Kidder Reports

May 16

Week Ahead: Rising US Rates Underpin Greenback | Marc
The US economy appears to be re-accelerating here in Q2 after nearly grinding to a halt in Q1 (0.5% annualized pace). April US CPI and PPI were more elevated than expected. The anticipated average effective Fed funds rate in December rose more than 15 bp in the past week and is up slightly more than 75 bp since the war on Iran began.

The bond rout was global. | Dog Noland Weekly
It’s worth noting that most risk/financial conditions indicators moved only marginally this week. The VIX added just over a point to 18.43, down from a 31.05 March 27th close. Even more remarkable, high yield CDS dropped nine this week to 315 bps, trading Thursday at the low (304) prior to the start of the war.

For the Week:The S&P500 was little changed (up 8.2% y-t-d)
Two-year government yields jumped 18 bps to 4.07% (up 60bps y-t-d)
Ten-year Treasury yields rose 24 bps to 4.59% (up 43bps)
Long bond yields jumped 18 bps to 5.12% (up 27bps).
Spot Gold retreated 3.7% to $4,540 (up 5.1%)
WTI Crude jumped $10.00, or 10.5%, to $105.42 (up 84%)

The Fed is “behind the curve,” and the bond market is getting very nervous. | Wolf
The long end of the Treasury market completely blew off the Fed’s rate cuts, as indicated by the widening gap, now 149 basis points, between the 30-year yield (5.12%) and the Effective Federal Funds Rate of 3.63%

Wages are now rising aggressively across the skilled trades | Arm
This is where the mainstream economic narrative completely failed. Governments assumed everything would become a digital service economy where everyone sat behind screens while production moved overseas.

S&P Oil FX Gold 10Y

Debt Rattle
* IRS migration data confirms the exodus is real: 892 companies left New York
* Edward Snowden is closing in on pardon for testifying in federal grand jury proceedings and criminal cases

Obama's rhetoric can’t mask the growing body of evidence chronicling the direct role he played in shielding Hillary Clinton and concocting a false Russia collusion narrative that was designed to fool American voters during the 2016 election and hamper the start of Trump’s first presidential term.| Insta

Why Warsh wants the Fed to keep quiet
The incoming chair thinks that constant ‘incantations’ do more harm than good

As early voting begins in California’s Bungle in the Jungle primary for governor, Democrats are shocked to find two Republicans lead the ticket. That’s a problem because only the top two make it to the general election. Democrats are splitting their votes between Katie “Hot Potatoes” Porter, billionaire Tom Steyer and others who are weirder. | Surber

The Week in Pictures

The Thucydides Trap refers to the tendency for war to arise when an emerging power threatens to displace an existing great power. This concept was popularized by political scientist Graham Allison, particularly in relation to the dynamics between the United States and China. The term is derived from the historical analysis of the Peloponnesian War, where the rise of Athens instilled fear in Sparta, leading to inevitable conflict.

A wigger (a portmanteau of "white" and "nigger") is a derogatory slang term for a typically young white person who imitates the fashion, speech patterns, music preferences, and mannerisms stereotypically linked to African American urban or hip-hop culture.

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