By Michael Every of Rabobank

Holy Illusions

Hands up how many of you had 528K down as your US payrolls guess? Nobody, because the Bloomberg survey low was 50K and the high 325K. While there are question marks over these data given Covid --nearly 3m people weren’t/couldn’t work due to it-- and the “birth/death” model, the household survey saw jobs +179K; backwards payroll revisions were +28K; total employment was back to pre-pandemic levels, albeit with reallocation away from sectors such as leisure and hospitality (-1,214K) towards others, such as transport (+745K); the participation rate edged down to 62.1%, so the jobless rate fell to 3.5%, but even using pre-Covid participation rates unemployment would have been 5.4%, down from 5.5%; and average hourly earnings rose much faster than expected at 0.5% m-o-m, 5.2% y-o-y (and 6.0% annualized).

China's military drills in six zones surrounding Taiwan were scheduled to wind down and end on Sunday, but on Monday Beijing announced it is extending the threatening military drills which Taipei officials have slammed as a "blockade" and simulation for future invasion. The drills were originally set for four days, but have now been extended into this new week.

Not only have the drills launched in the wake of the last Tuesday into Wednesday visit to the self-ruled island of US House Speaker Nancy Pelosi disrupted surrounding air traffic and shipping lanes key to global trade, but they've upped tensions with Washington, given the USS Ronald Reagan carrier strike group was ordered to stay in waters near Taiwan for longer than planned.

The People’s Liberation Army (PLA) Eastern Theatre Command confirmed Monday that it is "continuing joint training under real war conditions, focused on organizing joint anti-submarine warfare and naval strikes."

US equity futures rose to start the week as the "most hated meltup" continued just as we said it would over the weekend as stubborn bears are forced to cover and start chasing higher out of FOMO, while Treasury yields fell while investors assessed the path of monetary policy ahead of this week's critical CPI data. Nasdaq 100 futures rose 0.7% while S&P 500 futures gained 0.5% by 7:30 a.m. in New York after the underlying benchmarks dropped on Friday following news that US job growth soared beyond expectations. Meanwhile, the yield on the 10-year Treasury dropped to 2.79% after soaring at the end of last week, while the dollar dipped and bitcoin jumped above $24K.

Two weeks ago, ahead of the recent face-ripping, "most-hated rally" in tech stocks which has pushed the Nasdaq from the depths of a bear market in May to the verge of a 20%+ bull market last week, we said that with hedge funds positioned bearishly and getting steamrolled by the CTA, buyback and retail driven-rally, they will be forced to chase market upside.

First, we pointed out that amid all the recent preparations for a market crash, hedge funds forgot to "hedge" for a melt up, and as the Goldman Prime Brokerage chart below shows, positioning in the Info Tech sector weighting vs. SPX on the Goldman Prime hit a fresh 10-year low at the end of July....

Via blog.VariantPerception.com,

The main downside risk today that the market may not fully appreciate is the reversal of the historically large post-Covid bullwhip effect, which pulled forward a lot of future demand.

The bullwhip effect started with surging consumer goods demand and led to a huge restocking impulse up the supply chain. The below is an excerpt from our July 19th report.

"I think that in the coming months, we will have a shortage of milk in France. To make milk, you need fodder, mainly alfalfa and corn, which have grown little this year," said Yannick Fialip, president of the economic commission of the FNSEA and a breeder (translated).

Farage, an ally of former President Donald Trump, quickly became a favorite during the final day of the Conservative Political Action Conference (CPAC), where thousands of conservatives gathered for the event.

British supercar manufacturer and Formula One team McLaren Group is getting into the sneaker game to drive additional revenue streams after it suffered financial turmoil during the virus pandemic. 

McLaren's new running trainers, called "HySpeed," are constructed with design elements from its supercars like carbon fiber and nitrogen-infused cushioning, according to Bloomberg. 

A common criticism circulating among the outrage is that Amnesty is facilitating Russian propaganda, has been influenced by Russian propaganda, or has itself become an instrument of Russian propaganda.

The head of Amnesty International’s Ukrainian branch resigned as a result of the report, saying that “the organization created material that sounded like support for Russian narratives” and that in an effort to protect civilians, “this study became a tool of Russian propaganda.”

“It is a shame that the organization like Amnesty is participating in this disinformation and propaganda campaign,” tweeted Zelensky advisor Mykhailo Podolyak.

On February 24th, Russia invaded Ukraine launching one of the biggest wars on European soil since World War II. The invasion reflects a longstanding belief of Russia’s that Ukraine - and much of the Soviet Union’s former republics and satellite states - is still their territory to claim. But what is the “former glory” of Russia?

As Visual Capitalist's Avery Koop and Harrison Schell detail below, of the USSR’s former republics and satellite states, many have moved on to join the European Union, and in Putin’s eyes have become more “Westernized” and further from Russian values. In fact, Ukraine recently had its candidacy status approved with the EU.

It’s now been a full century since the formation of the USSR. Much has changed since then, and this visual timeline breaks down how countries within and near Europe have aligned themselves over those 100 years.

Police forces received 3,600 reports of “dishonest use of electricity” in the 12 months to March 2022, an increase of 13 percent on the previous year and the highest level since records began in 2013.

It comes after a protest website launched recently urging people not to pay their electricity bills from October.

The average annual UK gas and electricity bill rose from £1,400 in October 2021 to £2,000, after the government removed a price cap, which limited how much suppliers could charge customers.

Another hefty rise is expected in October 2022.

It was originally predicted average energy bills could reach £2,800 in the autumn but the latest forecast is £3,358.

The President of the Dutch police union, Jan Struijs, says the Netherlands has become a 'narco-state,' in which drug dealing criminals are operating a parallel economy which has had deleterious effects - including higher housing prices, and legal businesses turning into fronts for money laundering.

A new report from the House Oversight Committee says that leading gunmakers use "aggressive marketing tactics" which emphasize masculinity, and make 'veiled references' to white supremacist groups "like the Boogaloo Bois" (which isn't a 'far-right' group at all) in order to sell guns. In short, a massive gaslighting campaign.

"The business practices of these gun manufacturers are deeply disturbing, exploitative, and reckless," said Rep. Carolyn Maloney (D-NY), who chairs the committee.

Authored by Maria Ryan via Consortium News,

One aspect of U.S. House Speaker Nancy Pelosi’s trip to Taiwan that has been largely overlooked is her meeting with Mark Lui, chairman of the Taiwan Semiconductor Manufacturing Corporation (TSMC). Pelosi’s trip coincided with U.S. efforts to convince TSMC – the world’s largest chip manufacturer, on which the U.S. is heavily dependent – to establish a manufacturing base in the US and to stop making advanced chips for Chinese companies.

U.S. support for Taiwan has historically been based on Washington’s opposition to communist rule in Beijing, and Taiwan’s resistance to absorption by China. But in recent years, Taiwan’s autonomy has become a vital geopolitical interest for the U.S, because of the island’s dominance of the semiconductor manufacturing market.