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My preferred shares were down an aggregate of just under 1% today. That's a big move for preferred shares when the broad market is flat and the financial sector is only down 1/4%. That suggests to me that everyone is expecting another 25bp boost in overnight rates.
Market makers began pulling in the buying today which is a bit odd for the first of the month as new money is always coming into retirement accounts. I suspect there's concern the Fed will continue to raise rates even though the financial pain is becoming more obvious. The Fed meets tomorrow and Wednesday, reporting at 2:00PM Eastern. There is almost always a lot of volatility when Powell starts talking. It's a dangerous time to be trading unless you have a copy of his speech..:)
Good article from Barron's regarding how difficult navigating the rest of this inflation/economic cycle will be for the Fed. Last Monday I moved to 80% fixed investments and 20% preferreds. Retirement accounts are 100% fixed.
The Fed Has No Good Options. The Risk of a Misstep Is Growing
The Federal Reserve is struggling to cool inflation further without damaging the economy. The easy part is over
Since the Federal Reserve first kicked off its inflation-fighting campaign 15 months ago, it has raised interest rates nine consecutive times and wound down its pandemic-era bond-buying program, notching the fastest pace of monetary policy tightening in four decades. So far, it has achieved a balance that its critics thought nearly impossible, cutting headline price growth nearly in half while keeping the U.S. economy humming.
Since the Federal Reserve first kicked off its inflation-fighting campaign 15 months ago, it has raised interest rates nine consecutive times and wound down its pandemic-era bond-buying program, notching the fastest pace of monetary policy tightening in four decades. So far, it has achieved a balance that its critics thought nearly impossible, cutting headline price growth nearly in half while keeping the U.S. economy humming.
The problem is that the job is far from over, and the most difficult days lie ahead. As the central bank’s policy committee gears up for its May 2-3 meeting and what is widely expected to be a 10th rate hike, it will be embarking on a new and more volatile phase in its tightening cycle, marked by far less clarity than what has come before. The risk of a misstep is growing, and the consequences of over- or undershooting would be severe.
The central challenge for the Fed is that the economic outlook is souring at the same time that progress on reining in inflation is stalling out. Economic growth in the first quarter decelerated more than expected, data out this past week showed, while the Fed’s preferred inflation gauge is down less than a full percentage point from its peak and still more than double the bank’s 2% inflation target.
That contradiction will weigh on the Fed as it debates whether and when to pause its rate-hike campaign, forcing officials to decide how much economic pain is acceptable in the service of restoring price stability, and how much would be considered too much for the country to bear.
In a best-case scenario, the Fed will carve a winning path between two losing propositions: giving up the inflation fight too soon, which would risk a severe recession later, or pushing rates too deeply into restrictive territory and sending the economy into a tailspin as soon as the second half of this year. Success will depend on both skill and luck, and is by no means assured.
“They haven’t even gotten close to the hardest mile,” says Diane Swonk, chief economist at KPMG.
The Fed has lifted the federal-funds rate from near zero to a current range of 4.75%-5%, with more hikes likely from here. In doing so, it has ushered in an end to the easy-money policies that have defined the U.S. economy since the start of the 2008-09 financial crisis.
A continued transition to a more restrictive policy stance will ramp up the pain, further reducing demand for goods and services, weakening the labor market, and greatly increasing the cost of servicing debt—including mortgages, car loans, and the government’s more than $31 trillion in federal borrowings. And it will test the strength of a generation of companies that grew up in an accommodative policy environment and haven’t had to function under tighter monetary conditions.
At the same time, the financial sector is on increasingly unsteady footing. Higher rates have wreaked havoc with bank balance sheets; the industry’s unrealized losses on securities totaled more than $620 billion in the fourth quarter of 2022, according to the Federal Deposit Insurance Corp. The first quarter of this year saw two high-profile bank failures, which forced the Fed to establish an emergency lending facility. And Wall Street is rife with talk of impending chaos among nonbank lenders and alternative-asset managers, should interest rates move much higher.
Erring in either direction—by raising rates too much or not enough—would risk disrupting a fragile financial system and throwing millions of Americans out of work, erasing years of labor-market gains. Even an ideal outcome, cooling the economy without causing a deep recession, probably will lead to some painful fallout, so long as the Fed remains ironclad in its resolve to keep interest rates elevated even as joblessness rises, growth sputters, and a public backlash ensues.
“They’re walking a tightrope without a net,” Swonk says.
The Federal Reserve finds itself fighting inflation today partly because of policy decisions made more than a decade ago, when central banks around the globe grew worried about deflation in the aftermath of the financial crisis. While the U.S. economy recovered, price growth regularly undershot the 2% annual target that the Fed set early in 2012.
In response, Fed officials kept interest rates near zero to try to stoke demand and inflation. They also engaged in quantitative easing, a form of bond buying designed to increase the money supply and encourage lending and spending.
“It was the new abnormal,” says Ed Yardeni, a former Federal Reserve staff member and veteran investment strategist who now leads Yardeni Research.
The Fed had raised interest rates only modestly when Covid-19 hit in 2020, and it followed the same playbook it had written a decade before to cushion the blow from pandemic-related shutdowns. It slashed the federal-funds rate to zero and bought securities to increase liquidity in the financial system.
When inflation began to ramp up early in 2021, Fed Chairman Jerome Powell and other Fed officials, along with many economists, initially dismissed the trend as “transitory,” a temporary consequence of closing and subsequently reopening the global economy. The expectation was that price growth would naturally slow as supply chains healed, employees returned to work, and factories came back online.
Because the previous recovery had taken so long to gain traction, with more than 10 years passing before the labor market came close to what economists consider full employment, the Fed remained on the sidelines, loath to nip the post-Covid recovery in the bud. The central bank stayed put even as Congress passed another $1.9 trillion in pandemic-related fiscal relief and as state and local governments reported massive budget surpluses. By the time Powell announced the first rate hike in March 2022, the headline consumer price index had already reached 8.5%.
“They were right to gamble on running the economy hot,” says Adam Posen, president of the Peterson Institute for International Economics and a former Bank of England official. But once inflation took off, “what I fought them on was a failure to pivot.”
The historical context is relevant for two reasons: For one, it offers cause to question whether a Fed that was caught flat-footed by inflation two years ago will be able to recognize when it is time to shift gears again. The fear among Fed critics is that the central bank will be inclined to keep policy restrictive for longer than necessary to compensate for having let price growth get out of hand in the first place.
But the back story also serves as a reminder that the current economy has long grown used to low rates, and some aspects of the economy have become dependent on them. Some economists warn that moving back to a world of tighter policy—or returning to the old normal—will be a major shock to the system.
“Are we going to be able to make this transition…and absorb the shock of having all that happen basically in one year?” Yardeni asks. “That’s the big debate.”
Economists who think the Fed should pause say the economy is already sputtering. Because monetary policy operates with a lag, their view is that the amount of tightening to date will be sufficient to bring inflation back to target.
Some recent data support this view. Unemployment claims are rising materially, with the share of Americans receiving jobless aid up nearly 45% from a September low. The manufacturing sector is slowing, with factory activity contracting for five straight months. And first-quarter gross domestic product, which rose at an annual rate of 1.1%, fell short of economists’ expectations of 1.9% growth.
Credit conditions, meanwhile, are tightening, spelling trouble for the small-business sector, which so far has propped up the labor market and needs access to loans to keep hiring. Some economists expect further chaos in the banking sector as well.
“From my view, another rate hike is dangerous,” says Bill Spriggs, chief economist at the AFL-CIO and a Howard University economics professor. “[The Fed] got the yellow card several months ago. Now it’s time for the red card.”
Still, inflation remains far above the Fed’s target. A long-awaited slowdown in shelter costs has been elusive. Services prices, which the Fed is eager to see cool, have barely budged, and goods prices, which had been falling, are now turning upward again. Wage growth, too, remains hot: Compensation costs for all civilian workers climbed 1.2% in the first quarter of 2023, accelerating from the 1.1% pace set during the previous quarter, data released on Friday showed.
The core personal consumption expenditures, or PCE, deflator, the inflation gauge that the Fed watches most closely, stood at 4.6% in March and slowed less during the month than economists had expected, according to a separate data set released Friday. Viewed on a quarterly basis, which smooths out volatile month-to-month changes, core PCE has more or less been moving sideways since the middle of last year. And that is after the factors that initially had been considered the root causes of inflation—supply-chain snarls, pandemic shutdowns, generous fiscal stimulus—have mostly subsided.
“There was always at least some transitory component to inflation,” says Jason Furman, a Harvard University economist and former Obama White House economic adviser. “Getting rid of underlying inflation is a lot harder.”
That leaves the Fed, which has vowed to prioritize a return to price stability even at the expense of economic pain, with more work to do. Very few of what economists consider primary indicators of tightening monetary policy are showing significant deceleration, Posen notes. Factors such as wage growth, construction employment, and credit spreads all look fairly strong.
Nor have the risks of an upside inflation surprise disappeared. Labor markets remain tight. Semiconductors are still scarce. And fiscal stimulus continues to flow out to areas such as defense and green infrastructure.
“Inflation could well continue to be stubborn,” Furman says. “The Fed could have to raise rates more later this year. The market still isn’t fully prepared for that.”
Given the cards on the table, the Fed is poised to keep tightening for now. But will officials know when it is time to stop? Perhaps the greatest risk to the economy in the coming months is that they won’t.
For one, bank officials are reliant on economic data that are backward-looking and difficult to assess, given the ways in which the pandemic has altered consumer behavior and scrambled seasonal-adjustment calculations. They are also determined to secure a slowdown in services inflation before easing up on rate hikes, and that means waiting for spending categories such as airline travel, daycare, and recreation services to show signs of price deceleration.
Yet those areas are some of the last to feel the impact of interest-rate hikes, which work primarily by making goods, especially homes and cars, more expensive. “By definition, you have to overshoot in other sectors that are more interest-rate sensitive to get at [services] inflation,” Swonk says. “The system is rigged to overshoot.”
Fed officials have emphasized their fear of repeating history, specifically the painful inflation fight of 40 years ago during which then-Fed Chairman Paul Volcker hiked rates dramatically, slashed them when recession hit, and then pulled them up again months later when inflation proved more entrenched than anticipated. Public comments from Powell and other top officials in recent months suggest that they would rather keep rates high and weather the economic pain than lower rates only to have to lift them again in relatively short order.
“They’ve been studying past instances of when the Fed let inflation get out of control, and reached the conclusion that the common mistake was giving up too soon,” says Bill Nelson, chief economist at the Bank Policy Institute, who spent more than 20 years at the Fed’s Board of Governors. “I worry that is going to leave them somewhat dug in.”
There is a more recent historical lesson to learn, too. The Fed’s primary policy error in the past two years was misreading the economic situation and thus failing to act quickly enough to change course, a blunder that allowed inflation to spiral out of control.
Now we will see whether they make the same mistake again.
The attached chart of the SPX shows the low from last October through today's rally. The SPX is up over 18% since then. The red horizontal line shows resistance from last year at ~4,100 and the blue horizonal line shows current resistance at ~4,200. The SPX trend is clearly to the upside with a suggested technical support at 3,950. The breakdown in March suggests the market is still susceptible to bad news. That one was the possible banking crisis which appears to have been averted for now. The next most likely move is a test of 4,200. Not shown here, the A/D line suggests buyers are still in control but RSI has moved above 70, the PPO has begun to role over and the VIX is at ~15, suggesting we're close to a top for now.
When building a home that is virtually air tight you must use a whole house HRV/ERV, (heat/energy recovery ventilator). See the link below. We used one in both of the homes I described earlier. Also, in the east the preferred method for managing a crawl space is encapsulation. That with a dehumidifier will keep the crawl space in perfect order. Given the trajectory of climate change, there will continue to be additional moisture in the air.
https://www.hvi.org/resources/publications/home-ventilation-guide-articles/continuous-whole-house-ventilation/
At home nothing is required. We're still living in Santa Fe until later this year. Our water comes directly out of the mountains most of the year and it's perfect. We're working on the design for a house in Annapolis and will likely have to treat the water there. Anything coming out of the Chesapeake or its tributaries is still suspect. We've built two houses in the last decade to Passivhaus spec. One stick built and the other a double adobe. Very quiet, no drafts, every room remains at the same temperature and almost no heating/cooling required. Incredibly comfortable homes.
Source hydropanels are a good solution where electricity is unavailable and clean drinking water is also not available. Because of the expense, these panels must be supplied by a non-profit who will also manage the maintenance as the cost is ~$1.50 a day. For anyone living in an area where both water and electricity are available, an inline UV water treatment system with pre-filter and post mineral additive is perfect and costs a few hundred dollars instead of thousands to install. We've used a system like this on our boat for years. It's another great substitution for plastic bottled water.
Thanks, I don't follow this industry but clearly it must be part of the solution if the global we are going to be serious about climate change. Most of the current solutions that require massive mining and inserting inefficiencies into a system are just green washing.
Electreon talks about a carbon neutral transportation system but I didn't see a mention of how the energy in their system is generated. If their client states use a fossil fuel to generate energy for a system that is only 25% efficient, we'd be just as well off driving our ICE trucks.
I found a press release from Governor Whitmer's office. Michigan is installing a one mile Electreon testing system in Detroit. The PR also does not mention the power source for the system. Maybe they should use a small nuke..:).
Detroit to install Electreon charging system
This problem is more like the 1970s than 2008. The banking problems, so far, have been related to big money yanking their cash out quickly and putting the banks in a position where they have to sell fixed rate assets at a loss. I've not seen anyone talking about Schwab but their bank is in terrible shape. Any bank that bet heavily on near zero overnight rates as a long term strategy is in trouble now that rates are near 5%.
As I posted on another board, I sold all of my stocks and went to 80% fixed income, only holding on to 20% preferred shares when the market opened last Monday. So I'm skeptical that we can get through this without a recession but I don't think it's anything like 2008. Of course we could default on our federal debt this summer and things could rapidly get worse. Let's hope that doesn't happen.
One of the big advantages electric cars have over traditional ICE vehicles is the efficiency of power delivery. Much of that gain is lost if we sacrifice 75% of the energy through the delivery system. If the cost of a kWh of electricity is 15 cents, it's 60 cents per kWh to deliver through a system that costs $1.2MM per km to build. I may be missing something but this seems massively inefficient.
ElectReon’s coils deliver about a quarter of the electricity—energy travels more efficiently when the power source is in direct contact with the battery
One of the big advantages electric cars have over traditional ICE vehicles is the efficiency of power delivery. Much of that gain is lost if we sacrifice 75% of the energy through the delivery system. If the cost of a kWh of electricity is 15 cents, it's 60 cents per kWh to deliver through a system that costs $1.2MM per km to build. I may be missing something but this seems massively inefficient.
ElectReon’s coils deliver about a quarter of the electricity—energy travels more efficiently when the power source is in direct contact with the battery
The only thing holding up the price of homes is lack of supply as many current home owners who would like to move up or change locations are not willing to give up mortgages that would now come in at a 2X higher rate. For home prices to move up in a meaningful way, interest rates will have to come down. If there's a recession that may happen by the end of the year.
Nick, switch to a Freestyle 3. It's a much better product.
The cost of some business should be socialized. Fire departments are a good example. Institutions which house people with no rights, either explicitly or implicitly may also be good candidates. To my mind, prisons and nursing homes fall under that category.
So you're telling me we're not going to have to pay banks to hold our money..:). I may have railed against that idiotic idea more than once.
That worker in the top photo seems rather calm working without hazmat suit. I guess their product has already done its work?
Good article, thanks. As analysts like to say; I think this adds some color to our discussion regarding UPS and their lackluster performance. From the same WSJ article:
“Simply stated, we’re in a freight recession,” J.B. Hunt President Shelley Simpson told analysts in an earnings call.
Bob Costello, the American Trucking Associations’ chief economist, said he has seen trucking companies with fleets in the range of 200 to 300 vehicles failing at a rate of about one a week.
Another edition of fun stuff or maybe I should call it; everything is just fine. In case you thought the 2020 or 2022 elections were fraught with problems, 2024 is going to make those elections look calm. With generative AI you will be able to make anyone say anything. It takes a bit of talent today but soon everyone will have to verify everything. The quote below is from Wired.
“I don’t think there’s a website where you can say, ‘Create me a video of Joe Biden saying X.’ That doesn’t exist, but it will,” says Hany Farid, a professor at UC Berkeley’s School of Information. “It’s just a matter of time. People are already working on text-to-video.”
I won't rant again about what a horribly run company Six Flags is, but now that BBBY is BK, SIX is close to one of the last companies I'd place any of my investment with. I know they have new management and a new plan but as Buffet says: Turnarounds seldom turnaround.
You're welcome. It's great when a journalist has a firm understanding of the subject, writes clearly and doesn't have an ax to grind. It's only been in the last decade or so that we've had the technology to measure changes in the earth's surface with this degree of accuracy.
The same is true with Antarctic ice shelves. These are the bands that hold glaciers in place. When the large ice shelves collapse sea levels will begin to rise more rapidly. Currently scientists are most concerned about the Thwaites glacier. The ice shelf that supports this glacier is likely to collapse by the end of the decade and hasten the release of this glacier that's the size of Florida.
Anyone interested in the East Coast effects of global warming and human population should read this article. I've posted on this subject before but this covers several critical areas of land, water and climate management in a short article. tl;dr: Parts of the east coast are going under water at a rate of 10mm a year or 4" a decade and it's not all global warming.
There's a reason our Mid-Atlantic home is 30' above the water.
As Sea Levels Rise, the East Coast Is Also Sinking
Coastal lands are subsiding and losing elevation—a “hidden vulnerability” that’s making rising seas all the worse.
CLIMATE SCIENTISTS ALREADY know that the East Coast of the United States could see around a foot of sea-level rise by 2050, which will be catastrophic on its own. But they are just beginning to thoroughly measure a “hidden vulnerability” that will make matters far worse: The coastline is also sinking. It’s a phenomenon known as subsidence, and it’s poised to make the rising ocean all the more dangerous, both for people and coastal ecosystems.
New research published in the journal Nature Communications finds that the Atlantic Coast—home to more than a third of the US population—is dropping by several millimeters per year. In Charleston, South Carolina, and the Chesapeake Bay, it’s up to 5 millimeters (a fifth of an inch). In some areas of Delaware, it’s as much as twice that.
Five millimeters of annual sea-level rise along a stretch of coastline, plus 5 millimeters of subsidence there, is effectively 10 millimeters of relative sea-level rise. Atlantic coastal cities are already suffering from persistent flooding, and the deluge will only get worse as they sink while seas rise. Yet high-resolution subsidence data like this isn’t yet taken into account for coastal hazard assessments. “What we want to do here is to really bring awareness about this missing component, that based on our analysis actually makes the near-future vulnerability a lot worse than what you would expect from sea-level rise alone,” says Manoochehr Shirzaei, an environmental security expert at Virginia Tech and coauthor of the new paper.
The primary cause of dramatic land subsidence is over-extracting groundwater from it, which makes the terrain collapse like an empty water bottle. In San Jose, California, this has lowered the elevation by as much as 12 feet. The combination of sea-level rise and subsidence could inundate up to 165 square miles of Bay Area coastline by 2100, according to Shirzaei’s previous research. Parts of Jakarta are sinking 10 inches a year, forcing Indonesia to move its capital elsewhere. Extracting oil also causes subsidence, a particularly acute problem in the Houston-Galveston area. And landfill or sediments along coastlines can also settle over time.
While scientists have been aware that US coastlines are sinking, they haven’t had much data to show local differences in rates. Subsidence varies significantly even over short distances, given variations in the underlying geology and nearby human activity. For this new paper, Shirzaei and lead author Leonard Ohenhen, also an environmental security expert at Virginia Tech, used data from a highly sensitive satellite that fired radar signals at the Earth, then analyzed what bounced back to determine coastal deformation. They did this for the years between 2007 and 2020, along 3,500 kilometers (2,200 miles) of the Atlantic coast.
The researchers found particularly intense subsidence in agricultural areas, where groundwater is extracted to feed crops—which in turn will be more vulnerable to flooding as the elevation drops. They also found that most Atlantic coastal cities are seeing over 3 millimeters of subsidence a year, including Boston and New York City. As the elevation falls, it destabilizes above-ground infrastructure like buildings and roads, as well as buried pipes and cables.
“Three millimeters a year seems like a really tiny number,” says Ohenhen, but what really matters is “the cumulative effect of how much sinking will occur over the years.” And it could get worse, he predicts. “The East Coast is one of the fastest-growing areas for the US in terms of population. When you have more population, it means people will use more water, and that will increase how fast the land is sinking.”
People are also already destroying the wetlands that mitigate sea-level rise along the East Coast, in order to develop over them. Wetlands absorb storm surges, keeping seawater from reaching farther inland. As sea levels have naturally gone up and down over the millennia, wetlands have moved inland and back in response. “But now we have put a hard stop by building a ‘fence’—our buildings and whatever—so wetlands can no longer migrate landward,” says Ohenhen. They’re hemmed in, dooming them to drown in rising seas. Humans only make matters worse by damming rivers, thus preventing sediment from flowing to the coast, which would normally add elevation to delta wetland. Instead, these ecosystems continue subsiding.
Rising seas and subsidence are also conspiring to create “ghost forests” along the Atlantic Coast. Saltwater infiltrates fresh groundwater, killing off trees whose roots would normally hold soil together. “It causes more subsidence in these areas, and you can have more intrusion of saltwater,” says Ohenhen. “It’s just a rapid expansion of ghost forests.”
Coastal ecosystems are vital stores of carbon: As plants grow, they absorb CO2 from the atmosphere and spit out oxygen. If saltwater is killing off biomass, it’s killing off a carbon sink, meaning more CO2 can remain in the atmosphere to cause more warming—and further drive up sea levels.
The good news is that subsidence can be halted, first by stopping the overextraction of groundwater, then ideally by pumping water back into the ground. But if the human population keeps growing, there will be more demand for water, especially if certain regions receive less rainfall due to climate change. This groundwater is also threatened by seawater intrusion. Restoring the coastal ecosystems that naturally buffer against storm surges and rising sea levels could help keep that water supply drinkable. “Number one is just ensuring as much as we can that our wetlands stay healthy,” says Natalie Snider, associate vice president of the Climate Resilient Coasts and Watersheds program at the Environmental Defense Fund, who wasn’t involved in the new paper.
Precise satellite data like this will also help scientists and policymakers better understand subsidence—not just where it’s happening, but at what rate—and what can actually be done about it. “The more accurate and more detailed we can get in the data that we have available,” says Snider, “the better the solutions we’re going to develop.”
I saw that they bought the land but couldn't find any information regarding the beginning of the buildout. I know they were trying to go public via SPAC but that avenue was shut down for most. I'm not sure how they're planning to finance at this point but if they want any chance of being profitable in the US they can't continue to ship cars here.
OK, found this from this morning:
VinFast secures another $2.5 billion in funding, led by $1B from VinGroup’s chairperson alone
But tech is still up nicely today. The SPX is down however as the only positive sector is tech. Utilities are down 2% across the board, trucking is getting crushed, Yellow and SAIA down 12%, The Canadian transport company TFI and US based Old Dominion, down 10%. Many more down over 5%.
The economy is slowing, scary Jerry will probably keep his foot on the interest rate pedal and McCarthy's boys and girls just threw another hand grenade over the wall to the Dems. Fun times.
In the tech sector / software industry there are 323 companies listed. This morning 70% are in positive territory. They can thank MSFT. The big winner is Datadog, (DDOG), up 13%.
Renewable Energy is getting crushed this morning with Enphase, (ENPH) down 26% or $57 a share. 2023 has not been a good year for ENPH stock holders.
They're building a plant in Chatham County NC just outside Raleigh/Durham. It's smart to open all the dealerships in CA but still lots of hiccups as they prepare to sell cars in the US. As Rivian has discovered, it's very difficult to ramp up production. So far, only Tesla can make money selling electric cars here.
Well they did send the ransom note as articulated by press secretary Karine Jean-Pierre. Now the House has said, just ignore that ransom note, we're trying to agree on the real one. McCarthy is between a rock and a hard place of his own making. It's still possible he won't get a majority to vote on any ransom. It will only take a few Republicans to side with Dems, boot McCarthy out and vote in a moderate Republican as speaker.
Transportation is a bellwether. I don't follow them closely but traditionally UPS and FedEx were good canaries in the transportation coal mine along with a couple freight line carriers. Lately however, AMZN is managing more and more of their own deliveries and it isn't clear how much impact this is having on UPS. Initial reporting blames retail sales and commercial deliveries. Also, rising labor costs tend to lag economic inflation as workers catch up. UPS has a Teamsters contract due this summer so I suspect investors are weighing all this data and revising UPS value.
It looks to me as if 3M is carving out the bottom unless there's more bad news. The wild card is the debt ceiling but I don't expect the market to react too much unless they start furloughing government workers.
I think today's magic was caused by UPS coughing up a hairball. Down over 10%. Might also be First Republic giving the banking system another shake. Let's hope MSFT has a decent report after the market closes.
This is the tail wagging the dog. There is a small group within the Freedom Caucus that, like Trump, are willing to tear down the US to gain control. Many of these folks, like Jim Jordan, planned the January 6 insurrection. If they can't gain control of the levers of government there's a reasonable chance some will go on trial as insurrectionists.
When Republicans took control of the House in January 2023, one of the first things they did was to again repeal the Gephardt Rule so debt default is possible.
3M stock held up quite well this morning based on 3M taking some action but this afternoon the price is headed down. Currently at $104.28 with support just above $100. 3M peaked in January 2018 @ $215 and has been headed down sharply since mid 2021. Current P/E is just over 10X and 11.6X future. Dividend is 5.75% but unlikely to grow much considering the outlook. This year just one cent a quarter increase to keep the 50+ year streak alive.
SPX broke below its 20 day moving average for the first time this month. Although the market has been moving down the last few days, accumulation is still strong and the VIX is well below 20. The market seems to be in an ignore the news phase.
There are some who think the president can continue to pay the debt of the US even if Congress doesn't allow it based on article 4 of the Fourteenth Amendment. "the validity of the public debt of the United States…shall not be questioned." While that's both straightforward and vague at the same time, it may be enough for Biden to simply ignore Congress if they don't act. Fun times.
They had roughly the same issue as SVB, more than half their deposits were removed.
It's so bad at First Republic Bank, they won't even try to spin it.
First Republic Bank, the most imperiled U.S. lender after last month’s banking crisis, on Monday disclosed the grisly details of just how troubled its business has become — and not much else.
In the bank’s highly anticipated first update to investors since entering a free-fall over the past month and a half, its leaders said little. In a conference call to discuss its first quarter results with Wall Street analysts, the bank’s executives offered just 12 minutes of prepared remarks and declined to take questions, leaving investors and the public with few answers about how it would escape its crater.
BBBY and it's sibling store buybuy Baby have gone BK. Maybe rename it byebye Baby.
Of course. He's been a Russian asset for years.
I have BAC N series preferreds. They're up 4.3%. This looks like a good one.
Another warning for those who think crypto is safe. Molly White, in her Web 3 is going just great publication reports that between April 13 and April 21, there was $44.51MM hacked from various crypto vaults. And this just what was reported.