MAYBE THE PRESIDENT DOESN’T KNOW THAT IT HAS:
Kristen:"Has this now escalated into a wider war?"
Kirby: "I don't think there's any reason that it needs to."
Kristen: "But has it? We are in the midst of a wider war."
Kirby: "The president doesn't believe that it needs to." pic.twitter.com/QyBB3ILlo8
— Real Mac Report (@RealMacReport) April 14, 2024
ANALYSIS: TRUE. Iran Is a Violent Toddler in Need of a Spanking.
EVERYTHING IS GOING SWIMMINGLY: America’s Bonds Are Getting Harder to Sell.
A series of weak auctions for U.S. Treasurys are stoking investors’ concerns that markets will struggle to absorb an incoming rush of government debt.
A selloff sparked by a hotter-than-expected inflation report intensified this past week after lackluster demand for a $39 billion sale of 10-year Treasurys. Investors also showed tepid interest in auctions for three-year and 30-year Treasurys.
Behind their caution lies a growing conviction that inflation isn’t fully tamed and that the Federal Reserve will leave interest rates at multidecade highs for months, if not years, to come. The 10-year yield—the benchmark for borrowing rates on everything from mortgages to corporate loans—finished the week around 4.5%, near its highest levels since touching 5% in October.
At the same time, the government is poised to sell another $386 billion or so of bonds in May—an onslaught that Wall Street expects to continue no matter who wins November’s presidential election. While few fear a failed auction—an unlikely scenario that analysts said could potentially trigger prolonged turmoil—some worry that a glut of Treasurys will rattle other parts of the markets, raise the cost of government borrowing and hurt the economy.
“There’s been a big shift in the market narrative. The CPI [consumer-price index] report changed everybody’s view of where Fed policy is headed,” said James St. Aubin, chief investment officer at Sierra Mutual Funds.
Washington is adding a trillion dollars to the existing debt about every 100 days, the interest on the existing debt is one trillion dollars a year (bigger than defense and growing), there’s no plan from either party even to trim the rate of spending growth, and we’re stuck with higher interest rates until inflation cools. But that last item looks increasingly unlikely until Washington does something about its spending habits.
Other than “I told you so,” I’m not sure what else to add.
UNEXPECTEDLY: Labor group demands California’s $20 minimum wage for fast food workers extend to all sectors.
A fair wage advocacy group is demanding that California’s new $20 minimum wage law for fast food workers be extended to all sectors to help working-class people who are struggling with the state’s high cost of living.
FOX Business spoke with Saru Jayaraman, president of One Fair Wage, to discuss what she described as the skyrocketing levels of home insecurity and food insecurity post-pandemic.
Fast food workers winning a $20 minimum wage, she said, “was just the beginning.”
Gooder and harder, California.
KRUISER’S MORNING BRIEFING: Biden Could Have at Least Mentioned WWIII in his SOTU Address. “When the American president is weak, the bad actors around the world see that as a green light. When that president begins abandoning longstanding allies, as Biden has done with Israel, their trigger fingers get really itchy.”
YOU DIDN’T THINK HE WAS GOING TO DO ANYTHING TO SOLVE THE CRISIS HE DESIGNED, DID YOU? ‘All For Show’: Biden’s Newest Potential Executive Order For Border Crisis Doesn’t Hold Water, Experts Say. “’If Biden confines his executive action to just tweaking the asylum laws, that is meaningless if he continues to wave people in on parole and hand them an indefinite work permit,’ Jessica Vaughan, director of policy studies at the Center for Immigration Studies (CIS), told the DCNF. ‘While it’s fair to say that it would help if Congress were to act… the most impactful actions must come from the president. These include shutting down the catch-and-release policies, imposing consequences for illegal border crossing, ceasing the issuance of work permits, and allowing [Immigration and Customs Enforcement] to do their job in the interior.’”
FEELING THE SQUEEZE: Bidenflation Soars To 18.8%, Squeezing Americans.
Despite a decrease from the highs of mid-2022, many families continue to face significant inflationary pressures. Prices have increased by 18.8%, while real wages have declined by 2.5%. Average hourly earnings for all employees dropped 2.5% to $11.11 in March 2024 from $11.39 in January 2021 when Biden assumed office. According to Mark Zandi, the chief economist at Moody’s Analytics, the typical U.S. household now requires $1,069 more each month (equivalent to $12,828 annually) compared to three years ago, $784 more per month compared to two years ago, and an additional $227 per month compared to last year. The Allianz Life study found 67% are more concerned about paying bills now than their financial future.
Bidenflation and the Fed’s eleven rate hikes to reduce inflation have made housing unaffordable for many people and caused displacements. According to CBRE data, the average monthly payments on a new home soared to $3,322 in the third quarter of 2023. This marks a sharp 90% increase from late 2020, when it stood at just $1,746 before Biden took office. Rising rent and the end of pandemic-era protections are contributing to the homelessness crisis.
Therefore, it is unsurprising that inflation and food prices emerged as top economic issues among Americans in a recent nationwide TIPP Poll.
“Are you better off than you were four years ago?” should be on repeat from now until Election Day.
DAVID SOLWAY: Strikes and Balls: The Israeli Dilemma.
In “How to Do Things with Words,” philosopher J.L. Austin makes a useful distinction between two kinds of speech acts, the referential and the constative. The referential delineates an actual state of affairs; the constative establishes not a quality but a social function. Austin offers an analogy from baseball: the ball may travel knee-high across the center of the plate, a perfect strike, but if the umpire calls “ball,” that’s how it registers on the scoreboard and operates in the game.
For much of the world today, that is, for “umpires” engaged in the production of figments and bent on the reconstruction of reality, an Israeli “strike” will almost always count as a “ball.” The referential has been reconfigured as the constative, despite what a later replay may bring to light. Thus, the Israeli pitcher throws strikes; the Arab batter receives a base on balls. An intimate congruence has been performatively created between the report and the referent minus the slightest hint of the semantic distance that stretches between the two. The former remains parasitic upon the latter.
Read the whole thing.
SOME PARTS OF AMERICA STILL WORK: SpaceX’s most-flown reusable rocket will go for its 20th launch tonight.
Pretty much every day, SpaceX is either launching a rocket or rolling one out of the hangar to the launch pad. At this pace, SpaceX is redefining what is routine in the space industry, but the rapid-fire launch rate also means the company is continually breaking records, mostly its own.
Friday night’s launch will break another one of those records. This first-stage booster, designated by the tail number B1062, has flown 19 times since its first flight in November 2020. The booster will now be the first in SpaceX’s inventory to go for a 20th flight, breaking a tie with three other rockets as the company’s fleet leader.
When SpaceX debuted the latest version of its Falcon 9 rocket, the Falcon 9 Block 5, officials said the reusable first stage could fly 10 times with minimal refurbishment and perhaps additional flights with a more extensive overhaul. Now, SpaceX is certifying Falcon 9 boosters for 40 flights.
This particular rocket has not undergone any extended maintenance or long-term grounding. It has flown an average of once every two months since debuting three-and-a-half years ago. So the 20-flight milestone SpaceX will achieve Friday night means this rocket has doubled its original design life and, at the same time, has reached the halfway point of its extended service life.
Plus this: “Remarkably, this will be the sixth Falcon 9 launch in less than eight days, more flights than SpaceX’s main US rival, United Launch Alliance, has launched in 17 months.”
FLORIDA MAN FRIDAY [VIP]: Dad Dishes Out Some Rough Justice at Disney World. “It’s time for your much-needed break from the serious news, and this week we have Florida Man’s well-deserved Disney World beating, the birthday girl who swears she only had one shot of tequila, and Ireland Man’s revealing court appearance.”
DECOUPLING: Apple doubles India iPhone production to $14 billion as it shifts from China.
As relations between the U.S. and China have soured, Apple has worked to diversify its supply chain by expanding production in countries like Vietnam and India. It’s a big shift for the iPhone maker, which has historically relied on China for manufacturing.
Apple now makes around 1 in 7, or 14%, of its iPhones in India, twice the amount it produced there last year, the report said. The manufacturer Pegatron assembled around 17% of those iPhones, while Foxconn produced around 67%, according to the report. Wistron built the rest.
In June 2023, Apple CEO Tim Cook and other tech executives met with India’s prime minister, Narendra Modi, at the White House. Cook told CNBC after the meeting that India represents a “huge opportunity.” Apple opened its first retail stores in the country last year.
China remains a crucial market for Apple, but sales have been off to a rocky start this year. A Counterpoint Research report from March found that iPhone sales in China dropped 24% in the first six weeks of 2024. The firm said Apple faces significant competition from other smartphone vendors like Huawei.
It could also be that Chinese consumers are choosing to buy Chinese as Western firms ditch China.
YOU DON’T SAY: Divider-in-Chief: Voters Don’t Think Biden Has United the Country. “The latest Rasmussen Reports national telephone and online survey finds that 70% of Likely U.S. Voters believe America is now more divided than it was before the 2020 election. That’s up from 66% when we asked the same question in April 2022. Just nine percent (9%) now think the country has become more united since Biden’s election, while 19% say it has remained about the same.”
IF AT FIRST YOU HYSTERICALLY FAIL…: Move Over ‘Latinx’: There’s a New Fake Word No One Is Going To Use.
UNEXPECTEDLY: California just hiked minimum wage for fast food workers. Some restaurants are replacing them with kiosks. “The law also creates a fast food council, a first of its kind in the US, with representatives from both the restaurant industry and workers, who can increase the wage annually for the rest of the decade, in pace with inflation or up to 3.5%, whichever is higher. This council can also recommend standards for fast food worker safety, as well as work with existing state agencies to investigate issues like wage theft.”
It isn’t just becoming too expensive to hire human workers, it’s becoming too much of a pain.
SKYNET BLUFFS: AI Can Pretend To Be Stupider Than It Really Is, Scientists Find.
“Thanks to psycholinguistics, we have a relatively comprehensive understanding of what children are capable of at various ages,” Marklová told the outlet. “In particular, the theory of mind plays a significant role, as it explores the inner world of the child and is not easily emulated by observing simple statistical patterns.”
With a children-oriented theory of mind as a backdrop, the researcher and her colleagues at Charles University in Prague sought to determine if LLMs like OpenAI’s GPT-4 “can pretend to be less capable than they are.”
To figure that out, the mostly-Czech research team instructed the models to act like a child between the progressive ages of one to six years when giving responses. When put through a battery of more than 1,000 trials and cognitive tests, these “simulated child personas” did indeed seem to be advancing much the same as children those ages do — and, ultimately, demonstrated that the models can pretend to be less intelligent than they are.
“Large language models,” Marklová concluded, “are capable of feigning lower intelligence than they possess.”
Somebody quipped years ago — was it Glenn? — that the real trouble wouldn’t come when a computer could pass the Turing test but when it chose not to.
I’M NOT CONVINCED THIS IS A BIG BENEFIT OF REMOTE WORK BUT SOME PEOPLE SWEAR BY IT: The Hot New Trend Is… Bed-Rotting?
DECLINE IS A CHOICE:
The share of all US tech-industry jobs that are located in California has now fallen to some of the lowest levels in a decade, dropping a full percentage point over the last year alone pic.twitter.com/zlMwj8MdBQ
— Joey Politano 🏳️🌈 (@JosephPolitano) April 7, 2024
The risk to California isn’t that tech giants like Apple, Alphabet, or Meta will leave. It’s that the firms that end up displacing the Bay Area giants will be from Austin or one of the other, faster-growing tech centers.
DEINDUSTRIALIZATION: German industry unlikely to fully recover from energy crisis, warns RWE boss.
German industry is unlikely to recover to pre-Ukraine war levels as elevated prices from imported liquefied natural gas have put Europe’s largest economy at a “disadvantage”, the chief of one of Germany’s leading energy companies has warned.
“Gas prices in continental Europe, especially in Germany, are structurally higher now, because we, in the end, depend on LNG imports,” said Markus Krebber, chief executive of RWE. “The German industry has a disadvantage.”
His comments come as European gas prices have plummeted 90 per cent from the record levels seen in 2022 and dipped briefly to levels last seen before the energy crisis, spurring questions about the extent to which industrial demand will recover.
Chancellor Gerhard Schröder helped make Germany dependent on Russian energy then took high-paying jobs at Russian energy firms after leaving office.
KRUISER’S MORNING BRIEFING: Poor OJ Never Found Nicole’s Real Killer. “Those who have been reading me for a while probably knew that I was going to have to riff on OJ this morning. Hey, it’s Friday, let’s skip war, illegal alien crime, and economic turmoil as we head into the weekend. As long as Joe Biden is president there will be plenty of all of that waiting for us on Monday.”
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