helping” Vance’s office “informally for months,” before taking a leave from Paul Weiss and joining Vance’s office. Deutsche Bank was one of Trump’s largest bank lenders over the years — even after other banks refused to lend to him. Deutsche Bank is also a longstanding client of Paul Weiss.
Editor’s Update: The Press Office for the U.S. District Court for the Southern District of New York has informed us this morning that attorneys are allowed to update their contact information, which then is applied universally, even to old, closed cases. We have also reached out to the U.S. Attorney’s Office for the Southern District of New York for further clarification.
https://wallstreetonparade.com/2021/04/alex-oh-the-strange-case-of-the-sec-enforcement-chief-who-beat-a-hasty-exit-after-six-days-on-the-job/
Loved the Pilot last night ZOMBE...
kek!
prolly get a talking too about that.
Those #'s for Biden are padded for sure
had lunch wif him in the 90's
Lotsa contact with the remaining Mercury/Gemini/Apollo 7 astros in that time period.
Plenty of drinking stories wif a few of dem too*
On muh best day I couldn't keep up with 'em.
me on the right...blocked off of course
*but not with this one