Deal Or No Deal Week. June One Looms.

Baltic Dry Index. 1384 -18        Brent Crude 75.01

Spot Gold 1976           US 2 Year Yield 4.28  +0.04

Coronavirus Cases 01/04/20 World 1,000,000

Deaths 53,103

Coronavirus Cases 22/05/23 World 688,989,562

Deaths 6,880,332

Victoria Day Canada (and a few parts of eastern Scotland.)

A happy, enjoyable and safe Victoria Day to all celebrating today’s holiday, though it’s only a bank holiday in Canada I believe.

Though Uncle Sam hasn’t yet defaulted on his debts and hopefully won’t, the debt ceiling scare has already done damage to the prestige of the USA and the dollar reserve standard.

Why sell oil, arguably the worlds most important commodity after grains, only for ever more dodgy US fiat dollars, when Euros, Yuan, Yen and Roubles are also viable and useful, and carry only a little more risk than increasingly dodgy fiat US dollars?

The big news this week will be what sort of compromise, face saving deal team Biden will manage to reach with the Republicans in Washington, who have already passed in the House their version of debt ceiling relief.

While a no deal this week will certainly rattle the stock casinos and worry the global economy, no deal doesn’t mean that the USA will start defaulting on June one as implied by US Treasury Secretary Yellen.

 The US Treasury still has taxes and import duties coming in everyday, every week and every month, while domestic US Treasury payments can be prioritised, delayed, or even temporarily halted/reduced until a new debt ceiling agreement is reached.

But that will reduce the amount of money and money equivalents circulating in the US economy, plus reduce the velocity of money in the US economy, with spill over effects on the Canadian and Mexican economies.

If that only lasted a day or two the effect would be minimal. A month or two calamitous.

 

Biden, McCarthy to meet Monday for debt ceiling negotiations; Yellen warns of 'hard deadline'

MAY 21, 2023 / 3:20 PM

May 21 (UPI) -- President Joe Biden will resume negotiations on the debt ceiling with House Speaker Kevin McCarthy as the June default deadline nears.

McCarthy said he spoke with the president Sunday to schedule the meeting. Biden is returning to the United States after a trip to the G7 summit in Hiroshima, Japan.

"Just got off the phone with the president while he's out of the country," McCarthy tweeted. "My position has not changed. Washington cannot continue to spend money we do not have at the expense of children and grandchildren. Tomorrow, he and I will meet in person to continue negotiations."

Negotiations stalled last week as Republicans remain committed to vast budget cuts while Biden and Democrats seek a resolution without strings attached. Biden had previously stated that raising the debt ceiling was "not negotiable."

---- Meanwhile, Treasury Secretary Janet Yellen reaffirmed that June is a "hard deadline" for the government to raise the debt ceiling and avoid default.

During an appearance on Meet The Press, Yellen said the likelihood of the United States being able to pay all of its bills through June 15 is unlikely without a resolution.

"I indicated in my last letter to Congress that we expect to be unable to pay all of our bills in early June and possibly as soon as June 1. And I will continue to update Congress, but I certainly haven't changed my assessment," Yellen said. "So I think that that's a hard deadline."

More

Biden, McCarthy to meet Monday for debt ceiling negotiations; Yellen warns of 'hard deadline' - UPI.com

In the stock casinos this morning, cautious optimism that success will be snatched from the jaws of disaster, plus incredulity that this is happening at all.

 

European markets head for cautious open as U.S. debt ceiling talks are set to resume

UPDATED MON, MAY 22 2023 12:41 AM EDT

European markets are heading for a mixed open Monday, with investors keeping an eye on tense debt ceiling talks in the United States.

Federal leaders are expected to continue with negotiations on the U.S. debt ceiling on Monday as the country approaches a potential default, with President Joe Biden and House Speaker Kevin McCarthy scheduled to meet at the White House.

On Sunday, U.S. Treasury Secretary Janet Yellen said “hard choices” will need to be made about which bills will go unpaid if the debt ceiling is not raised and reaffirmed her warning that the United States could default on its debt as early as June 1.

Asia-Pacific markets mostly rose overnight as stocks in Tokyo extended a rally, while U.S. stock futures retreated slightly on Sunday evening.

European markets live updates: stocks, news, U.S. debt ceiling talks (cnbc.com)

Stock futures fall slightly as Wall Street focuses on tense debt ceiling negotiations

UPDATED SUN, MAY 21 2023 7:06 PM EDT

Stock futures retreated slightly on Sunday evening as traders monitored the negotiations over the U.S. debt ceiling.

Futures for the Dow Jones Industrial Average ticked down 48 points, or about 0.1%. S&P 500 futures dipped about 0.2%, and Nasdaq 100 futures also shed 0.1%.

Stocks rose last week despite the uncertainty in Washington. The Nasdaq Composite climbed 3.04%, while the S&P 500 gained 1.65%. The Dow added 0.38%.

President Joe Biden and House Speaker Kevin McCarthy, R-Calif., are set to meet Monday to continue negotiations. Treasury Secretary Janet Yellen has said the U.S. could default on its debt as early as June 1.

The market has continued to grind higher, led by tech stocks, even in the face of a potential debt default and stubborn inflation. Bank of America strategist Savita Subramanian on Sunday hiked her year-end target for the S&P 500 to 4,300 from 4,000, saying that the focus of companies on efficiency would make earnings more stable and that stocks were not overvalued.

“Current valuations are not low, but rarely are low during profits recessions. On cyclically adjusted earnings, valuations argue for price returns of 5% per year for the S&P 500 over the next decade,” Subramanian said in a note to clients.

The first-quarter earnings season is winding down, but there are a few notable reports in the coming days, with Zoom Video on Monday and Lowe’s and Dick’s Sporting Goods on Tuesday.

The upcoming week has a relatively light slate of economic data, highlighted by a second reading for first-quarter GDP on Thursday and the personal consumption expenditures inflation gauge on Friday. The release of the Federal Reserve meeting minutes on Wednesday could also shed light on how central bankers are thinking about the possibility of further rate hikes.

Traders will also be keeping an eye on JPMorgan Chase’s investor day on Monday.

Stock futures fall slightly as Wall Street focuses on tense debt ceiling negotiations (cnbc.com)

How Wall Street is preparing for possible US debt default

May 22, 2023 5:54 AM GMT+1

NEW YORK/WASHINGTON, May 22 (Reuters) - As talks over raising the U.S. government's $31.4 trillion debt ceiling go down to the wire, Wall Street banks and asset managers have been preparing for the fallout from a potential default.

The financial industry has prepared for such a crisis before, most recently in September 2021. But this time, the relatively short time frame for reaching a compromise has bankers on edge, said one senior industry official.

Less than two weeks remain until June 1, when the Treasury Department has warned that the federal government might not be able to pay all its debts, a deadline U.S. Treasury Secretary Janet Yellen reaffirmed on Sunday.

Citigroup (C.N) CEO Jane Fraser said this debate on the debt ceiling is "more worrying" than previous ones. JPMorgan Chase & CO (JPM.N) CEO Jamie Dimon said the bank is convening weekly meetings on the implications.

WHAT WOULD HAPPEN IF THE U.S. DEFAULTED?

U.S. government bonds underpin the global financial system so it is difficult to fully gauge the damage a default would create, but executives expect massive volatility across equity, debt and other markets.

The ability to trade in and out of Treasury positions in the secondary market would be severely impaired.

Wall Street executives who have advised the Treasury's debt operations have warned that Treasury market dysfunction would quickly spread to the derivative, mortgage and commodity markets, as investors would question the validity of Treasuries widely used as collateral for securing trades and loans. Financial institutions could ask counterparties to replace the bonds affected by missed payments, said analysts.

Even a short breach of the debt limit could lead to a spike in interest rates, a plunge in equity prices, and covenant breaches in loan documentation and leverage agreements.

Short-term funding markets would likely freeze up as well, Moody's Analytics said.

Banks, brokers and trading platforms are prepping for disruption to the Treasury market, as well as broader volatility.

More

How Wall Street is preparing for possible US debt default | Reuters

Nothing is so admirable in politics as a short memory.

John Kenneth Galbraith.

 

Global Inflation/Stagflation/Recession Watch.

 

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Professor Boyle on the rising US commercial real estate problem. Approx. 14 minutes.

Commercial Real Estate Meltdown?

Commercial Real Estate Meltdown? - YouTube

Covid-19 Corner 

This section will continue until it becomes unneeded.

Strange and stranger but no one anywhere is investigating the continuing rise in excess deaths. Why?

Probably because any investigation would turn up the wrong sort of data for big pharma. Was there a reason big pharma knew that they needed indemnity from vaccine harm lawsuits?  Approx. 14 minutes.

Excess deaths in Canada

Excess deaths in Canada - YouTube

Supreme Court Justice Neil Gorsuch blasts U.S. response to COVID-19

MAY 20, 2023 / 7:41 PM

May 20 (UPI) -- U.S. Supreme Court Justice Neil Gorsuch has issued a rare official statement, blasting the response of the United States to the COVID-19 pandemic as one of the "greatest intrusions on civil liberties."

Gorsuch, 55, issued the statement after the high court on Thursday rejected an appeal from Republican-led states seeking to maintain the Title 42 public health order, which was imposed by the administration of former President Donald Trump that allowed quick expulsion of migrants at the border.

The Supreme Court, in its one-sentence decision, had simply instructed an appeals court to dismiss the motion by the Republican-led states as "moot" likely because the health emergency used to justify Title 42 expired earlier this month. The administration of President Joe Biden has previously pushed to end Title 42.

More

Supreme Court Justice Neil Gorsuch blasts U.S. response to COVID-19 - UPI.com

Johns Hopkins Coronavirus resource centre

https://coronavirus.jhu.edu/map.html

Centers for Disease Control Coronavirus

https://www.cdc.gov/coronavirus/2019-ncov/index.html

The Spectator Covid-19 data tracker (UK)

https://data.spectator.co.uk/city/national

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Today, more on so you really, really, really want an  electric vehicle (EV.)

EXCLUSIVE: Blind charity slams electric car owners who dangle charging cables across the pavement and force pedestrians to dice with death by walking in the road

May 20, 2023

Electric vehicle car charging cables hanging out of windows and draped over pavements have been slammed by leading charities as 'ludicrous' and 'unsafe'.

The National Federation of the Blind UK, Living Streets and Guide Dogs urged local authorities and electric car companies to improve charging infrastructure which currently poses a 'risk' to pedestrians.

It comes after images of poorly maintained charging cables hanging out of windows and trailing across pavements across the UK have provoked backlash on social media.

In one photo, an orange cable can be seen hanging out the window of a house in Wandsworth, London, trailing down to a lamppost and wrapped around a 20mph sign.

And in another, an orange charging cable can be seen running over a permit holders only sign in Wandsworth, London.

The NFBUK, which campaigns for the blind and partially sighted, said it was 'totally unsafe' and 'ludicrous' for homeowners to run cables from their houses to charge their cars.

A spokesman said: 'With the growth in electric vehicle ownership it is essential the infrastructure for charging them keeps up with the sales.

'Expecting people to charge them with cables coming from out their houses crossing pavements is absolutely ludicrous and is unsafe.

'They can become trip hazards and the cables should not be allowed to cross the pavements.'

'It is totally unsafe for homeowners to run cables from their houses to charge their cars.

'It's imperative the charging for electric vehicles is undertaken on the road with no cables being present on any part of the pavement.

The spokesman added: 'Pavements are for people to use to get to A to B on foot or by using mobility device, not for EV charging cables. 

'The local authorities along with the EV companies should be working together to ensure off pavement charging facilities are designed that do not impact the safety and accessibility of the pavement for blind, visually impaired, disabled and older pedestrians. 

'This will ensure those people purchasing such vehicles will be able to do so with our impacting other people's safety and accessibility.'

There are 37,055 public electric vehicle charging devices in the UK, according to recent figures.

And the number of devices has increased by 31 per cent over the last year, with 8,680 installations across the UK.

More, plus pictures.

EXCLUSIVE: Blind charity slams electric car owners who dangle charging cables across the pavement and force pedestrians to dice with death by walking in the road (msn.com)

If all else fails, immortality can always be assured by spectacular error.

John Kenneth Galbraith.