US Marshals Arrest Over 230 Fugitives, Including Rapists And Murderers, In Maryland Operation

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

The U.S. Marshals Service has announced the conclusion of “Operation Silver Shield,” a 90-day interagency operation that resulted in the arrest of 232 fugitives across Maryland, including individuals wanted for serious crimes such as rape and murder.

Members of the U.S. Marshals Service monitor an area in New York City on April 2, 2015. (Victor J. Blue/Getty Images)

The large-scale, public safety initiative, which ran from May through August 2024, targeted non-compliant sex offenders and fugitives associated with violent crimes, the U.S. Marshals said in an Aug. 9 press release. Among the arrested were 36 individuals wanted for sex offender registration violations, 17 for rape, and 14 for homicide.

“The arrest of these fugitives represents a step in the right direction to keep Maryland safe,” Erek L. Barron, U.S. Attorney for the District of Maryland, said in a statement.

As part of the operation, law enforcement also seized seven firearms and successfully recovered four critically missing children.

Dozens of federal, state, and local agencies participated in the operation, with deputies from the District of Maryland prioritizing the arrest of non-compliant sex offenders, while members of the Capital Area Regional Fugitive Task Force, a unit of the U.S. Marshals, focused on catching violent fugitives.

“Throughout this operation, we worked hand-in-hand with local communities to take dangerous offenders off the streets,“ Mathew Silverman, chief deputy U.S. Marshal for the District of Maryland, said in a statement, adding that the results of the operation reflect ”the true power of our public safety partnership.”

The Capital Area Regional Fugitive Task Force, which has apprehended over 78,000 fugitives since its inception in 2004, has partnership agreements with over 133 federal, state, and local agencies operating in Virginia, Maryland, and the District of Columbia.

Besides the U.S. Marshals Service, some of the law enforcement agencies involved in Operation Silver Shield include the Baltimore Police Department, Homeland Security Investigations, the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and the FBI.

Operation Silver Shield was launched on May 3, 2024, aiming to protect the community by prioritizing the recovery of critically missing children and arresting offenders who pose the biggest risk to public safety.

A similar operation in 2023, dubbed “Operation We Will Find You,” led to the recovery of 225 missing or endangered children.

At the time, the U.S. Marshals noted that cases involving missing or endangered children are some of the most challenging due to the presence of “high-risk factors,” such as involvement in child sex trafficking, child exploitation, sexual and physical abuse, and serious medical and mental health conditions.

The passage of the Justice for Victims of Trafficking Act in 2015 strengthened law enforcement’s ability to recover missing children. The legislation enhanced the U.S. Marshals’ authority, enabling them to better address cases involving endangered children, even when a fugitive or sex offender wasn’t directly involved.

Since the law’s enactment, the U.S. Marshals, in collaboration with the National Center for Missing and Exploited Children, have successfully recovered over 3,100 missing children.

Tyler Durden Mon, 08/12/2024 - 18:25

Amnesty On The Table: Biden Officials Want Maduro To Regime Change Himself

A fresh Wall Street Journal report reveals just how desperate Washington officials are to see Venezuelan President Nicolás Maduro swiftly exit power, after the US has accused him and his officials of stealing the vote, keeping former diplomat Edmundo González from power while reportedly locking up thousands of opposition supporters.

"The U.S. is pursuing a long-shot bid to push Venezuelan President Nicolás Maduro to give up power in exchange for amnesty as overwhelming evidence emerges that the strongman lost last month’s election, people familiar with the matter said," WSJ writes. 

"The U.S. has discussed pardons for Maduro and top lieutenants of his who face Justice Department indictments, said three people familiar with the Biden administration deliberation. One of the sources said that the Biden administration is putting "everything on the table" in order to peaceably persuade Maduro to step down before his term is up in January. To translate, Biden officials are asking nicely: please Mr. Maduro, won't you cancel yourself?

US DOJ "wanted" chart 

But Maduro and his government have hailed him as the legitimate victor of the July 28th national election. He's set to enter a third 6-year term. He has many times over the last several years accused Washington of plotting coup and regime change against his rule, and there is ample evidence that there is more truth than falsehood to these accusations.

Rather than present the US as in a position of power vis-a-vis Caracas, the whole WSJ report and its claims—largely the product of the usual 'anon security and defense officials'—is a testament to just how pathetic, weak, and desperate US policy toward the 'rogue' state remains.

Maduro will supposedly turn himself in on cocaine charges in return for an 'amnesty' based on what he sees as total fictions of a fraudulent and 'imperialist' American system? The following could arguably be some of the dumbest and most fantastical lines ever cooked up by the gaggle of career national security pencil pushers in charge of Latin America policy:

Another person familiar with the talks said the U.S. would be open to providing guarantees not to pursue those regime figures for extradition. The U.S. in 2020 placed a $15 million bounty for information leading to Maduro’s arrest on charges of conspiring with his allies to flood the U.S. with cocaine. 

The talks represent a flicker of hope for a Venezuelan political opposition that meticulously collected voter tallies showing its candidate, little-known former diplomat Edmundo González, defeated Maduro in a landslide in the July 28 election. Over the past two weeks, Maduro has jailed thousands of dissidents, maintained the military’s loyalty and tasked the Supreme Court, stacked with his handpicked allies, with resolving the election impasse, buying him time.  

Flooding US streets with cocaine? ...The CIA might have some past expertise on that.

As recently as Friday, Maduro put it very simply in a televised news conference: "Don’t mess with Venezuela’s internal affairs, that’s all I ask for," Maduro said.

‘In Secret Talks, U.S. Offers Amnesty to Venezuela’s Maduro for Ceding Power’

I can’t stress how weak of a move this is for the U.S.

The U.S. is offering Maduro a pardon if he steps down. This is an absolute joke. “Kindly step down bc the coup we orchestrated didn’t work” pic.twitter.com/0bNfM65TMc

— Zagonel (@Zagonel85) August 11, 2024

Where does US policy go from here? Biden's gambit to ease sanctions on Venezuelan crude, bring Maduro 'in from the cold', and tap cheap energy at a crucial moment of wars in Eastern Europe and the Middle East appears at a standstill.

Now with a crack-brained plan to offer "amnesty" to Maduro having been floated (surely an object of laughter and mockery among Venezuelan officials), perhaps Washington is ready to try the whole Guaidó-style thing with González, who has even less name recognitions internationally, and declare him 'Interim President'.

Tyler Durden Mon, 08/12/2024 - 18:00

Smith & Wesson Asks US Supreme Court To Expedite Its Appeal Of Mexico Lawsuit

Authored by Matthew Vadum via The Epoch Times (emphasis ours),

U.S. gun maker Smith & Wesson asked the U.S. Supreme Court on Aug. 8 for “immediate review” of its appeal in Mexico’s ongoing $10 billion lawsuit against U.S. firearms companies.

A Smith & Wesson .357 magnum revolver is displayed at the Los Angeles Gun Club in Los Angeles, California on December 7, 2012. (Kevork Djansezian/Getty Images)

The request was made after a lower court on Aug. 7 threw out the case against six out of eight gun companies in the lawsuit, which is pending in federal district court in Massachusetts. The decision left gun maker Smith & Wesson and gun wholesaler Interstate Arms remaining as defendants.

In the suit, Mexico is seeking $10 billion from U.S. gun companies for allegedly flooding that country with firearms. Mexico blames the companies for a violent crime wave, saying their actions benefited criminal cartels.

Although some gun control activists welcome Mexico’s lawsuit, gun rights advocates say it constitutes foreign interference in U.S. affairs and is aimed at crippling the U.S. firearms industry and weakening the Second Amendment protections enjoyed by Americans.

The gun companies say the suit is barred by the federal Protection of Lawful Commerce in Arms Act (PLCAA) of 2005, which was enacted to protect the industry from frivolous lawsuits.

The Supreme Court already is scheduled to consider on Sept. 30 whether to hear the appeal of the eight gun companies called Smith & Wesson Brands Inc. v. Estados Unidos Mexicanos.

The appeal concerns the Jan. 22 decision of a three-judge panel of the U.S. Court of Appeals for the First Circuit that allowed the lawsuit to proceed.

Circuit Judge William Kayatta wrote that even though the PLCAA limits lawsuits that foreign governments may bring in U.S. courts for harm experienced outside the United States, Mexico could move forward because it made a plausible argument that the companies committed “knowing violations of statutes regulating the sale or marketing of firearms.”

Mexico claims that illegal gun trafficking into that country is driven largely by Mexican drug cartels’ demands for military-style weapons.

Kayatta wrote that a spike in gun violence in Mexico in recent years “correlates” with the boost in gun production in the United States that started when the U.S. assault weapon ban lapsed in 2004.

The First Circuit returned the case to U.S. District Judge Dennis Saylor of Massachusetts, who had previously dismissed the lawsuit against all eight corporate defendants on Sept. 30, 2022.

Saylor found in 2022 that the PLCAA “unequivocally bars lawsuits seeking to hold gun manufacturers responsible for the acts of individuals using guns for their intended purpose.”

When Saylor revisited the case on Aug. 7, he ruled that Mexico had failed to present enough evidence to show that six of the companies were connected to gun crime in Mexico.

The six defendants Saylor dismissed from the suit are Sturm, Ruger & Co.; Barrett Firearms Manufacturing Inc.; Glock Inc.; Colt’s Manufacturing Co. LLC; Century International Arms Inc.; and Beretta U.S.A. Corp.

Mexico indicated it may appeal the dismissal decision.

In the meantime, this means that Smith & Wesson and Witmer Public Safety Group, which does business as Interstate Arms, are still named as defendants in the suit pending in Saylor’s court.

In the Aug. 8 filing, Smith & Wesson attorney Noel Francisco of Jones Day in Washington told the Supreme Court that “immediate review ... is still needed” because Smith & Wesson and Interstate Arms are “unaffected by” the Aug. 7 decision.

“As a result, Mexico is still pursuing ‘joint and several’ liability—to the tune of billions of dollars, plus far-reaching injunctive relief—against those two defendants,” Francisco wrote.

With joint and several liability, a plaintiff who secures a judgment against the defendants collectively may collect the full value of the judgment from any of the defendants.

“So just as before, leading members of the American firearms industry are facing years of litigation costs and the specter of business-crushing liability,” Francisco wrote.

“And just as before, this Court’s review is warranted now, because Congress made clear in PLCAA that this sort of lawfare against any law-abiding member of the firearms industry has no business in American courts, and must be promptly dismissed.”

Lawfare is the strategic use of legal proceedings to undermine or frustrate the efforts of an opponent.

Mexico argued in a brief that it filed with the Supreme Court on July 3 that the First Circuit’s decision was correct.

The lawsuit should be allowed to proceed because the companies “deliberately chose to engage in unlawful ... conduct to profit off the criminal market for their products.”

According to the brief, the gun companies were wrong to argue that the prospect of them being held “liable for negligence and public nuisance” presents “an existential threat to the gun industry.”

Mexico’s attorney, Cate Stetson of Hogan Lovells in Washington, didn’t respond by publication time to a request by The Epoch Times for comment.

Stephen Katte contributed to this report.

Tyler Durden Mon, 08/12/2024 - 17:40

US Records 2nd Biggest July Deficit In History As 25% Of Tax Revenue Go To Pay Interest

While there was much more talk about the soaring US budget deficit earlier this year, when debt seemed to rise by $1 trillion every other month, lately it appears that the topic has become almost taboo perhaps because neither presidential candidate has any plan or clue how to normalize the trend which assures fiscal collapse for the US and the loss of dollar reserve status.

But while others may have conflicts of interest in reporting on this most important topic, we don't, and we are sad to inform our readers that July was another catastrophic month for US fiscal viability: that's because US tax revenue of $330.4BN (down sharply from the $466.3BN in June, if higher than the $276.2BN a year ago), was far below the $573.1BN in government outlays (which was materially above the $537.2BN in June and also the $496.9BN last July)...

.... resulting in a monthly deficit of $243.7BN, the second largest July budget deficit on record, surpassed only by the record post-covid print in July 2021.

With two months left in the fiscal year, the US budget deficit for fiscal 2024 has hite $1.517 trillion, tracking last year's blowout expansion almost dollar for dollar (one year ago the cumulative deficit was $1.613 trillion), and the 4th highest on record despite there being no raging emergency and no war demanding such a massive deficit spend.

Unfortunately, that's as good as it gets, because when one takes a step back and ignores the monthly calendar effects, the picture remains the same: the US is spending far more than it is generating in tax revenues.

In fact, at $581BN, the 6-month moving average (to smooth out month-to-month changes) in US government spending has risen to the highest level since August 2021, when the US was still reeling from the covid shock.

So how is this possible? How can the US, which is now $35 trillion in the hole justify this kind of irresponsible, profligate spending? The only possible answer for why this level of explosive deficit (and debt) growth continues, is the admin's ongoing attempts to buy as many votes as possible, as well as the relentless increase in interest on the US debt.

And it only goes downhill from there, because as we have noted previously, the biggest risk factor is not so much spending on such discretionary items as social security, health and national defense ("how dare you say these are discretionary! these are mandatory, untouchable outlays" some will scream, but if and when the taxes dry up and the dollar loses its reserve status you will see just how discretionary they are), but on interest, and here recall what we said back in April: "interest on US debt - currently the second biggest government outlay at $1.2 trillion - will surpass social security and become the single biggest US expense before the end of 2024 at $1.6 trillion."...

Now that rate cuts are off the table, interest on US debt - currently the second biggest government outlay at $1.1 trillion - will surpass social security and become the single biggest US expense before the end of 2024 at $1.6 trillion. pic.twitter.com/OQYjHhOks9

— zerohedge (@zerohedge) April 11, 2024

... and hit $1.7 trillion by April 2025, at which point it will be by far the single biggest outlay of the US government.

$1.7 trillion in interest spending next April.

This is the Minsky Moment pic.twitter.com/S3ChHjFbyg

— zerohedge (@zerohedge) April 26, 2024

So where are we now? Well, according to the latest Treasury Monthly Statement, in July the US spent a gross $88.6 billion on debt interest, bringing the YTD total to $956 billion and is on pace to hit $1.157 trillion for the full year.

And putting it in context, the $87 billion in gross interest spending (which follows June's record $140 billion) was 25% of all US receipts (mostly taxes) in June...

... a staggering number fast approaching the threshold where everyone will be forced to admit the US has crossed into a Minsky moment.

Tyler Durden Mon, 08/12/2024 - 17:20

FOIA Files: How Feds, Press, and Academia "Coordinate" On Speech

Authored by James Rushmore via Racket News,

In March 2023, the University of Washington’s Center for an Informed Public (CIP) put out an article asserting that the Election Integrity Partnership (EIP) — comprised of the CIP, the Stanford Internet Observatory (SIO), Graphika, and the Atlantic Council’s Digital Forensic Research Lab (DFRLab) — was not a “government cut-out” controlled by the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA).

Racket has sent out numerous Freedom of Information (FOIA) requests about the Election Integrity Partnership. Recently, we received several new batches of results from the University of Washington that cast doubt on their earlier assertions. These disclosures, which have been added to the Racket FOIA Library, hint at a dynamic perhaps more intimate than reported. This is the first of a series of disclosures we’ll be publishing this week.

On March 4, 2021, Shira Ovide of The New York Times emailed the EIP to ask what government officials and social media platforms did to “stop disinformation from having a material effect on the [2020] election.”

The response came from Matthew Masterson, at the time a non-resident policy fellow at the Stanford Internet Observatory. Masterson then only just finished working as a senior cybersecurity advisor at CISA, a position he held from March 2018 to December 2020. He stayed at CISA through the 2020 election, then moved to Stanford just in time to receive Ovide’s inquiry as a private citizen. His response is humorous in its frankness (emphasis ours):

Happy to talk regarding the work we (the feds) did in coordination with social media companies to anticipate and respond to efforts to undermine the election.

Masterson’s choice of verb is interesting. For years, “anti-disinformation” activists have insisted that state actors merely contacted social media companies with helpful tips regarding troublesome accounts. Masterson’s response suggests CISA was in close contact with platforms like Twitter throughout the 2020 election cycle, though Ovide wasn’t told how close. (See the accompanying article by Matt Taibbi to learn more.) He’s explicit in his characterization of the EIP-CISA dynamic as a coordinated effort.

When reached for comment, Ovide directed Racket to an article she published shortly after her conversation with Masterson. The former DHS official told Ovide that “coordination was the biggest change that helped shore up digital defenses in [2020] election management systems.” At the time, Masterson said, “This is as good [sic] as the federal government has worked on any issue in my experience.” The piece doesn’t mention the EIP, but it still captures the degree to which federal law enforcement agencies like CISA were in contact with 2020 election officials.

You’ll find more evidence of the tight-knit relationship between CISA and the EIP in their communications the following year. On March 14, 2022, Nicky Vogt, the senior advisor for public affairs at CISA, reached out to the EIP in order to coordinate their messaging efforts on MisinfoDay. (MisinfoDay, for those unfamiliar, is an annual celebration intended to help students, educators, and librarians “learn how to navigate complex information environments and make informed decisions about what to believe online.”)

In an email marked with the subject line “Social Amplification on MisInfo Day?”, Vogt asked Julia Carter Scanlan, the CIP’s director for strategy and operations, if the EIP could “amplify” CISA’s MisinfoDay-themed graphics on its social media accounts. Vogt offered to return the favor by promoting the EIP’s MisinfoDay content on CISA’s accounts. Also worth noting is the “as our team may have mentioned” at the start of Vogt’s email. CISA and the EIP seemed to be on very friendly terms!

Carter Scanlan’s response was enthusiastic (emphasis ours):

I’m so glad we can coordinate on this to help get the word out on both fronts. I’m looping in here my colleague Michael Grass, the CIP’s Assistant Director for Communications. He’s managing all of the social and other media for MisinfoDay and will be point on this.

The word of the day is “coordination.”

A few hours later, Vogt made contact with Grass, who promised to share the EIP’s MisinfoDay content on the CIP’s Twitter, Facebook, and LinkedIn accounts. Grass also indicated that other schools would be participating in the day’s festivities through the #MisinfoDay2022 hashtag.

Here’s the tweet CISA asked Grass to promote.

These emails illustrate the synergies between the “anti-disinformation” industry and the national security state. In theory, the two factions are supposed to be separate entities, but in practice, they represent the same interests. It’s not often that a single disclosure offers evidence of the alacrity with which outfits like the EIP did the bidding of federal law enforcement agencies. We should be grateful for their candor.

Below are a few more excerpts from this latest batch of FOIA disclosures, which you can access in full at the Racket FOIA Library.

• In July 2020, shortly before the EIP officially launched, the key players debated what they wanted to call their partnership. Emerson Brooking of the Atlantic Council recommended against going with the “Election Disinformation Partnership,” arguing that it could “very easily be made to sound like [they] are spreading disinformation,” and suggested the “2020 Partnership.” His suggestion was co-signed by the SIO’s Alex Stamos (“[S]ounds a bit like an Olympics thing.”) and Graphika’s Camille François (“It will fit on a shirt”). The group ultimately settled on the “Election Integrity Partnership,” a name that Stamos described as generic and unlikely to be misinterpreted. (See page 109.)

• On November 17, 2021, Ashley Quarcoo, a senior director at the Partnership for American Democracy, reached out to the EIP to discuss how they could take steps to prepare for “election misinformation” in the 2022 cycle. (See pages 47 and 48.)

• On October 31, 2022, Mark Scott of Politico emailed the SIO’s Renée DiResta with some examples of Telegram channels that were spreading “election-related falsehoods” in swing states during the runup to the midterm elections. Scott asked DiResta if she could account for the spread of such theories “from fringe networks like Telegram to more mainstream networks.” (See page 17.)

Click here to access Racket’s library of University of Washington FOIA productions.

Subscribe to Racket News here...

Tyler Durden Mon, 08/12/2024 - 17:00

West Threatens Iran Over Plan To Supply Russia With Ballistic Missiles

NATO countries have been warning of swift and severe consequences in the wake of widespread reports that Iran is considering transferring sophisticated ballistic missiles to Russia for use in the Ukraine war.

A weekend Reuters story authored by multiple national security veteran reporters alleged that Russian personnel are already being trained to operate the Fath-360 close-range ballistic missile system. Several European intelligence sources were cited as the basis of the report, which Iranian leaders subsequently denied.

Via Tasnim news agency

Biden's national security council has said this would mark a "dramatic escalation" in military cooperation between Tehran and Moscow, which has so far seen thousands of small Iranian drones transferred and utilized over Ukraine's skies.

Reuters details the following: 

Citing multiple confidential intelligence sources, the officials said that Russian personnel have visited Iran to learn how to operate the Fath-360 defence system, which launches missiles with a maximum range of 120 km (75 miles) and a warhead of 150 kg. One of the sources said that that "the only next possible" step after training would be actual delivery of the missiles to Russia.

Moscow possesses an array of its own ballistic missiles, but the supply of Fath-360s could allow Russia to use more of its arsenal for targets beyond the front line, while employing Iranian warheads for closer-range targets, a military expert said.

An expected delivery date wasn't disclosed in the report, but it would be consistent with the trend of much closer cooperation on defense between the two 'pariah' nations which are highly sanctioned by the West. 

At his point there's not much left to sanction, and so increasingly both Russian and Iranian leaders have demonstrated a "nothing to lose" attitude in terms of flaunting their defiance of Western warnings.

We also recently highlighted that Russia has appeared to step up supplies of air defense equipment to the Islamic Republic, at a moment Tehran is threatening massive retaliation attacks on Israel for the July 31 killing of Hamas leader Ismail Haniyeh in Tehran. The expectation in such a scenario is that Israel's counter-response would be bigger.

Allegations further say Russia has already received many Iranian ballistic missiles...

⚡️BREAKING

Iran has supplied Russia with a large number of powerful precision ballistic missiles.

According to Reuters, Iran has sent 400 missiles, many of which belong to the Fateh-110 family of short-range ballistic weapons, as well as Zolfaghar missiles.

These missiles… pic.twitter.com/wnhoSDuypO

— Iran Observer (@IranObserver0) February 21, 2024

The Iranians are reportedly also pressuring Moscow to fulfill delivery of Su-35S fighter jet fighters which were previously pledged in a defense deal, given the regional temperature is heating up fast.

Moscow likely feels obliged given the significant Iranian drone transfers it has received throughout the course of the Ukraine war. Iran has heavily aided Russian forces, and now Russia is quickly coming to Iran's assistance.

Tyler Durden Mon, 08/12/2024 - 16:40

The Party Line Is A Mighty Squishy Line

Authored by James Howard Kusntler via Kunstler.com,

“I’ve never heard her [Kamala Harris] say anything original or observant; at her best, she simply recites the party line. At her worst, she’s too lazy to memorize the party line.”

- Lionel Shriver

Does anybody know what this shape-shifting chimera passed off as “our democracy” actually is? I will tell you. Like everything else in the Democratic Party’s tool-bag these days, it’s the opposite of what it appears to mean, namely: You, the demos, give us, officialdom, the power to take whatever we like from you: your savings, your liberty, your stuff, your identity, and your posterity — because we are the boss-of-you, and don’t you forget it. . . and, by the way, the beatings will continue until morale improves.

It’s really that simple, though the deceptions cooked up to hide it are convoluted to the max. Like: engineering the illegal entrance to the US of millions from other lands and then using procedural hocus-pocus such as motor-voter registration and public assistance applications (free money + automatic voter registration) to stuff the election drop-boxes with the ballots of non-citizens — who, get this, don’t even have to be the ones casting those ballots, which can just be harvested, like so many oven-ready pullets, by lowly hired shills. If you catch onto the ruse, you’ll be instructed that borders are arbitrary roadblocks to social justice thrown up by the old white male patriarchy, and that these are “free and fair elections.”

And if you object loudly enough, you lose your job, your livelihood, your Facebook account, and maybe get thrown into solitary confinement for a year.

Our democracy.

Meanwhile, we’re enjoying the spectacle of this evil party’s candidate selection tour with their joyful warriors/avatars, Harris and Walz — joyful because they laugh and laugh in the absence of articulating any actual views on the particulars of governance, and it’s infectious to witness all that mirth. There is, of course, an artificially strenuous air about all this hoopla. It rolls out in an alternative reality like one of those summer techno-pop raves where everyone is stoned on MDMA. The dream girl gets launched into center-stage by invisible forces and is joined by her prom king, and it’s just so heartwarming to get waved at by the grinning, hand-holding couple nobody voted for. This is your demos-free ticket!

Will anybody at the imminent Democratic National Convention notice how this all mysteriously came to be? And might there be any active consternation over it? Perhaps even a welling movement to pull the plug on this rave? You may be apt to wonder what is going on in the Chappaqua redoubt of She-Whose-Turn-Has-Been-(so far)-Thwarted, HRC, boss-of-all-girl-bosses, putatively retired from public life. She’s been awfully quiet since that night over a week ago when she was obliged on-stage somewhere to hug and air-kiss Ms. Harris, and made a face seconds after as if she had thrown up in her mouth.

Is she stewing in the broth of grievance but still and nonetheless tirelessly working her phone to canvas the delegates of that looming party meet-up? She might remind them that the DNC (that is, the Democratic National Committee, Inc), went broke in 2016 and got bailed out by the Clinton Foundation checkbook, and, Jeez, we can’t seem to find any repayment check from all’y’all. It seems maybe you owe us. . . something.

And, by the way, HRC could remind said delegates: you have allowed a laughing hyena who drinks her lunch to land at the head of the ticket for the worst reasons (viz., DEI) minus any votes from the party membership, and then managed to duct-tape a China-owned, Cluster-B head-case to her as the veep sidekick. . . and maybe when all the hee-hawing and hooting dies down, you’ll discover what a pair of losers you’ve allowed to be undemocratically implanted to (ha!) represent you. And also, by the way, I happen to be available as her capable-and-experienced replacement. . . whom you can actually vote for on the convention floor, if you manage to get your shit together. . . you know. . . our democracy, and all. Just sayin’.

That is, I’m just sayin’ what She might be thinkin’ (and sayin’). I am in no position to predict any actual outcome, but it’s hard to imagine any winning moves by the Harris & Walz team in actual play-by-play. In case you have forgotten amid all the week-long laughter and euphoria, there are important national issues to discuss about how to manage the malevolent leviathan the federal government has become, and many dilemmas and threats the people face. And there are very different records of each team’s views on these things, party by party.

Some of that discussion could happen in the (so far) one scheduled September 10 debate. If Mr. Trump can manage to be polite, he can press Kamala Harris to explain herself on things like the wide-open border, failure to negotiate with the Russians to end the Ukraine War, her party’s antipathy to public safety, her party’s promotion of gender identity insanity, its Gestapo-style lawfare operations, its endless hoaxes, and its disgraceful documented efforts to censor free speech. The record is pretty clear on all of that, and there’s a fair chance that Ms. Harris can’t possibly explain it away. Or laugh it off.

Mr. Trump has requested two more head-to-head debates, which Ms. Harris apparently wants to forego. Mr. Trump has come up with an excellent alternative: two “town hall” format appearances in which he fields questions from citizens, or from news reporters, or some combo of both. That would be much to his advantage, without Ms. Harris on stage to defend her positions — or, more likely, to dodge any coherent reply by repeating “racist racist racist,” and laughing her head off.

That is, if she even remains the nominee. Let’s see how it goes this week leading to the convention. For instance, if she and Mr. Walz can still weasel out of taking any questions from the news media. Or whether the White House (remember “Joe Biden” still lives there) and his blob compadres can engineer a major escalation into world war, to take everybody’s mind off the election race. Or if any tremors of apprehension emanate from the delegate corps packing their rolly-bags for the dreaded party confab in Chicago. You have to kind of wonder if they’re bringing any riot gear.

*  *  *

Support his blog by visiting Jim’s Patreon Page or Substack

Tyler Durden Mon, 08/12/2024 - 16:20

Gold, Oil, & Bonds Soar As Stocks Swing Wildly To Unch Ahead Of Big Data Week

Stocks were relatively quiet today (relative to recent history and relative to other asset-classes today) as traders await July CPI and Retail Sales data later this week, as well as earnings reports prints from bellwethers including WMT and HD.

Small Caps and The Dow were the day's laggards with Nasdaq and the S&P basically unchanged...

There have been seven 30-handle SPX swings today...

...yet, Goldman's trading desk notes that overall activity levels are down dramatically (-40% vs. the trailing 2 weeks with market volumes down -20% vs the 10dma) with the floor tilting +2% better to buy,  with LOs net to buy and HFs net for sale.

• HFs are -9% better for sale, this is 95th %-ile over the last 1yr following a week where PB noted single stocks saw the largest net buying in 6 months.  They are better for sale in every sector ex-HCare, Tech & REITs.  The largest supply is from Macro Products, while Fins, Cons Disc and Mats follow close behind.

• LOs are +1% better to buy.  Macro Products is at the top, more than 3x better to buy than the next closest sector (HCare).  Also buying Staples, Tech & Comms Svcs while selling Cons Disc, Indust, Energy & Fins.

Additionally, Goldman highlights that CTA supply is almost over with $81B out of global equities and $24B out of SPX in the last week...still for sale over the this week, but much more manageable supply...

Source: Goldman Sachs

VIX also ended practically unchanged, roundtripping the tumble at the cash open...

Source: Bloomberg

Treasury yields were all lower on the day by around 4bps (30Y underperformed)...

Source: Bloomberg

The 2Y yield fell to 4.00% and found some support on the day...

Source: Bloomberg

Rate-cut expectations rose today but the dovishness was all pushed into 2025 (with 2024 stuck at four 25bps cuts)...

Source: Bloomberg

Gold soared up towards record highs once again (a record high close today)...

Source: Bloomberg

Crude prices also exploded higher today amid geopolitcal tensions with WTI topping $80 for the first time in three weeks)...

Source: Bloomberg

And while commodities were rising, so was the Dollar

Source: Bloomberg

Crypto markets were just as chaotic as stocks today with some serious intraday swings (as BTC whipsawed between $58,000 and $60,000)...

Source: Bloomberg

But for a change, ETH outperformed BTC on the day...

Source: Bloomberg

Finally, it's worth noting just how dramatically inverted the S&P 500's vol term structure is...

Source: Bloomberg

With VIX liquidity at or near record lows, and gamma negative, there's still plenty of room for chaotic swings before NVDA's earnings.

Tyler Durden Mon, 08/12/2024 - 16:00

KFC Unveils 'Finger-Lickin Good' Meal Deal As Value Wars Heat Up 

Quick-service restaurant customers have been frustrated by rising Big Mac and chicken sandwich prices, which we dubbed 'McFlation.' As burger sales slide, chains like McDonald's and Burger King have swiftly introduced meal deals to maintain market share amid a worsening downturn among consumers, especially low/mid-tier ones. 

With McDonald's and Burger King already offering $5 meal deals, it was inevitable that Yum! Brands' KFC would introduce its own $5 deal, signaling that the value wars in the QSR space are intensifying.

"KFC claps back in "Value Wars" with more deals for customers every day of the week this fall," KFC wrote in a press release on Monday morning. 

KFC's new $5 meal deal includes "finger-lickin' good value and make KFC affordable for everyone," the company said, adding the new deal includes three offers: KFC Chicken Nuggets, Famous Bowl with KFC Chicken Nuggets, and Two-Piece Drum & Thigh. 

"As customers are looking for more value from brands, we're expanding our Taste of KFC lineup with new KFC fan favorites like our nuggets and Famous Bowls, each for just $5," Nick Chavez, CMO, KFC US wrote in a statement. 

Chavez said, "These Taste of KFC Deals offer three choices – with something for everyone – at an incredible price."

We suspect additional QSRs will soon offer meal deals, as corporate America has already warned numerous times about a consumer downturn on earnings calls.

Take, for instance, the number of times "consumer downturn" was mentioned on earnings calls, spiking to six this earnings season, the highest level since GFC. 

The number of times "cautious consumer" was mentioned 33 times, a record high. 

"Consumer pressure" mentions still lingers near record highs. 

Across industries—from luxury brands, airlines, and travel companies to fast-food chains, theme parks, and consumer goods companies—management teams have signaled profit warnings due to a consumer slowdown that continues to gain momentum. 

Low/mid-tier consumers seem to have reached their limit in absorbing price hikes on goods and services, thanks to depleted personal savings and maxed-out credit cards. This is due to elevated inflation and high interest rates under Bideonomics. 

Also, the second quarter has displayed unmistakable signs of a consumer slowdown, with the latest credit card data from the Federal Reserve also indicating that some consumers have hit a proverbial 'brick wall.' 

Even VP Harris recently admitted at a campaign rally that a cost of living crisis persists. So much for Bidenomics...

QSRs offering meal deals only reflect an economy trending in the wrong direction. The mid/low-iter consumer has tapped out under failed Bidenomics. 

Tyler Durden Mon, 08/12/2024 - 15:20

These Six Drivers Are Gone, And That's Why The Global Economy Is Toast

Authored by Charles Hugh Smith via OfTwoMinds blog,

The global economy is toast. All that's left is the distribution of the burned bits.

The six one-offs that drove growth and pulled the global economy out of bubble-bust recessions for the past 30 years have all reversed or dissipated. Absent these one-off drivers, the global economy is stumbling off the cliff into a deep recession without any replacement drivers. Colloquially speaking, the global economy is toast.

Here are the six one-offs that won't be coming back:

1) China's industrialization.

2) Growth-positive demographics.

3) Low interest rates.

4) Low debt levels.

5) Low inflation.

6) Tech productivity boom.

Cutting to the chase, China bailed the world out of the last three recessions triggered by credit-asset bubbles popping: the Asian Contagion of 1997-98, the dot-com bubble and pop of 2000-02, and the Global Financial Crisis of 2008-09. In each case, China's high growth and massive issuance of stimulus and credit (a.k.a. China's Credit Impulse) acted as catalysts to restart global expansion.

The boost phase of picking low-hanging fruit via rapid industrialization boosting mercantilist exports and building tens of millions of housing units is over. Even in 2000 when I first visited China, there were signs of overproduction / demand saturation: TV production in China in 2000 had overwhelmed global and domestic demand: everyone in China already had a TV, so what to do with the millions of TVs still being churned out?

China's model of economic development that worked so brilliantly in the boost phase, when all the low-hanging fruit could be so easily picked, no longer works at the top of the S-Curve.

Having reached the saturation-decline phase of the S-Curve, these policies have led to an extreme concentration of household wealth in real estate. Those who favored investing in China's stock market have suffered major losses. (see chart below)

This is the problem with overproduction as a model of endless growth: it eventually overwhelms demand and the income needed to pay for it.

Where China's workforce was growing during the boost phase, now the demographic picture has darkened: China's workforce is shrinking, the population of elderly retirees is soaring, and so the cost burdens of supporting a burgeoning cohort of retirees will have to be funded by a shrinking workforce who will have less to spend / invest as a result.

This is a global phenomenon, and there are no quick and easy solutions. Skilled labor will become increasingly scarce and able to demand higher wages regardless of any other factors, and that will be a long-term source of inflation. Governments will have to borrow more--and probably raise taxes as well--to fund soaring pension and healthcare costs for retirees. This will bleed off other social spending and investment.

The era of zero-interest rates and unlimited government borrowing has ended. As Japan has shown, even at ludicrously low rates of 1%, interest payments on skyrocketing government debt eventually consume virtually all tax revenues. Higher rates will accelerate this dynamic, pushing government finances to the wall as interest on sovereign debt crowds out all other spending. As taxes rise, households are left with less disposable income to spend on consumption, leading to stagnation.

At the start of the cycle, global debt levels (government and private-sector) were low. Now they are high. The boost phase of debt expansion and debt-funded spending is over, and we're in the stagnation-decline phase where adding debt generates diminishing returns.

The era of low inflation has also ended for multiple reasons. Exporting nations' wages have risen sharply, pushing their costs higher, and as noted, skilled labor in developed economies can demand higher wages as this labor cannot be automated or offshored. Offshoring is reversing to onshoring, raising production costs and diverting investment from asset bubbles to the real world.

Higher costs of resource extraction, transport and refining will push inflation higher. So will rampant money-printing to "boost consumption."

The tech productivity boom was also a one-off. Economists were puzzled in the early 1990s by the stagnation of productivity despite the tremendous investments made in personal and corporate computers, a boom launched in the mid-1980s with Apple's Macintosh and desktop publishing, and Microsoft's Mac-clone Windows operating system.

By the mid-1990s, productivity was finally rising and the emergence of the Internet as "the vital 4%" triggered the adoption of the 20% which then led to 80% getting online combined with distributed computing to generate a true revolution in sharing, connectivity and economic potential.

The buzz around AI holds that an equivalent boom is now starting that will generate a glorious "Roaring 20s" of trillions booked in new profits and skyrocketing productivity as white-collar work and jobs are automated into oblivion.

There are two problems with this story:

1) The projections are based more on wishful thinking than real-world dynamics.

2) If the projections come true and tens of millions of white-collar jobs disappear forever, there is no replacement sector to employ the tens of millions of unemployed workers.

In the previous cycles of industrialization and post-industrialization, agricultural workers shifted to factory work, and then factory workers shifted to services and office work. There is no equivalent place to shift tens of millions of unemployed office workers, as AI is a dragon that eats its own tail: AI can perform many programming tasks so it won't need millions of human coders.

As for profits, as I explained in There's Just One Problem: AI Isn't Intelligent, and That's a Systemic Risk, everyone will have the same AI tools and so whatever those tools generate will be overproduced and therefore of little value: there is no pricing power when the world is awash in AI-generated content, bots, etc., other than the pricing power offered by monopoly, addiction and fraud--all extreme negatives for humanity and the global economy.

Either way it goes--AI is a money-pit of grandiose expectations that will generate marginal returns, or it wipes out much of the middle class while generating little profit--AI will not be the miraculous source of millions of new high-paying jobs and astounding profits.

What we now have is a hyper-centralized, hyper-connected (i.e. tightly bound), hyper-globalized and hyper-financialized global economy of extreme fragility, over-indebted and hollowed out by speculation, fraud, corruption, leverage, sclerosis and by an unbreakable addiction to doing more of what's failed spectacularly.

The downside slide into recession and polycrisis-collapse is not as fun as the boost phase.

Concentrating assets, capital, control, debt and leverage also concentrates risk, which eventually leaks through the illusion of resilience and melts down the entire economy:

In a word, the global economy is toast. All that's left is the distribution of the burned bits. Those who end up with collapsing currencies experience hyper-inflation, and those who manage to wallow in deflation experience stagnation as the best-case scenario. In all cases, the pool of creaky policies from the 1930s that will actually work has dried up: all the "fixes" that were solutions in the past are now accelerating the slide into a post-bubble recession with no visible exit.

*  *  *

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Tyler Durden Mon, 08/12/2024 - 15:00

US Gymnast Jordan Chiles Must Return Bronze Medal, Olympic Committee Says

Authored by Jack Phillips via The Epoch Times (emphasis ours),

U.S. gymnast Jordan Chiles must return the bronze medal she won in the Paris Olympics floor exercise last week after the sport’s highest court rejected an appeal by Chiles’s coach that vaulted her to third place over Romanian gymnast Ana Barbosu, the International Olympic Committee (IOC) stated on Aug. 11.

U.S. gymnast Jordan Chiles shows her medals after ringing the closing bell at the Nasdaq MarketSite in New York's Times Square on Aug. 8, 2024. (Richard Drew/AP Photo)

The IOC confirmed the reallocation of the medal less than 24 hours after the Court of Arbitration for Sport voided an appeal from Chiles’s coach during the Aug. 5 competition, which had resulted in a score change.

The IOC stated that it “will reallocate the bronze medal to Ana Barbosu (Romania),” in an Aug. 11 statement.

“We are in touch with the NOC of Romania to discuss the reallocation ceremony and with USOPC regarding the return of the bronze medal,” the statement reads.

The ruling from a court on Aug. 10 states that the American’s inquiry was made outside the allotted time window and is therefore invalid, reverting Chiles’s score to 13.666. Barbosu received a 13.700.

“The inquiry submitted on behalf of ... Jordan Chiles in the Final of the women’s Floor exercise was raised after the conclusion of the one-minute deadline provided by article 8.5 of the 2024 [International Gymnastics Federation] Technical Regulations and is determined to be without effect,” the court’s decision reads in part.

In an apparent reaction to the decision, Chiles wrote in an Instagram post that she was “taking this time and removing myself from social media for my mental health.”

USA Gymnastics, in an Aug. 10 statement, said that the ruling and “inquiry into the Difficulty Value of Jordan Chiles’ floor exercise routine was filed in good faith and, we believed, in accordance with [International Gymnastics Federation] rules to ensure accurate scoring.”

“Throughout the appeal process, Jordan has been subject to consistent, utterly baseless, and extremely hurtful attacks on social media,” the statement reads. “No athlete should be subject to such treatment. We condemn the attacks and those who engage, support, or instigate them. We commend Jordan for conducting herself with integrity both on and off the competition floor, and we continue to stand by and support her.”

On Aug. 11, the team said in a statement that it would appeal the decision because it believes “that Jordan rightfully earned the bronze medal, and there were critical errors in both the initial scoring by the International Gymnastics Federation.”

Team USA coach Cecile Landi last week explained why she asked for a review, telling reporters that “at this point, we had nothing to lose, so I was like, ‘We’re just going to try.’”

“I honestly didn’t think it was going to happen, but when I heard her scream, I turned around and was like, ‘What?’” Landi said.

Meanwhile, Chiles told TeamUSA.com that she didn’t “even realize my coaches put in an inquiry” for her score.

After the Americans’ appeal last week that prevented Barbosu from getting the bronze, controversy erupted. Romanian gymnastics legend and 1976 Olympic champion Nadia Comaneci was critical of the judges.

“I can’t believe we play with athletes mental health and emotions like this,” Comaneci posted on social media.

The former longtime gymnast also posted a video clip of the NBC prime-time broadcast of the final event and claimed that Romanian gymnast Sabrina Maneca-Voinea’s heel didn’t go out of bounds, alleging that she was unfairly penalized.

Romanian Prime Minister Marcel Ciolacu wrote on social media that he would not attend the Olympics’ Closing Ceremony on Aug. 11 after Barbosu was denied the podium.

“I decided not to attend the closing ceremony of the Paris Olympics, following the scandalous situation in the gymnastics, where our athletes were treated in an absolutely dishonorable manner,” he wrote on Facebook. “To withdraw a medal earned for honest work on the basis of an appeal, which neither the coaches nor the top technicians understand, is totally unacceptable!”

Despite being stripped of the bronze medal, Chiles still has a gold in the team all-around competition that Team USA won earlier in the competition.

The Associated Press contributed to this report.

Tyler Durden Mon, 08/12/2024 - 14:20

Harris Campaign Said Walz 'Chaired Veterans Affairs'... He Did Not

Authored by Philip Wegmann via RealClearPolitics,

As Republicans began scrutinizing the military record of Minnesota Gov. Tim Walz, the Harris campaign released a statement supporting the vice-presidential nominee, in part, by pointing to his time in Congress and claiming that “he chaired Veterans Affairs.”

While the former congressman spent over a decade in the House, serving on Veterans Affairs and eventually rising to become the ranking member of that committee, at no time was he ever the chairman.

Vice President Kamala Harris correctly characterized Walz’s time in Congress when introducing her running mate in Philadelphia, calling him “the top Democrat on the Veterans Committee.”

It was her campaign, however, that erred.

The statement in question reads, “after 24 years of military service, Governor Walz retired in 2005 and ran for Congress, where he chaired Veterans Affairs and was a tireless advocate for our men and women in uniform — and as Vice President of the United States he will continue to be a relentless champion for our veterans and military families.”

It was printed in RealClearPolitics, NBC News, and numerous other outlets, further raising the ire of Republicans who already claim that Walz has misrepresented his record. A Harris aide told RCP Thursday morning that the error “was an innocent mistake” made by staff.

“Governor Walz was ranking member/top Democrat on the House Committee on Veterans’ Affairs,” a spokesman for the Harris campaign said, for the 115th Congress between 2017 and 2018.

A spokesman for Illinois Republican Rep. Mike Bost, current chairman of the committee, told RCP the same, saying that “Rep. Walz was only ever ranking member and he served in that role from 2017-2019.”

“When Tim Walz was asked by his country to go to Iraq, do you know what he did? He dropped out of the Army and allowed his unit to go without him – a fact that he’s been criticized for aggressively by a lot of the people that he served with,” said GOP vice presidential nominee J.D. Vance. A Marine Corps veteran who served in Iraq, Vance added, “I think it’s shameful to prepare your unit to go to Iraq, to make a promise that you’re going to follow through, and then to drop out right before you actually have to go.”

It was a reference to the fact that Walz retired from the National Guard in 2005, ending a 24-year career before his unit, the National Guard’s 1st Battalion, 125th Field Artillery, deployed to Iraq.

Walz eventually reached the rank of a command sergeant major, the most senior enlisted noncommissioned officer in a battalion and represented himself previously as “the highest-ranking enlisted service member ever to serve in Congress.”

As Army Lt. Col. Kristen Augé, public affairs officer for the Minnesota National Guard, told NBC News, however, Walz “culminated his career serving as the command sergeant major for the battalion” and “retired as a master sergeant in 2005 for benefit purposes because he did not complete additional coursework at the U.S. Army Sergeants Major Academy.”

Another discrepancy: In a video clip promoted by the Harris campaign, Walz called for gun control on the grounds that “we can make sure those weapons of war, that I carried in war, are only carried in war.” The candidate did not, however, ever serve in a war zone.

A spokesperson for the Harris-Walz campaign did not dispute that the governor may have overstated his case when claiming he carried a weapon in combat. “In his 24 years of service, the governor carried, fired and trained others to use weapons of war innumerable times. Gov. Walz would never insult or undermine any American’s service to this country – in fact, he thanks Senator Vance for putting his life on the line for our country,” the campaign said in a statement to RCP on Wednesday. “It’s the American way.”

Tyler Durden Mon, 08/12/2024 - 13:25

Medium-Term Inflation Expectations Tumble In NY Fed Survey As Spending Growth Pessimism Rises

With all eyes on this week's inflation data barrage, starting with PPI tomorrow and moving to CPI on Wednesday, today's NY Fed consumer survey was closely watched to see what it would reveal about consumer inflation expectations ahead of the coming hard numbers. The result was generally agreeable: while median 1 and 5-year inflation expectations were unchanged at 3.0% and 2.8%, respectively, consumers’ three-year-ahead inflation expectations fell by 0.6% point to 2.3%, sliding to a new series low since the survey’s inception in June 2013.

This decline in 3 Year inflation expectations was most pronounced for respondents with a high-school education or less and those with annual household income under $50,000. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at the one- and five-year-ahead horizons and was unchanged at the three-year-ahead horizon.  

Extending the inflation outlook,, median home price growth expectations was unchanged at 3.0% in July...

... while year-ahead commodity price expectations declined by 0.8 percentage point for gas to 3.5% and 0.1 percentage point for food to 4.7%, but rose by 0.2 percentage point for the cost of medical care to 7.6%, 1.9 percentage points for the cost of college education to 7.2%, and 0.6 percentage point for rent to 7.1%.

Turning to the labor market, we find that optimism here fizzled as median one-year-ahead expected earnings growth declined by 0.3% point to 2.7% in July. The series has been moving within a narrow range of 2.7-3.0% since January 2024.

At the same time, mean unemployment expectations, or the mean probability that the U.S. unemployment rate will be higher one year from now, decreased by 1.0 percentage point to 36.6%, remaining below its 12-month trailing average of 37.7%.

One surprise is that according to the survey, the mean perceived probability of losing one’s job in the next 12 months decreased by 0.5% point to 14.3% even though the actual unemployment rate surged last month and triggered the Sahm's Rule which has preceded every record recession.

Additionally, the mean probability of leaving one’s job voluntarily in the next 12 months increased by 0.2 percentage point to 20.7%, the measure’s highest reading since February 2023. The mean perceived probability of finding a job (if one’s current job was lost) decreased by 0.9 percentage point to 52.5%.

Turning to household finances, the median expected growth in household income was unchanged at 3.0% in Jul...

... while median household spending growth expectations fell by 0.2 percentage point to 4.9%, the measure’s lowest reading since April 2021.

Some more findings:

• Perceptions of credit access compared to a year ago deteriorated in July, with the share of households reporting it is harder to obtain credit than one year ago increasing. However, expectations for future credit availability improved in July, with the share of respondents expecting it will be harder to obtain credit in the year-ahead decreasing.
• Delinquency expectations increased, with the average perceived probability of missing a minimum debt payment over the next three months increasing by 1.0 percentage point to 13.3%, its highest level since April 2020. The increase was most pronounced for those with an annual income below $50,000 and those with a high school degree or less education.
• The median expectation regarding a year-ahead change in taxes (at current income level) declined by 0.3 percentage point to 4.0%. Boy are they going to be surprised.
• Median year-ahead expected growth in government debt was unchanged at 9.3% in July.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 0.2 percentage point to 25.1%.
• Perceptions about households’ current financial situations compared to a year ago improved slightly in July, with the share of households reporting a better situation compared to a year ago rising. Conversely, year-ahead expectations about households’ financial situations deteriorated in July, with the share of households expecting a worse financial situation in one year from now rising.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 0.1 percentage point to 39.3%.

Source: NY Fed

Tyler Durden Mon, 08/12/2024 - 13:05

DEI 'Litmus Tests' Must End

Authored by Zachary Marschall via RealClearEducation,

Ideological litmus tests have no place in higher education. They weaponize loyalty and contradict the university’s purpose of fostering academic inquiry and informed debates. Scholars cannot pursue truth or progress if they are denied academic jobs based on their devotion to a specific political ideology or philosophy. 

I applaud states like Florida, Alabama, Wyoming, Tennessee, and Texas that have banned varied Diversity, Equity, and Inclusion (DEI) requirements that mandate loyalty to its agenda. But we need to go further. Congress can deny federal funding to universities that impose DEI on faculty, administrators, and staff. Conservative lawmakers are already trying to “dismantle” DEI in the federal government and others are currently weighing defunding universities over Title VI violations. They should extend defunding to universities that require DEI. 

DEI litmus tests must go because they do not serve students. In reality, they are about power. DEI loyalty oaths fortify campus leaders’ power to reduce diversity, equal opportunity, and access initiatives to a set of counterproductive far-left policy prescriptions that ultimately marginalize, limit, and exclude students. 

In February, Cornell University emeritus trustee Jon Lindseth blamed the school’s embrace of DEI for the growing “antisemitism and general intolerance” on its campus. And yet, loyalty to the toxic DEI agenda has become pervasive in faculty hiring protocols, as have commitment pledges. A new report by the Cornell Free Speech Alliance claims that the Ivy League university has systematically filled faculty positions based on applicants’ DEI statements. 

Cornell is not the only university to demand DEI loyalty, but the problem goes beyond mere numbers. In 2021, the American Enterprise Institute discovered that while 34% of faculty job postings at elite universities mandated DEI statements, 68% of all listings discussed diversity as a core aspect of the position. This large percentage supports the Cornell report’s indications that even when DEI statements are a choice, academics who omit the document are stigmatized in the application process.

But DEI statements are not just for getting a job in academia, they are too often needed for promotion and advancement. In 2022, the American Association of University found that 45.6% of “large” universities —  where the most prestigious research takes place — require “DEI criteria in tenure standards.” Tenured professors are at the top of the academic food chain. They sit on curriculum, hiring, and programming committees, and have the greatest access to funding and publication resources. 

Those academics that get the top spots get to dictate who is worthy of inclusion or exclusion in the academic job market. A scholar marked unfit might as well be branded with a “Scarlet Letter” confirming his ostracization from higher education. These DEI zealots are the same people teaching the next generation of educators, parents, business leaders, and politicians. 

That is why leaders outside of higher education must step in to strip undue power away from ideologically driven administrators and professors. Ideologues and their administrative allies are grafting divisive politics onto their institutions, erroneously marketing their insertions as sutures for past injustices. That is not the purpose or the design of higher education. 

The Western university is nearly 1,000 years old and its mission pre-dates liberal democracies, capitalism, socialism, communism, and every other system of government or economics currently being debated by politicians. It exists to help students cultivate their intellectual and moral development. It is its own animal in the West that may examine — but should never reflect — fleeting political trends or sympathies.

When personal growth becomes political, rigor and truth erode from the foundations of higher learning. The DEI campus complex, which inculcates groupthink and replaces scholars with social justice warriors, attests to this intellectual and moral decline. Faculty and students should be encouraged to think and question, not to be complicit in a regime of unquestioning conformity. 

As an adjunct professor, I can attest that DEI statements contravene the objectives of higher education. America cannot afford to have the next generation of business, political, and cultural leaders operate according to that immoral logic. Professors should be exposing students to uncomfortable truths and diverse perspectives. This process requires exposure to contradicting ideas that challenge students intellectually. 

Ideological purity paves over the debates and discussions that hone students’ critical thinking skills. A campus of like-minded people not only lacks diversity, but it also inhibits students’ abilities to learn from one another.  

Tyler Durden Mon, 08/12/2024 - 12:45

Markets Need A Lot More Than A Rate-Cut

Authored by Daniel Lacalle,

The recent market weakness suggests a combination of profit-taking and concerns about the latest United States jobs and manufacturing figures, added to the abrupt unwinding of part of the yen carry trade. Valuations had soared and market participants now demand central bank easing. However, rate cuts may not be enough to send markets to new all-time highs. Money supply growth and quantitative easing are needed to maintain these valuations.

Investors are turning to utilities and real estate stocks, but these sectors need more than low rates; they need a buoyant economy and strong consumer demand, so interest rate decisions may be insufficient.

If we look at the long-term trend, the market remains in a cyclical bullish mode, but we need to understand why and be aware of the rise in volatility.

Markets have been rising, discounting an ever-increasing money supply and future currency debasement. However, the next wave of central bank easing may not come until 2025.

Fundamentals may have been weak and earnings not as robust as required by demanding valuations, but investors understand that the fiscal challenges posed by rising government expenditure and public debt will ultimately mean ultra-loose monetary policies, which make sovereign bonds more expensive, erode currency purchasing power and, by comparison, make equities and risky assets more attractive.

Investors may continue to accept higher valuations for equities and risky assets because they fear monetary and fiscal insanity more than they are concerned about a recession.

It is not that markets like fiscal imprudence. Extreme monetary policies erode the currency’s purchasing power, and equities and risky assets become protection for real inflation. Murray Rothbard calculated the true money supply (TMS), which is the most realistic indicator of inflation. As Professor Joseph Salerno explains, “three items which are not included in any Fed measure of the money supply (Ml, M2, M3) or even of overall “liquidity” (L) find a place in the TMS.”. These are the demand and other deposits held by the U.S. government, foreign official institutions, and foreign commercial banks at “U.S. commercial and Fed banks.”.

When we look at True Money Supply, we can understand what market participants really look at for a bullish market trend, even if they may not be calculating it in the Rothbard way. The available money for market transactions. The quantity of money that is put to work to generate a return that offsets inflation. “Liquidity,” as most market participants call it.

Mike Shedlock, a great macroeconomic analyst and investor, discusses these important differences when analyzing money growth because they basically give us an idea of the buying or selling pressure in a market. The True Money Supply (TMS) includes the currency component of M1, total checkable and savings deposits, as well as U.S. government deposits, note balances, and demand deposits from foreign banks and public institutions. Any market trader understands this when they are talking of “cash on the sides,” “high liquidity,” and “bullish sentiment.”. All these money measures, when rising, indicate stronger demand for risky assets looking for a return. Alternatively, Professor Frank Shostak’s definition of total money supply includes cash plus demand deposits with commercial banks and institutions plus government deposits with banks and the central bank.

Why are these measures more important than the traditional M2 and M3 money aggregates? Because they show us the level of buying pressure in the market.

Many Keynesian economists see deposits and savings accounts as idle money and invented the ludicrous “excessive savings” concept. There is no such thing as excessive savings or idle money. The reason they see those savings as negative is because their political view of economics perceives that any money not spent by the government is not productive. Far from it. Those savings and deposits are invested in the capital markets and are the key to originating lending, investment, and growth in the real economy. Keynesians tend to think of the “social use of money,” which means more printing of currency through deficit spending, because they mostly perceive that the government is the only one making a real social use of currency issued. However, inflationism is not a social policy but a tool for serfdom that creates hostage clients of citizens by destroying the purchasing power of their wages and deposit savings. It is a transfer of wealth from the middle class to the government.

Once we understand that what matters for market participants is the elusive “liquidity” and “sentiment” perception and that bullish sentiment and liquidity come from a rising true money supply, while bearish signals arise from a decline in this measure of liquidity, then we can understand that the allegedly hawkish messages of central banks disguise a much looser policy than headlines suggest. Furthermore, using any of the different measures of true money supply previously mentioned, we can understand why market participants try to defend their clients from the current and future loss of purchasing power of the currency by taking more risk and accepting higher valuations for growth assets.

Most market participants are aware that higher liquidity injections will mask the current fiscal imbalances. Unsustainable deficit spending is money printing, which creates strong long-term pressure on the purchasing power of fiat currencies. Thus, market corrections are always an opportunity to buy stocks and risky assets that will always rise in value in fiat currency terms because the unit of measure, money, loses purchasing power.

Once it is established that fiscal insanity will make currencies fall in value and, consequently, markets denominated in that currency rise, investors need to understand the timing and where to invest.

The difficulty this time is that now we have persistent inflation and central bank losses in their bond portfolio. Thus, timing is essential. The lag effect of a market correction and its subsequent bounce may be longer. It will happen, but we need to guess when.

After the Fed decided to hold rates steady at its two-day meeting, equities slumped, even though Powell seemed to signal that rate cuts could be coming as soon as September. Markets discounted a slump in liquidity, therefore lowering buying pressure. Hence, multiple compressions. Rate cuts do not signal a healthy economy but a slowing one, so equities slump despite the promise of a rate cut because investors continue to see lower buying pressure.

Even with the bounce after Black Monday, most indices remain significantly below the level when markets started to weaken on July 22. The lag effect of the true money supply started to show its effect on March 13. The Nasdaq and the S&P 500 were leading markets that had begun to slow down and pointed to lower highs and deeper lows.

What can we learn ahead of the next bullish wave of money growth? First, pay attention to the components mentioned above and their trends. Second, analyze when the Fed may start a true easing path, being realistic. The trend now signals liquidity drying up. There may not be a recession, but monetary buying pressure is slowing down markedly. The tap is not closed, but the flow is slow.

The Fed may cut rates in September, but that is only realizing that the economy is weaker than headlines suggest. A rate cut of 25 or 50 basis points is unlikely to generate an immediate burst in credit demand or rising deposits. Hence, the truly bullish signal would come when the Fed returns to purchasing mortgage-backed securities and treasuries. However, that may not happen until elections have passed and there is clarity about the next chairman of the Fed. We may be talking about March 2025.

Before that money growth bounces abruptly and leads to the next multiple expansion phase, we must remember the lessons of this correction. So-called defensive indices do not protect investors. Japan and Europe remain bad options in a liquidity drought. Cryptocurrencies do not show defensive qualities and their correlation to US tech stocks remains elevated. Gold is a better defense against a market correction than most risky assets, and commodities do not perform well in a slowing economy with diminishing liquidity.

 

Most investors will look at the recent slump with prudence, knowing they need to leave some dry powder (less liquidity, less buying pressure) to take advantage of opportunities.

In this era of monetary insanity, ignoring the macroeconomic, geopolitical, and earnings’ realities may lead to excessive risk-taking and significant losses in a correction. We must consider the fundamentals when looking at buying opportunities and pay attention to when liquidity will flow back to capture the currency debasement trend that leads to the next bull market. It’s not easy. Risks accumulate slowly but manifest quickly, and we tend to blame one catalyst instead of the complacency built after years of fiscal and monetary excess.

The next wave of monetary excess will be more aggressive than the past one, that is guaranteed. That means markets will soar again. However, timing is key… and it may take a few painful months to arrive.

Tyler Durden Mon, 08/12/2024 - 11:55

Trump To Sue DOJ For $100 Million Over Mar-a-Lago Raid

Former President Donald Trump is set to sue the DOJ for $100 million in damages over the 2022 raid on his Mar-a-Lago property in Palm Beach, Florida - arguing that it was done "clear intent to engage in political persecution."

According to a memo obtained by Fox News, the lawsuit will claim "tortious conduct by the United States against President Trump."

Trump and his legal team intend to sue the Justice Department for its conduct during the FBI’s raid on Mar-a-Lago on Aug. 8, 2022, amid the federal investigation into his alleged improper retention of classified records.

After the raid, Special Counsel Jack Smith was appointed to investigate. Smith ultimately brought 37 felony counts against Trump, including willful retention of national defense information, conspiracy to obstruct justice, and false statements. Trump pleaded not guilty to all counts.

Last month, US District Judge Aileen Cannon dismissed the DOJ's case against Trump - ruling that Smith was unlawfully appointed and funded, citing the Appointments Clause in the constitution.

The notice to sue was filed by Trump attorney Daniel Epstein, and gives the DOJ 180 days from the date of receipt to respond and come to a resolution. If no agreement is made, Trump's case will move to federal court in the Southern District of Florida.

"What President Trump is doing here is not just standing up for himself – he is standing up for all Americans who believe in the rule of law and believe that you should hold the government accountable when it wrongs you," Epstein told Fox Business' Lydia Hu.

Former president Donald Trump's Mar-a-Lago resort in Palm Beach, Florida.  (Charles Trainor Jr./Miami Herald/Tribune News Service via Getty Images)

According to the filing, the "tortious acts against the president are rooted in intrusion upon seclusion, malicious prosecution, and abuse of process resulting from the August 8, 2022 raid of his and his family’s home at Mar-a-Lago in Palm Beach Florida," adding that decisions made by the DOJ and FBI in conducting the raid were "inconsistent with protocols requiring the consent of an investigative target, disclosure to that individual’s attorneys, and the use of the local U.S. Attorney’s Office."

Epstein further argues that decisions made by Attorney General Merrick Garland as well as FBI Director Christopher Wray were not based on "social, economic, and political policy," but instead were in "clear dereliction of constitutional principles, inconsistent standards as applied to" Trump and a "clear intent to engage in political persecution – not to advance good law enforcement practices."

"Garland and Wray should have never approved a raid and subsequent indictment of President Trump because the well-established protocol with former U.S. presidents is to use non-enforcement means to obtain records of the United States," wrote Epstein. "But notwithstanding the fact that the raid should have never occurred, Garland and Wray should have ensured their agents sought consent from President Trump, notified his lawyers, and sought cooperation."

"Garland and Wray decided to stray from established protocol to injure President Trump," the filing continues.

Epstein argued that the DOJ violated Florida law, intrusion upon seclusion, which is recognized as a form of invasion of privacy. Intrusion upon seclusion includes "an intentional intrusion, physically or otherwise, into the private quarters of another person" and the intrusion "must occur in a manner that a reasonable person would find highly offensive." -Fox News

"The FBI’s demonstrated activity was inconsistent with protocols used in routine searches of an investigative target’s premises," the filing continues, adding that Trump "had a clear expectation of privacy at Mar-a-Lago. Worse, the FBI’s conduct in the raid – where established protocol was violated – constitutes a severe and unacceptable intrusion that is highly offensive to a reasonable person."

The filing also argues that the DOJ and special counsel's office "brought a lawless criminal indictment," which constitutes "malicious prosecution."

"As such, given the Supreme Court’s immunity decision and Judge Cannon’s dismissal of the prosecution on grounds that the Special Counsel’s appointment violated the appointments clause and his office was funded through an improper appropriation, there was no constitutional basis for the search or the subsequent indictment."

Trump is also planning to sue for punitive damages.

"For these harms to President Trump, the respondents must pay punitive damages of $100 million," Epstein wrote, adding that there was an "abuse of process," and that the methods used against Trump were "unconstitutional and aimed at politically persecuting the former President, which led to extensive legal costs and negative consequences for him."

In a statement to Fox Business, Epstein said: "You have clear evidence that the FBI failed to follow protocols, and the failure to follow protocols shows that there was an improper purpose," adding "f the government is able to say, well, we don't like someone, we can raid their home, we can violate their privacy, we can breach protocols when we decide to prosecute them, we can use the process to advance our personal motive--not a motive of justice--if someone doesn't stand against that in a very public way and seek to obtain and protect their rights, then the government will have a mandate to roughshod over every American."

Tyler Durden Mon, 08/12/2024 - 11:35

Biden's Freudian Slip: "If Trump Wins," There'll Be No Peaceful Transfer Of Power

Authored by Paul Joseph Watson via modernity.news,

President Joe Biden uttered an interesting Freudian slip when he said that “if Trump wins” the election he’s not confident there’ll be a peaceful transfer of power.

Biden made the remarks during an interview with CBS News.

“Are you confident that there will be a peaceful transfer of power in January 2025,” Biden was asked.

“If Trump wins, no, I’m not confident at all,” he responded.

Well, that’s one hell of a powerful Freudian slip.

“Are you confident that there will be a peaceful transfer of power in January 2025”

“if Trump wins, no, I’m not confident at all!” -Joe Biden

Cut (because there is an edit/cut)

“I mean, if Trump loses, I’m not confident at… pic.twitter.com/VXrbKmVlnZ

— Viva Frei (@thevivafrei) August 12, 2024

There then appeared to be a cut in the interview before Biden corrected himself, “I mean, if Trump loses, I’m not confident at all.”

While Biden is infamous for his verbal gaffes, many respondents on X actually believed this to be a revealing Freudian slip.

As we highlighted earlier, during the same interview, Biden confirmed that high ranking Democrats pushed him out of the race, essentially corroborating the accusations of a coup.

“A number of my Democratic colleagues in the House and Senate thought that I was going to hurt them in the races,” Biden said.

The president was reportedly told by Nancy Pelosi that he would be removed either by means of “the easy way” or “the hard way,” after he desperately tried to cling onto the nomination despite being humiliated during a presidential debate with Donald Trump.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Mon, 08/12/2024 - 11:15

Homebuyers Get Creative Amid Historically High Property Values

Authored by Michael Washburn via The Epoch Times (emphasis ours),

The dramatic rise in median home prices in New York City and other busy real estate markets from pre-pandemic levels, and the intense competition for desirable properties, has driven buyers throughout the country to pursue a range of innovative solutions they might never have considered four or five years ago, brokers and real estate lawyers have told The Epoch Times.

With the median home listing price in New York City at $825,000, and a median sale price of $776,100, according to realtor.com figures, the Big Apple stands out as one of the most expensive and competitive markets in the nation.

By comparison, the median price stood at $615,000 in January 2019.

But that does not mean that buyers elsewhere have it easy. Throughout the rest of the country, they are looking long and hard for affordable deals with average home prices poised at $412,300.

The pandemic was something of a turning point. In the period from the first quarter of 2020 to the end of 2024, for example, the average price rose nearly 50 percent, from $329,000 to $479,500, according to data from the Federal Reserve Bank of St. Louis.

Mark Scheier, cofounder of Acton, Massachusetts-based real estate law firm Scheier Katin & Epstein, said recent analyses that describe the current market as a buyer’s market—where inventory volume and a relatively low bar for access favor buyers over sellers—are mistaken.

“I’m not experiencing a buyer’s market at all, I’m still experiencing a seller’s market here,” he told The Epoch Times.

Until recently, about 10 percent of the deals Scheier brokered for clients were all-cash deals, while the rest involved some mixture of financing—typically, bank loans—and cash.

“Almost 40 percent of my deals are cash deals, which was never the case before. People are doing everything they can, breaking into their retirement money, pooling all their assets together, to try to make cash deals,” Scheier said.

With prices rising so rapidly, one factor is fear of missing out (FOMO)—an acute sense on the part of many buyers that if they don’t get in now, they will face an even more fiercely competitive market in the near future, he stated.

A corollary to this perception, he said, is the need to acquire properties whose value is increasing dramatically and take advantage of the price appreciation while they still can.

“I’ve been practicing for 51 years, and I’ve seen all the ups and downs, and right now, I think there’s a lot of FOMO going on,” said Scheier.

“The train is leaving without them and if they don’t rush to get on the train, they’re going to lose out on that appreciation. People are feeling that way, so they’re moving ahead, they’re jumping off the cliff.”

Many people in the market are coming to realize that mortgage rates are unlikely to fall back to 2.5 percent in the foreseeable future and that they will have to accept rates of 6.5–7.0 percent, which might have previously put them off trying to close a deal, Scheier noted.

But the historically high prices and the competition requires a diversification of strategy that brokers say they have rarely seen before.

Homes near Castle Harbor Marina in Stevensville, Md., on March 4, 2024. From the first quarter of 2020 to the fourth quarter of 2022, the median home sales price rose 46 percent, according to the Federal Reserve Bank of St. Louis. (Jim Watson/AFP via Getty Images) Tough Times

Some real estate industry professionals hailed the $418 million settlement in March of a long-running lawsuit against the National Association of Realtors (NAR), Sitzer/Burnett v. NAR Commission.

The lawsuit took issue with agents’ use of the association’s Multiple Listing Service (MLS) and the practice of charging 6 percent commissions, often split evenly between sellers’ and buyers’ brokers, in property sales.

Michael Downer, a broker at Coldwell Banker Realty in Naples, Florida, said the settlement means that buyers’ brokers can no longer pretend to their clients that they are acting pro bono while in fact automatically getting half of the 6 percent commission paid to sellers’ brokers at closing.

Buy-side brokers will have to be more transparent about what they are actually doing and what compensation they should rightfully receive for their role in a deal.

At the same time, others criticized the outcome on the grounds that purchasers who cease finding a buy-side broker using the MLS will begin working directly with sellers’ brokers, which poses a conflict of interest given those brokers’ preexisting relationships with their own clients.

“From a legal perspective, I don’t know that there has been that significant of a change in laws. Obviously, there was the recent NAR settlement, but it’s just with respect to the use of the MLS,” Zachary Schorr, a real estate lawyer and partner of the Los Angeles-based firm Schorr Law, told The Epoch Times.

In this highly competitive environment, some buyers are even going so far as waive the loan and appraisal contingencies that many have relied upon in the past to guarantee that they can get their deposit back if the mortgage financing they seek doesn’t get approved, or if the appraisal turned up unexpected issues at the property, said Schorr.

It can be a big mistake to waive these things or skirt due diligence—which may lead to serious problems after a sale, and cases of buyer’s remorse. Yet some people these days are acutely conscious of the disadvantage they face with respect to other buyers who are able to present themselves to sellers as unencumbered by any need to secure financing.

“It’s a more strategic way to do it if you’re in the all-cash market, or you’ll be beaten out by all-cash,” said Schorr.

“This is a higher-end market, too. If you’re way above the median price, there are more all-cash buyers.”

Lara Mizrack, a broker at Brown Harris Stevens in New York City, described many buyers’ unease as largely a function of high interest rates, the upcoming election, and international uncertainty. Mizrack acknowledged the distinct advantage that cash buyers hold in the current market.

“An all-cash deal has a faster application process, easier closing, and a seller does not have concerns about bank rejections,” she said.

Children ride scooters past “Open House” flags displayed outside a house in Los Angeles on Sept. 22, 2022. (Allison Dinner/Getty Images) Creative Approaches

The key for buyers in the current market who are not super-wealthy is to show a high degree of flexibility both with regard to the types of properties they set out to acquire no less than the terms and structures of financing, said Cara Ameer, a broker with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Florida.

Finding prices in the range they can afford may sometimes require buyers to look beyond the area where they live and to consider, say, a townhouse or condo unit rather than a single-family home, Ameer told The Epoch Times.

Another option is to buy a property in order to rent it out and use the revenue from the rental to pay off the mortgage and increase their share in the equity of the property in question, she said.

“There are affordable opportunities in virtually every city and state, you just have to know where to look. Smaller towns near colleges and universities are often promising opportunities,” Ameer stated.

“Buyers should also work with a lender well versed in low- to no-downpayment loans, as well as first-time homebuyer programs and creative lending options that can help them access financing.”

Ameer noted that one Southern California lender she works with makes use of a program where buyers do not need to put any money down on a first mortgage and can take out a second mortgage using 3.5 percent in gift funds directly from the lender. The buyer must have funds to cover the closing costs.

The total paid at closing runs to around 3–4 percent of the purchase price, she said. Buyers who do not have the means even to cover that expense at closing can request a cost credit from the seller.

Ameer also pointed to Federal Housing Administration (FHA) loan programs that require 3.5 percent down, and conventional loan programs with low down payments that cover anywhere from 5 percent to 100 percent of the total purchase price.

Yet another option for buyers who do not have deep pockets is to seek out a property in a state of disrepair, whether that means something as serious as a missing roof or as cosmetic as broken air conditioning, and to apply for a renovation loan, Ameer said.

Read more here...

Tyler Durden Mon, 08/12/2024 - 10:35

Key Events This Busy Week: CPI, PPI, Retail Sales

It is a macro-heavy week, and the market's key focus will be on US inflation data, with the July CPI print on Wednesday preceded by the PPI data on Tuesday, followed by Retail Sales on Thursday.

The median economist forecast is for both headline and core CPI to rise +0.20% on the month, which would leave annual headline CPI steady at 3.0%, with core ticking down a tenth to 3.2%. On a monthly basis, this would be an acceleration from the +0.1% core CPI print in June, but with both the three- and six-month annualized rates falling by 40bps to 1.7% and 2.9%, respectively.

In terms of the CPI details, there will be focus on whether the June slowing in rental inflation is sustained. For the PPI on Tuesday, economists see headline PPI gains staying at +0.2% MoM, though PPI components that feed into the Fed’s preferred core PCE measure may leave it running ahead of core CPI for the second month in a row.

The upcoming inflation data will be key for whether the Fed gains confidence to signal more clearly a cut at the September meeting. Over the weekend we heard from Fed Governor Bowman, who commented that “she “will remain cautious in my approach to considering adjustments to the current stance of policy” as "inflation is still uncomfortably above the committee’s 2% goal". So one of the most hawkish FOMC voices sounding not yet convinced on the immediacy of rate cuts.

Speaking of Fed talking heads, several regional Fed presidents are due to speak this week, including Bostic on Tuesday, Musalem and Harker on Thursday and Goolsbee on Friday, so we’ll see if there are any changes in tone in response to the inflation data. We may have to wait until next week’s Jackson Hole symposium for an in depth take on how the Fed is thinking about the expected easing cycle.

Other notable US releases this week will include July retail sales and industrial production on Thursday, which economists expect to grow by +0.4% and shrink -0.3% on the month respectively. These will present some of the first pieces of hard activity data for Q3. We will also have the University of Michigan consumer survey on Friday.

Finally, with earnings season winding down, we will get some more evidence on the health of the US consumer with earnings reports from Home Depot (Tuesday) and Walmart (Thursday) as the earnings season winds down.

A bit of a detour here courtesy of DB's Peter Sidorov who writes that as we start the week, Fed funds futures are pricing 101bps of cuts by year-end, so favoring at least one 50bps cut across the remaining three FOMC meetings. This is down from 138bps at the peak of the market stress last Monday but still well above the 87bps seen prior to the July payrolls print and it is hard to see how such easing would transpire without a material slowing of the economy. While fears of a US recession ticked up in recent weeks amid softer labor market data, activity surveys have largely held up and the Atlanta Fed’s GDPNow currently signals solid 2.9% growth for Q3. Compared to Europe, the US continues to benefit from stronger productivity growth, higher wealth effects and deeper capital markets.

Courtesy of Rabobank and DB, here is a day by day snapshot of what to expect.

Monday: A light day for data. RBA Deputy Governor Andrew Hauser is speaking, China money supply figures will be released, and we will also see building permits for Canada and the New York Fed’s 1-year inflation expectations index.

• Data: US July NY Fed 1-yr inflation expectations, monthly budget statement, Germany June current account balance, July wholesale price index, Canada June building permits, Denmark July CPI
• Earnings: Barrick Gold

Tuesday: Japan PPI and New Zealand net migration are first up, followed by Australia’s wage price index (an important one for RBA watchers) and both business and consumer confidence figures. At the start of the European session we have UK labour market data, followed by the ZEW survey in Germany and then it’s over to the USA for PPI and comments from the Fed’s Raphael Bostic.

• Data: US July PPI, NFIB small business optimism, UK June average weekly earnings, unemployment rate, July jobless claims change, Japan July PPI, machine tool orders, Germany and Eurozone August Zew survey
• Central banks: Fed's Bostic speaks
• Earnings: Home Depot, Asics

Wednesday: The RBNZ policy rate decision is main point of interest early in the day. We think the bank will err on the side of unchanged, but it really is a knife’s edge decision, and the futures see strong odds of a cut. Following that its over to the UK for July CPI (-0.1% m-o-m expected) and then we will get the second read of Q2 GDP for the Eurozone. The key release of the day (and the week) is the US CPI report, where prices are expected to have risen by 0.2% m-o-m on both headline and core readings.

• Data: US July CPI, UK July CPI, RPI, PPI, June house price index, Eurozone Q2 GDP, employment, June industrial production, Sweden July CPI
• Central banks: RBNZ decision
• Earnings: Cisco, Tencent, RWE, Vestas

Thursday: RBNZ Governor Orr will appear before the Kiwi parliament, and we will also see July card spending and food price data for New Zealand in the early morning. Following that is Japan Q2 GDP, the PBOC’s 1-year MLF decision, Aussie labour market figures for July (+20k employment and an unchanged unemployment rate of 4% being the consensus) and July industrial production and retail sales data for China. Later in the day we get UK Q2 GDP, the results of the Empire manufacturing survey and the US retail sales report, where growth of 0.1% m-o-m is expected for the control group. We will also see the US weekly jobless claims data, which might be important this time around. The Fed’s Patrick Harker and Alberto Musalem will be speaking.

• Data: US July retail sales, industrial production, import and export price indices, capacity utilisation, August Empire manufacturing index, Philadelphia Fed business outlook, NAHB housing market index, June business inventories, total net TIC  flows, initial jobless claims, China July retail sales, industrial production, new home prices, property investment, UK June monthly GDP, Japan Q2 GDP, June capacity utilisation, Canada July existing home sales, June wholesale sales ex. petroleum
• Central banks: Fed's Musalem and Harker speak, Norges decision, China 1-yr MLF rate
• Earnings: Walmart, Alibaba, JD.com, Deere, Applied Materials, Orsted

Friday: New Zealand’s manufacturing PMI and Q2 PPI is out. We will also see more remarks from RBNZ Governor Orr and then it’s over to the UK for July retail sales (+0.6% m-o-m incl fuel expected). Following that we have Canadian housing starts and manufacturing sales for June, and then US housing starts for July, the New York Fed’s Service Business Activity Survey and the University of Michigan’s Consumer Sentiment report where a modest improvement is expected. The Fed’s Austan Goolsbee will also be speaking in a ‘fireside chat’.

• Data: US August University of Michigan consumer survey, New York Fed services business activity, July building permits, housing starts, UK July retail sales, Japan June Tertiary industry index, Italy June general government debt, Eurozone June trade balance, Canada July housing starts, June manufacturing sales, international securities transactions
• Central banks: Fed's Goolsbee speaks

Finally, focusing on just the US, Goldman notes that the key economic data releases this week are the CPI report on Wednesday and the retail sales report on Thursday. There are several speaking engagements from Fed officials this week.

Monday, August 12

• There are no major economic data releases scheduled.

Tuesday, August 13

• 06:00 AM NFIB small business optimism, July (consensus 91.5, last 91.5)
• 08:30 AM PPI final demand, July (GS +0.2%, consensus +0.2%, last +0.2%); PPI ex-food and energy, July (GS +0.2%, consensus +0.2%, last +0.4%); PPI ex-food, energy, and trade, July (GS +0.2%, consensus +0.2%, last flat)
• 01:15 PM Atlanta Fed President Bostic (FOMC voter) speaks: Atlanta Fed President Raphael Bostic will speak on the economic outlook in a moderated conversation at the Conference of African American Financial Professionals. A Q&A is expected.

Wednesday, August 14

• 08:30 AM CPI (MoM), July (GS +0.17%, consensus +0.2%, last -0.1%); Core CPI (MoM), July (GS +0.16%, consensus +0.2%, last +0.1%); CPI (YoY), July (GS +2.93%, consensus +3.0%, last +3.0%); Core CPI (YoY), July (GS +3.20%, consensus +3.2%, last +3.3%): We estimate a 0.16% increase in July core CPI (month-over-month SA). Our forecast reflects further declines in used car prices (-1.5%) and airfares (-2.5%), as well as a modest decline in new car prices (-0.1%) after a rebound in incentives following last month’s disruptions to dealer software systems. We expect another firm increase in the car insurance category (+0.7%) based on continued—albeit decelerating—increases in premiums in our online dataset. We expect modest boosts from tobacco prices related to new taxes in Colorado and Maryland and from the partial-month impact of a postage price hike on July 14th. After last month’s step lower, we assume another moderate increase in OER (+0.29%) and a partial rebound in primary rent (+0.33%), reflecting payback for the January spike in OER and drop in rent. We estimate a 0.17% rise in headline CPI, reflecting higher food (+0.15%) and energy (+0.4%) prices.

Thursday, August 15

• 08:30 AM Empire State manufacturing survey, August (consensus -5.5, last -6.6); 08:30 AM Retail sales, July (GS +0.1%, consensus +0.4%, last flat); Retail sales ex-auto, July (GS flat, consensus +0.1%, last +0.4%); Retail sales ex-auto & gas, July (GS flat, consensus +0.2%, last +0.8%); Core retail sales, July (GS -0.2%, consensus +0.1%, last +0.9%): We estimate core retail sales declined 0.2% in July (ex-autos, gasoline, and building materials; month-over-month SA). Our forecast reflects a boost from another record Amazon Prime Day but sequentially slower credit card spending growth and a potential headwind from seasonality. We estimate a 0.1% rebound in headline retail sales, reflecting flattish gasoline prices but sharply higher auto sales following disruptions from cyberattacks in the prior month.
• 08:30 AM Philadelphia Fed manufacturing index, August (GS 3.9, consensus 5.0, last 13.9): We estimate that the Philadelphia Fed manufacturing index pulled back 10pt to 3.9 in August, reflecting downward convergence toward other surveys.
• 08:30 AM Initial jobless claims, week ended August 10 (GS 230k, consensus 236k, last 233k): Continuing jobless claims, week ended August 3 (consensus 1,870k, last 1,875k)
• 08:30 AM Import price index, July (consensus -0.1%, last flat): Export price index, July (consensus flat, last -0.5%)
• 09:10 AM St. Louis Fed President Musalem (FOMC non-voter) speaks: St. Louis Fed President Alberto Musalem will speak on the US economy and monetary policy at Greater Louisville Inc.'s Regional Economic Development Update. A Q&A is expected. On July 11, Musalem said “I will be looking for more evidence that inflation can be expected to return to 2% going forward.”
• 09:15 AM Industrial production, July (GS -0.1%, consensus -0.3%, last +0.6%); Manufacturing production, July (GS -0.1%, consensus -0.3%, last +0.4%); Capacity utilization, July (GS 78.6%, consensus 78.5%, last 78.8%); We estimate industrial production decreased 0.1%, as weak electricity production likely outweighed strong oil and gas and mining production. We estimate capacity utilization decreased to 78.6%.
• 10:00 AM Business inventories, June (consensus +0.3%, last +0.5%)
• 10:00 AM NAHB housing market index, August (consensus 42, last 42)
• 01:10 PM Philadelphia Fed President Harker (FOMC non-voter) speaks: Philadelphia Fed President Patrick Harker will give a speech on the Federal Reserve Bank of Philadelphia’s Center for the Restoration of Economic Data (CREED). Speech text is expected. On July 17, Harker said that he expects “economic growth to slow but remain above trend and the unemployment rate to increase modestly” this year.

Friday, August 16

• 08:30 AM Housing starts, July (GS -1.5%, consensus -1.3%, last +3.0%); Building permits, July (consensus -1.5%, last +3.9%)
• 10:00 AM University of Michigan consumer sentiment, August preliminary (GS 65.9, consensus 66.9, last 66.4); University of Michigan 5-10-year inflation expectations, August preliminary (GS 2.9%, consensus 2.9%, last 3.0%)
• 01:25 PM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will participate in a fireside chat at the Angeles Investors’ Q3 Summit & Awards Event. A Q&A is expected. On August 6, Goolsbee said “I’ve been saying for a long time that we’ve been in a restrictive posture… the real fed funds rate is as high as it’s been in a long time and we’re at the peak even in this cycle as inflation comes down. And you only want to be that restrictive if you think there’s fear of overheating. These data, to me, do not look like overheating.”

Tyler Durden Mon, 08/12/2024 - 10:25

Gaze Into The Data Long Enough...

By Benjamin Picton, Senior Market Strategist at Rabobank

Friday saw equities continue their recovery from steep selloffs early last week and the preceding Friday. The S&P500 and the NASDAQ both rose by around half a percentage point and the Treasury curve flattened. 10-year yields sank by 5bps, and 2-year yields rose marginally as markets continued to price out hysterical calls for large emergency rate cuts. Nevertheless, the futures curve still has 38bps of cuts to the Fed Funds rate priced in for the September meeting, so starting an easing cycle with a supersized cut is still very much on the minds of traders.

Michelle Bowman, perhaps the most hawkish of the Fed Governors, gave a speech to the Kansas Bankers Association over the weekend where she mentioned that she may not be ready to support any cut at all in September. Bowman said that recent progress in disinflation was a “welcome development” but cautioned that much of the past progress had come courtesy of supply side factors that are now largely behind us. Bowman warned that inflation still remains uncomfortably above the Fed’s 2% target, and that latent inflation risks from new supply side pressures and big fiscal deficits make the case for caution.

Bowman’s Fed colleague Tom Barkin also sent the message that the Fed shouldn’t be panicked into cutting too hard too fast. Barkin said that he is optimistic that future inflation readings will be “good”, and intimated that the Fed has “some time in a healthy economy” to normalize policy rates in a “steady, deliberate way.” The Boston Fed’s Susan Collins struck a similar tone, saying that it would be appropriate to begin cutting “soon”, and that the pace of easing will remain contingent on the flow of data. Market pricing suggests that traders remain nervous about the steady-as-she-goes assessment of policy rates, and the volatility of last week perhaps serves as a warning that we could be only one or two bad prints away from further turmoil.

Of course, this week will throw up a number of opportunities to upset the narrative and allow volatility to rear its ugly head again. The key focus for markets will be Wednesday’s release of the July CPI report for the USA, but we also have PPI the day before and both July retail sales and the weekly jobless claims figures on Thursday. Those weekly claims numbers are generally considered to be second-tier data, but they have taken on increased importance since the release of the July non-farm payrolls report the Friday before last. That softer-than-expected report triggered the ‘Sahm Rule’ recession indicator and became one of the catalysts for the sharp price action in the days following. So, expect markets to remain particularly sensitive to fresh hints pertaining to labour market conditions.

Elsewhere today we have the news that US Defence Secretary Lloyd Austin has ordered the USS Abraham Lincoln carrier strike group to hasten its transit to the Middle East, and has also ordered the Omaha-class ballistic missile submarine USS Georgia to deploy to the region. Austin’s press release says that the Lincoln strike group will add to the capabilities already provided by the USS Theodore Roosevelt, which seems to imply that it will not simply be relieving the Roosevelt as was previously reported. At least not straight away.

Having sold off in sympathy with equities last Monday, Brent crude futures have crept higher this morning after posting four-straight days of gains at the back end of last week. Latent nervousness about the timing and scale of Iranian (and allies) retaliation for Israel’s assassination of Hamas political leader Haniyeh and Hezbollah #2 Fuad Shukr remains, but in light of the soft demand outlook our energy analyst Joe DeLaura believes that a substantial move higher would require actual interruptions to the flow of energy supplies through the Persian Gulf.

Elsewhere this week we are expecting UK CPI, Aussie labour market figures for July, and a policy rate meeting from the Reserve Bank of New Zealand. That meeting is a coin toss as to whether the RBNZ cuts its policy rate or not. Rabobank had held a forecast of an August 2024 rate cut since all the way back in November of 2023, but we recently pushed that back by one meeting to October after non-tradeable inflation in Q2 printed a little higher than expected.

Like the Fed, the RBNZ won’t want to leave it too long to easy policy. Central bankers continue to stress their data-dependence when making policy decisions, but it’s a game that does require some degree of forward projection. To borrow from Nietzsche: If you gaze too long into the data, the data also gazes into you.

Tyler Durden Mon, 08/12/2024 - 10:05