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Rogan Slams Biden Admin For "Gaslighting" Americans About Recession

Rogan Slams Biden Admin For "Gaslighting" Americans About Recession Having seen the mainstream media rush to defend a clearly weakening economy, closing the 'Overton Window' on any mention of the 'r-word' - to the extent that one senior economist was fact-checked by Facebook for daring to utter the 'r-word' - pocaster Joe Rogan blasted the Biden administration for "gaslighting" the American people about the meaning of a recession after two consecutive quarters of economic contraction were reported last week. During a podcast with Chris Williamson, the pair turned to the topic of the recent quarterly gross domestic product (GDP) report and the efforts of President Joe Biden's entire administration (and every mainstream media useful idiot and tenured ivory tower economist) to deflect the recession label. Rogan criticized the administration for tampering with the definition of the word “recession,” and claimed that politicians were “gaslighting” the American public by denying the label. “People think that [the word recession] is trivial, ’cause they are talking about this economic downturn, but it’s not trivial, because we’ve always used that term ‘recession,’ and we’ve always used that term to define whether or not the economic policies that are currently in place and whether or not the management in the government has done a good job of making sure that the economy stays in a good place,” Rogan said. “They definitely haven’t done that, so in order to escape that sort of distinction, they’re literally changing the definition, which is terrible, and it should be pushed back against in a big way. It should be something that people get angry about.” Williamson appeared to agree with Rogan, arguing that changing the definition of recession served only to distract from the hard economic reality and to protect the political interests of the Democratic Party. “The bizarre thing about the recession situation is the fact that it doesn’t matter what you call it. You can call it … ‘paradise’ if you want, but it’s still [expletive], and all of the criteria of what’s happening indicates a recession,” Williamson said. “The reason, obviously, is that you’ve got midterms coming up, and you need to make sure that ‘is in a recession’ is something that can’t be thrown at the Democrats.” Watch the full discussion below: And finally, don;t let the administration and its prancing ponies 'gaslight' you again that strong jobs data 'proves' we are not in a recession. First things first, as we detailed here, jobs are the most lagged signal of a recession; and second, under the hood of today's "great" jobs data, we find that the surge in jobs was driven by individuals taking on multiple jobs - which hit a record high. Tyler Durden Fri, 08/05/2022 - 20:40.....»»

Category: worldSource: nytAug 5th, 2022

Economics professor rips Biden admin denying recession: "Just accept it"

Fox News contributor Brian Brenberg argues the economy needs the Biden administration to "quit talking about spending money and quit talking about tax increases.".....»»

Category: topSource: foxnews16 hr. 47 min. ago

Sorry White House, Gasoline Prices Are About To Surge: Here"s Why

Sorry White House, Gasoline Prices Are About To Surge: Here's Why There was celebration in the White House overnight when the AAA reported that the average retail gasoline prices fell below $4 a gallon to the lowest level since early March. It wasn't just the Biden admin (which eagerly awaits the plunge in gas prices to translate in sharply higher approval ratings) however, which was enthused by the drop in gasoline: so was the broader market, expecting this drop in gas prices would allow the Fed to ease its tightening pace and accelerate the stock market bounce. Alas, the recent drop in gas prices is unlikely to last, and not just because after dropping to pre-Ukraine war levels, oil has resumed its move higher, with Brent just shy of $100 and expected to move briskly higher... ...  now that fears of collapsing gasoline demand have been shelved. Implied gasoline demand finally spiked, jumping back over 9 million: was 9.12MM in last week, up from artificially low 8.54MM the week prior — zerohedge (@zerohedge) August 10, 2022 The more actionable reason why gas prices - especially in the tri-state area - are set to move much higher, is because the wholesale cost of gasoline in New York surged more than 40% against futures after regional supplies sank to the lowest level in a decade, raising the risk of shortages. Reminding market watchers just how vast the chasm between financial and physical commodities has become, gasoline stockpiles in the central East Coast region are at the lowest absolute level since November 2012, the EIA reported yesterday. Seasonally, supplies are near an all-time low in records going back to 1993... ... and as a result, the premium for New York gasoline on the spot market, jumped by 10 cents Wednesday. Only San Francisco has more expensive wholesale gasoline. Stockpiles have slumped as a result of tighter supply amid a rebound in demand, a drop in European gasoline imports and continued cargo diversions away from the region. This offset production efforts from East Coast refiners - all of them in the Central Atlantic region - which operated at 100.4% of nameplate capacity last week, the highest on record. But so what? A New York shortage will hardly crippled the rest of the country? Well, not so fast: as Bloomberg notes, low gasoline supplies in region can have an outsized global impact because New York Harbor is home to physical deliveries of futures contracts that underpin trade flows around the world. A fuel tanker moving from India to Brazil, for example, is likely priced against the New York futures benchmark. So shortages in this key region that cause prices to spike would also impact prices elsewhere. Meanwhile, gas station fuel sales have been rising over the past few weeks, according to data from price reporting agency Opis and retail tracker Gasbuddy. The implied demand figure from the EIA has been far more volatile than usual in recent weeks (and prompted allegations of manipulation by the Biden DOE), but the latest weekly jump should help further bolster retail volumes. Commenting on the recent absurd gasoline demand reports, Rabobank's Michael Every wrote the following: You could hear the champagne corks fly wherever you were yesterday. After all, there was "zero US inflation" in July, as some put it. And that came after zero US recession, as some also put it, despite two consecutive quarters of negative GDP growth. And after a red-hot labour market report. And EIA energy data showing gasoline usage apparently well below 2020 levels despite all this non-recession and jobs boom, and even as refineries are working at incredibly high capacity levels, diesel stocks are low, and exports are also down. These are all numbers/claims worthy of champagne. Yet they make little sense taken together. And speaking of diesel, supply there remains dire as well, with seasonal distillates stockpiles languishing at the lowest level ever since March in records going back to 1993. The tightness will start to be felt when the weather turns in two months. The US northeast is the only region in the country where the majority of home and commercial heating comes from burning fuel, and while it won't be hit as hard as Europe where a monthly electricity bill will hit 4 digits, it will still be hit very hard. Tyler Durden Thu, 08/11/2022 - 17:40.....»»

Category: personnelSource: nytAug 11th, 2022

Rogan Slams Biden Admin For "Gaslighting" Americans About Recession

Rogan Slams Biden Admin For "Gaslighting" Americans About Recession Having seen the mainstream media rush to defend a clearly weakening economy, closing the 'Overton Window' on any mention of the 'r-word' - to the extent that one senior economist was fact-checked by Facebook for daring to utter the 'r-word' - pocaster Joe Rogan blasted the Biden administration for "gaslighting" the American people about the meaning of a recession after two consecutive quarters of economic contraction were reported last week. During a podcast with Chris Williamson, the pair turned to the topic of the recent quarterly gross domestic product (GDP) report and the efforts of President Joe Biden's entire administration (and every mainstream media useful idiot and tenured ivory tower economist) to deflect the recession label. Rogan criticized the administration for tampering with the definition of the word “recession,” and claimed that politicians were “gaslighting” the American public by denying the label. “People think that [the word recession] is trivial, ’cause they are talking about this economic downturn, but it’s not trivial, because we’ve always used that term ‘recession,’ and we’ve always used that term to define whether or not the economic policies that are currently in place and whether or not the management in the government has done a good job of making sure that the economy stays in a good place,” Rogan said. “They definitely haven’t done that, so in order to escape that sort of distinction, they’re literally changing the definition, which is terrible, and it should be pushed back against in a big way. It should be something that people get angry about.” Williamson appeared to agree with Rogan, arguing that changing the definition of recession served only to distract from the hard economic reality and to protect the political interests of the Democratic Party. “The bizarre thing about the recession situation is the fact that it doesn’t matter what you call it. You can call it … ‘paradise’ if you want, but it’s still [expletive], and all of the criteria of what’s happening indicates a recession,” Williamson said. “The reason, obviously, is that you’ve got midterms coming up, and you need to make sure that ‘is in a recession’ is something that can’t be thrown at the Democrats.” Watch the full discussion below: And finally, don;t let the administration and its prancing ponies 'gaslight' you again that strong jobs data 'proves' we are not in a recession. First things first, as we detailed here, jobs are the most lagged signal of a recession; and second, under the hood of today's "great" jobs data, we find that the surge in jobs was driven by individuals taking on multiple jobs - which hit a record high. Tyler Durden Fri, 08/05/2022 - 20:40.....»»

Category: worldSource: nytAug 5th, 2022

Labor Secretary Marty Walsh: "None" of the inflationary pressures caused by Biden admin

Labor Secretary Marty Walsh explained the moves the Biden administration has taken to try and lower costs for Americans as inflation sits at a four-decade high. Labor Secretary Marty Walsh argued shortly after the release of the July employment report Friday that "none" of the price pressures Americans have been dealing with were caused by the Biden administration.  He also laid out the actions the administration has been taking to try and lower costs as the latest data revealed inflation sits at a 40-year high, pointing to "actions on the ports" to alleviate supply chain issues, the release of oil reserves in an attempt to bring down gas prices and the Inflation Reduction Act.  Senate Majority Leader Chuck Schumer and Sen. Joe Manchin last week announced the Inflation Reduction Act, which will spend $433 billion primarily on climate initiatives while imposing a 15% minimum tax on large corporations.  "I think this is an all of government approach, if you will, to bring these costs down, these pressures down," Walsh told FOX Business’ Edward Lawrence in an interview that aired on "Cavuto: Coast to Coast" Friday. He then added that "none of this was caused by this administration, quite honestly," putting the blame partly on the COVID-19 pandemic. BIDEN TOUTS JOBS NUMBERS, SAYS HE HAS MADE 'SIGNIFICANT PROGRESS' IN EFFORT TO 'REBUILD THE MIDDLE CLASS' "And this is a global recession. We can't lose sight of that," he continued. "What’s happening here in the United States is happening all across the globe and, quite honestly, in a higher level in some places. " The labor secretary made the comments after it was revealed that U.S. job growth unexpectedly accelerated in July, defying fears of a slowdown in hiring even as the labor market confronts the double threats of persistent inflation and rising interest rates. Employers added 528,000 jobs in July, the Labor Department said in its monthly payroll report released Friday, blowing past the 250,000 jobs forecast by Refinitiv economists. The unemployment rate, meanwhile, edged down to 3.5%, the lowest level since the COVID-19 pandemic began more than two years ago. The uptick in hiring comes amid a growing consensus that the economy is losing momentum as the Federal Reserve hikes interest rates at the fastest pace in decades to wrestle inflation under control.  With back-to-back quarterly declines in gross domestic product – the broadest measure of goods and services produced in the nation – the economy meets the technical criteria for a recession. Many economists have argued the strong jobs market has so far prevented the U.S. from sliding into a downturn, while others, including MacroMavens founder Stephanie Pomboy, argue that the employment data is misleading given it is a "lagging indicator." Pomboy warned on FOX Business Friday that the Fed "really put most of their eggs in this employment basket and they’re looking at a lagging indicator to tell them when it’s time that they have tightened enough, which suggests that they are going to overdo it on the rate hikes." MARKETS WILL BE IN FOR A 'RUDE AWAKENING’ FOLLOWING JOBS REPORT, ECONOMIST WARNS The Commerce Department reported last month that GDP shrank 0.6% in the three-month period from April to June. That followed a decline of 1.6% in the first three months of the year.  President Biden said last week the United States "is not in a recession," despite the latest GDP report.  "Coming off of last year’s historic economic growth — and regaining all the private sector jobs lost during the pandemic crisis — it’s no surprise that the economy is slowing down as the Federal Reserve acts to bring down inflation," Biden said in a statement last week. "But even as we face historic global challenges, we are on the right path and we will come through this transition stronger and more secure." Biden then touted the job market, saying it "remains historically strong" and pointed to unemployment and consumer spending data.  Those comments from the president came days after he said the U.S. was "not coming into recession."  "We're not coming into recession, in my view," Biden said.  Walsh acknowledged Friday that "we have a ways to go" given "people are still feeling the pressure."  He added that he is now focused on "making sure we’re working with the president to pass his Inflation Reduction Act that's in front of Congress now and part of that bill will bring down, hopefully, the cost of inflation that people are feeling in their pocketbook today."  Walsh then pointed to the drop in gas prices, "which is putting a little more money in people's pocket." Gas prices have been steadily declining since reaching a high of $5.01 on June 14. On Friday, the national average for a gallon of gas was $4.11, according to AAA.  FOX Business’ Megan Henney contributed to this report......»»

Category: topSource: foxnewsAug 5th, 2022

Something Snaps In The Job Market: Multiple Jobholders Hit All Time High As Unexplained 1.8 Million Jobs Gap Emerges

Something Snaps In The Job Market: Multiple Jobholders Hit All Time High As Unexplained 1.8 Million Jobs Gap Emerges Something very odd emerges for the second month in a row when looking at the July payrolls report. Recall last month we showed that a stark divergence had opened between the Household and Establishment surveys that make up the monthly jobs report, and since March the former was sliding while the latter was rising every single month. In addition to that, full-time jobs were plunging while multiple jobholders soared near all time highs. Guess what: at a time when the Biden admin is now being accused of fabricating energy numbers to push oil prices lower, the jarring divergences and inconsistencies in the jobs report just hit escape velocity. Consider the following: on one hand, the closely followed establishment survey came in red hot, and not only did it soar despite the US entering a technical recession last week, it printed at a 5 month high of 528K, a six-sigm beat to consensus expectations of 250K... ... and with wages also coming in hotter than expected, rising 0.5% M/M or 5.2% Y/Y, it was enough for many to conclude that calls of a recession are premature because, after all, you can't enter a recession when jobs are rising by over 500K. True... but a problem emerges for the second month in a row when looking at third-party data which tracks the number of new employees laid off as well as new layoff events, both of which have soared since May yet which have unexpectedly not been reflected in BLS data. But even if one ignores outside data sources, a more pressing question emerges when looking at the BLS's own far more detailed, if less closely watched, Household survey. Here, unlike the Establishment Survey, the June jobs change was a far smaller 179K increase, following last month's 315K drop. And since the Household survey also feeds other closely watched ratios, such as the labor force participation rate, it explains why despite the apparent "surge" in June jobs, the LFP declined for the second month in a row and is now back to levels last seen in 2021. So what's going on here? Well, those who read our article from last month will know what's coming next. Those who haven't, will be surprised to learn that something appears to have snapped a few months ago, around March, when the Establishment Survey kept on rising unperturbed, while the Household Survey hit some unexplained brick wall, and hasn't moved at all. In fact, since March, the Establishment Survey shows a gain of 1.680 million jobs while the Household Survey shows an employment loss of 168K! But wait, there's more, because digging in even deeper, we find that this drop in Household Survey employment is the result of both full-time and part-time jobs. In fact, as shown below, since March, the US has lost 141K full-time employees and 78K part-time employees. This trend has persisted into June, when according to the BLS, the US labor force saw a 71K drop in full-time workers offset by a 384K gain in far lower paying part-timers (source). The offset? Multiple jobholders, or people who have more than one job. As shown below, while  the number of total employees (per the Household Survey) has stagnated, the number of multiple jobholders has been growing steadily, hitting a new post-covid high in June of 7,541 million. The increase for June? 92K, which stands in stark contrast to the sharp drop in full-time job holders. But even more notable is that since June, the US has lost 141K full-time jobs, 78K part-time jobs, while adding a whopping 263K multiple jobholders. And even more remarkable: the number of multiple jobholders whose primary and secondary jobs are both full-time just hit a record high! Hardly the sign of a strong job market, one where people can afford to quit jobs at will. So what's going on here? The simple answer: Fewer people working, but more people working more than one job, a rotation which picked up in earnest some time in March and which has only been captured by the Household survey. And since the Establishment survey is far slower to pick up on the nuances in employment composition, while the Household Survey has gone nowhere since March, the BLS data engineers have been busy goalseeking the Establishment Survey (perhaps with the occasional nudge from the White House especially now that the economy is in a technical recession) to make it appear as if the economy is growing strongly, when in reality all they are doing is applying the same erroneous seasonal adjustment factor that gave such a wrong perspective of the labor market in the aftermath of the covid pandemic (until it was all adjusted away a year ago). In other words, while the labor market is already cracking, it will take the BLS several months of veering away from reality before the government bureaucrats accept and admit what is truly taking place. We expect that "realization" to take place just after the midterms, because the last thing the Biden administration can afford is admit the labor market is crashing in addition to the continued surge in inflation. Tyler Durden Fri, 08/05/2022 - 10:25.....»»

Category: worldSource: nytAug 5th, 2022

"Very Crooked Numbers": Biden Admin Accused Of Fabricating Low Gas Demand Data To Hammer Price Of Oil

"Very Crooked Numbers": Biden Admin Accused Of Fabricating Low Gas Demand Data To Hammer Price Of Oil Something very odd is taking place in the oil market: on one hand, when it comes to physical, buyers can't seem to get enough: as we noted earlier Saudi prices for Asian buyers just hit a new record high, a clear indicator of relentless demand for physical oil no matter the price... ... and yet at the same time, oil prices have tumbled today amid continued fears that demand for oil, and especially gasoline, will collapse when the US, Europe and the UK slumps into a recession... or already has. As our friends at ForexLive point out, the trigger behind today's plunge in oil prices is gasoline demand, which as we noted yesterday, showed that for July, gasoline demand (on a trailing 4 week basis) slumped below 2020 levels. Intuitively, ForexLive cautions, "that doesn't make sense. Yes, gasoline prices are much higher than 2020 but the world was in the midst of a pandemic and far more people were working from home in the summer of 2020." But the data is what it is and yesterday's numbers were soft once again at 8540k. That was the main reason for the drop in oil yesterday and the decline through $90 today for the first time since the start of the Ukraine war. Next, ForexLive's Adam Button runs through a quick list of factors laying out the arguments for both sides: Why it might be true: 1) Elasticity: Gasoline is traditionally one of the least-elastic commodities -- people need to drive. However there's a limit and we may have it it in early July as gasoline cracks below out and US prices hit record highs. Around the July 4th weekend there were clear signs of demand destruction. Perhaps we hit a breaking point and drivers are cutting discretionary miles whereever possible. 2) Efficiency: There's no doubt that cars are getting more efficient and people are switching to EVs and hybrids. That's a secular trend that will weigh on gasoline demand in the long term. But compared to a year ago? The auto cycle is a long one and it will chip away at demand, but at a slow pace. 3) Flying more: The idea is that people and families are flying more this summer and driving less. Intuitively it makes sense. People were stuck driving to nearby locations for vaction for two years and now are branching out further. We've all see the nightmares at airports and flying is as busy as ever. Is that killing driving demand? Possibly but given that so much of driving is commuting and errands, it's hardly believable that it could account for a 10% decline in demand. 4) Running on empty: According to GasBuddy, US retail gasoline prices have now fallen for 49 straight days. Following the gasoline price shock in late June, we could be seeing a behaviour shift in drivers where they are waiting longer to fill up gas tanks. That has been the right move for the past seven weeks and the drawdown in collective gas tanks could temporarily be masking demand. 5) Commercial pumps: The EIA data measures commercial gasoline demand -- so from gasoline stations rather than consumers -- so similar to the above, we could be seeing gasoline stations running with less inventory. That makes sense because right now the value of inventory is falling daily. Again, this would only be masking demand. 6) A sign of recession: All the talk of recession may have people cutting back on driving and spending. We've heard from Visa lately that's not the case but weekly gasoline demand is some of the most up-to-date data out there. But if gasoline demand is falling this rapidly, what does it say about the rest of the economy? 7) Price is falling: Both crude and gasoline prices are falling and today oil is at the lowest since February. Could implied gasoline demand data really be fooling the market? There are reports on physical tightness and paper crude could be liquidating but I have a hard time believing that US demand figures are a major reason for oil weakness. Why it might not be true: 1) EIA data is subject to major revisions: The EIA does its best to get out petroleum data weekly but it's a tough job and subject to all kinds of assumptions. HFI Reserach notes that the data is subject to big revisions when the month numbers are finally released. So traders may be simply looking at bad data that will be adjusted. 2) US gasoline storage remains at a five year low: Given cracks and pressure on to boost gasoline output, refiners have been working hard this summer. Combined with supposed lower demand, inventories should be moving up rapidly. Despite some progress, inventories are basically flat in the last month and still at five-year lows. This is another HFI chart and their explanation is well-worth reading. 3) Refiners aren't seeing a slowdown: US refining giant Valero was asked about falling gasoline demand last week and Gary Simmons, Chief Commercial Officer, had this to say: "I can tell you, through our wholesale channel there is really no indication of any demand destruction... In June, we actually set sales records. We read a lot about demand destruction and mobility data showing in that range of 3% to 5% demand destruction. Again, we're not seeing it in our system." 4) Alternate data doesn't line up: GasBuddy tracks retail gasoline demand at the pumps in the US and they showed a 2% rise in gasoline demand last week while the EIA showed a 7.6% drop. Morevoer, last week was the strongest demand of the year from GasBuddy. Another data point shows vehicle miles traveled from the US Federal Highway Administration. While it's only though May, it shows vehicle miles traveled up materially year-over-year through May. We'll get the June data in the middle of this month. Conspiracy: Some are have gone so far as to accuse the Biden administration of explicitly "cooking the numbers" to depress the price of oil. As a reminder, in late-June the EIA shut down reporting for several weeks, supposedly due to a server malfunction; however since they have returned, the gasoline demand data has been consistently bad. "Maybe there's an issue with reporting or maybe it's a conspiracy", according to ForexLive. But it's not just same anonymous twitter randos screaming foul: last week Bank of America energy strategist Doug Legate published a note (available to pro subs in the usual place) titled the "fall of gasoline demand appears grossly exaggerated" in which he noted that last week we finally got the post July 4th rebound he suggested could follow the 4th of July holiday. "For the week ending July 22nd, implied gasoline demand rebounded to 9.2 million b/d - a 1 million b/d increase vs the last two week average, and the second highest level of 2022." Curiously, right after that, however, we got a steep drop. So steep, in fact, that Piper Sandler global energy strategist at Piper Sandler, yesterday called the data "crooked": "What is more bearish to the market is this notion that gasoline demand is falling away; we think that's a very mistaken notion based on very crooked numbers from the [DOE] weekly data set... The way that the numbers are computed leaves significant room for error. We are supposed to believe that in July, in the middle of driving season we are only using 8.6 million barrels per day. That would be down half a million barrels a day from May of this year; that would be below the Covid low of 2020. So we ask all the refiners, we ask all the retailers, we ask everybody that reported earnings this season. Every single one of them tells you that their sales are not down materially from even pre-covid days. Some report record high sales." If there is indeed "crooked" data, it comes at a strategic time: just as Brent tumbled below the 200DMA, in the process triggering systematic sell orders which push the notoriously momentum-chasing also community short the commodity. Alas, as Adam Button concludes, "at the end of the day traders have to trade what's in front of them. Right now it's a crude chart that's breaking support after a major period of consolidation -- that's not good. The calls for a recession are growing louder crude demand has a long history of following global growth. There are supply factors that will eventually be bullish -- like the SPR releases ending in October -- but that's months away and OPEC is still adding some barrels." Finally, for those wondering to what lengths the Biden admin would be willing to go to hammer the price of oil, and gas at the pump, sharply lower ahead of the midterms, we remind you what is going on with the US strategic midterm petroleum reserve which has been drained by 110 million barrels since the start of the Ukraine war (with much of it going to China) to levels last seen in May 1985. One better hope the US doesn't encounter a real emergency in the next few weeks, beyond more than just Biden's approval rating hitting an all time low. Tyler Durden Thu, 08/04/2022 - 14:03.....»»

Category: smallbizSource: nytAug 4th, 2022

Sen. Hagerty slams Biden, IRS over calling for bank data: "This is just like the Chinese Communist Party"

Sen. Bill Hagerty, R-Tenn., criticizes Democrats' spending bill that boosts power of the IRS and enables the government to 'snoop' on Americans. Sen. Bill Haggerty joined "Mornings with Maria" Wednesday to discuss the "Inflation Reduction Act" and its connection to the IRS and increased taxes for Americans. Hagerty argued Democrats and the IRS want to "snoop" into Americans' data in order to "justify" more spending, despite being in a recession.  MANCHIN-SCHUMER BILL WOULD REINSTATE TAX ON IMPORTED OIL AND PETROLEUM PRODUCTS  SEN. BILL HAGERTY: Clearly, they want all of our data. This is just like the Chinese Communist Party. They want to be able to snoop and look into every aspect of our life. And that amount of data creates a tremendous amount of reporting overhead. It's going to increase costs for businesses that have to make all these reports. It's going to make it next to impossible for small businesses and entrepreneurs to deal with. They don't care. They're so out of touch with the economy and out of touch with reality that they're just going to continue to plow through because this generates fictitious numbers that they use here in the Congress to justify even more massive spending. WATCH THE FULL VIDEO BELOW: .....»»

Category: topSource: foxnewsAug 3rd, 2022

It"s time to start worrying about China again

China is one of the US' largest customers. As its economy struggles and tensions over Taiwan rise, the United States is bracing for impact. biden, xi meeting 2011Lintao Zhang/Getty Images China's slowing economic growth and supply-chain challenges have impacted the US economy. US-China tensions have risen amid news House Speaker Pelosi will visit Taiwan. These economic and national security challenges could rival international focus on Russia and Ukraine. The US economy is already struggling as new GDP data shows multiple quarters of contraction. But it could face further pressure as developments in China — a familiar economic foe — threaten to spill over globally.A few weeks ago, China reported GDP growth of 0.4% in the second quarter, falling short of the 1% projected by analysts polled by Reuters. It was the worst report since the country reported a 6.8% contraction in the first quarter of 2020 as it began battling the pandemic. Additionally, House Speaker Nancy Pelosi just landed in Taiwan as part of her Asian tour, the highest-ranking US official to visit the island nation in 25 years. This has escalated tensions between the US and China, which views Taiwan — a self-governing democracy — as a Chinese territory. China has said it would view Pelosi's visit as support for the island's independence, and her visit "will lead to serious consequences," according to Chinese Foreign Ministry spokesman Zhao Lijian.Both developments could have major economic and national security implications for the US and echo back to the last time China ruled economic news during trade wars with former-President Trump in which the two countries traded tariffs in attempt to each protect their domestic industries.China accounts for a large chunk of US exports: The 3rd-biggest customer in 2021 at $151 billion through its purchases of goods like machinery, oilseeds and soybeans. And supply chain constraints hampering China's economy are among the many factors pushing inflation in the US to record-high levels and feeding fears of a pending recession. And whether it be next year or in a decade, if a Chinese invasion of Taiwan leads to something beyond a trade war, the economic ramifications could be substantial, to say the least. China's economy is slowing China's muted second quarter growth was driven in part by the zero-Covid policies, which included strict lockdowns and quarantines intended to stamp out the virus. They brought much of the economy to a standstill. In June, the unemployment rate in China of people in cities aged 16 to 24 rose to 19.3%, the highest level since the figure was first released in 2018. In addition to falling short of projections, the GDP report may have even understated the slowing of the Chinese economy. There is widespread skepticism among economists about the accuracy of Chinese economic data, and many have speculated the Chinese economy actually experienced a contraction in the second quarter. "We think the evidence is clear that China's economy contracted significantly in the second quarter," Logan Wright, director of China markets research at Rhodium Group, told The Washington Post. A disappointing GDP report isn't the only bad news for the Chinese economy in recent weeks. In June, property values fell for a 10th straight month, and as construction has slowed, homebuyers in over 20 cities have begun refusing to pay their mortgages on unfinished projects.China's manufacturing activity also unexpectedly contracted in July — further highlighting the economy's sluggish growth as of late. And due to all of these factors, Chinese consumer confidence has taken a nosedive. Despite some scaling back Covid restrictions as cases eased in June, which allowed business activity to resume, recent case spikes tied to a new variant have led to some restrictions being reinstated, suggesting there could be further economic disruptions in the months ahead. Economists have long debated when China will surpass the US as the world's largest economy — some estimates predict 2030. But if slowing growth, a potential overseas debt crisis, and a shrinking workforce — spurred by the country's one-child policy — generate further economic obstacles down the road, the passing of the torch may be less inevitable than it once seemed. Tensions over Taiwan are rising as China's economic power dragsWhile China's economic challenges have negative impacted the US economy, a significant political conflict could make things even worse — potentially putting the countries' economic relationship in jeopardy. Such a conflict isn't unthinkable, particularly if tensions escalate further in response to Speaker Pelosi's visit to Taiwan on Tuesday.While the US does not have formal diplomatic relations with Taiwan, President Biden has suggested it would supply weapons to Taiwan in the event of an attack from China. Whether the US would take action beyond this — potentially leading to a military conflict — remains uncertain. The world may receive the answer soon enough. While there has been previous speculation China would invade Taiwan by 2025 or 2030, some US officials reportedly fear it could come within the next 18 months.  After all, Chinese President Xi Jinping, reportedly doesn't see the economy as the only path to making China the "great power" he hopes it to be."It's the idea of China standing up, no longer hiding and biding, and being a world power be taken seriously, " Gerard DiPippo, a senior fellow in the economics program at the Center for Strategic & International Studies, told Axios. "Economics is part of that, but the non-economic side is louder now than it was ten years ago."While an economic slowdown may weaken China to some degree, it's possible this shift in focus to the "non-economic side" could actually increase the likelihood of a confrontation with the US.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 3rd, 2022

Miranda Devine slams Democrats for "lying" about recession, "trying to fool" the American people on inflation

Fox News contributor Miranda Devine ripped Democrats on 'Varney & Co.' Monday for allegedly 'lying' about the U.S.'s economic state of a recession......»»

Category: topSource: foxnewsAug 1st, 2022

The New Age Of Orwellianism

The New Age Of Orwellianism Authored by Josh Hammer via The Epoch Times, Community organizer and left-wing social activist Saul Alinsky wrote, in his 1971 book “Rules for Radicals,” that “he who controls the language controls the masses.” Alinsky, whose work profoundly influenced at least one notable fellow Chicagoan, Barack Obama, was in that quip channeling George Orwell’s famous dystopian novel, “1984.” “Newspeak,” the language of Orwell’s fictional single-political party superstate, was a tool devised for monitoring the people’s communications, prosecuting “thoughtcrimes,” and ultimately controlling and dictating the people’s very beliefs. Conservatives have taken pleasure in poking fun at the modern Left’s “Orwellian” tendencies—perhaps too much, actually, as overuse of the accusation has had the effect of limiting its potency. But as the woke ideology metastasizes within the American Left like the cancer it is, and as censors increasingly clamp down on anything sniffing of dissent to the regime’s orthodoxy, it is now clear that we are in a new age of Orwellianism. In this new age, the regime and its enforcers pursue the suffusion of its orthodoxy at any cost, gaslighting dissenters into not believing their own lying eyes. Last week, new governmental data revealed that the American economy, measured by gross domestic product, contracted for the second straight quarter. That was, up until perhaps two weeks ago, the universally accepted definition of what constitutes a “recession.” This was not a partisan issue; indeed, well-known liberal, Democratic Party economists have frequently defined recession in precisely these terms. Back in 2008, President Joe Biden’s current National Economic Council director, Brian Deese, stated: “Of course economists have a technical definition of recession, which is two consecutive quarters of negative growth.” And in 2019, top Biden economic adviser Jared Bernstein said that a “recession” is “defined as two consecutive quarters of declining growth.” Democrats are now singing a different tune. White House press secretary Karine Jean-Pierre has stubbornly refused to concede that America is now in an economic recession. Deese apparently also disagrees with his old self of 2008: Following the release of the data evincing the second straight quarter of economic contraction, Deese stipulated that we are “certainly in a transition,” but also added that “virtually nothing signals that this period … is recessionary.” The ruse is transparent and obvious to the point of comedy. As famed investor David Sacks tweeted: “A lot of people are wondering about the definition of recession. A recession is defined as two consecutive quarters of negative GDP growth if a Republican is president. The definition is far more complicated and unknowable if a Democrat is president.” Democrats similarly seem interested in changing the definition of “inflation,” which currently sits at four-decade highs and is disproportionately responsible for Biden’s dismal job approval ratings and Democrats’ unfavorable political outlook this fall. The widely accepted economic definition of inflation is when there is too much money chasing too few goods. The way to tamp down inflation is thus to limit the money supply and/or increase the production of goods. Just last week, around the same time as when the United States formally entered a recession, Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.) finally reached an agreement on a version of the White House’s long-sought after Build Back Better domestic initiative. But Democrats renamed the bill: It is now not called Build Back Better but the Inflation Reduction Act. And the revised bill includes new government expenditures to the tune of nearly $400 billion in energy- and climate-related spending. Authorizing such a fiscal boondoggle is the precise opposite of limiting the money supply. It is the logical equivalent of trying to put out a fire with a blowtorch. Remarkably, it is the same ideologues who are eager to change the well-accepted definitions of “recession” and “inflation” who remain perplexed as to what exactly a “woman” is. In March, then-Judge Ketanji Brown Jackson, during her Senate Judiciary Committee confirmation hearing to replace the retiring Justice Stephen Breyer on the Supreme Court, pointedly refused to define what a “woman” is. Her excuse was that she is “not a biologist.” Related, in Matt Walsh’s excellent new documentary, “What Is a Woman?,” the myriad “gender studies” professors and gender ideology-bewitched “doctors” interviewed by Walsh invariably define a “woman,” in circular fashion, as being “someone who identifies as a woman.” Whether it is a Supreme Court justice herself or the vogue flatulence that now constitutes “gender studies” in the American academy, then, the Left is incapable of defining what a “woman” is. That confusion appears to be ubiquitous: Lia Thomas, the biological man who has been wreaking havoc in women’s collegiate swimming, was even nominated for the 2022 NCAA Woman of the Year award. Alinsky would be proud of such an imperious enforcement of regime-approved orthodoxy; “he who controls the language controls the masses,” after all. The Left’s fundamental problem is that its haughtiness, fervor and zeal for gaslighting us sane Americans is belied by its unpopularity. It is curious that the Left can talk and act this way when its most notable avatar, Biden, is as severely unpopular as he currently is. Perhaps the Left will be chastened by its impending November defeats at the ballot box. But don’t bet on it. Tyler Durden Sun, 07/31/2022 - 22:00.....»»

Category: worldSource: nytJul 31st, 2022

Gold"s Rise Is Just A Recession Away

Gold's Rise Is Just A Recession Away Authored by Matthew Piepenburg via GoldSwitzerland.com, Many are asking about Gold’s rise, or better yet: When, how and why it will rise? Toward this end, cold data in the face of historical facts and current recessionary realities will make gold’s rise easier to grasp. Let’s start with the cold data, which centers around officially reported real rates and relative USD dollar strength, two current and key headwinds to gold’s rise. Cold Data Point 1: Real Rates As we’ve written previously, there is a clear inverse relationship (95% correlation) to real (inflation-adjusted) rates and the gold price. Stated simply, when inflation outpaces the yield on the 10 UST, the net result is a negative real rate environment. Conversely, when rates (as defined by the yield on the 10Y UST) are above inflation, we have positive real rates. Gold, as a real asset that produces no yields or dividends, shines brightest when real yields/rates are negative. After all, when bonds produce negative returns, investors look more favorably toward real assets like precious metals. Today, one would think that soaring Year-over-Year (YoY) inflation in the U.S. at 9.1% (and closer to 18% using the more honest 1980’s CPI scale) against a 2.89% nominal yield on the 10Y UST would seem to be a screaming indicator of negative real rates and thus a profound tailwind for gold, right? And as to inflation, we said over a year it ago it would skyrocket while Powell promised it was “transitory.” After all, when a nation expands its money supply by 40% in a two-year period prior to COVID and Putin, one can’t just blame inflation (or a later Fed Balance Sheet expansion from $4.2T to $8.7T) on a virus or Russian bully. Based on these cold facts and the subsequent (and monthly YoY) CPI figures, who was more candid (and accurate) about transitory inflation? See a trend? Getting back to real rates, a 2.9% nominal yield minus the above 9.1% inflation rate = negative 6.21% real yields. Easy-peasy and good for gold’s rise, right? Well, nothing is that simple in our new central bank normal… Fudged Math Whether you believe in central banks or “official” inflation data (and we certainly do not), this doesn’t change the equally cold fact that central banks (or central controllers) are nevertheless always right, even when they are empirically wrong. According to the Fed, for example, the Real Rate on the US 10Y UST is +1.06%. See for yourself. Huh? How does a negative 6% become a positive 1%? Short answer: Clever Fed math (mixed with deflationary expectations priced into the duration of the bond). Huh? As indicated in many prior reports, the Fed, much like Al Capone’s accountants, are masters at manipulating, downplaying, obfuscating or just flat-out non-reporting embarrassing facts, including severe inflation realities, to create fictional calm. Thus, when publicly charting otherwise embarrassing real rate data, they employ a spiders-web of clever math and proprietary models to come up with a downplayed inflation rate against which they measure nominal rates to derive a fictional “inflation-adjusted” real rate. In other words, they fudge the numbers. In the example above, rather than using the otherwise simple 9.1% YoY inflation rate, the Federal Reserve Bank of Cleveland offers us an official mash of “expectations”, “risk premiums,” “real risk premiums,” the “real interest rate,” as well as a “model” that mixes “data, inflation swaps” and even “surveys” just to avoid stating what is already abundantly clear: Real rates today are -6.21 not +1.06. In essence, the foregoing Fed math hides the blunt reality of current inflation by saying they foresee deflation ahead over the duration of the 10Y UST. And as we discuss below, they may ironically be correct but for all the wrong reasons… For now, and given the “official facts” as presented by the never-wrong Fed, current real rates on the 10Y UST are often mis-presented as slightly positive rather than honestly reported as deeply negative.  And as stated above, this fiction has been a clear, deliberate (and temporary) headwind for gold’s rise. Cold Data Point No 2: Rising (but Short-Lived) U.S. Dollar Strength The USD, of course, has been rising at astronomical levels (7% in Q2), and this too is often a headwind to gold’s rise, as a rising dollar appears/appeals to many investors (foreign and domestic) as a safer haven than precious metals. In fact, a rising USD and rising rate environment was immediately (and predictably) bad for just about every asset class, though far less so for gold’s rise. There were few places to hide. Percentage declines across asset classes for 1H 2022 proved this point: NASDAQ 100, Down 29.3% S&P 500, Down 20.0% Emerging Markets, Down 17.2% US Govt Bonds (TLT), Down 21.9% Real Estate (XLRE), Down 20.1% HY Bonds (HYG), Down 13.8% Muni Bonds (MUB), Down 7.8% Gold Bullion, Down 1.2% We’ve explained this dollar rise in prior reports as a desperate yet explicable attempt by Yellen and Powell (and Biden and Summers) to attract foreign inflows into U.S. markets wherein the USD is seen as a relatively superior “safe haven” when compared against other global currencies, like the Euro, whose debt levels (and non-reserve currency status) can’t endure equally hawkish rate hikes. That is, by pursuing deliberate and well-telegraphed rate hikes (50 bps in May, 75 bps in June and potentially more to come in July), the Fed, for now, has made the USD the best currency horse in the international fiat glue factory. This deliberate policy to make the USD stronger is a temporary tool to “fight” inflation, as it reduces the cost of import prices within the U.S. A German toaster, after all, costs less when the USD reaches parity with the Euro. But a stronger USD also strangles U.S. export competitivity and adds to increased U.S. trade deficits longer term, which is one (but not the main) reason the strong USD policy will be short-lived (see below). Why short-lived? Because as indicated above, historical facts and current realities all converge toward a recessionary landscape in which weaker currencies and lower rates are the only path forward. What makes us think so? The Historical Facts and Cold Math of Recessions Despite the post-2008 Fed’s valiant yet vain (really vain) attempts to convince the world that recessions have been made extinct by mouse-click monetary policies, the simple yet common-sense reality is that recessions have not been outlawed (but merely postponed) by such fantasy fiat dollars. Deep down, we all know this, even the market bulls: You can’t solve a debt crisis with more debt paid for with money created by a computer rather than GDP. The other simple yet common-sense and historical reality is that no recession (not one, not ever) can be defeated in a backdrop of high rates and a strong currency, the very policies which the US is currently and temporarily pursuing. Despite the fatal hubris and immense power of the Fed, the U.S. will be no exception to these recessionary realities and consequent policy shifts. The markets (from the NASDAQ to Muni-bonds) can’t afford rising rates and will continue to fall as Powell pretends to be a rate-hiking Volcker despite forgetting that Volcker was facing a 30% debt to GDP in 1980, not 125% ratios in 2022. Powell may want to believe he’s a Volcker, and I’d like to ride a horse like Adolfo Cambiaso or throw a fast ball like Nolan Ryan, but it ain’t gonna happen. In short: Powell will pivot as the grotesquely over-heated bubble markets the Fed created start tanking further. Tech stocks (of which we consider BTC to be) are uniquely poised for further pain… Like the Q1-Q4 2018 rate-hikes to the predictable 2018 Q4 market beat-down (and hence 2019 pivot), the Fed will reduce rates and the USD will weaken in a QT to QE pivot once the recession off (or already under) our bow slams into our debt-soaked and sinking Titanic economy and markets. Current Realities: Recession Ahead (or Already Here?) Recessions become official (and lagging) once the number-crunchers (i.e., fiction writers) in DC officially tell us so, namely, once they report 2 consecutive quarters of negative GDP (i.e., too late for most retail investors who still trust the Fed). Thankfully, there’s no need to hold our breath. [ZH: Of course this is not a recession, the elites have told us so] In short, we are likely already in recession, and this neither bothers nor surprises the Fed. After all, the same bankers who built the inflationary bubble will trigger the deflationary recession to follow. Stated more simply, and when it comes to market bubbles, the Fed giveth and the Fed taketh away. The Fed’s Real Anti-Inflation Weapon: A Deflationary Recession Despite pretending to fight inflation with rising rates, the Fed knows its nervous rate hikes (be they at 50, 75 or even a 100 bps) won’t defeat current inflation, which is considerably much higher than officially reported. Negative rather than positive real rates are already (albeit unofficially) in play to deliberately “inflate away” some of Uncle Sam’s embarrassing debt. By lying about (i.e., “fudging”) the inflation data, the Fed therefore gets to have its cake and eat it too; namely it can privately exploit extreme inflation while publicly pretending/reporting it lower than it actually is, even at these embarrassing levels. (Of course, another way to calm inflation fears is to intentionally repress the paper price of gold on the COMEX, of which we’ve written extensively.) Yet looking ahead, the historically most accurate tool for fighting inflation (and crushing Main Street), of course, is a recession, wherein economic growth and consumer demand weakens and hence prices (and inflation) fall—i.e., deflationary forces. The Fed knows this too. Nothing fights a Fed-created inflation like a Fed-induced recession. Thanks Mr. Powell. The current chest-puffing claims by the Fed to send the Fed Funds Rate to a “projected” 3.8% by 2023 is, in my opinion, just another Fed ruse, as nearly all its “projections” have been in the past. At $30T+ in public debt, Uncle Sam (or Mr. Market) can’t afford such “projections.” For every 1% rise in rates, the cost of servicing Uncle Sam’s $30T+ bar tab rises by $27 million per day. And WHEN not IF the recession hits the U.S., the Fed knows all too well that there is no way out of that dis-inflationary (and long-term) recession other than lower rates and a weaker USD—all good for gold’s rise. As our advisory colleague, Ronni Stöferle recently observed: “The current cycle of interest rate hikes could go down in history as the shortest and weakest in recent decades.” Why? Because, 1) economic activity and growth is slowing (and has been for years), 2) indebted nations can’t afford meaningfully higher rate hikes, 3) inflationary debt relief is counter-acted by increased government spending, and 4) markets are already pricing-in inevitable rate cuts. The Return of the Money Printers—Just a Recession Away And what’s the best method to 1) cap or cut rates (as Japan’s current YCC confirms), 2) weaken the currency and 3) spur “growth” in a recession? Easy: A money printer to artificially suppress bond yields and weaken (debase) the currency. Again, this means the inevitable pivot from current hawkish tightening to future dovish easing is just a recession away. For now, and as stated elsewhere, the Fed’s (and Canada’s) hawkish rate hikes today have been engineered not to fight inflation, but simply to have room to cut rates tomorrow when the recession our central banks have been postponing with mouse-click dollars comes painfully home to roost. Gold Price Reaction, Gold’s Rise This inevitable shift from a rising dollar and rising rate setting to a falling dollar and repressed (but still negative) rate reality in a recession will be an extreme catalyst for gold’s rise, now currently and intentionally suppressed by: 1) an openly rigged COMX market, 2) a disingenuous “anti-inflationary” rate hike policy and 3) a short-term strong dollar policy to fight mis-reported (i.e., much higher) inflation. My colleague, Egon von Greyerz, would remind that gold’s rise is based on more than just inflation and deflation fluctuations or rising or falling rates. Indeed, gold’s rise in the past has occurred in environments of a strong dollar, a weak dollar, a rising rate and a falling rate. There are many specific reasons and contexts for this, too numerable and nuanced to unpack in an article, which is why we’ve authored a book (Gold Matters) to explain the same in greater detail. There’s More to Gold’s Rise than a USD Furthermore, and as anyone owning gold in currencies other than the USD already knows, gold’s rise has been considerably stronger against currencies who don’t have the bullying power of the USD—namely the power to export inflation or pivot from Hawk to Dove to Hawk because of a world reserve currency status. The EU and its central bank, for example, are so thoroughly debt-strapped and dependent upon USD-based markets, debts and settlement policies that even an ECB rate hike move from 25 bps to 50 bps has LaGarde shaking in her designer boots. France, from where I sit, has a total debt to GDP ratio of over 350% and Italy, whose debt and political coalition confusions are no mystery to European citizens, is an early warning sign of future economic and political fracturing in the EU. Germany, meanwhile, will soon (2023) have to pay the bill for the inflation-adjusted bonds it issued in prior years, the cost of which will be 25% of the nation’s total debt. And as for Japan and its dying Yen (at 50-year lows and down 24% in dollar terms in the first half of 2022 after decades of mouse-click money madness/QE), this nation is effectively a financial zombie. Again, these are just cold facts. Not Even the USD Can Avoid Nature Despite the slow, very slow process of de-dollarization set in motion by openly failed/backfiring sanctions against an energy-rich Putin, the USD remains uniquely positioned (via its petrodollar, its SWIFT pre-eminence and its post-war reserve currency status) to sin deeper and longer with its centralized money printers, fictional CPI authors and disingenuous rate policies. But not even the USD and an artificially engineered and controlled market economy can escape the inevitable and natural consequences of over-expansion, over-dilution/debasement and over-indebtedness. Regardless of how the Fed and other central banks misreport inflation, recessionary realities will make the genuine nature and future of negative real rates a reported reality, which will create an optimal setting for gold’s rise. As I, Ronni Stöferle and many others have argued for well over a year, the developed economies (which are in fact little more than debt-soaked banana republics on paper) cannot endure (ertragen) the reality of an international debt crisis which would surely follow any prolonged policy of rate hikes into a global debt swamp of over $300T. Gold owners will benefit most from these inevitable changes and realities, as all currencies and all central banks are running out of tools, options and excuses. As in hockey, polo or asset prices, the best players look to where the puck or ball is headed, not where it currently sits. The forces discussed above (recessionary, rate and currency) collectively, historically, empirically and common-sensically point toward new highs for gold, whose bull market, which began to stretch its legs after the 2016 bottom of $1050, has yet to sprint ahead. But gold will sprint fast and higher north, even if it does not feel like it today. Tyler Durden Sat, 07/30/2022 - 10:30.....»»

Category: worldSource: nytJul 30th, 2022

Futures Surge Propelled By Stellar Tech, Energy Earnings

Futures Surge Propelled By Stellar Tech, Energy Earnings US and European stock were set for their best month since November 2020 following blowout earnings from the likes of Amazon and Apple last night, and record profits from energy giants Exxon and Chevron this morning, boosted by expectations of shallower Federal Reserve monetary tightening now that the US is technically in a recession. S&P futures rose 0.6% following yesterday's meltup while Nasdaq 100 futures rose more than 1% after US stocks hit a seven-week high Thursday, as record underinvested hedge funds are forced to chase the move higher now that most downside catalysts (peak inflation, hawkish Fed, earnings disappointment) have been eliminated. The dollar was flat, and 10Y yields rose slightly to 2.70% after plunging as low as 2.65% yesterday after the Q2 GDP print confirmed news of the unofficial US recession. In premarket trading, Amazon soared as much as 13% in premarket trading on Friday, after the e-commerce giant reported better-than-expected 2Q results and gave an upbeat forecast. Apple rose 2.8% after the iPhone maker reported third-quarter revenue that was stronger than expected. US energy giants Exxon and Chevron both rose sharply higher in premarket trading after reporting record profits for Q2. here are some other notable premarket movers: Roku (ROKU US) tumbles 26% after the video-streaming platform company issued a 3Q revenue forecast and reported 2Q results that were weaker than expected, citing a slowdown in TV advertising spending. Intel (INTC US) slumps 9.4% after the chip manufacturer reported lower-than-expected 2Q earnings and cut its full-year forecasts US-listed Chinese stocks fall in premarket trading, following Asian peers lower, amid a lack of new stimulus policies from China’s top leadership. Avantor Inc. (AVTR US) analysts pointed to several factors weighing on the life sciences firm’s results, including its exposure to the European market, forex and Covid. Avantor’s shares slid 11% in US postmarket trading on Thursday. Dexcom Inc. (DXCM US) shares slumped as much as 18% in premarket trading, with analysts pointing to disappointing US growth and a delay to the US launch of the medical device maker’s G7 glucose- monitoring system used by people with diabetes. Analysts said the reaction was overdone and a buying opportunity given the growth outlook. Edwards Life (EW US) down after posting second- quarter results below analyst expectations, as hospital staff shortages and FX headwinds weigh on the medical technology company’s growth. Global shares are set for a second weekly advance, paring this year’s rout. The risk is that the recent bout of optimism eventually gets a reality check if inflation stays stubbornly elevated, leaving interest rates higher than investors would like amid an economic downturn. “At some point, the Fed will pivot policy and that should be better for risk markets, but in the meantime, they’re so bent on quelling inflation that we prefer not to buy the dip here,” Thomas Taw, head of APAC iShares Investment Strategy at BlackRock Inc., said on Bloomberg Radio. Elsewhere, a call between US President Joe Biden and China’s Xi Jinping underlined bilateral tension even as the leaders sought an in-person meeting. European stocks also rallied into the month-end after positive earnings buoyed sentiment. The Euro Stoxx 600 rose 0.9%, with Italy's. FTSE MIB outperforms peers, adding 1.6%, FTSE 100 lags, adding 0.6%. Construction, retailers and consumer products are the strongest performing sectors. The banking sector outperformed after a slate of better-than-expected results from Banco Bilbao Vizcaya Argentaria SA, Standard Chartered Plc and BNP Paribas SA. Hermes International rose about 6% after joining LVMH and Kering SA in posting strong results, showing the luxury consumer is resilient so far to high inflation and worries over a potential economic downturn. Here are some other notable European movers: NatWest shares surge as much as 9.5% after the UK lender reported second-quarter earnings that beat estimates, also announcing a special dividend with analysts seeing consensus upgrades ahead. Allfunds jumps as much as 14%, most since May, after reporting adjusted Ebitda ahead of Morgan Stanley’s expectations and providing a “reassuring outlook.” Zalando rises as much as 8.7% alongside other European ecommerce stocks following blowout results from US giant Amazon, which sent its shares surging in premarket trading. Hermes climbs as much as 9.6% to an almost 6-month high after the maker of Kelly handbags reported what Bernstein called a “very strong” beat, with 2Q sales almost 9% ahead. L’Oreal jumps as much as 5.2% after it reported 2Q like-for-like sales that beat estimates, with Jefferies calling the performance “another quarter of gravity- defying growth.” Fluidra gains as much as 12%, the most intraday since October 2020, despite a guidance cut as analysts remain optimistic on longer-term prospects. Kion rises as much as 9.6%, the most since March, bouncing after a post-results decline in the prior session. UBS said it’s positive on the forklift maker’s outlook. Signify slumps as much as 11% after reporting 2Q Ebita below consensus and flagging margin headwinds, which Citi expects will lead to low-single-digit downgrades to full-year estimates. AstraZeneca slides as much as 3.1% on its latest earnings, which exceeded estimates. Analysts say the beat, however, was fueled by one-time items. EssilorLuxottica dips as much as 5.1% after the eyewear firm reported interim results. Jefferies noted the “understandably circumspect” tone of the company’s near-term outlook. Fresenius Medical Care declines as much as 5.7%, extending Thursday’s 14% fall, as the market continued to digest the guidance downgrade. JPMorgan cut its price target by more than 50%. AMS-Osram shares fall as much as 9.7% after its new guidance consensus estimates, with the chipmaker saying production volumes were hit by increasingly unfavorable end markets. Euro-zone GDP rose by more than three times the amount economists expected, putting it on a firmer footing as surging inflation and a possible Russian energy cutoff threaten to tip it into a recession. On the other hand, inflation in the region soared to another all-time high, supporting calls for the European Central Bank to follow up its first interest-rate hike since 2011 with another big move. The tone was more somber in Asia, hampered by a tumble in Chinese tech shares that dragged Hong Kong toward a correction of more than 10% from a June high. Asian stocks slumped as losses in Chinese equities offset gains in the rest of the region, after the nation’s Politburo refrained from announcing new stimulus. The MSCI Asia Pacific Index swung between small gains and losses on Friday. Alibaba and Tencent were among the biggest drags, countering gains in heavyweights including TSMC and Reliance Industries. The Hang Seng Index entered a technical correction, while a gauge of Hong Kong’s tech shares tumbled close to 5%. Sentiment was damped by Chinese leaders’ downbeat assessment of growth and the lack of new measures to boost the economy from a highly anticipated Politburo meeting. Shares of Alibaba tumbled after a report said that Jack Ma was planning to give up control of his fintech unit Ant Group, ahead of the tech giant’s earnings report next week. “We were kind of looking for more policy” from the Chinese government before the National Party Congress later this year, Thomas Taw, head of APAC iShares Investment Strategy at BlackRock Inc., said on Bloomberg Radio. “I think the offshore, foreign sentiment towards China is very, very bearish at the moment.” Investors are also monitoring the latest corporate results while keeping an eye on the property crisis and Covid situation in China. Major overseas earnings before the Asian open were a mixed bag, with strong reports from Apple and Amazon while Intel disappointed. The key Asian stock gauge is still on track for its biggest monthly gain so far in 2022. While stocks in Hong Kong and mainland China are set for a monthly loss, the region’s other markets such as India, Japan and South Korea are poised for their best months of the year. Japanese stocks dipped in afternoon trading as the yen resumed strengthening against the dollar. The Topix fell 0.4% to close at 1,940.31, while the Nikkei was down 0.1% to 27,801.64. Still the Nikkei closed July with a 5.3% gain, its best month since November 2020. The yen rose 0.9% to around 133 per dollar, pushing its three-day advance to 2.8%. Yen Advances to Level That Threatens This Year’s Big FX Short Keyence Corp. contributed the most to the Topix decline, decreasing 2.8% after it missed earnings expectations. Out of 2,170 shares in the index, 601 rose and 1,469 fell, while 100 were unchanged. In FX, the Bloomberg dollar spot index falls 0.3%. GBP and CAD are the weakest performers in G-10 FX, JPY continues to outperform, trading at 133.11/USD.   In fixed income, Treasuries were cheaper across the curve with losses led by the long-end, where yields are higher by around 4bp. Wider losses seen across bunds and gilts, weighing on Treasuries as ECB rate-hike premium is added in after a mix of CPI and GDP data out of Eurozone. US 10-year yields around 2.70%, cheaper by 2bp on the day and outperforming bunds and gilts by 3.5bp and 4.5bp in the sector; long-end led losses steepens 2s10s, 5s30s spreads each by around 2bp on the day. IG issuance slate empty so far; four names priced $5.1b Thursday, paying 15bp in concessions on order books that were 3 times oversubscribed.  WTI trades within Thursday’s range, adding 2.1% to trade around $98. Spot gold rises roughly $8 to trade close to $1,765/oz. Most base metals trade in the green; LME zinc rises 3.9%, outperforming peers. Looking to the day ahead, data includes the employment cost index, PCE, income, and spending data in the US, Tokyo CPI, consumer confidence, jobless rate, retail sales, industrial production, and starts in Japan, CPI and GDP in France, GDP in Germany, and GDP in Canada. It’s another full slate of earnings which will include Sony, Exxon, Procter & Gamble, Chevron, AbbVie, AstraZeneca, Colgate-Palmolive, BNP Paribas, Eni, Intesa Sanpaolo, LyondellBasell, Engie, BBVA, NatWest, and Citrix. Market Snapshot S&P 500 futures up 0.7% to 4,103.00 Gold spot up 0.4% to $1,763.27 U.S. Dollar Index down 0.36% to 105.97   Top Overnight News from Bloomberg Euro-zone inflation climbed to another all-time high, supporting calls for the European Central Bank to follow up its first interest-rate hike since 2011 with another big move The euro-zone economy expanded by more than three times the amount economists expected, putting it on a firmer footing as surging inflation and a possible Russian energy cutoff threaten to tip it into a recession Stocks in Europe and the US are set for their biggest monthly advance since November 2020 on positive earnings and expectations of shallower Federal Reserve monetary tightening China’s top leadership is committing to ample liquidity as the nation contends with a slowdown. So far, a lot of that cash is sitting in the financial system instead of being transmitted to the real economy Biden, Xi Plan In-Person Meet as Taiwan Tensions Intensify Amazon, Apple Poised to Add $230 Billion After Resilient Results Citigroup Drops Some Clients to Boost Trading Returns Credit Suisse Woes Spread to Singapore With $800 Million Trial Bitcoin and Ether Are on Track for Their Best Month Since 2021 Russia Is Wiring Dollars to Turkey for $20 Billion Nuclear Plant Alibaba Slumps as Traders Assess Earnings Risk, Ant Report BofA Says Too Soon for Bull Rally as Investors Pile Into Stocks Singapore, New York Tie for Highest First Half Rental Growth Morgan Stanley Hires Shen as Head of China Onshore Equities Alito Mocks Foreign Leaders Who Attacked His Abortion Opinion A more detailed look at global markets courtesy of Newsquawk APAC stocks traded mixed despite the positive lead from Wall Street, with Chinese markets lagging. ASX 200 was lifted by gold names amid the recent rise in the precious metal. Nikkei 225 saw mild gains throughout the session but eventually fell into the red amid notable JPY strength, whilst Nissan shares fell over 4% at one point after earnings. KOSPI was propelled by its Telecom sector, with Financials and Industrials also aiding. Hang Seng slipped over 2% with Alibaba shedding 6% after WSJ reported that Jack Ma intends to relinquish control of Ant Group. Headlines pointed out the Hang Seng index has fallen 10% from its June peak. Shanghai Comp held a negative bias as traders reacted to the Biden-Xi call, which included no rollback of Trump-era tariffs. Selling thereafter resumed following downbeat commentary from China's MOFCOM, suggesting the outlook for H2 trade growth is not optimistic. Top Asian News China's Commerce Ministry said China's foreign trade faces higher risks; the outlook for China's H2 trade growth is not optimistic, via Bloomberg. MOFCOM said they will study targeted measures for foreign trade, and will step up support for export credit insurance in H2 and expand imports actively and ensure domestic commodity supply, via Reuters. China's Commerce Ministry official said foundation for consumption recovery is not solid yet, more efforts needed to boost consumption, via Reuters. Japanese government decided to tap JPY 257bln in budget reserves to help with rising oil and broader inflation, according to the MoF. PBoC injected CNY 2bln via 7-day reverse repos with the maintained rate of 2.10% for a net drain of CNY 1bln and for a weekly drain of CNY 12bln PBoC set USD/CNY mid-point at 6.7437 vs exp. 6.7414 (prev. 6.7411) Japan's Finance Minister Suzuki provides no comment on day-to-day FX moves, closely watching moves with a sense of urgency while working with the BoJ; Japan's MOF said it did not intervene in FX in the June 29th to July 27th period. European bourses are firmer across the board, Euro Stoxx 50 +0.9%, and are set to post their best monthly performance since Nov'20. Stateside, the NQ continues to outperform, +1.2%, amid after-market earnings from AMZN and AAPL; US PCE Price Index ahead. Top European News Germany Stagnates as Rest of Europe Beats Estimates: GDP Update UK June Mortgage Approvals Fall to 24-Month Low of 63.7k Ukraine Latest: Lavrov in No Rush to Respond to Blinken Request Amundi Defies Gloom Among Managers With $1.8-Billion Inflows Biden, Xi Plan In-Person Meet as Taiwan Tensions Intensify FX Yen recovery momentum gathers pace and extends beyond Dollar pairing to JPY crosses, USD/JPY slides over 2 big figures to test 132.50, EUR/JPY down to 137.56 from 137.32. DXY loses grip of 106.000 post-negative US GDP print and looking for support from PCE, ECI and/or Chicago PMI. Euro fades again irrespective of some encouraging Eurozone data and option expiry interest may be capping, EUR/USD tops out just over 1.0250 yet again and circa 3bln rolling off between 1.2045-50. Rand underpinned by Gold gains and Lira holds above 18.0000 as Turkish trade deficit narrows and Russia transfers funds for a nuclear facility. Sterling fades amidst mixed BoE consumer credit and housing metrics, Cable sub-1.2150 vs 1.2245 at best and EUR/GBP probing 0.8400 vs low around 0.8346 yesterday. Fixed Income Marked debt retracement following run of even more pronounced recovery gains. Bunds fade just shy of 158.00 again and retreat to 156.21, Gilts reverse around 100 ticks from 118.36 and T-note to 120-21+ from 121-08 at best. Stronger than expected Eurozone data also in the mix along with buoyant risk sentiment and firm oil. Bonds braced for busy pm agenda comprising US PCE, ECI and Chicago PMI. Commodities WTI Sep’22 and Brent Oct’22 are posting gains in excess of 2.0% on the session but remain capped by USD 100/bbl and 105/bbl respectively. Dutch TTF Sep’22 has pulled back to modestly below the EUR 200/mWh mark, but remains bid after several sessions of pronounced price action. Spot gold is relatively contained and resides just above the unchanged mark but continues to be dictated by the USD with the JPY-induced pressure lifting the yellow metal briefly overnight. Saudi Energy Minister and Russian Deputy PM Novak met in Riyadh and discussion cooperation between the two nations, according to Twitter, via Reuters. Biden-Xi Call Senior US admin official said US President Biden and China's President Xi discussed face-to-face meeting and directed teams to follow up; did not discuss any potential lifting of US tariffs on Chinese products. White House said presidents Biden and Xi discussed a range of issues important to bilateral relationship and other regional/global issues. Senior US admin official said Biden and Xi had a 'direct and honest' discussion on Taiwan. They discussed areas of cooperation including climate change, health security and counter-narcotics. Biden brought up the long-standing concerns on human rights. Macroeconomic coordination between China and US is of great importance. Biden explained to Xi his core concerns about China's economic practices. China President Xi told US President Biden that the US should abide by the One China principle, and act in line with its words, according to State Media. On the Taiwan issue, Xi told Biden that 'those who play with fire will get burned'. Xi told Biden that China fiercely opposes Taiwan independence and the interference of external forces US President Biden told China President Xi that the US stance on One China policy remains unchanged, according to China's Global Times. Central Banks BoJ Summary of Opinions (Jul meeting): achieving the price stability target in a stable manner is difficult given developments in the output gap and inflation expectations. The recent resurgence of COVID-19 is extremely rapid, and it is necessary to examine how this will affect financial positions, mainly of small and medium-sized firms. The Bank needs to closely monitor the impact that the recent increase in its Japanese government bond (JGB) purchases to contain upward pressure on interest rates has on the functioning of the JGB market. ECB's de Guindos says EUR depreciation has been one of the factors behind high inflation, main factor that guides decisions is the evolution of inflation. HKMA buys around HKD 9.656bln from the market to defend the peg.   US Event Calendar 08:30: 2Q Employment Cost Index, est. 1.2%, prior 1.4% 08:30: June Personal Income, est. 0.5%, prior 0.5% June Personal Spending, est. 0.9%, prior 0.2% June Real Personal Spending, est. 0%, prior -0.4% June PCE Deflator MoM, est. 0.9%, prior 0.6%; PCE Deflator YoY, est. 6.8%, prior 6.3% June PCE Core Deflator MoM, est. 0.5%, prior 0.3%; Core Deflator YoY, est. 4.7%, prior 4.7% 09:45: July MNI Chicago PMI, est. 55.0, prior 56.0 10:00: July U. of Mich. Sentiment, est. 51.1, prior 51.1; Expectations, est. 47.5, prior 47.3 Current Conditions, est. 57.1, prior 57.1 1 Yr Inflation, est. 5.2%, prior 5.2%; 5-10 Yr Inflation, est. 2.8%, prior 2.8% DB's Jim Reid concludes the overnight wrap Morning from sunny Frankfurt. Today we wave goodbye to July which after the worst first half returns since 1788 in treasuries and 1962 for the S&P 500, is set to launch us into a very strong start to H2. A reminder that in a chart of the day I did back in June, it showed that the worst 5 H1s for equities all saw a big H2 rebound. However there are five long months to go before we can relax. The key questions from the last 24 hours were 1) Did the Fed pivot on Wednesday? And 2) Is the US in a recession? Treasury markets continued to think the answer to both was yes, which boosted risk sentiment by further capping how far the market thinks the Fed can go. Meanwhile, Presidents Biden and Xi held a phone call, the markets continued to digest the Inflation Reduction Act, the US did see it's second successive quarter of negative growth, German CPI beat expectations and Amazon and Apple impressed the market with earnings after the bell. The main macro driver continued to be the interpretation of the July FOMC. Specifically, that the Chair said at some point in the future it may be appropriate to slow the pace of tightening and that he and the Committee paid heed to slowing activity data (more below). The current interpretation being that factors other than inflation were seeping into the Fed’s reaction function. Global yields rallied hard yesterday. 2yr yields were -13.6bps lower at 2.86% while 10yr Treasuries were -10.9bps lower at 2.68%, their lowest since early April. Notably, real yields drove the decline, falling -13.1bps (-26.2bps lower over the last two days, their largest two-day decline since the invasion in early March), suggesting easier expected policy without an impact on inflation, with breakevens up a modest +2.1bps. This is a market believing the Fed will be forced into a pivot, and that slowing activity figures will soon translate into lower inflation. This morning in Asia, yields on 10yr USTs (-1.80 bps) are extending their decline, trading at 2.66% as I type. Europe outpaced the US with 2yr bunds -18.7bps lower at 0.22%, their lowest since mid-May. 10yr bunds were -11.8bps lower and OATs fell -13.4bps. 10yr BTPs outperformed on the perceived shift in policy tone, down -14.9bps. Regular readers will know we are skeptical things will work out as the market is increasingly pricing in. Real policy rates remain deeply in negative territory despite the Fed believing they are at neutral. Furthermore, policy works on long and variable lags, not only is 5 months (the amount of time until the market is pricing cuts) a very short amount of time for today’s tightening to bring inflation back from 9%, but the very reaction we’re witnessing in markets means financial conditions have actually eased since the June FOMC meeting. So the Fed has instituted back-to-back 75bp hikes and financial conditions haven’t gotten any tighter. DB research has been putting out a number of pieces addressing this of late. Matt Luzzetti and Peter Hooper put out a piece yesterday showing that the Fed is historically more cautious about cutting rates when core PCE is above 4% (see here), while Tim Wessel on my team showed that markets overestimate how large those cuts will be ahead of time when inflation is that high (see here). However, one needs to be wary of summer seasonals, where August is usually the strongest month of the year, when deciding whether to fight the move now or wait until September. Adding to the yield rally justification, advanced US GDP came in at -0.9% in 2Q, that is in negative territory for a second straight quarter. This has driven much hand-wringing about whether or not the US is currently in a recession. We won’t know for a while if the NBER officially calls this a recession, as the growth data will undergo plenty of revisions before we have a final number. Further, the NBER actually doesn’t use GDP as one of their indicators for defining recessions, funnily enough, instead amalgamating personal income, payrolls, real PCE, retail sales, household survey employment, and industrial production (which eventually wind up looking a whole lot like GDP). Some of those underlying figures still look quite strong even if the headline GDP figure is not. In the end, whether or not the NBER decides in the future that we are in recession today is almost beside the point: markets will continue to trade based on their perception of the Fed’s responsiveness to slowing activity weighed against runaway inflation. On that note, the overwhelming perception over the last two days is that slowing activity, will become increasingly more important for policy going forward. This drove risk assets higher for a second straight day across the Atlantic. The S&P 500 increased +1.21% with all but one sector higher, while the NASDAQ was up +1.08%, bringing them +11.06% and +14.24% higher since terminal rates first fell from above 4% in mid-June. In Europe, the STOXX 600 climbed +1.09%, while the DAX and CAC increased +0.88% and +1.30%, respectively. On the earnings front, Mastercard said that card spending and use of its payments infrastructure have picked up in a big way amidst runaway inflation, pushing the company’s revenue forecast for the year higher. Hard to see how inflation slows if consumers are spending like that. After the close Apple and Amazon reported earnings on the stronger side of what we’ve seen for mega-caps so far, with both releases containing optimism around supply chains and consumer spending. Apple’s revenues and earnings figures beat street estimates, despite supply chain disruptions from China covid lockdowns, on the back of stronger-than-expected iPhone and iPad sales, with shares rising around +3% after hours. Amazon shares rose more than +12% in after hours trading after beating revenue estimates and revising forecasts higher. While hiring appears to be slowing, Amazon also looks to be unwinding storage capacity, again another sign that supply chain pressures may be easing, while cutting costs. We got more international data on the great slower activity versus high inflation dichotomy, with German CPI increasing +0.9% MoM versus expectations of +0.6%, bringing YoY to +7.5% versus +7.4% expectations. The EU harmonised measures also beat expectations, climbing +0.8% MoM versus +0.4% expectations while YoY ticked up to +8.5% versus +8.1% expectations. Asian equity markets are mixed this morning with the Hang Seng (-2.19%) sharply lower and with the Shanghai Composite (-0.71%) and CSI (-1.02%) also slipping on rising expectations of China's economic growth outlook remaining subdued in H2 after yesterday’s high-level Communist Party meeting omitted its full-year GDP growth target and will instead strive to achieve the best results for the economy this year. Elsewhere, the Nikkei (+0.46%) and the Kospi (+0.43%) are trading in positive territory and more matching western markets. Talking of which, stock futures in the US are pointing to a strong start with contracts on the S&P 500 (+0.57%) and NASDAQ 100 (+1.21%) both higher on the positive earnings from Amazon and Apple. Early morning data showed that Japan’s industrial output jumped +8.9% m/m in June (v/s +4.2% expected) posting the biggest one-month gain in nine years as disruptions due to China's COVID-19 curbs eased. It followed a -7.5% drop last month. But retail sales (-1.4% m/m) unexpectedly contracted in June (v/s +0.2% expected) after an upwardly revised +0.7% increase in May. Separately, July Tokyo CPI advanced to +2.5% y/y in July (v/s +2.4% expected, +2.3% in June) on the back of a hike in utility prices. Meanwhile, labour market conditions in the nation remained relatively healthy as the jobless rate stayed at 2.6% in June (v/s 2.5% market consensus) albeit the job-to-applicants ratio improved to 1.27 in June (v/s 1.25 expected) from 1.24 in May. Elsewhere, Presidents Biden and Xi had a two-hour phone call. The call covered foreign policy issues surrounding Taiwan and Ukraine. The two leaders reportedly covered areas of mutual cooperation, as well, including using their economic might to prevent a global recession and tasking aides to follow up on climate and healthy security issues. Aides have been tasked with setting up a face to face meeting which seems an impressive development even with the tensions there obviously are between the two sides. To the day ahead, data includes the employment cost index, PCE, income, and spending data in the US, Tokyo CPI, consumer confidence, jobless rate, retail sales, industrial production, and starts in Japan, CPI and GDP in France, GDP in Germany, and GDP in Canada. It’s another full slate of earnings which will include Sony, Exxon, Procter & Gamble, Chevron, AbbVie, AstraZeneca, Colgate-Palmolive, BNP Paribas, Eni, Intesa Sanpaolo, LyondellBasell, Engie, BBVA, NatWest, and Citrix. Tyler Durden Fri, 07/29/2022 - 08:16.....»»

Category: worldSource: nytJul 29th, 2022

Biden Nemesis Exxon Reports Record Earnings As Company Prints $20 Billion In Cash

Biden Nemesis Exxon Reports Record Earnings As Company Prints $20 Billion In Cash The Biden administration will be terribly vexed to learn that the one company it hates the most, Exxon (we are confident the sentiment is mutual) reported record Q2 earnings (largely thanks to Biden's SPR release which has proven to be a risk-free arb black gold mine for the company) which smashed expectations and also reiterated guidance while maintaining its generous $30 billion buyback program. The biggest North American oil explorer followed European giants Shell Plc and TotalEnergies, as well as US peer Chevron in disclosing unprecedented results.  Here are the Q2 details for the company which is reaping the rewards from surging commodity prices and the Biden admin's destructive "green energy" policies that have sent gas prices to record highs. Net income reached $17.9 billion, surpassing the previous record set in 2008. Adjusted EPS $4.14, beating the estimate $3.98 and about 4x more than the $1.10 year ago Operating cash flow in Q2 was a record $20 billion; on a YTD basis, Free Cash Flow in H1 has more than doubled Y/Y to $27.7 bilion. Going down the list: Refinery throughput 3,988 KBD Total revenues & other income $115.68 billion, estimate $119.4 billion Upstream production 3,732 koebd, estimate 3,720 koebd Refinery throughput 3,988 KBD, estimate 4,068 KBD Crude oil, NGL, bitumen and synthetic oil production 2,298 KBD, estimate 2,358 KBD Some more financial highlights: Generated earnings of $17.9 billion (vs $5.5 billion in the first quarter of 2022) and cash flow from operating activities of $20 billion in second-quarter 2022 as a result of increased production, higher realizations and margins, and aggressive cost control Cash increased by $7.8 billion in the second quarter, as strong cash flow from operating activities more than covered capital investments and shareholder distributions. Free cash flow in the quarter totaled $16.9 billion. Shareholder distributions were $7.6 billion for the quarter, including $3.7 billion of dividends. Net-debt-to-capital ratio improved to 13% reflecting a period-end cash balance of $18.9 billion. The debt-to-capital ratio was 20%, at the low-end of the company's target range. Capital investments totaled $9.5 billion for first half of 2022; on track with full-year guidance And some further details on production: Oil-equivalent production in the second quarter was 3.7 million barrels per day. Excluding entitlement effects, divestments, and government mandates, including the impact of curtailed production in Russia, oil-equivalent production increased 4% versus the first quarter. Liquids volumes increased nearly 35,000 barrels per day and natural gas volumes grew by more than 150 million cubic feet per day. XOM said it is helping meet increased demand by expanding its refining capacity by about 250,000 barrels per day in the first quarter of 2023 - representing the industry's largest single capacity addition in the U.S. since 2012. Exxon also maintained its stock buyback program, which it tripled to $30 billion in April, as well as its CapEx program at $21 billion to $24 billion, above the estimate of $18.27 billion. That said, Exxon’s capital spending in Q2 was surprisingly low at just $4.6 billion. In order to meet its $21B-$24B guidance, Exxon likely will have to pick up the pace on spending aggressively in the second half of the year. “Earnings and cash flow benefited from increased production, higher realizations, and tight cost control,” said Darren Woods, chairman and chief executive officer. “Strong second-quarter results reflect our focus on the fundamentals and the investments we put in motion several years ago and sustained through the depths of the pandemic. And speaking of CapEx, one of Exxon CEO Darren Woods’ favorite slides is back in the presentation after a notable absence: The oil industry is not investing enough to keep up with future demand: Here’s something else that's interesting from Exxon's slide presentation (see below): They expect America’s tight oil industry to produce record high volumes this year of 8.5m b/d. That’s in spite all the complaints and warnings about inflationary pressures across the nation. On top of that, the entire sector is warning of a lack of labor, while equipment for use in the projects are getting snapped up so rapidly it’s making availability through next year already tight. While Exxon’s sky-high profits come at a sensitive political time for the oil industry, which has been accused by idiot politicians and democrats in general of profiteering from the fallout from Russia’s invasion of Ukraine and failing to invest enough in new drilling (largely because of democrat policies), the recent retreat in crude and gasoline prices may provide executives with some cover from the political backlash they faced in June, when President Joe Biden accused Exxon of making “more money than God.” To be sure, the bears are warning that with recession fears gathering pace, the second quarter may end up marking the high point for Big Oil this year; on the other hand Exxon's money printing machine may be just getting started if politicians indeed follow through with their abjectly retarded Russian price cap idea which will send oil above $200/bbl. For now however, somewhat lower oil prices simply mean that the bonanza may be a little more muted but will last longer. Additionallly, US refining margins also have deflated somewhat since touching all-time highs, though natural gas prices remain elevated around the world. As Bloomberg notes, Exxon CEO Darren Woods has made a series of public appearances and statements in recent weeks defending the industry’s profit surge. Woods has also repeatedly pointed out that Exxon incurred a record loss of more than $20 billion in 2020 which did not lead to a White House bailout, and took on vast amounts of debt to finance major projects like deepwater oil production in Guyana and refinery expansions that will increase fuel supplies in the coming years. As an aside, the Manchin-Schumer climate and energy pact did include several things that are likely on Exxon’s wish list, such as locking in lease sales, and even pairing renewable rights to oil and gas lease sales. While Exxon didn't directly comment on the Manchin-Schumer deal earlier this week, CEO Woods says the US needs “clear and consistent” policy that promotes US resource development. “This policy could include regular and predictable lease sales, as well as streamlined regulatory approvals and support for infrastructure such as pipelines.” Wall Street was unified in its praise of the company's record earnings: “The key drivers of the beat were the upstream, as well as lower corporate costs relative to our estimates,” RBC’s Co-Head of European Energy Research Biraj Borkhataria says in a note. Jefferies (hold): “Strong set of numbers beating consensus in both upstream and downstream,” analyst Giacomo Romeo wrote in a note. Notes wide earnings per share beat “primarily driven by international downstream” Vital Knowledge: “Keep in mind that Exxon provides analysts with a first look at their quarterly results in an 8K filing, so they tend to not beat by as much as CVX,” Adam Crisafulli wrote. Downstream saw “explosive growth thanks to record refining margins” Exxon stock, which we have been recommending since late 2020, has climbed more than 50% this year, has blown away all of its peer majors and remains the third-best performer in the S&P 500 Index.  The company's Q2 slideshow is below: Tyler Durden Fri, 07/29/2022 - 07:38.....»»

Category: personnelSource: nytJul 29th, 2022

Welcome To The Biden Recession: Q2 GDP "Unexpectedly" Shrinks 0.9%, 2nd Consecutive Decline

Welcome To The Biden Recession: Q2 GDP "Unexpectedly" Shrinks 0.9%, 2nd Consecutive Decline Considering the dismal Atlanta Fed GDPNow prints in recent weeks, and considering the full-court press by the Biden admin to change the definition of recession, it will hardly be a surprise but in any case moments ago the Bureau of Economic Analysis confirmed what everyone has long known and that is that the Biden economy is now in a technical recession: the first estimate of Q2 GDP came in at -0.9%, far below the 0.5% consensus forecast (but right on top of the Atlanta Fed -1.2% tracker), and while an improvement from Q1's -1.6%, this was still the second consecutive quarter of declining GDP which as far as the markets are concerned at least, is the definition of a recession.   Tyler Durden Thu, 07/28/2022 - 08:40.....»»

Category: blogSource: zerohedgeJul 28th, 2022

Biden admin, allies make recession denial push ahead of GDP report

The Biden administration and allies of the president are pushing for the public to "ignore" the definition of a recession ahead of Thursday's GDP report......»»

Category: topSource: foxnewsJul 28th, 2022

Stocks, Bonds, Gold, & Crypto Soar As Fed Confirms "Bad News Is Great News" Again

Stocks, Bonds, Gold, & Crypto Soar As Fed Confirms 'Bad News Is Great News' Again Markets were all relatively behaving themselves up to Fed Chair Powell's presser. The statement was shrugged off as a nothingburger but as Powell began speaking - beginning with a focus on inflation - he flipped and offered the junkie-market just the fix it needed: "likely appropriate to slow increases at some point" and any further increases will be "data dependent." Hawkish statement... Dovish presser. Finally, Powell said "he doesn't see US in recession", and - toeing the Biden admin line - proclaimed, that he takes the first estimate for Q2 GDP (due tomorrow) "with a grain of salt." What that translates to is simple... Bad news is officially great news again. A big miss on Friday = limit up — zerohedge (@zerohedge) July 27, 2022 Powell's words sent rate-hike expectations tumbling dovishly... Source: Bloomberg And the markets all went full 'Leeroy Jenkins' after that... The largest buy program since March 2021 rolled through stocks as Fed Chair Jerome Powell said it will probably be appropriate to slow the pace of rate hikes at some point. Source: Bloomberg Stocks were already higher ahead of the Powell promises but exploded higher afterwards: As a reminder, the Nasdaq 100 has been insanely bullish on recent Fed days: Today: +4.3% June 15: +2.49% May 4: +3.41% March 16: +3.7% Gold shot higher on the dovish talk... Cryptos exploded to the upside with Bitcoin approaching $23,000... Source: Bloomberg And bond yields plunged at the short-end... Source: Bloomberg The longer-end of the curve underperformed the short-end (30Y +3bps, 2Y -8bps)... Source: Bloomberg ...sending the yield curve significantly steeper (2s30s un-inverted)... Source: Bloomberg On the other side of the scale, the dollar was clubbed like a baby seal... Source: Bloomberg Oil prices were notably higher today with WTI back at $98, erasing yesterday's losses... US NatGas prices fell today... Finally, we note just how massively dovishly divergent the market is from The Fed's Dot-Plot... Source: Bloomberg Will The Fed really pivot that hard from its inflation-fighting stance? Tyler Durden Wed, 07/27/2022 - 16:00.....»»

Category: blogSource: zerohedgeJul 27th, 2022

Yellen: "Recession" Doesn"t Mean What You Think It Means

Yellen: "Recession" Doesn't Mean What You Think It Means Authored by Ryan McMaken via The Mises Institute, In September 2008, the worsening global financial crisis hit a new phase when Lehman Brothers collapsed and it became undeniable that "hard times" had arrived for most ordinary people. By then, the unemployment rate had been climbing for months, foreclosures had skyrocketed, and the yield curve had inverted through much of 2006 and 2007. Months later, the National Bureau of Economic Research (NBER) declared that what we now call "The Great Recession" had begun in December of 2007. In other words, by the time a recession was declared, the US had already been going down that road for nearly a year. Yet, right up until Black Monday of 2008, it remained controversial to say that the US economy was in recession. As late as August 2008, then-presidential candidate John McCain repeatedly declared the US economy to be in good shape, and Federal Reserve chairman Ben Bernanke denied any recession was in progress. Of course they said these things. Political expedience demanded it.  The gaslighting and ignorance of the "experts" and the policymakers in 2008 provides some helpful context to this week's effort by Treasury Secretary Janet Yellen to control the narrative over what a recession is. With midterm elections only a few months away, the Biden administration is attempting to control who uses the word "recession" and when. This will become even more politically important as Americans continue to face ongoing threats to their standards of living in our current age of inflation and stagnating wages.  Yellen Declares: There Is No Recession On "Meet the Press" on Sunday, Yellen set to work preemptively downplaying any additional economic news that might suggest the US economy is in recession. The context is this: the federal government's official figures showed negative GDP growth for the first quarter of this year. Many analysists strongly suspect that when the GDP numbers come out for the second quarter, that will show negative growth as well. For instance, the Atlanta Federal Reserve Bank's "Nowcast" has been predicting negative GDP growth for the second quarter report for weeks. If the number does come in at a negative, then the commonly understood definition of recession—two quarters of negative growth in GDP—will have many people saying the US economy is in recession.  Yellen, of course, doesn't want that to happen, so she has been insisting that "what a recession really means is a broad-based contraction in the economy, and even if that [Second-quarter GDP] number is negative, we are not in a recession now. I would warn that we should be not characterizing that as a recession."  HANKE’S BELIEVE IT OT NOT! Secretary Yellen said “a common definition of recession is 2 negative quarters of GDP growth.” Less than a minute later she said “even if we have 2 quarters of negative GDP growth that's not a recession”pic.twitter.com/16SUbyqd9H — Steve Hanke (@steve_hanke) July 25, 2022 The NBC host pushed back on this questioning how Yellen could suddenly change "the technical definition of a recession." Yellen replied that the two-quarters-of-negative-growth standard was not actually the "technical definition" and this line was further pushed by a White House spokesman today:  NOW - Biden economic advisor: "Two negative quarters of GDP growth is not the technical definition of recession." pic.twitter.com/UTfdl5LzuS — Disclose.tv (@disclosetv) July 26, 2022 What Is a Recession?  They're not actually lying when they say that the two-quarter definition is not the "technical definition" of a recession. The NBER's definition of a recession is much broader than the two-quarters standard.  For example, the 2001 recession did not include two quarters of negative GDP growth.  In fact, there is no "technical definition" of a recession at all. The two-quarters definition is purely arbitrary and hardly based on some sort of economic law or natural law of economic growth. It's something economists made up. It is a commonly used definition of recession to be sure, and a Google search of articles on recessions published prior to 2022 shows that both economists and pundits routinely have used the two-quarters-of-contraction definition repeatedly. But that doesn't make it some kind of immutable standard for whether or not an economy is in recession.  The word itself not a technical word. It became popular as a word to describe economic downturns because in the mid-twentieth century, the word "depression" was deemed by regime pundits and propagandists as too dour and unpleasant. This idea likely came out of the "accentuate the positive" craze that was employed during the Second World War to curtail criticism of the regime in wartime. So, "patriotism" demanded the United States stopped having depressions and start having recessions in the 1950s. For most people nowadays, though, the word simply means "the economy is lousy and times are bad." That's how most people understand it. Economists don't have—nor should they be allowed to have—a monopoly on use of the word.  It should not surprise us, then, that Janet Yellen is going on TV to argue about what the word actually means. With midterm elections looming, the administration doesn't want the word "recession" to become the go-to word for describing the state of the economy. Naturally, people like Yellen would prefer terms like "transition" or "challenges." But, from the point of view of political optics, "recession" is obviously a nonstarter. Yellen wants to get control over both how recession is defined, and who gets to define it.  Recessions Are "Officially" Declared Long After the Fact But even if the federal data comes back next month with a declaration that GDP again contracted in the second quarter, that won't mean the NBER will be issuing a press release on the whether or not a recession has started. As the 2008 experience reminds us, the NBER can take many months to issue its opinion on whether or not a recession exists. By then, a recession may have already come and gone. Or we may be months into a recession without any official declaration from the NBER or anyone else.  This lag is why then-Fed chairman Bernanke could still get away with saying in January 2008—when the US was already in recession according to the NBER—that the "The Federal Reserve is not currently forecasting a recession." and then declare in June 2008 that "The risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."  These declarations were spectacularly wrong, but Bernanke could make them and not be laughed out of the room because the "official" start date of the recession was not yet published.  A Lack of An Official Recession Doesn't Mean Everything Is Fine  The problem with Yellen's claims on Meet the Press was not primarily her definition of recession. The bigger problem is the context the Yellen is working within: a situation in which so much discourse over the state of the economy accepts the idea that unless a tiny group of economists at the NBER decides the US economy is "in recession" then things are more or less fine. It is entirely possible that months from now, the NBER might declare that the US was not in recession in the first half of 2022, or did not enter recession at all in 2022. So does this mean everything was fine in 2022, and we're wrong to regard the "Biden economy" as a period of economic decline? Certainly not. We don't need a recession to know that ordinary American workers are falling behind as inflation continues to outpace wages. We don't need an "official" recession to see that the number of employed workers has stagnated. We don't need to the NBER to tell us that the standard of living is declining as food and rent inflation forces more Americans to pile up credit card debt and spend down savings. That's all happening right now, regardless of whether or not some economists can agree on what a recession is.  Yellen wants to keep the word "recession" out of the headlines, but if wages continue to fall behind inflation, and if the GDP numbers do show another contraction in the second quarter, it will be increasingly hard to declare the current state of the economy as an "expansion" just because some economists say so.  Tyler Durden Wed, 07/27/2022 - 08:50.....»»

Category: blogSource: zerohedgeJul 27th, 2022

Jim Jordan slams Democrats for attempting to redefine definition of a "recession"

Rep. Jim Jordan slammed Democrats who are attempting to redefine the accepted definition of a “recession” under Joe Biden's economy on "Hannity.".....»»

Category: topSource: foxnewsJul 27th, 2022

WTI Rises Modestly After Second Straight Weekly Crude Draw

WTI Rises Modestly After Second Straight Weekly Crude Draw Oil prices ended the day lower as worries about a recession dulled demand expectations and increased supply threats from the Biden admin's SPR. The oil market market continues to show "significant downside risk and fear of recession," said Robbie Fraser, manager, global research & analytics at Schneider Electric. The "supply side headline about an additional 20 million barrels of oil being made available from the [Strategic Petroleum Reserve] between September and October was also a bearish catalyst for oil,"  Tyler Richey, co-editor of Sevens Report Research, told MarketWatch, adding that the planned SPR releases have been "largely on schedule in recent months." For now all eyes will be on tonight's API data and tomorrow's official data to see if these trends are continuing. API Crude -4.073mm (-1.121mm exp) Cushing Gasoline Distillates Acccording to API, Crude stocks fell significantly more than expected last week (the second straight weekly draw if it carries over into the official data tomorrow)... Source: Bloomberg WTI was hovering around $95.25 ahead of the API print and moved very modestly higher after the crude draw... We note that WTI found support again for now at its 200DMA... Finally, we note that the gap between global oil benchmarks has blown out in recent days... “The slackening of gasoline demand is weighing on the WTI complex,” brokerage PVM Oil Associates Ltd wrote this week. “At the same time, Brent prices have found support from a plethora of sources,” including underproduction by key oil producers. WTI-Brent is now over $9 - the widest spread since April 2020 when WTI went negative... Source: Bloomberg As Bloomberg reports, demand in the US is slowing as historically high gasoline prices cuts into driving habits, while ongoing strategic oil sales have kept crude circulating in the market. Meanwhile, Europe has sought to reduce its dependency on Russia in the wake of the war and is paying enormous premiums for crude grades.  Tyler Durden Tue, 07/26/2022 - 16:43.....»»

Category: blogSource: zerohedgeJul 26th, 2022

Top Trump WH economist slams Biden administration"s "recession" spin

The former top economist in the Trump White House criticized the Biden administration's attempt to downplay recession fears, saying the economy was headed toward a sharp downturn......»»

Category: topSource: foxnewsJul 26th, 2022