Everything about the process of cutting down energy exploitation, then driving supply side inflation, then raising interest rates to shrink demand (stem inflation) created by a desire to lower economic activity to the scale of diminished energy production, is a game of pretending.

The collateral damage from the rate hikes has been the banking destabilization, which shows the priority of the government officials and central banks to support the climate change agenda.  Into the game of pretending comes the second unavoidable consequence with inflation continuing as a result of the energy policy.

They simply cannot cut energy demand enough to meet the diminished scale of production.  There is no alternative ‘green’ energy system in place to make up the difference. That is the reality.  Now, the fed is scheduled to raise rates again, then begin to debate the collateral damage as they continue the pretending game.

(Via Wall Street Journal) – […] Another quarter-percentage point increase would lift the benchmark federal-funds rate to a 16-year high. The Fed began raising rates from near zero in March 2022.

Fed officials increased rates by a quarter point on March 22 to a range between 4.75% and 5%. That increase occurred with officials just beginning to grapple with the potential fallout of two midsize bank failures in March.

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The topline story from the announcement by JPMorgan Chase [SEE HERE] there are no banking rules/laws in the Biden Fed/Treasury system.

The Dodd-Frank laws are still on the books, but the FDIC decision to insure all deposits, regardless of size, now means those laws, rules and regulations are not required to be followed.  Additionally, as a result of JPMorgan gaining another $100+/- billion in deposit assets, the law(s) surrounding the 10% U.S. deposit maximum, within too big to fail banks, no longer exists. Noted in the announcement, “JPMorgan Chase is assuming all deposits – insured and uninsured.”

JPMorgan is also assuming assets consisting of $173 billion in loans and approximately $30 billion in securities.  The FDIC is going to assume risk (with a risk sharing agreement) for current First Republic Bank mortgage and commercial loans acquired by JPMorgan, guaranteeing JPMorgan a 5-year fed fixed rate on $50 billion in mortgage bonds.

The Federal Deposit Insurance Corporation (FDIC) rule requiring the holding of 1.5% of deposits for all depositors up to $250k in all institutions is now essentially moot.  If the FDIC is guaranteeing all deposits, there’s no way for the insurance corporation to capture or hold $1.5% of all banking deposits.  The law is in conflict with the outcome action of the Fed/Treasury and ultimately the FDIC, ergo the law is nulled by the ignoring of it.

Mohamed El-Erian gives his take below, but seemingly missed the part of the announcement where JPMorgan states, “no systemic risk exception was required” in the deal.  This means the FDIC is completely free-range with the agreement, they are not even trying to justify why they would make a too big to fail bank even bigger. WATCH:

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Gary Cohn is connected to the banking and finance industry, well connected.  In this interview with Face The Nation earlier today, Cohn is discussing the current status of First Republic Bank, another big player in the California banking system that is about to collapse.  Cohn notes something at the 1:15 mark that just seems obvious yet is undiscussed in most outlines of the FRB discussion.

Six weeks ago, in an effort organized by the FDIC, $30 billion was pushed into FRB by eleven larger banks to stabilize it.  However, the only thing that infusion of capital did was allow institutional depositors time and ability to withdraw their funds. A complete racket.  Once the at-risk group exits, suddenly the collapse is back on the tee.  WATCH:

[Transcript] – MARGARET BRENNAN: We want to turn now to Gary Cohn, who is the vice chairman of IBM, former Goldman Sachs president and a former Trump administration top economic adviser. Good morning to you. Lots of titles, Gary, Lots of experience. That’s why we like having you here. I want to ask you about what’s happening with First Republic. It’s been under pressure. We know they’ve been looking for a buyer, the FDIC, the government is looking to arrange, moving it into government control and then maybe selling it. What are you hearing about how this would roll out?

GARY COHN: Margaret, thanks for having me. I think you’re portraying the situation as we find ourselves again on a weekend. As we closed business of Friday, the FDIC was in a process of looking for acquirers or bidders for the assets over the course of the weekend. I think the FDIC has asked potentially three banks for their final bids for the entire bank. The FDIC would prefer to sell the bank in its entirety than the pieces. What will most likely happen is the FDIC will seize control and then simultaneously resell the asset to the successful bidder. I think that will happen sometime later this afternoon before the markets open in Asia this evening.

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The Bureau of Economic Analysis (BEA) released their first quarter estimate of economic growth [DATA HERE] and the result of 1.1% growth shows how the U.S. economy has become dependent on government spending money we don’t have. The Gross Domestic Product (GDP) calculation is a valuation of all goods and services created within the U.S. economy, minus the value of goods and services imported.

Keep in mind that all calculations are in dollar terms. Personal consumption expenditure (PCE) prices increased 4.2% in the first quarter after increasing 3.7% in the fourth quarter. Excluding food and energy, the PCE “core” price index increased 4.9% after increasing 4.4%.   Two-thirds of the increased spending on goods was driven by higher prices, only one third by consumers purchasing more stuff.

Looking at Table 2 (the percentage change by sector) the increase in prices provided 2.48% lift to the GDP but the actual purchasing of goods only delivered 1.45%.  Meanwhile the decline in inventories subtracted 2.26% from the GDP, a major factor, and domestic investment has dropped subtracting 2.34%.

Government expenditures (+0.81) drove more than 70% of the total GDP growth as national defense spending (Ukraine War) was a major federal component.  The local and state government spending increase was driven by higher wage rates.   Don’t forget there’s $2.2 trillion in Inflation Reduction Act (Green New Deal) spending that is also within the economy.

Overall, this is a dark picture.  Inflation is still raging. Inventories are dropping as consumer purchasing is squeezed, and replacements goods are not being manufactured. Companies are tightening their belts.  The federal government is spending to try and assist the economy, but the private sector is contracting economic activity.

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Earlier GM cut 5,000 salaried workers and several hundred hourly jobs. Ford previously announced it would cut a total of 3,000 salaried and contract jobs, mostly in North America and India.  Now, today, Chrysler parent company Stellantis announces 3,500 auto sector job cuts.

Stellantis owns the Jeep, Ram, Chrysler, Dodge and Fiat brands. Apparently, there is something in the U.S. economy that’s happening despite the great pretending….

Biden in Michigan, speaking to auto-workers, 2020

WASHINGTON, April 25 (Reuters) – Chrysler-parent Stellantis NV (STLAM.MI) wants to cut approximately 3,500 hourly U.S. jobs and is offering voluntary exit packages, according to a United Auto Workers union letter made public Tuesday.

The automaker is looking to reduce its hourly workforce offering incentive packages that include $50,000 payments for workers hired before 2007, UAW Local 1264 said in a letter dated Monday posted on its Facebook page.

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Neil Oliver returns from a few weeks of holiday to hit this monologue out of the park.  It’s almost as if Neil and I had sat down and shared a cup of tea.

Comrades, in this wake-up monologue Oliver hits on the key dynamic we have discussed, we are in an abusive relationship with government.  We are being oppressed and held captive by our inability to come to terms with the nature of this relationship.  We are suffering through battered citizen syndrome, thinking that if we just bear through the next round of beatings the abuser will change.

Neil Oliver hits another key point, something you also might find familiar.  The gaslighting around us that feeds and maintains the nature of the abusive relationship is based on the entire community around us “pretending” we are not being abused.  Oliver then folds in the bigger picture and agenda behind, Build Back Better. WATCH:

It’s desperately necessary for our survival that we become disillusioned–and quickly.

Think about that word: Dis-illusioned. Having illusions exposed and removing them from the decision-making process.

Getting disillusioned quicky is important, because when illusions are defended, protected and argued for, instead of being exposed, they will always take us to default decisions that are inherently based on non-reality. This is where the pretending comes from.

Isaac Newton said that passivity in objects was predictable. Perhaps passivity in troubled humans is predictable as well.

Newton said it this way with regard to objects: “An object that is at rest will stay at rest unless an unbalanced force act upon it.”  So, it appears we need an unbalanced force to act upon these passively willing objects that are content to remain at rest.  That unbalanced force is Donald J Trump.

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Oh, this is funny.  Rupert Murdoch’s little foot soldiers, Bill Hemmer and Dana Perino, hosted three Florida Republicans on their broadcast to explain why they support Donald Trump and not Ron DeSantis.  Fox News has big sad.

Congressional Republicans Greg Steube, Cory Mills and Byron Donalds all explain why President Donald Trump is the better choice in 2024.  Bill Hemmer pleads with them to evaluate how brilliant Ron DeSantis is, but Donalds, Mills and Steube brought the MAGA hammer.   Epic Video. WATCH:

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This type of conversational interview with President Trump is the reason he connects to Zoomers (Gen-Z) so naturally. There is an authenticity that comes from within a sense of conversational comfort and honesty in the content.  Gen-Z MAGA is crushing the support level on social media platforms, especially TikTok, and the connected level of support shows up in polling data.  MAGA is a very diverse and inclusive coalition.

This interview flows through a multitude of interesting topics and current events, while also pointing out some of the ordinary perspectives that people have in the day-to-day discussion of them. Take the time to watch this interview; it is a great reminder about how and why President Trump connects to the average person. WATCH:

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As higher interest rates continue to put pressure on borrowers, the ability of the average person to afford a mortgage diminishes.  Higher mortgage rates lead to downward pressure on residential home values as fewer borrowers can afford higher payments.  Simultaneously, commercial real estate is dropping in value as vacancies continue increasing.

Put both of these issues together and already tenuous banks holding mortgage bonds as assets can become more unstable.

This dynamic creates the continual tremors in the background of an economy already suffering from high inflation and low consumer purchasing of durable goods.

A perfect storm starts to realize.

(Wall Street Journal) U.S. existing-home sales decreased 2.4% in March from the prior month to a seasonally adjusted annual rate of 4.44 million, the National Association of Realtors said Thursday. March sales fell 22% from a year earlier.

March marked the 13th time in the previous 14 months that sales have slowed. The housing market had a surprisingly strong February, when sales rose a revised 13.75% from the previous month. But after mortgage rates ticked higher, March sales resumed the extended period of declines.

The housing market’s slowdown is now starting to weigh on prices, which have fallen on an annual basis for two consecutive months for the first time in 11 years. The national median existing-home price decline of 0.9% in March from a year earlier to $375,700 was the biggest year-over-year price drop since January 2012, NAR said.

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The second half of Tucker Carlson’s interview with Elon Musk is below. The second part is most esoteric discussion about the current state of U.S. and geopolitical affairs with further discussion of AI, the banking industry and the future of human life as quantified by the viability of civilization. {Direct Rumble link} WATCH:

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