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After three week under Israeli siege and a bombing campaign which has been unprecedented in its intensity, Gazans are getting increasingly desperate. The Strip is almost completely enveloped in darkness, also with communications cut, which happened Friday, and the United Nations is now warning of a total breakdown in civic order.
UN Relief and Works Agency for Palestine Refugees (UNRWA) in Gaza has said that thousands of Palestinians have broken into several of its warehouses in the Strip, raiding wheat, flour, and hygiene stores - among other basic necessities stored there.
"This is a worrying sign that civil order is starting to break down after three weeks of war and a tight siege,” UNRWA director Thomas White told press agencies.
UN Secretary-General Antonio Guterres has also in fresh Sunday statements called the crisis a "nightmare" and again urged a ceasefire. "The situation in Gaza is growing more desperate by the hour. I regret that instead of a critically needed humanitarian pause, supported by the international community, Israel has intensified its military operations."
Over the weekend the Gazan death toll surpassed 8,000 - with Gaza's Health Ministry saying that most of these are women and young people. The Biden administration, which has repeatedly affirmed that it "stands with Israel", has also said that it doesn't trust casualty figures being issued by Hamas or Palestinian sources.
There are reports that communications were restored to much of the Gaza Strip as of Sunday, possibly the result of growing international pressure on the Israelis. Ten more aid trucks have also reportedly crossed from Egypt on Sunday.
According to Al Jazeera, "The Israeli military said on Sunday it had struck more than 450 targets over the past 24 hours, including Hamas command centres, observation posts and antitank missile launching positions. It said more ground forces were sent into Gaza overnight." The Israeli ground offensive has continued expanding, with The Guardian observing, "Under the cover of strikes and artillery, Israeli ground troops have begun moving into the north of the strip in Beit Lahia and Beit Hanoun in what the Israeli prime minister, Benjamin Netanyahu, described as the “second stage” of the war triggered by Hamas."
As we continue to expand our ground operations in northern Gaza:
— Israel Defense Forces (@IDF) October 29, 2023
🔴IAF aircraft, guided by IDF troops, struck Hamas structures.
🔴Anti-tank missile launch posts & observation posts were struck.
🔴Multiple terrorists were eliminated. pic.twitter.com/XMwKPKGZ1R
IDF troops have been seen reaching a point some two miles into Gaza:
Israeli troops appear to have advanced over two miles into Gaza, according to a CNN analysis of video published by an Israeli media outlet.
The troops in the video, taken on Saturday, are seen putting an Israeli flag on a Gaza resort hotel's roof. CNN geolocated the video to an area just over two miles from the Gaza-Israeli border.
"Soldiers of the 52 Battalion of the 401 Brigade are waving the Israeli flag in the heart of Gaza, by the beach," a soldier is heard saying in the video, taken several miles north of central Gaza City. "We will not forgive nor forget, and we’ll not stop until the victory."
Palestinian sources are also saying another major hospital, which is treating hundreds of patients and giving shelter to over 10,000, has come under attack:
Israeli airstrikes have “caused extensive damage to hospital departments and exposed residents and patients to suffocation” at the Al-Quds Hospital, the Palestinian Red Crescent Society said Sunday.
The aid organization accused Israel of “deliberately” launching the airstrikes “directly next to Al-Quds Hospital, with the aim of forcing the medical staff, displaced people, and patients to evacuate the hospital.”
Major bulldozing and tank operations have been observed on the beach in Gaza...
Israeli Defence Forces over the last few hours continued to strike and kill terrorists in the Gaza Strip. IDF soldiers operating adjacent to the Erez Crossing identified a number of terrorists exiting the shaft of a tunnel in the Gaza Strip. Following the identification, the… pic.twitter.com/EKGA69Vvdo
— Aditya Raj Kaul (@AdityaRajKaul) October 29, 2023
A statement cited in The Times of Israel described:
The IDF says troops killed a number of Hamas gunmen who opened fire at the ground forces in the Strip, and other terrorists identified on the beach in Gaza, near the southern Israel community of Zikim.
Hamas and the IDF have continued to exchange gunfire, but the status of forces on either said remains unknown and for the moment lost in the fog of war. At this point, if either suffers significant casualties, they are unlikely to make it publicly known.
Meanwhile, the intensifying crisis for Palestinian civilians has not only led to massive street protests in various nations, particularly in Europe, but has resulted in rare criticism aimed at Israel from leading Western nations. The French government has issued scathing criticism of "unacceptable" Israeli settler attacks on Palestinians in the West Bank:
More than 100 Palestinians have been killed in the West Bank since the outbreak of war in the Gaza Strip earlier this month, mostly during raids by Israeli forces or attacks by settlers, according to the Ramallah-based health ministry.
“France strongly condemns the settler attacks that have led to the deaths of several Palestinian civilians over the past few days in Qusra and Sawiya, as well as the forced departure of several communities,” said a foreign ministry statement.
And Norway too has condemned what it says is a massive and "disproportionate" response and death toll among Palestinians in the wake of the Oct.7 Hamas terror attack which killed 1,400 people. "International law stipulates that [the reaction] must be proportionate. Civilians must be taken into account, and humanitarian law is very clear on this. I think this limit has been largely exceeded," Prime Minister Jonas Gahr Store aid in a public broadcast radio interview.
"Almost half of the thousands of people killed are children," he stressed. "Israel has the right to defend itself, and I recognize that it is very difficult to defend against attacks from an area as densely populated as Gaza,” Store said. "Rockets are still being fired from Gaza into Israel, and we condemn this."
Israeli flag flies inside Gaza for first time since 2005pic.twitter.com/uc0sJrNyXW
— Lucas Tomlinson (@LucasFoxNews) October 29, 2023
Even the White House has begun to urge caution, with national security advisor Jake Sullivan telling the Sunday shows that even though Hamas used civilians as "human shields" - it's still ultimately Israel's responsibility to avoid hitting them.
"They’re putting rockets and other terrorist infrastructure in civilian areas. That creates an added burden for the Israeli Defense Forces," he said. "But it does not lessen their responsibility to distinguish between terrorists and innocent civilians and to protect the lives of innocent civilians as they conduct this military operation."
Authored by Michael Matulef via The Mises Institute,
The threat of hyperinflation has haunted fiat money economies throughout history. Although past empires crumbled under the weight of unrestrained money printing, modern bankers at the Federal Reserve assure us that today’s financial system is immune to such a fate. Austrian business cycle theory, however, reveals that current economic stimulation may be propelling us toward a crisis of catastrophic proportions: a crack-up boom that marks the dramatic end of this boom-and-bust cycle. When a central bank expands the money supply to reinflate bubbles, it destroys the currency’s purchasing power. This endgame, in which the monetary system crumbles beneath a weak economy, represents the ultimate failure of interventionism.
Once the public expects prices to keep rising, hyperinflation becomes a self-fulfilling prophecy.
To comprehend the precarious state of America’s monetary system, we must first review the boom-and-bust cycle as formulated by Ludwig von Mises and the Austrian school. The Austrians observed that the artificial suppression of interest rates by a central bank initiates an unsustainable economic boom by promoting malinvestment. Pushing rates below natural market levels sends a distorted signal to businesses that long-term capital investment is more profitable than the economy can actually support. In the euphoric boom phase, jobs multiply and GDP grows with investment. But the investments lack economic merit, so the house of cards eventually collapses.
With the liquidation of malinvestments, the bust phase emerges: unemployment soars, output contracts, and a recession begins. Since the investments were built on quicksand, they must unwind. Each failed business further curtails consumer spending, rippling the bust through the economy. But rather than letting liquidation and market corrections occur, policymakers add stimulus, setting up a larger bubble and more painful bust down the line.
At this point, people panic and exchange currency for real assets before rapid devaluation consumes their savings. As the crack-up boom picks up steam, the demand for money plummets while prices of real goods skyrocket, leading to hyperinflation. This psychological shift marks the event horizon where monetary policy is rendered impotent. Mises describes the nature of this crisis:
This phenomenon was, in the great European inflations of the ’20s, called flight into real goods (Flucht in die Sachwerte) or crack-up boom (Katastrophenhausse). The mathematical economists are at a loss to comprehend the causal relation between the increase in the quantity of money and what they call “velocity of circulation.”
The characteristic mark of the phenomenon is that the increase in the quantity of money causes a fall in the demand for money. The tendency toward a fall in purchasing power as generated by the increased supply of money is intensified by the general propensity to restrict cash holdings which it brings about. Eventually a point is reached where the prices at which people would be prepared to part with “real” goods discount to such an extent the expected progress in the fall of purchasing power that nobody has a sufficient amount of cash at hand to pay them.
The monetary system breaks down; all transactions in the money concerned cease; a panic makes its purchasing power vanish altogether. People return either to barter or to the use of another kind of money.
The crack-up brings the unsustainable, debt-fueled boom to a catastrophic end. Personal savings are wiped out along with the monetary system’s credibility. Society becomes less stable as the populace loses faith in institutions and scrambles for resources. The economy finds its ultimate bottom not in recession but in the total decay of the currency itself.
Today, deficits balloon out of control as a result of efforts to sustain demand. Rather than allowing healthy corrections, the Fed piles on monetary stimulus at the first signs of financial crisis. Like an addict, the economy needs increasingly larger doses to maintain the status quo. But this trajectory of interventionism cannot persist forever without severe consequences: the Faustian bargain of trading long-term stability for short-term gain will backfire catastrophically.
With each intervention, the Fed suppresses market corrections, inflates asset bubbles, and encourages high-risk debt. This constant flood of stimulus promotes moral hazard as it optimizes the economy for speculation while curtailing organic productivity. How much longer can this monetary dance along the precipice of hyperinflation continue before the dollar plunges into the abyss?
Despite the veneer of stability, individuals sense that the economy rests on a precarious foundation of debt and deceit. They intuitively grasp that capitalism has metamorphosed into a cronyism that disproportionately rewards those with political connections in an amalgamation of concentrated power, unrestrained money creation, and escalating inequality.
Hoping for a return to monetary and fiscal restraint may prove naively optimistic. Exercising prudence would require immense political courage and social responsibility, qualities rarely exhibited in politics. Politicians face overwhelming incentives to maintain short-term stability through stimulus, spending, and low rates. And restructuring programs with enormous and unfunded liabilities like Medicare and Social Security would spur public backlash, even if it was fiscally prudent.
After decades of excess, the economy is addicted to perpetual stimulus and deficit spending. The prevailing social mindset assumes that unending, debt-fueled growth is the natural state of affairs. With little political will for discipline, reform may depend on a crisis to force change. In the meantime, politicians, paralyzed by the status quo, are unlikely to make the difficult choices that could preempt such a crisis.
It is all but inevitable that central banks will continue expanding the money supply to delay the day of reckoning and preserve the facade until the inevitable hyperinflationary crack-up boom, although the sheer weight of debt alone may produce this outcome. Promises of reform have been made, only to go unfulfilled. In order to prevent disaster, we must fundamentally rethink our monetary and fiscal policies against the temptations of short-term political gain. To quote Ayn Rand:
Just as a man can evade reality and act on the blind whim of any given moment, but can achieve nothing save progressive self-destruction—so a society can evade reality and establish a system ruled by the blind whims of its members or its leader, by the majority gang of any given moment, by the current demagogue or by a permanent dictator. But such a society can achieve nothing save the rule of brute force and a state of progressive self-destruction.
A crack-up boom would erode the power of the federal government: with a dramatic fall in the currency’s purchasing power, the administration’s ability to fund programs and institutions would deteriorate, the Treasury would go bankrupt, and the government would have to either massively downsize or attempt to fund operations by printing even more money. Along with the value of the promissory notes, trust in centralized authority would evaporate.
With the federal government weakened and desperate, power would naturally shift back to individuals and their local communities. When faced with harsh economic realities, communities depend on themselves rather than flailing national policy. Individuals and communities should strengthen their local networks to weather the coming storm, increasing local involvement and forging bonds of cooperation. Joining area organizations and neighborhood groups can foster mutually beneficial relationships and support systems, invaluable resources for when the currency buckles. With shared purpose, communities enhance their capacity to withstand the crisis.
Equally vital are the practical skills and knowledge that can provide real value to others when centralized systems fray. Pursuing expertise in food production, energy generation, medicine, engineering, and other technical fields equips people to meet local needs. In these ways, proactive societies can cultivate the true source of lasting wealth: strong social webs and skilled human capital. Global forces are beyond local influence, but strong communities retain some control over their destiny, even in hyperinflation’s wake.
Praxeological reflection, the methodology of Austrian economics, can expose the unsound foundations that stretch currencies to their breaking point. It cannot foresee when hyperinflation will arrive, but it can point to the causes and guide human action toward stability and prosperity.
There are shocking and surreal scenes coming out of the southern Russian Republic of Dagestan, after word spread that a flight from Tel Aviv was set to land at its international airport.
Rumors that a flight full of Israeli Jews was set to land triggered Muslim mobs to raid the airport, where they broke past barriers and even at one point stormed the airstrip in search of Jews.
In #Dagestan, a crowd stormed the building of Makhachkala airport in search of Jews from a flight from Tel Aviv. pic.twitter.com/TaBvakBKIE
— NEXTA (@nexta_tv) October 29, 2023
"A flight from Israel to the Russian Republic of Dagestan earlier today was forced to divert from its intended destination in the capital of Makhachkala after pro-Palestinians protesters stormed the airport, seeking to attack the Israeli arrivals, according to multiple reports," Times of Israel (TOI) described of the chaotic scene.
Several videos have emerged showing angry rioters yelling "Allahu Akbar" while seeking to intercept offboarding passengers from the Israeli flight.
A Russian Pilot telling Passengers on a Plane at Makhachkala International Airport in Dagestan to not attempt to Open any of the Doors due to the Rioters on the Tarmac which are trying to enter the Aircraft. pic.twitter.com/lwTW0Zg3V6
— OSINTdefender (@sentdefender) October 29, 2023
It appears police or security personnel were nowhere in sight as the mob, reportedly mainly made up of Palestinians who live in Dagestan, rampaged through the terminal.
"Dagestan’s population is overwhelmingly Muslim," TOI noted. "According to Channel 12, the crowd was apparently largely made up of Palestinian expats."
The flight from Tel Aviv either diverted or took off after briefly landing. There are reports that the mob tried to break into a plane on the tarmac. Some reports say that the aircraft which was surrounded was full of Russian citizens.
Some of them tried to storm the plane, per Izvestia https://t.co/js5uaaYkSg pic.twitter.com/bwJuMGH57g
— max seddon (@maxseddon) October 29, 2023
Regional media said the group went so far as to begin checking the IDs of travelers exiting the airport by car:
Some of the signs held by demonstrators read “Child killers have no place in Dagestan” and “We are against Jewish refugees.”
The independent Medizona news website reported that the demonstration was prompted by calls spread on the Telegram messaging app earlier on Sunday to block a plane scheduled to arrive directly from the Israeli city of Tel Aviv.
According to local media, some of the demonstrators were stopping cars outside Makhachkala's airport to check the personal identification documents of drivers and passengers as they searched for Israeli citizens among the motorists.
The flight from Tel Aviv landed at 7:17 p.m. local time, according to the airport's website, after which the protesters stormed into the airport, breaking past security and running onto the tarmac.
One group of people who ran onto the airport's tarmac surrounded a plane and jumped onto one of its wings, the pro-Kremlin newspaper Izvestia reported.
A plane from Israel lands in Dagestan:
— Russian Market (@runews) October 29, 2023
The voice of the flight-attendant: Return into the plane immediately! https://t.co/ADzRxxwqMu pic.twitter.com/6g3IEAAiJf
The FT's Moscow correspondent Max Seddon wrote of one video, "Remarkable to see security forces in Russia standing by for so long. By now, according to Baza, police in Makhachkala have chased them off the runway and outside the airport, where they are now protesting."
The Dagestan airport was forced to temporarily close as the military and police belatedly tried to gain control of the situation and restore order. Per regional N12 News:
"Security official: the event in [Dagestan] is not over yet. A relatively small number of Israelis and Jews are isolated and secured at the airport. We are working for them to take off from there for an onward flight to Moscow as soon as the conditions allow."
When word spread that a plane from Tel Aviv was landing in Dagestan, Russia, a mob stormed the airport in what can only be described as a modern-day pogrom. pic.twitter.com/1G6phfdraz
— Aviva Klompas (@AvivaKlompas) October 29, 2023
Some observers are speculating that security forces essentially turned a blind eye and allowed the disturbing scene to happen.
It is indeed remarkable that given the typical high security nature of international airports, the mob so easily breached all security checkpoints and overwhelmed both the terminal and tarmac.
Authored by Jackson Elliott via The Epoch Times (emphasis ours),
Former cross country runner Teagan Ewings feels a bit bewildered watching her sister, Teanne, run at high school meets.
That's because Teanne Ewings has to run against a boy who identifies as a girl.
"When I was in high school, even the thought of a transgender athlete being in my race was not even on my radar," 21-year-old Teagan Ewings told The Epoch Times.
But much has changed in school sports.
Even just a year ago, a 16-year-old cross-country runner from Maine Coast Waldorf School (MCWS), ran as a boy.
He placed 172nd in the state men's cross country during his freshman year.
But then he grew his short hair out and transitioned to women's cross country. Now, his running times allow him to be considered one of the state's top girl runners.
In a meet on Oct. 5, he won the 5K (3.1 mile) race with a time of 18:09, beating the second-place girl, Emma Young, by 66 seconds.
As of Sept. 26, he ranked fifth in the state among all women and third among the state's small-school athletes, according to online rankings by Maine track and cross country time website MileSplit.
Teanne Ewings ranks second overall and second in the state's division for small-school athletes.
The Epoch Times attempted to contact the male runner, but his Instagram is private. His profile picture shows a crying child, along with the Pride flag and transgender pride flag.
The Epoch Times contacted MCWS but received no comment by publication time.
The Maine Principals Association (MPA) emailed The Epoch Times a statement that state law requires them to include him in women's sports.
"The Maine Principals’ Association is committed to working with schools across the entire state to ensure that Maine State Law is followed," the MPA's statement reads.
"The state of Maine recently enacted laws that explicitly prohibit 'Unlawful educational discrimination in schools based on sex, sexual orientation, gender identity, a physical or mental disability, ancestry, national origin, race, color, or religion.'"
Teagan Ewings said her sister's peers are divided about whether a boy who identifies as a girl should participate in women's cross country.
Some girls told her sister to "run faster" and said sports are all about having fun, she said.
"They just want everyone to have fun, and everybody can do what they want."
Other women see the inclusion of boys as the end of women's sports.
"There's just not going to be female sports anymore," Teagan Ewings said. "It'll just be male sports and then males pretending to be females."
Local parent Cathy Ross has concerns about this, too.
High school boys have far better running times than women, she said.
"There's a handful of us moms who have seen our daughters work like crazy," she said. "These are kids who run over 40 miles a week. Sometimes, at the height of their season, they give up their Saturdays, so that they can travel two-and-a-half hours to a meet far away."
After all of the effort and sacrifice, losing to a man is "crushing" for the girls, Ms. Ross said.
Currently, the young male beats the girls he runs against by two minutes. He's several inches taller than the girls he competes with.
Scientific studies show male hips give men a more efficient running stride than women. Testosterone also allows men to build more muscle than women.
Basically, biology means that he has a larger heart, more leg muscle, larger lungs, and stronger bones than the girls he competes with, Ms. Ross said.
Allowing him into women's sports amounts to Maine giving a special privilege to a man over every girl in the state, she said.
"I don't understand why the gender identity of one individual, and trying to validate that, is seen as far more important than the hard work and the efforts and the need to compete fairly and honestly and to achieve success for girls," Ms. Ross said.
Katherine Collins has a son and daughter in cross country, she said.
The female-identifying runner "is going to get faster because he's getting older," she said. "All he did was grow his hair out and put braids in his hair. I mean, that's all he did. He didn't have to prove anything" to be allowed to compete as a girl.
No matter how much training they endure and dedication girls bring, it's not enough to beat the testosterone advantage, Ms. Collins said.
"The fastest boys' 5K time in Maine is more than two minutes faster than the fastest girls," she said. "There's just no comparison."
Friends have confessed to her that their daughters don't want to compete anymore because they know they'll lose, she said.
And she's frustrated hearing "people say, 'Oh, well, they should just work harder,'" she said. "It's impossible. It's physiologically impossible."
Letting men enter women's sports likely will cost a generation of children their shot at competitive athletics, said Marshi Smith, a former NCAA women's swimming champion,
"How many girls are going to be sacrificed in the meantime?" she asked rhetorically during an interview with The Epoch Times.
"My daughter is 7 right now. In 10 years, that will be her entire childhood athletic career."
For some female students in Maine, the male runner's victories will rob them of accolades that could affect their college applications, Ms. Collins said.
"If you're applying to college and you say that you're nationally ranked or a state champion, that is a big deal," said Ms. Collins.
So his inclusion is a "slap in the face" to female athletes, Ms. Collins said.
"The MPA doesn't care about girls," she said. "They don't care about women."
Parents in Maine opposed to allowing a boy to compete as a girl have few options to change the situation, Maine parental rights advocate Shawn McBreairty told The Epoch Times.
But parents can file complaints with their local school district citing Title IX, the landmark U.S. law meant to bring equity between men and women in most facets of education, Mr. McBreairty suggested.
If that doesn't change things, they can consider filing lawsuits, he said.
Although the boy didn't crack the top 100 of Maine's male runners, he's one of the best "female" runners in the state, Mr. McBreairty said.
The MPA's handbook includes the word "gender" 39 times and the word "transgender" nine times.
"The MPA supports student-athletes regardless of their gender identity or expression," the handbook reads. "The MPA also recognizes that high school sports teams have traditionally been binary [single sex] and believes that it is important to continue to offer single-sex interscholastic athletic teams in order to ensure equal athletic opportunities for girls."
The handbook also states that "most high school-aged boys have a distinct athletic advantage" over girls.
The MPA's Gender Identity Equity Committee (GIE) can decline a request for cross-sex competition—when a boy who identifies as a girl asks to compete with girls—if members are convinced the student is only pretending to be transgender, the handbook reads.
The GIE committee makes this decision under a long list of criteria.
Some criteria involve physical traits like height, weight, previous athletic performance, and whether a student has passed puberty.
Other criteria include whether the student has consistently identified as transgender, whether a student has already changed their gender identity in school records, and what sports the student plans to do.
However, no test can determine if someone is transgender because "gender identity is an internal identification and experience," according to guidelines from the World Professional Association for Transgender Health (WPATH).
The MPA handbook also states that the committee can decline a student's request to play on opposite-sex teams if the student would gain an "unfair athletic advantage or pose an unacceptable risk of physical injury to other student-athletes."
Parents wonder how the current case, in which one participant jumped more than 100 places up in ranking when switching to compete as a girl, can be within the bounds of fairness by the MPA's standards.
"They're acknowledging that boys have an athletic advantage," Ms. Ross said.
"Basically, they don't intend to do anything about it."
Attacks on US military outposts in Iraq and Syria have continued over the weekend. Al-Mayadeen news and other regional outlets have reported that there have been several attacks by Iran-backed militias on Saturday and Sunday. Russian media has also reported on the fresh attacks, calling recent Pentagon airstrikes on Syria an "unsuccessful bid to deter the militias."
A statement by a coalition of Shia paramilitary groups said, "The Mujahideen of the Islamic Resistance in Iraq targeted the American occupation base in Al-Tanf, Syria, with two drones, which directly hit their targets." They carried out the attack from just across the Iraq border into Syria.
Reports say separately that the al-Shaddadi base in eastern Syria was also hit with two drones, and al-Omar base and oil field was struck. The latter was reportedly attacked a mere hours after the US airstrikes.
Al-Mayadeen had says ago cited a statement from the Iraqi Hezbollah Brigades which said the group is willing to fight "a war of attrition against the enemy that will extend for years."
In the early hours of Friday, the US had sent fighter jets to attack multiple locations of Iran-linked paramilitaries in Syria. The Associated Press summarized the action based on US official statements as follows:
Air Force Brig. Gen. Pat Ryder said Friday that the strikes near Boukamal by F-16 and F-15 fighter aircraft targeted a weapons storage facility and ammunition storage facility used by the IRGC and affiliated groups. “Both facilities were destroyed,” he said. “We currently assess there were no casualties in the strikes.”
"These precision self-defense strikes are a response to a series of ongoing and mostly unsuccessful attacks against US personnel in Iraq and Syria by Iranian-backed militia groups," US Defense Secretary Lloyd Austin said in the aftermath.
“Iran wants to hide its hand and deny its role in these attacks against our forces. We will not let them. If attacks by Iran’s proxies against US forces continue, we will not hesitate to take further necessary measures to protect our people,” he added.
Iraqi Shia militias have released a video of them launching a suicide drone toward a U.S. military base.
— Visegrád 24 (@visegrad24) October 28, 2023
A Palestinian flag is showed on the drone before it is launched.
More than 20 U.S. soldiers have been wounded in recent attacks on military bases in Syria and Iraq. pic.twitter.com/OB7VHDGsyb
But given the rocket and drone attacks have continued into the weekend, it's become clear that these US strikes didn't have the desired deterrent effect.
US spy plane fights along the eastern Mediterranean, including stepped up drone activity, have increased in relation to Israel's ongoing ground assault on Gaza.
Poor sugar and cocoa harvests in Mexico, India, and the Ivory Coast, primarily due to El Nino-induced weather disturbances like low rainfall, have caused a spike in candy prices for the second consecutive year. Surging prices are leading some consumers to trade down to value or store-brand candy this Halloween, according to AP News.
Data from retail price tracking website Datasembly reveals consumers have been slapped with the second year of double-digit inflation in the candy aisle. Prices for candy jumped 13% this month compared to prices last October. That's up from a 14% increase in candy in October 2022.
"The price of candy has gotten to be outrageous," Jessica Weathers, a small business owner in Shiloh, Illinois, told AP. She usually buys plenty of candy for the trick-or-treaters, but this year, she only bought two bags, indicating, "It doesn't make sense to me to spend $100 on candy."
This Halloween, one-third of consumers are planning to trade down to value or store brands when buying candy for trick-or-treaters, according to market research firm Numerator.
Data from the Bureau of Labor Statistics show candy prices have rocketed higher in the last several years.
El Nino weather trends have meant drier conditions for Asia, Central America, and West Africa, which are major growing areas for cocoa and sugar.
Cocoa prices rocketed to 44-year highs on drier conditions across West Africa.
"There may be no price relief in sight, at least through the first half of 2024," said Dan Sadler, principal of client insights for Circana, a market research firm.
Global sugar prices have surged to 12-year highs as parts of Asia experienced dry weather that dented harvests.
"The US candy consumer is essentially paying the price for poor crops in Mexico and also Asia," John Stansfield, a senior sugar analyst at commodity data platform DNEXT, told NYTimes.
For some context, at the supermarket, candy inflation means consumers can expect a 250-piece variety pack of Mars Inc. chocolate bars to cost around $25, versus the same package was $19.50 two years ago.
Last week, Hershey's CEO Michele Buck warned: "We know that value and affordability continue to be top-of-the-line for consumers as budgets are stretched."
Authored by Aaron Pan via The Epoch Times,
The survey found that 60 percent of Americans are falling behind on their savings for emergencies, in which 38 percent said they are significantly behind...
A large majority of Americans are falling behind on their savings, as 81 percent have not increased their emergency savings since the beginning of the year, according to a survey.
The survey by Bankrate, released on Oct. 25, showed just 19 percent of American households increased their emergency savings, while 32 percent have less savings now compared with the beginning of 2023. Thirty percent of households have the same amount of savings, while 20 percent had no emergency savings at the start of the year and remain having none.
In terms of age, older generations tend to have less emergency savings now than at the beginning of the year.
According to the survey, households with income over $100,000 tend to have more savings now than at the beginning of the year.
In addition, the survey found that 60 percent of Americans are falling behind on their savings for emergencies, in which 38 percent said they are significantly behind and 22 percent said they are slightly behind.
Among those who said they were falling short on their savings, 13 percent said they would never be on track, while 22 percent said they were uncertain how long it would take.
The poll also found inflation is the main impediment that prevents Americans from increasing their savings amid renewed concern over long-term price hikes. Fifty-seven percent of households who suffered no saving increase blamed inflation for their issue, while 38 percent cited too many expenses that hurt their saving funds.
"Just 19 percent have increased their emergency savings balances since the beginning of the year. Rising prices and high household expenses have been the predominant impediments to boosting emergency savings," said Bankrate chief financial analyst Greg McBride.
The survey was conducted online with 2,496 adults from Sept. 20 to 22.
The Federal Reserve Bank of New York revealed on Oct. 11 that Americans' disposable income has fallen, and consumers are increasingly dipping into savings to prop up consumption.
From the beginning of the pandemic in 2020 through the end of 2021, Americans' excess savings grew to roughly $2.6 trillion, or 14 percent of annual disposable income, according to the New York Fed.
Since then, U.S. excess savings have steadily fallen, dropping to 10 percent of disposable income—or $1.9 trillion—by the second quarter of 2023.
Data for the first two months of the third quarter cited by the New York Fed show that consumers have generally maintained their propensity to spend, but as real disposable income has fallen, they've increasingly been drawing on their savings to continue shopping.
Amid persistent inflation, retirement savings also take a hit as more Americans make hardship withdrawals from their retirement funds to cover emergency needs.
USA Today cited a report from Fidelity Investments, reporting that hardship withdrawals from 401(k) accounts have tripled from 2.1 percent in 2018 to 6.9 percent in 2023.
Moreover, hardship withdrawals at Vanguard have doubled during the 2018-2022 period, increasing from a monthly rate of 2.1 transactions per 1,000 participants in 2018 to 4.3 in 2022.
Nearly 50 percent of Americans say high prices are eroding their living standards—a record number that matched the all-time high set in July 2022, when the pace of inflation was a whisker away from breaking into the double digits.
"After stabilizing earlier this year, concerns about inflation have grown again," reads the latest University of Michigan Surveys of Consumers report, released on Oct. 13.
The survey shows that 49 percent of consumers polled in early October said high prices eroded their living standards. That's up substantially from last month's 39 percent and matches the all-time high notched in July 2022.
Inflation, as measured by the Consumer Price Index (CPI), shot up at a furious pace through 2021 and narrowly missed breaking the 10 percent psychological barrier by mid-2022.
The rising prices peaked at 9 percent in June 2022, a multi-decade high that later fell to 3.1 percent by June 2023. However, inflation in August and September jumped back up to 3.7 percent, bringing renewed concerns about inflation.
What's more, year-ahead inflation expectations have jumped, rising from 3.2 percent in September to 3.8 percent in early October, per the University of Michigan survey.
Longer-term inflation expectations also rose to 3 percent this month from 2.8 percent last month.
With its only commercial tenant out, the legendary Flatiron Building at 175 Fifth Avenue is being converted into luxury housing.
The building has recently "fallen on hard times", including seeing its only office tenant, Macmillan Publishers, move out before Covid, according to a report by The New York Times. This has prompted the building's owners to redevelop the property.
A buyer had previously won an auction for the building back in March, but never showed up when it was time to cut the check. This past week, residential developer the Brodsky Organization bought a stake in the building and will lead the conversion according to the Times.
The triangle-shaped building will now feature condominiums or rentals. Dean Amro, a principal at the Brodsky Organization, says he believes the project shows the company's "confidence in New York coming back even stronger than before.”
Sure, as long as you're not talking about commercial real estate...
But we digress. The project is slated to take about 3 years, according to the Times. Approval from the Department of City Planning could take as much as a year, while demolition and construction would take up to two years.
Plans are still in flux, but roughly 40 residential units are under consideration, while the ground floor will remain retail. Real estate expert Jonathan J. Miller believes the shift aligns well with the stagnant office market and sees potential for the project to succeed as a residential landmark.
Since Macmillan's departure in 2019, the Flatiron's upper floors have remained vacant, and a court-ordered sale occurred earlier this year due to previous ownership disputes over renovation plans. The Flatiron district itself is among Manhattan's priciest and most coveted residential areas.
Jeff Gural, an office developer who was the Flatiron’s majority interest holder, had hoped to maintain some of the office space in the building. But he eventually conceded that "current economic conditions" made it clear that the building would be "better suited for residences".
Which is, of course, a nice way of saying, even commercial real estate developers don't want to be in the business of commercial real estate right now...
He concluded: “There are going to be 40 people who want to live in the Flatiron Building.”
China is Apple's third-largest market after North America and Europe, and mounting data from research firms shows iPhone 15 demand is sluggish after the launch in late September. This comes as Huawei Technologies Co.'s return to the mobile market with the Mate 60 series is a big hit.
Sales of iPhone 15 models in September (launch month) fell 6% compared with the prior year, according to Bloomberg, citing an estimate from market researcher GfK. For the third quarter, a separate report from mobile industry tracker IDC shows Apple's shipments were down 4% in the quarter. Both reports indicate that the Mate 60 series launch, one week before the iPhone 15 launch, dented sales for Apple. GfK said the Mate 60 series recorded sales of 1.5 million in its launch month, doubling from a year ago.
"Against the backdrop of the strong growth of Huawei, Apple iPhone 15 series registered a 6% decline in sales," said Hayden Hou, China senior analyst at GfK
Hou continued, "Huawei Mate 60 series will continue to maintain its strong sales momentum going forward."
The Mate 60's cutting-edge, made-in-China processor is a major victory for Chinese tech despite US sanctions on chips. Another developing issue for Apple is the Chinese government broadened a ban on iPhones at government agencies and state companies.
In mid-October, Jefferies and Counterpoint Research warned about sliding Chinese iPhone demand - just weeks after launch.
Jefferies analysts led by Edison Lee said, "The trend suggests iPhone would lose to Huawei in 2024 - We believe weak demand in China would eventually lead to lower-than-expected global shipments of iPhone."
What's worrisome for Apple is that it gets about 20% of its revenue from China. The apparent nationalism wave among Chinese consumers because of US sanctions appears to be shifting demand from iPhones to Mate 60 phones.
"We're seeing a lot of nationalism right now as Chinese consumers who think they've been wronged by the US government and sanctions are gravitating toward the Mate 60 and that is edging into Apple volumes," Jeff Fieldhack, research director at Counterpoint, told CNN earlier this month.
There are risks that the Biden administration's semiconductor restrictions are falling, as one tech insider revealed last week that the West won't hinder China's rise in chip advancements.
The latest iPhone 15 is equipped with 3-nanometer chips, whereas the Mate 60 series operates using 7-nanometer chips.
There are expectations that China will soon be running smartphones on 5-nanometer chips.
Ending a week that saw the S&P be the most overshorted in history, with Goldman PB reporting that its HF clients had shorted stocks for a record 12 consecutive weeks, it was inevitable that we would get an oversold bounce at some point and this morning we are seeing just that, with stocks in Europe broadly higher, and US equity futures also rising and reversing all of Friday's loss. As of 7:45am, S&P futures were higher by 0.7%, Nasdaq futures gained 0.8% and the Estoxx rose 0.8% in early London session with gains led by utilities and energy; WTI futures were lower by 1.1% on the day because the complacent market downplayed the Israeli ground offensive into Gaza as "less aggressive than feared." Ahead of a very busy week, JPM summarizes sentiment as follows: "are futures potentially setting up a relief rally into month-end or does the selling pressure continue with SPX under its 200dma." Gold slipped below $2,000 an ounce, the dollar dropped as bitcoin gained and ten-year Treasury yields resumed their grind higher to 4.86% ahead of today's Treasury issuance projections statement.
In premarket trading, HSBC was steady after the bank’s further share buyback of as much as $3 billion offset news of a pretax profit of $7.71 billion that fell short of analyst estimates. Cisco shares are little changed after the digital communications technology company was downgraded to market perform from outperform at Raymond James. Here are some other notable premarket movers:
As usual we start with geopolitics, where instead of a massive ground invasion, newsflow over the weekend revealed that the Israeli military has started slowly and according to Bloomberg, "so far there are few signs that the conflict will spread across the wider Middle East region" (the shekel took a pause from recent selling, gaining 0.4% at 4.0566 but remains the world’s worst-performing currency this month, recently hitting 11-year lows). That’s being seen as enough good news for investors to wade back into markets after last week’s sharp selloff, which sent the S&P 500 into a correction on Friday after the index closing 10% below a recent peak.
"The relatively contained operations over the weekend were perhaps a relief to markets, who are worried about other players being dragged into the conflict,” said James Rossiter, global head of macro strategy at TD Securities. “That should bode well for some risk assets. That said, there are definitely a few risk events for markets to chew on this week.”
Still, stocks globally have lost $12 trillion in value since the end of July - aka since the Fed's last rate hike - as concern mounts that central banks’ “higher-for-longer” interest-rate policies may tip the global economy toward a recession. The S&P 500 entered a technical correction and Morgan Stanley strategist Michael Wilson said investors hoping for a boost to stocks by the end of the year will be disappointed.
The week also includes a slew of potentially market-moving events for investors to track, including central bank meetings in Japan, the US and the UK, while the US Treasury Department announces its quarterly bond sales plan. Concern that central banks’ “higher-for-longer” interest-rate policies may tip the global economy toward a recession.
Government bonds have also tumbled, with 10-year Treasury yields hitting a 16-year high last week, despite signals from policy makers they’re “at or near” the end of rate hikes. Bond yields remain high even after the outbreak of the Israel-Hamas war three weeks ago – the kind of geopolitical flashpoint that can spur haven demand for Treasuries. On Monday, the Treasury will set the stage for its issuance plans with an update of quarterly borrowing estimates, and for its cash balance.
European stocks also rose, with the Stoxx 600 gaining 0.7% as all 20 sectors rise after data showed German inflation eased further, while its economy shrank in the third quarter, as Europe slides into its next recession. Travel & leisure and retail sectors the biggest gainers, while automotive shares gained the least. Siemens Energy is among top performers, rebounding after its board chairman moved to reassure investors over state aid concerns. Here are the most notable European movers:
Earlier in the session, Asian stocks declined as weak corporate earnings took center stage amid continued concerns over high US interest rates, geopoliitcal tensions and China’s economy.The MSCI Asia Pacific Index slid as much as 0.6%, with Toyota and Alibaba among the biggest drags.
In FX, the Bloomberg Dollar Spot Index falls 0.1%. The Aussie is the strongest of the G-10 currencies after retail-sales data beat estimates, an outcome that may boost the Reserve Bank of Australia’s confidence that the economy can withstand further interest-rate hikes. The Swiss franc was the weakest. The recent rebound in the Aussie “is spurred by higher iron ore prices, rising expectations for the RBA to deliver one more rate hike,” strategists at Malayan Banking Bhd. led by Saktiandi Supaat wrote in a research note. “We see more room for upside than down” for AUD/USD, they said. The Swedish krona underperformed G10 counterparts after a flash estimate showed the economy was stagnant last quarter
In rates, treasuries were cheaper across the curve, with losses led by front and belly, unwinding a portion of Friday’s sharp 5s30s steepening move. US yields cheaper by up to 5.5bp across belly of the curve, with 5s30s spread flatter by 3bp on the day; 10-year yields around 4.88%, cheaper by 4bp vs. Friday close with bunds and gilts outperforming by 5.5bp and 2bp in the sector. Safe-haven demand eased for Treasuries, pushing yields slightly higher after the market lulled itself into complacency again, and instead of believing in a ceasefire any moment, today the narrative was that "Israel’s military action in Gaza proceeded more cautiously than anticipated." At this rate anything else that mushroom clouds will be bullish. Meanwhile, bunds are higher, the curve bull steepening as S&P futures advance, boosted by German state inflation readings that point to a lower-than-expected national CPI print later today. Data also showed the German economy shrank in the third quarter.
In commodities, oil prices fell, along with gold and Treasuries. WTI falls 1.2% to trade near $84.50. Spot gold drops 0.5%. Iron-ore futures traded in Singapore rose after posting their first weekly gain in more than a month amid optimism that China’s authorities will step up their efforts to support growth
US economic data includes October Dallas Fed manufacturing activity at 10:30 a.m. New York time; employment cost index, consumer confidence, manufacturing PMI, ADP employment change, ISM manufacturing, factory orders and jobs report also due this week. Fed officials are in self-imposed quiet period ahead of Nov. 1 rate decision; Treasury quarterly debt refunding announcement also due Nov. 1
Market Snapshot
Top Overnight News
A more detailed look at global markets
APAC stocks ultimately traded mixed but with the major indices mostly in the red as geopolitics continued to dominate headlines ahead of month-end and this week’s slew of upcoming risk events. ASX 200 was led lower by underperformance in energy and the top-weighted financial sector although the index moved off intraday lows as participants also digested stronger-than-expected Australian Retail Sales data. Nikkei 225 suffered as yields edged higher and the BoJ kick-started its 'live' 2-day policy meeting. Hang Seng and Shanghai Comp were both initially lower with financials pressured after mixed earnings from some of the large banks including China’s biggest commercial lender ICBC which posted flat profit for Q3, while there was turbulence in Evergrande shares owing to a wind-up hearing which was adjourned to December 4th. Nonetheless, the declines were stemmed in the mainland amid hopes of improving US-China ties after US Secretary of State Blinken met with Chinese Foreign Minister Wang Yi and agreed to work towards a Biden-Xi meeting in November.
Top Asian News
European bourses, Euro Stoxx 50 +0.7%, began the week on the front foot after a mixed APAC handover. Focus since has been on the geopolitical front and data, with reports of tanks around Gaza City briefly halting sentiment for the region. Sectors are all in the green with no overarching bias, Energy and Banks lagged initially given benchmarks and an update from JPM on the European sector respectively. Stateside, futures are in the green ES +0.6% ahead of the latest Treasury Estimates before Wednesday's refunding announcement. As it stands, the NQ is experiencing some modest outperformance and perhaps aided by the modest EGB bid on data.
Top European News
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US Event Calendar
DB's Jim Reid concludes the overnight wrap
We start a busy week for markets after a few major landmarks were reached on Friday that are worth highlighting. The S&P 500 moved into "correction" territory, now down -10.27% from the July highs. Meanwhile the benchmark small-cap Russell 2000 index went through its June 2022 lows and back to levels last seen in November 2020, around the time that Pfizer announced the first successful Covid-19 vaccine trials. In fact, it's now back to levels it first breached in November 2018. When you factor in the huge inflation over this period, that's some serious real adjusted declines. So for all the optimism surrounding US equities this year it really is only a handful of huge companies that's skewing the positivity.
The move into correction territory comes as we hit a very busy week of important central bank meetings, data, earnings and a fresh Treasury refunding announcement. The BoJ could be the stand-out (tomorrow) as our economist believes (close call) they will revise YCC. That could overshadow the FOMC (Wednesday) and the BoE (Thursday) meeting. In terms of data all roads point towards Payolls on Friday, with ADP and JOLTs (Wednesday) providing the warm-up act. Elsewhere US ISM Manufacturing (Wednesday) and Services (Friday) will be a focal point as will the various global PMI numbers, especially China's.
Over in Europe, the highlights will include the preliminary October CPIs and Q3 GDP reports for Germany today, followed by France, Italy and the Eurozone on Tuesday. Earnings will be in full flow but with Apple on Thursday the highlight. The full day-by-day calendar is at the end as usual but we'll preview the highlights in more detail now below.
Starting with the BoJ tomorrow, our Chief Japanese economist (see full preview here) expects the central bank to revise its monetary policy framework but acknowledges it is a close call. They are likely to revise up their inflation forecast for the second successive Outlook Report which makes it hard for them to do nothing. Our economist would favour the abandonment of YCC but acknowledges that local media have suggested a bias towards tweaks. In his view, even if the BoJ maintains the status quo, the YCC is likely to come under further pressure as expectations of policy normalisation build up .
For the Fed on Wednesday, our US economists expect the central bank to stay on hold and see future hikes as a function of financial conditions and the path of the economy. While their baseline is for rates to stay at 5.3% through year end, they see an increasing risk of a hike in December or Q1. They also recently published a note on what the recent tightening in financial conditions mean for the Fed here. Linked into financial conditions, the latest US financing estimates (today) and refunding announcement (Wednesday) will be important given how much the early August equivalent spooked the market given the extra supply that it heralded. There is some hope that the Treasury may pause its coupon increases it flagged back in August. However our strategists think this is unlikely. See their report here. Remember the August refunding announcement has arguably proved to be the most important macro event of the last 3 months .
The BoE will round out the busy week for central banks on Thursday and our UK economist expects no change in the Bank Rate (5.25%) or the Bank's forward guidance. The full preview of the meeting here also touches on central bank's forecasts as well as QT. Elsewhere in Europe, Norges Bank will also decide on its monetary policy that day as well.
In terms of payrolls, our US economists expect the headline to come in at 140k (consensus 190k), down from +336k in September with the UAW strike causing around a 35k drag. They also see the unemployment rate remaining at 3.8% (same as consensus). There will be plenty of labour market data before hand with the ECI (tomorrow), JOLTS and ADP (Wednesday), claims (Thursday), and all the employment subcomponents within the PMI surveys.
German GDP today will likely see a -0.3% contraction (consensus -0.2%) with a mild contraction of -0.1% (consensus 0.0%) in the wider Euro area (tomorrow ). Our economists also expect the headline inflation measure for the Euro area to further decline to 3.1% from 4.3% in September, and see the core gauge slowing to 4.1% (4.5%).
Elsewhere, reports indicate Chinese officials may gather as early as today for the National Financial Work Conference that takes place once every five years behind closed doors. The real estate turmoil as well as other financial risks will be key discussion points.
Equity markets in Asia are mixed this morning as continued concerns over the direction of the Israel-Hamas war are being tempered by the fact that major escalations have been avoided so far. As I check my screens, the Nikkei (-1.20%) is the biggest underperformer as the Bank of Japan (BOJ) starts its two-day monetary policy meeting. Elsewhere, the Hang Seng (-0.28%) is also trading in negative territory while the CSI (+0.67%), the Shanghai Composite (+0.17%) and the KOSPI (+0.46%) are higher. S&P 500 (+0.33%) and NASDAQ 100 (+0.51%) futures are seeing a decent bid for the time of day. US Treasury yields are 2-4bps higher across the curve as we go to print.
Early morning data showed that retail sales in Australia advanced at the fastest pace in eight months, rising +0.9% m/m in September (v/s +0.3% expected) accelerating from August’s upwardly revised +0.3% increase thus encouraging some expectation of a hike at the RBA meeting next week. The Australian dollar (+0.28%) is trading at 0.635 versus the dollar while 3yr yields are up around 5bps. Oil prices have dipped in Asia with Brent futures (-1.36%) slipping back below $90/bbl.
Now, reflecting on last week, on Friday we had the PCE data for September. Headline PCE inflation came in at a four-month high of +0.4% month-on-month (+0.3% expected), while core PCE was in line with expectations at 0.3%. In year-on-year terms, headline was at 3.4%, while core PCE inflation was 3.7% (both as expected). This slight upside came as the strength of consumer spending showed no sign of abating, after nominal personal spending jumped from 0.4% in August to 0.7% month-on-month (vs 0.5% expected). In other data, the University of Michigan survey saw 1-year inflation expectations unexpectedly rise to a five-month high (from 3.8% to 4.2%), though longer-term expectations were flat at 3.0% .
The data did little to budge near-term Fed expectations, with markets pricing a 16% chance of another hike by year-end (from 19% Thursday and 20% a week earlier). Our economists noted that while the core PCE print was the strongest since April, its pace would need to pick up marginally further in Q4 to meet the September SEP projections for end-23. Bonds saw a decent rally last week, with 10yr Treasury yields down -7.9bps to 4.84% (-0.9bps Friday). Renewed curve steepening was a key theme on Friday, with the 2yr yield down -3.8bps to 5.00% but the 30yr up +2.8bps to 5.01%. This marks the first time since August 2022 that the 2s30s slope has closed in positive territory .
After an ECB meeting on Thursday that delivered as expected, although with some dovish tilts, German 10yr bunds yields closed down -5.8bps last week (-3.0bps Friday). We heard from ECB’s Nagel on Friday, who stated that “tight monetary policy is showing effect”, with “future decisions to be made meeting by meeting”. So one of the hawks sticking to the tone of Thursday’s meeting.
In equities, the main story at the end of last week was the S&P 500 entering correction territory, down -10.27% from its end-July peak. The index was down -0.48% on Friday and -2.53% on the week. The -4.86% decline over the past two weeks is its sharpest in 10 months. Equities had started Friday on the front foot after strong earnings results from the likes of Amazon (+6.83% Friday) and Intel (+9.29%) the previous evening. This saw consumer discretionary (+1.70%) and information technology (+0.58%) sectors outperform on an otherwise negative day (with 82% of S&P constituents down on Friday). The NASDAQ benefitted from late week tech earnings, gaining +0.38% on Friday (but still down -2.62% week-on-week). Europe was similarly gripped by the risk-off mood, with the STOXX 600 down -0.84% on Friday (and -0.96% week-on-week) .
The largest underperformer in the S&P on Friday was the energy sector, falling -2.30%. This followed disappointing earnings reports from Exxon Mobil and Chevron, which slipped -4.98% (and -1.91% on Friday) and -13.47% (-6.72% on Friday) over the week respectively. Friday’s decline in energy stocks came despite Brent and WTI crude prices jumping +2.90% and +2.80% respectively on Friday after news that Israel forces undertook a second raid into Gaza, destroying Hamas naval infrastructure. However, oil prices still declined on the week, with Brent down -1.82% to $90.48/bbl and WTI down -3.62% to $85.54/bbl .
Gold secured a third consecutive week of gains, rising +1.26% (and +1.11% on Friday) to $2,006 per ounce, its first time above $2,000 since May.
Authored by Melanie Sun via The Epoch Times,
A federal judge has reinstated a gag order she previously ordered on former President Donald Trump in the Department of Justice’s federal election case accusing him of trying to overturn the results of the 2020 election.
U.S. District Judge Tanya Chutkan had initially approved President Trump’s request for an administrative stay, or pause, on the gag order requested by government prosecutor special counsel Jack Smith. The gag order prohibited remarks that would "target" the prosecution and defense legal teams, court staff, and potential witnesses.
In Judge Chutkan's initial written opinion, she dismissed arguments made for First Amendment defenses, writing that the obligation to protect the proceedings from outside interference preceded First Amendment rights.
President Trump’s legal team had requested the pause while the merits of the case were being considered by an appeals court. They said the gag order would deny his protected political speech, and the rights of President Trump's audience to hear his remarks.
However, the government filed its opposition to the temporary lifting of the gag order, after which President Trump had three days to file a response to the opposition, which he did on Saturday.
"The Gag Order would not have done anything to prevent a national discussion of this issue during a campaign. Thus, the only thing the Gag Order would accomplish is ensuring that President Trump could not respond to inappropriate prosecutorial or witness leaks, an obviously impermissible and wholly unconstitutional goal,” Trump’s attorneys argued.
With arguments from both sides now made, the judge has sided with the prosecution, denying President Trump’s request to pause the gag order during the appeals process. The ruling appeared in a docket entry on Sunday night, but the details of the ruling have not yet been made public.
President Trump responded to the judge’s action in a late Sunday post on his social media platform Truth Social, saying that his First Amendment rights had been breached.
"The Corrupt Biden Administration just took away my First Amendment Right To Free Speech," he wrote. "NOT CONSTITUTIONAL!"
The American Civil Liberties Union (ACLU) came out to advocate for what it believes are President Trump's First Amendment rights in a rare statement of support, describing Judge Chutkan's order as "vague" and "impermissibly broad" in restricting the former president's free speech.
President Trump is also subject to a gag order in the civil case in New York being pursued by Attorney General Leticia James.
In recent submissions for the election case, the defense has added in its arguments that President Trump was never charged with inciting violence on Jan. 6. They are seeking to strike prosecutors’ public statements that have implied this as a given fact from the indictment.
President Trump has pleaded not guilty to the charges that he plotted to unlawfully interfere in the counting of votes and block the congressional certification of contested state votes on Jan. 6, 2021.
As uranium ore trades at records highs, several hedge fund managers are expanding their allocations to uranium stocks, with a conviction that an increasing embrace of nuclear energy as part of a "green" future -- along with geopolitically-rooted ambitions to reduce dependence on Russian oil and gas -- means the trend has a lot of room to run.
A dozen years after the disaster at Japan's Fukashima reactor put nuclear energy on worldwide probation -- and in, Germany, gave it a death sentence -- various factors are combining to bring it back into the acceptable realm of energy solutions.
First, the International Energy Agency says that, in order to meet "net zero" goals -- which describes a state where carbon emitted into the atmosphere matches the amount removed from it -- global nuclear generation capacity must double from 2020 levels by 2050.
In addition to nuclear energy coming to the fore as a zero-carbon-emitting power source, it's also seen as a way for the western economies to reduce their need for Russian oil and gas. The fact that Russia currently accounts for about 8% of the world's uranium reserves underscores the need to develop new supply sources. There's also an increasing appetite for nuclear power in Asia and Africa.
Taken together, the uranium-friendly trends could power significant gains in the sector. "[Uranium] equities could see dramatic upside -- 50%, 100%, possibly more," Terra Capital’s Matthew Langsford told Bloomberg in a report published Sunday.
Langsford has been building positions in Denison Mines Corp and NexGen Energy. Headquartered in Vancouver, BC, NexGen is exploring a new Canadian mine thought capable of producing a quarter of the world's supply. If so, NexGen would be “very important for the nuclear industry in the 2030s, which could end up being the golden age of nuclear power,” said Langsford.
“We’re most focused on uranium miners in public markets,” Arthur Hyde, a portfolio manager at Segra Capital, told Bloomberg. “For the supply and demand of this market to balance, we need new assets to come online...If you’re going to insulate the US, Europe and Canada from the global fuel cycle, which is heavily dependent on Russia and China, the best way to do that is to build new mines, new conversion capacity, new enrichment capacity.”
That's not to say everyone's exclusively playing the long side. Hyde, for one, told Bloomberg he's thinking of shorting Cameco Corp after a 70% surge in 2023. Meanwhile, he's bullish on Ur-Energy and Energy Fuels Inc.
Stellantis NV, maker of the Jeep, Ram and Chrysler brands, reached a tentative agreement with the UAW on Saturday, which included the same 25% hourly pay raise plus cost-of-living allowances over the more-than-four-year contract included in a similar deal reached by Ford last week.
Those agreements still need to be voted on by the companies’ union members.
And now, after more threats from the UAW, Bloomberg is reporting that GM is said to have reached a tentative agreement with UAW to end the strike that is costing them billions.
GM Chief Executive Officer Mary Barra and UAW President Shawn Fain reportedly spoke on Sunday, people familiar with the discussions said.
Bloomberg reported that the automaker and UAW made progress on the status of temporary workers but still needed to agree on retiree benefits, the people said.
With 300,000 retirees - the most of any automaker - a $500 annual payment would cost the company $150 million a year for the life of the deal.
The deal reached Monday includes a 25% hourly pay raise plus cost-of-living allowances over the more-than-four-year contract, according to the person, who wasn’t authorized to speak publicly.
The agreement still needs to be approved by GM’s union members.
For context:
Detroit automaker unionized labor costs, including wages and benefits, are estimated at an average of $66/hour.
That compares with $45 at Tesla, which isn’t unionized, and $55 for Asian automakers.
Meeting all of Fain’s initial demands would boost average hourly labor costs to an estimated $136/hour.
Fein claims to be matching the roughly 40% compensation gains automaker CEOs have realized in the past decade.
Ford’s CEO made $22mm last year. Stellantis’s $24.8mm. GM’s nearly $29mm.
“Competition is code word for race to the bottom, and I’m not concerned about Elon Musk building more rocket ships so he can fly in outer space and stuff,” Fain told CNBC, defending his demands.
“Our concern is working-class people need their share of economic justice in this world.”
As Eric Peters warned over the weekend: "The secular trend toward ever rising inequality is turning."
"In August, UPS settled its labor dispute with the Teamsters 340k drivers who on average now make $170k in wages and benefits. That same month, Yellow failed to come to agreement with the Teamsters and ceased operations after nearly a century of trucking delivery -- it awarded ten executives $4.6mm in special retention bonuses, laid off all 30k drivers and went into liquidation. A secular trend reversal to how society divides its economic spoils is not all that different from revolution. Bitterly fought, treacherous for all involved.
And this latest episode promises to be particularly so.
Because in the timeless conflict between capital and labor, it is extremely rare for the imbalance to be so extreme.
The wider the gap, the bigger the stakes.
And the last time the chasm was so great was at the height of the Roaring 1920s."
GM shares are up in the pre-market, but not very impressively - perhaps on the reality of what this will do to the company's bottom line...
As Eric Peters exclaimed yesterday, in the end its the taxpayer that will foot this giant bill:
“We hit the companies to maximum effect,” said UAW President Shawn Fain in a Facebook livestream. GM and Stellantis [and now GM] had just agreed to provide a 25% wage increase to United Auto Workers members, matching the same offer by Ford to end the six-week strike.
The gains are valued at more than four times those won in the last UAW contract in 2019 and provide more in base wage increases than Ford workers have received in the past 22 years.
The deal will reinstate major benefits lost during the Great Recession, including cost-of-living allowances. Some lower paid workers will receive an immediate 85% wage increase.
This is the sort of thing that happens in a relatively free market when capital owners have extracted such a large share of the nation’s economic spoils that labor revolts.
Government workers got a 4.6% raise this year. And 70mm Social Security recipients received an 8.7% benefit increase in 2023.
Such gains are mechanical, mathematical, removing the need for union strikes to extract more money.
The cost is simply added to the Federal deficit, which is funded through the issuance of bills and bonds, the supply of which is expanding at an accelerating rate.
Politicians can dampen the trajectory of this parabolic trend. Theoretically. In practice, they are the ones responsible for its remarkable shape.
And after six weeks of paralysis in the republican congress, a new House Speaker was selected, hailing from Louisiana, the 3rd most federally dependent state government in the union. Ahead of what will be the most chaotic presidential election in modern history, Mike Johnson will lead, having circulated an amicus brief - signed by more than 100 Republican lawmakers - and filed it in a Texas court case to contest the 2020 election results in four swing states.
It thus seems unlikely that our politicians will be focused in 2024 on restoring our national finances to a sustainable trajectory. There will be no Union boss to fight that fight. Only bond markets, which are ultimately built upon faith. And this is fading."
The full terms of the deal are unknown but we are President Biden will give it another 'thumbs up', because, after all, it's not his money.
Sur enough, President Biden just told reports, "I think it's great." Great for whom we are not 100% sure.
The United States is borrowing its way to disguise recession.
The headline economic figures for the United States look robust. However, details show concerning weaknesses.
Real GDP growth surged to 4.9% in the third quarter, above the consensus estimate of 4.5%. However, some analysts, including Bloomberg, expected up to 5% growth based on the nowcast estimates.
United States unemployment is also low, at 3.8%, but real wage growth remains negative, according to the Bureau of Labor Statistics. Between September 2022 and the same month of 2023, the decrease in real average weekly earnings was 0.1%. This means that a tight labor market is not improving the real disposable income of workers. Additionally, the labor participation rate and employment-to-population ratio remain below pre-pandemic levels. Add rising taxes to inflation, eating away at wage growth, and you can see why things are more complicated than what headlines suggest.
The cracks in the bullish story will appear soon. Consumer spending grew at a strong 4.0% annualized rate in the third quarter, which surprised most analysts after a weak 0.8% in the previous reading. The worrying fact is that this rise in consumption comes mostly from higher debt, as United States consumers are borrowing heavily to spend on entertainment. The rise in services was 3.6%, while real disposable income is negative (-0.1%) and household credit card debt reaches a new record. Unsurprisingly, credit card debt rose to a new high of more than $1 trillion, with the average consumer running a $5,900 debt on their card, according to the Federal Reserve Bank of New York. Last year, credit card interest rose to $105 billion, and this year will be much higher.
Americans are living on borrowed time as real salaries remain in negative territory in the past five years and inflation eats savings away. This may last, but not much.
More concerning figures in GDP: A strong economy does not show a decline in investment of this magnitude. Nonresidential business investment fell 0.1%, including a 3.8% slump in equipment investment. According to Morgan Stanley, capital expenditure plans have fallen to May 2020 levels.
The mirage of construction is also gone, as it fell to just 1.6% after a one-off double-digit increase in the past quarter. Furthermore, a large part of the growth in GDP came from bloated government spending financed with more debt and inventory revaluation, adding 0.8 and 1.4 percentage points to GDP growth. Many of these temporary effects will revert in the fourth quarter.
The level of public debt is exceedingly concerning. The increase in gross domestic product between the third quarter of 2022 and the same period of 2023 was a mere $414.3 billion, according to the Bureau of Economic Analysis, while the increase in public debt was $1.3 trillion ($32.3 to $33.6 trillion, according to the Treasury).
The United States is now in the worst year of growth, excluding public debt accumulation since the thirties.
Consumption financed by soaring credit card debt and economic growth disguised by enormous government spending and record public debt are not indicators of a strong economy but proof of a very worrying trend that may last another two quarters but will likely result in a much weaker economy in the next three years.
We start an extremely busy week for markets after a few major landmarks were reached on Friday which DB's Jim Reid felt are worth highlighting. The S&P 500 moved into "correction" territory, now down -10.27% from the July highs. Meanwhile the benchmark small-cap Russell 2000 index went through its June 2022 lows and back to levels last seen in November 2020, around the time that Pfizer announced the first successful Covid-19 vaccine trials. In fact, it's now back to levels it first breached in November 2018. When you factor in the huge inflation over this period, that's some serious real adjusted declines. So for all the optimism surrounding US equities this year it really is only a handful of huge companies that's skewing the positivity.
And speaking of companies skewing performance, if one strips away the Mag 7 stocks, the non-tech heavy SPW, NYA, CWI, RTY equity indices are now all at or below 200wma and down for the year.
The move into correction territory comes as we hit a very busy week of important central bank meetings, data, earnings and a fresh Treasury refunding announcement.
Over in Europe, the highlights will include the preliminary October CPIs and Q3 GDP reports for Germany today, followed by France, Italy and the Eurozone on Tuesday.
Earnings will be in full flow but with Apple on Thursday the highlight. The full day-by-day calendar is at the end as usual but let's preview the highlights in more detail now below.
In terms of payrolls, economists expect the headline to come in at 190k, down from +336k in September with the UAW strike causing around a 35k drag. They also see the unemployment rate remaining at 3.8%. There will be plenty of labor market data before hand with the ECI (tomorrow), JOLTS and ADP (Wednesday), claims (Thursday), and all the employment subcomponents within the PMI surveys.
German GDP today will likely see a -0.3% contraction (consensus -0.2%) with a mild contraction of -0.1% (consensus 0.0%) in the wider Euro area (tomorrow ). Our economists also expect the headline inflation measure for the Euro area to further decline to 3.1% from 4.3% in September, and see the core gauge slowing to 4.1% (4.5%).
Elsewhere, reports indicate Chinese officials may gather as early as today for the National Financial Work Conference that takes place once every five years behind closed doors. The real estate turmoil as well as other financial risks will be key discussion points.
Finally, on the earnings side, we are past peak earnings...
... but it is still an extremely busy week for reporting companies with the likes of Apple, Qualcomm, PayPal, AMD, Roku, First Solar, Pfizer, Caterpiller and others on deck.
Courtesy of DB, here is a day-by-day calendar of events
Monday October 30
Tuesday October 31
Wednesday November 1
Thursday November 2
Friday November 3
* * *
Finally, turning to just the US, Goldman writes that the key economic data releases this week are the employment cost index on Tuesday, JOLTS job openings and ISM manufacturing on Wednesday, and the nonfarm payrolls on Friday. The November FOMC meeting is on Wednesday. The post-meeting statement will be released at 2:00 PM ET, followed by Chair Powell’s press conference at 2:30 PM.
Monday, October 30
Tuesday, October 31
Wednesday, November 1
Thursday, November 2
Friday, November 3
Source: DB, Goldman, BofA
Update(1730ET): Amid the expanding ground operation which has seen Israeli tanks positioned outside of Gaza City and heavy firefights with Hamas militants erupt, Axios has revealed that the head of Mossad, David Barnea, made a secretive weekend trip to Qatar where he met with senior Qatari officials as part of mediation efforts to secure the release of Israeli and foreign hostages.
According to the latest update, over 235 are in Hamas and Palestinian Islamic Jihad (PIJ) captivity, and Qatar remains the chief third party communicating with both Tel Aviv and Hamas. But Israeli officials have described that the ground offensive was launched after it became clear that the talks had born no fruit. Barnea was in Doha as the ground invasion kicked off and progressed. According to the Israeli side's conclusions reached as a result of the meetings, per Axios:
On Monday the Israel Defense Forces (IDF) made the unexpected announcement that one hostage, a military member who had been taken on Oct.7, has been rescued alive from the battlefield...
She is home.
— Israel Defense Forces (@IDF) October 30, 2023
PVT Megidish was abducted by Hamas on October 7. Tonight, she was rescued during ground operations.
Ori is now home with her family. pic.twitter.com/SZsqpvPQux
But also on Monday, Hamas released a new hostage video featuring three women. They've been identified by Israeali sources as Yelena Tropenov, Daniel Aloni and Rimon Kirsht. Netanyahu has denounced this as an example of "cruel Hamas-ISIS psychological warfare" - and Axios has detailed of the video:
New released video of Israeli hostages. pic.twitter.com/HbvmglYNE0
— Mohammed El-Kurd (@m7mdkurd) October 30, 2023
The White House has meanwhile reiterated Monday that "We do not believe that a ceasefire is the right answer right now," according to National Security Council spokesman John Kirby. "We do not support a ceasefire at this time."
And the US has also signaled it is winding down chartered evacuation flights of American citizens from Israel:
US State Department spokesperson Matthew Miller says Washington will cease operating charter flights for civilians looking to flee Israel during the war due to a lack of demand.
“We have consistently seen the demand for our charter flights go down to where we’ve had a lot of flights going out with 50% capability,” Miller says. “I think that the number of seats that we have offered, we’ve had something like 25% of them actually be filled.”
* * *
The Israel Defense Forces (IDF) says it has killed dozens of Hamas militants, among them commanders, as it pushes deeper into Gaza, with tanks being seen Monday on the outskirts of Gaza City, blocking a key road linking the northern and southern halves of the Strip.
Hamas has also announced it is engaged in "heavy fighting… with the invading occupation force", after the IDF confirmed more Israeli troops have been surged into the Strip. It appears the warring sides are in some locales engaged in building-to-building and door-to-door fighting in the dense urban zone.
"Overnight, troops eliminated dozens of terrorists who barricaded themselves in the buildings and tried to attack the forces that were moving in their direction," IDF Spokesman Rear Adm. Daniel Hagari said. "We are carrying out an expanded ground operation into the Strip… forces are moving towards the terrorists, the terrorists are barricading themselves in staging grounds, and we are attacking them from the air."
Israel is signaling its intent to encircle Gaza City with tank and ground units - a significant challenge given its size of 18 square miles with a pre-conflict population of over 650,000 people. In total some 1.1 million people live in the northern half of the Strip.
Recent reports have estimated that hundreds of thousands of Palestinians have defied Israel's order to flee south. By Saturday the IDF had utilized open spaces like the beach to quickly allow tank units to plunge two miles deep into the Strip.
IDF has been publishing brief clips of forces operating in Gaza:
צה"ל המשיך במהלך הלילה בהרחבת הפעילות הקרקעית ברצועת עזה.
— דובר צה״ל דניאל הגרי - Daniel Hagari (@IDFSpokesperson) October 30, 2023
בהיתקלויות עם מחבלים ברצועת עזה, חיסלו לוחמי צה"ל עשרות מחבלים אשר התבצרו במבנים וניסו לפגוע בכוחות. במהלך אחד מהאירועים, כלי טיס בהכוונת הלוחמים בשטח תקף מבנה כינוס של ארגון הטרור חמאס ובו מעל ל-20 מחבלים >> pic.twitter.com/IlGkMyoiSG
Gazans have told Al Jazeera that they are receiving emergency phone calls at their residences (after communications were switched back on this weekend) with messages like the following: "This is the Israeli army, we are telling you to evacuate south because in the coming hours it is going to be very dangerous in the area where you are at."
At this point amid the fog of war as well as the desire of each side present that they have the battlefield edge, it's not expected that military casualty rates will be published, but the Israeli media has cited a series of IDF statements to compile the following accounts:
As for Israeli forces having reportedly gained control of a key road that runs north-south, AFP has also cited eyewitnesses who say "They have cut the Salah al-Din road and are firing at any vehicle that tries to go along it."
Palestinian photojournalist Youssef Al Saifi exclaimed in the below video that "they are shooting at a whole family":
🚨 JUST IN: Israeli Forces Block Key Gaza North-to-South Road, Raising Speculation of an Advance on Gaza City
— Mario Nawfal (@MarioNawfal) October 30, 2023
- An Israeli tank and armored vehicle reported having cut Salah-al-Din road near Gaza City, with speculation of an advance on the territory's largest city.
- A video… pic.twitter.com/SfoQuzY0JP
Additionally Hamas has claimed to have stalled the IDF's advance deeper into Gaza City:
Later on Monday, Salama Maarouf, the head of the Hamas government office in Gaza, said the Israeli tanks had retreated from the outskirts of Gaza City.
"There’s absolutely no ground advance inside the residential neighborhoods in the Gaza Strip. What happened on Salah al-Din Street was the incursion of a few occupation army tanks and a bulldozer,” Maarouf said in a statement.
The Hamas official then asserted, "These vehicles targeted two civilian cars on Salah al-Din Street and bulldozed the street before the resistance forced them to retreat. There is currently no presence of occupation army vehicles on Salah al-Din Road, and citizen movement has returned to normal on the road."
Now with the death toll in Gaza having far surpassed 8,000 - with an estimated half of these women and children - Israel is facing growing international pressure and condemnation, including from some European countries, as we detailed Sunday. Statements of PM Netanyahu and his top officials essentially declaring a scorched earth campaign over the densely populated land have drawn rebuke from some corners of Europe, but receive scant mention in US mainstream media...
Netanyahu declaring invasion: "You must remember what Amalek has done to you, says our Holy Bible"
— Michael Tracey (@mtracey) October 28, 2023
1 Samuel 15:3
"Now go and smite Amalek, and utterly destroy all that they have, and spare them not; but slay both man and woman, infant and suckling, ox and sheep, camel and ass" pic.twitter.com/5QF9PkGhjJ
Meanwhile, the Israeli military's Chief of the General Staff, LTG Herzi Halevi, has defined the mission as follows: "The IDF is focused right now on one thing—victory and dismantling Hamas." But the question of the fate of millions of Palestinian civilians across the West Bank and Gaza hangs in the balance, with Palestinian leaders and their supporters expressing alarm over Netanyahu's "smite the Amalek" reference.
Israel has been seeking retaliation for the Oct.7 Hamas terror raids into southern Israel, which killed over 1,400 Israelis and foreigners, and resulted in at least 220 hostages still held captive somewhere in the Strip. But more tragic news has emerged concerning one one woman who had been taken from the Nova music festival, and who had been seen half-naked in the back of a pick-up truck, possibly deceased or at least badly wounded:
Shani Louk, a German-Israeli woman kidnapped by Hamas gunmen during the October 7 attack and taken to Gaza, has been found dead, the Israeli Ministry of Foreign Affairs has said.
"We are devastated to share that the body of 23 year old German-Israeli Shani (Louk) was found and identified," the ministry posted on X, formerly Twitter, on Monday.
The images, including graphic video, of what appeared her lifeless body underneath several smiling Hamas militants in the bed of a pick-up truck was among the first to go viral on Oct.7 - and underscores the utter brutality and mercilessness of the Hamas terror raid.
Authored by Jesse Felder via The Felder Report,
Rising interest rates have historically created problems for certain areas of the economy and markets but they may be especially pernicious today given both the speed and magnitude of the rise and the risk-taking behaviors engendered by the extreme monetary accommodation that preceded it.
"I suspect that this most sudden and even violent lurch higher in interest rates is going to test financial structures that came into being during the period of very low nominal interest rates." -Jim Grant https://t.co/1yX1GNU4e8
— Jesse Felder (@jessefelder) October 27, 2023
Certainly, that debt accumulation at the corporate level that was inspired by ultra-low interest rates could prove to be a problem in the quarters ahead as debt maturities grow and interest rates have reset at much higher levels than when those debts were first taken on.
'Treasurers did a good job of locking in low rates when they were available in 2021 but amounts due to be repaid increase noticeably next year and then jump to levels that could be really problematic in 2025 and 2026.' https://t.co/871kHycHNN pic.twitter.com/xHdt85ANlW
— Jesse Felder (@jessefelder) October 25, 2023
In addition, rising interest rates already appear be causing problems in the market for long-term treasuries.
'A vicious circle is foreseeable — where concerns over mounting debt raise real interest rates, which worsen the future debt ratio, and so on.' https://t.co/BvFkV9GfF5 pic.twitter.com/hskWX8mQvk
— Jesse Felder (@jessefelder) October 25, 2023
But the stock market has only just begun to recognize the fact that “risk-free” rates now represent real competition for investor capital for the first time in over a decade.
Want to see a wild chart? This is the boldest outperformance by stocks who pay a 0% dividend since the data commenced in 1927. If we get a mean reversion of any magnitude on this thing, you can say goodnight to the growth-at-any-price framework that is so commonly embraced. pic.twitter.com/IC9TiEY9Fr
— Jeff Weniger (@JeffWeniger) October 26, 2023
And if the rapid rise in rates ends up exerting its normal effect on the economy and earnings in the quarters to come, then this recognition process in equities has only just begun.
'Most times SPX closes below its 3-year moving average one sees rallies in the short term. However, it's important to note that there have been exceptions and some of these have foreshadowed substantial and turbulent market declines.' https://t.co/qaNvobzKSM by @NautilusCap pic.twitter.com/9kmm8UnbGz
— Jesse Felder (@jessefelder) October 27, 2023
Party's over...
With tomorrow's BOJ "live" announcement already expected to be a far more exciting affair than either the Fed or BOE later this week (both of which will unveil no surprise), moments ago the yen spiked to a session high against the US dollar, and the highest since Oct 12, after Japan's Nikkei reported that the Bank of Japan may tweak its YCC again and allow long-term yields to rise above 1% as soon as its Tuesdays meeting.
According to the Nikkei, which correctly warned just ahead of the last YCC tweak by the BOJ, after several YCC tweaks, the BOJ is once again realizing that it is trapped, and has to adjust its YCC more "potentially allowing 10-year Japanese government bond yields to rise above 1%" at Tuesday's monetary policy meeting.
With the long-term interest rate currently capped at 1%, the central bank has been conducting unlimited fixed-rate buying operations to keep yields below that mark, in the process crushing the yen, and pushing inflation sharply higher even as Ueda's approval rating plunges to record lows...
... as Japan realizes that the one thing it hated more than deflation is inflation.
Support for Japan’s Kishida Hits New Low in Nikkei Poll
— zerohedge (@zerohedge) October 29, 2023
Maybe replacing the yen with the lira and ignoring galloping inflation wasn't the smartest plan
The report also noted that "the second framework tweak in three months appears to have been deemed necessary as 10-year yields are approaching 1% amid a backdrop of rising U.S. rates" and added that the "BOJ is also likely to more flexibly conduct its JGB purchase operations... This, along with a more flexible cap on 10-year yields, is aimed at deterring speculators from targeting the upper limit and sparing the BOJ the need to buy droves of JGBs to keep rates under 1%."
Long-term rates have risen faster than the central bank had expected in July. On Monday, the newly issued 10-year government bond yield reached 0.89%, its highest since July 2013. It is approaching 1% -- what BOJ Gov. Kazuo Ueda has called "the upper limit."
Which, if nothing else, again confirms that the BOJ is by far the dumbest central bank and its leaders are nothing more than headless chickens running around in circles.
BOJ right now pic.twitter.com/oU6QaHqq3y
— zerohedge (@zerohedge) October 26, 2023
The Nikkei report comes just hours after this morning's 2yr JGB Auction tailed by the most since 2010, despite having a 10bp Coupon for the first time in 32 months, as investors balk at the "opportunity" of buying long-term paper just ahead of another substantial tightening move by the BOJ.
Also ahead of the NIkkei report, Goldman's FICC desk published a lengthy note from Ryoya Wakamatsu (available to pro subs here), in which he summarized the key aspects of Tuesday's decision:
Finally, as Bloomberg's Mark Cranfield writes, the USD/JPY is likely to end the week lower in two of three Bank of Japan scenarios which traders are likely to be confronting.
Much more in the full Goldman note available to pro subs.
Early Monday morning, the White House announced President Biden unveiled a wide-ranging executive order on artificial intelligence - the first of its kind. This comes after tech billionaires, such as Elon Musk, have called for a "regulatory structure" for AI due to risks to civilization.
The order is broad and aims to establish new standards for AI safety and security, protect Americans' privacy, advance equity and civil rights, stand up for consumers and workers, promote innovation and competition, and position the US to lead the global AI race.
On Sunday, a White House official, who asked not to be named, told NBC News that AI has so many factors that effective regulations must be broad.
"AI policy is like running into a decathlon, and there's 10 different events here.
"And we don't have the luxury of just picking 'we're just going to do safety' or 'we're just going to do equity' or 'we're just going to do privacy.' You have to do all of these things," the official said.
The order uses the Defense Production Act, mandating that tech firms must inform the government when developing any AI system that could pose risks to national security, national economic security, or national public health and safety.
White House Deputy Chief of Staff Bruce Reed told NBC the order represents "the strongest set of actions any government in the world has ever taken on AI safety, security, and trust."
Biden has been vocal about about the need for AI regulation. He has held discussions with tech leaders, civil society leaders, and labor unions about the rapidly evolving technology without choking competition. At the moment, OpenAI, Google, Microsoft, Meta, and Nvidia are some of the leaders in the space.
"I have a keen interest in AI and convened key experts on how to harness the power of artificial intelligence for good while protecting people from the profound risk it also presents," Biden said in San Francisco last month.
Here's a summary of the executive order:
Developers of powerful AI systems must share safety test results with the US government.
AI systems posing risks to national security, economy, or public health must notify the government during development.
The National Institute of Standards and Technology to set rigorous safety standards.
The Department of Homeland Security to establish an AI Safety and Security Board.
Address threats to critical infrastructure and cybersecurity risks.
Develop standards for biological synthesis screening to counter AI-engineered biological threats.
Establish standards for detecting AI-generated content and authenticating official content.
Develop AI tools to identify and fix vulnerabilities in critical software.
Direct further actions on AI and security for military and intelligence use.
Accelerate development of privacy-preserving techniques.
Strengthen research in privacy-preserving technologies.
Evaluate agencies' use of commercially available information.
Develop guidelines for evaluating privacy-preserving techniques in AI.
Guidance to prevent AI algorithms from exacerbating discrimination.
Address algorithmic discrimination in civil rights violations.
Develop best practices for AI use in the criminal justice system.
Responsible use of AI in healthcare and education.
Safety program for reporting harms in healthcare involving AI.
Develop principles to mitigate AI harms and maximize benefits for workers.
Report on AI's potential labor-market impacts.
Catalyze AI research and provide resources for small developers.
Encourage FTC to exercise authorities for a competitive AI ecosystem.
Streamline visa processes for skilled immigrants in critical areas.
Collaborate internationally on AI safety and standards.
Promote responsible AI development globally.
Issue guidance for agencies' AI use, including standards to protect rights and safety.
Accelerate hiring of AI professionals and provide AI training in relevant fields.
Biden's social media team posted on X about "Making AI Work for the American People."
Artificial Intelligence is moving quickly.
— President Biden (@POTUS) October 30, 2023
And so is my Administration.
Visit https://t.co/RqhfxoxjQ6 and see how we're harnessing the power of AI and keeping all Americans safe in the process.
Musk recently told reporters: "When there is something that is a potential danger to the public, you want to have some oversight."
Authored by Jesse Coghlan via CoinTelegraph.com,
Gary Gensler once criticized the United States securities regulator for its “inconsistent” approach to spot Bitcoin products, according to a resurfaced video of Gensler from 2019.
The video clip, which has recently made the rounds again on social media, shows the pre-SEC Gensler discussing blockchain regulation at the 2019 MIT Bitcoin Expo in a fireside chat with United States Securities and Exchange Commission Commissioner Hester Peirce.
“Bitcoin futures, and I think Ethereum futures and so forth, will exist, and Bitcoin ETFs have not, and that feels a little inconsistent to me [...] It feels a little inconsistent,” Gensler said.
“Even though the laws aren’t exactly the same, they’re quite similar,” he added.
Meanwhile, on X (Twitter), the crypto community couldn’t help but highlight the contrast with Gensler’s views toward spot Bitcoin exchange-traded funds (ETFs) today.
”Gary Gensler says Gary Gensler is wrong,” market analyst Zack Voell posted. “We missed out on chill and normal Gensler,” another X user remarked.
Gary Gensler says Gary Gensler is wrong. pic.twitter.com/sHGzHcUyIC
— Zack Voell (@zackvoell) October 28, 2023
To date, the SEC has only approved Bitcoin and Ether futures ETFs.
Since as far back as 2017, the SEC has rejected spot Bitcoin ETF applications, a tradition carried on under Gensler, who has denied, delayed or pushed back recent spot Bitcoin ETF applications, claiming the funds don’t have protections for market manipulation.
Gensler’s SEC was sued by asset manager Grayscale for rejecting its bid to convert its existing Bitcoin trust into a spot ETF.
A court ruled the SEC was “arbitrary and capricious” to reject the application. The SEC did not appeal the decision.
Perceptions of broader business conditions continued to worsen in October, according to The Dallas Fed Manufacturing Survey.
The general business activity and company outlook indexes remained largely unchanged at -19.2 and -17.1, respectively.
Source: Bloomberg
This is the 18th straight month of negative readings for the headline sentiment signal.
The outlook uncertainty index remained elevated but retreated from 27.0 to 20.2, but under the hood, the individual factors were almost all lower on the month...
New Orders are dumping again and the average workweek is declining...
Source: Bloomberg
The one teeny tiny bright spot... prices paid (and received) dropped on the month.
Respondents were almost perfectly, uniformly downbeat...
Six months from now is actually quite scary. The economy is uncertain, and customers cannot predict with any certainty what they see. Political pressure and the wars are now forcing customers to reevaluate their business activities and reduce their outlook. It’s very uncertain.
In a consumer business, we are hearing a lot more "I can't afford this" than we ever have before.
Business has slowed down significantly; we see no signs of improvement in business activity.
Oh, how we long for the days of a stable market. We just lost another long-time customer to China where the pricing for the finished product was what we pay for the raw material. With the inflation we have being imposed on us here in the U.S., we won't ever see those customers come back.
With the unrest in the Middle East, there is now additional global uncertainty and about how it will impact the U.S. and overall global economy. There is limited optimism; we will see a very slow recovery in the first quarter depending on the global impacts of additional conflict.
We are off by 20 percent this year so far. I don't expect it to get better. Prices of goods are going up. Shipping is going up.
Activity is definitely slowing down. We remain optimistic at this point for a turnaround, but cautiously.
The economy is slowing.
Our industry continues to be severely damaged by foreign countries dumping product into the U.S. and our territories. That, coupled with overall business being down, has caused a loss of jobs and capital dollars going back into our industry.
We anticipate that business conditions will remain constant or decline over the next three to four months, based on the rate that we are receiving orders. Oil and gas orders have been weak all year, which is strange since oil prices have been high and are anticipated to continue to increase with the uncertainty in the world order.
We are currently forecasting a 20 percent drop in 2024 versus 2023 (previously planned for a 13 percent drop), so the market forecast has worsened month over month.
Reduction in government grants, cash flow issues with customers and the uncertainty created by the lack of border controls [are issues affecting our business].
The lack of petroleum-based energy policy is troublesome.
We are seeing a pronounced slowdown in owners going forward with new projects. There is too much uncertainty in the economy and globally.
We are working our way to find a cyclical bottom. The overall economy is still the wild card, and it’s not helping. If things stay stable in the economy overall, customer inventories should have stopped draining, and our growth should resume sometime by mid next year.
Overall customer projections are said to be up for 2024, but our forecasts don't match and are down.
Bidenomics, bitches!
Authored by Kevin Downey Jr via PJMedia.com,
Most news articles about the animal in Lewiston, Maine, who shot 31 people, killing 18, focus specifically on the shooter’s skin color and “AR-15 style” rifle.
The media seem to have missed the ten mass shootings that have taken place in the three and a half days since the Maine massacre.
FACT-O-RAMA! A mass shooting is defined as four or more people shot, not including the shooter, in a fluid situation.
Lewiston stands out because of the unusually high body count. Also, the shooter escaped and was at large for a while before police found his body. Every news source from Maine to New York kept readers glued to their sites with stories of “the shooter MAY come here next” fear porn.
Legendary jackpudding Joy Behar from “The View” doesn’t know the difference between an AR-15 and a bazooka. She is paid millions of dollars a year to lie to wine-box mommies who believe her codswallop.
Joy Behar: "If you shoot with an AR-15, let's say you shoot a deer, you can't eat it because you basically demolish the animal."
— DC_Draino (@DC_Draino) October 27, 2023
Lol who wants to tell her?
pic.twitter.com/XMdm0waOkZ
Left-leaning, gun-grabbing racists cheered when the Lewiston shooter was identified as a white male. The Lewiston victims were still cooling in the local morgue as commie pundits dutifully went to work decrying the two things they hate the most: peckerwoods and AR-15s. It was a convenient distraction from the weekend “festival of lead” we. saw in all the familiar places.
Since the Lewiston shooting of October 25, our nation has been home to ten more mass shootings, most of which didn’t warrant a blip on the news radar.
The ten shootings left 14 dead and 65 wounded. Two took place in Chicago and left 19 people ventilated — 15 in just one shooting involving a handgun. Astonishingly, no one gave up the ghost.
Indianapolis was home to a shooting that left one dead and eight injured at a Halloween bash in a building the police somehow can’t identify — which to me sounds like a “pop-up party.” The victims’ ages ranged from 16-22.
POP-O-RAMA! Pop-up parties frequently take place in illegal locations such as empty buildings and seem to be a magnet for poorly raised, gun-toting youths.
The bloodiest shooting since Lewiston erupted when two “groups” of maniacs decided to shoot it out during Halloween festivities outdoors in a Tampa-area bar district. Videos show two men with handguns. No AR-15s or MAGA hats were found at the scene.
GRAPHIC WARNING
One of the shooters appears to not be a white male, which may be the reason the press ignored this Halloween fight night despite two people getting killed and 18 more injured.
LEFTARDS-O-RAMA! The Pravda press refuses to report mass shootings if the master blaster is black. Black civil rights groups then complain that “racist” news outlets don’t care about black people dying. Yet, when someone mentions that Chicago is a hotbed of mostly-black shootings, they too are called “racist.” Remember, anyone who crosses a Marxist is deemed a “racist.” It is the vehicle by which the commies exert control.
You can watch this Low-T Teletubby laugh as bullets fill the night — and 20 revelers. I count roughly 27 shots in this video below:
BREAKING: Multiple people shot in a #shooting in Ybor City neighborhood in #Tampa, Florida
— Michael (@michael_gen_x) October 29, 2023
❗️Re-upload after a watermark has not been removed ❗️ pic.twitter.com/ohrBLK9Hec
Five people were shot to death — including a 73-year-old male — in Clinton, North Carolina, at a residence known for selling the dopes.
A mass shooting in NC barely makes the news.
— Radical Radish ⭐️ (@radish2020) October 26, 2023
Clinton NC | 5 people shot and killed in Sampson County home - ABC11 Raleigh-Durham https://t.co/irbogCV5cL
Six people were shot at a party in the back of a business in Texarkana, Texas, when, according to police, “a fist fight broke out between two men at the party. At some point during this fight, at least two men there pulled out rifles and started shooting.”
???-O-RAMA! What did they pull the rifles out of if they were in a business location?
More weekend shoot-out info!
Four were injured at a shoot’em up party in Chicago.
Six teens were injured at a party in Lake Charles, Louisiana.
Six teens were shot at a house party in Mansfield, Ohio. Two died.
35 shot & 4 killed in Chicago's gun-free zones this past weekend.
— Sal the Agorist (@SallyMayweather) October 30, 2023
Don't expect a tweet from @davidhogg111 or @krassenstein - since this contradicts their narrative 🙄https://t.co/WFpICp8ZJ2
Since I began writing this article two more mass shootings have popped up at gunviolencearchives.com.
Ricardo Johary Cadena-Garcia, 36, using a handgun — not one of those big, scary “assault weapons” — perforated four men in a Dodge City, Kansas, bar, two of whom are never going home.
Seven people were injured in a shooting Saturday at a party in Las Cruces, New Mexico. No deaths were reported.
We have learned the press is picky about the mass shootings they report, but you likely knew that.
We have also learned that parties seem to attract “gun nuts,” but that may also have to do with Halloween. Although, as I’ve reported before, social gatherings seem to be getting wildly dangerous, such as this Sweet 16 party in Dadeville, Alabama, where six people, one of them only 15 years old, shot 32 roisterers, killing four. The victims and suspects were all black.
* * *
Help PJ Media continue to report the facts about the Democrats' disastrous policies that are causing a spike in violent crime across the country.
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Israeli Prime Minister Benjamin Netanyahu's days are numbered in the country's top office, according to growing consensus both inside and outside Israel. The dominant thinking is that once this conflict and crisis settles, he will pay the political price for October 7.
Fierce domestic political controversy has already erupted, fueled especially by a weekend statement (since retracted) issued by Netanyahu which laid blame on the military and intelligence establishment for failing to identify and prevent the threats that led to the Oct.7 Hamas terror raids that killed over 1,400 people and resulted in the kidnapping of over 220 men, women and children.
Netanyahu has yet to take any personal responsibility. The whole event shocked the world and especially Israeli citizens who've long joked that even if a cricket or small animal approached the Israel-Gaza border fence, the Israel Defense Forces (IDF) would know about it.
But instead, Netanyahu has deflected, and after a tense Saturday news conference shifted blame on his security chiefs. He posted to X: "Under no circumstances and at no stage was Prime Minister Netanyahu warned of war intentions on the part of Hamas."
He then emphasized, "On the contrary, the assessment of the entire security echelon, including the head of military intelligence and the head of Shin Bet, was that Hamas was deterred and was seeking an arrangement."
He soon after deleted the post the amid the firestorm of controversy that ensued, and instead stated in a new post, "I was wrong." He apologized and backtracked:
"The things I said following the press conference should not have been said and I apologize for that,” he wrote. “I give full backing to all the heads of the security arms. I am strengthening the Chief of Staff and the commanders and soldiers of the IDF [Israel Defense Forces] who are at the front," he wrote in Hebrew, according to a translation.
The comments split the already fragile unity of the emergency war coalition which was agreed to by opposition leader Benny Gantz, who was the first to lash out.
Netanyahu's quick retraction is being seen in part as a necessary move toward preserving the wartime emergency government, and to pacify a media establishment which is already "out for blood" related to the hostage crisis and Oct.7, which marked the worst single-day terror attack in Israel's history:
His statement was met with sharp criticism from several officials. Gantz, a former defense minister and current cabinet minister, called on Netanyahu to retract his comments.
Leader of the opposition and former Prime Minister Yair Lapid echoed Gantz, saying Netanyahu "crossed a red line" with his words.
Most importantly Lapid was able to play the undermining the military while the nation is at war card. He said according to a Reuters translation, "The attempts to evade responsibility and place the blame on the security establishment weakens the [Israeli Defense Forces] while it’s fighting Israel’s enemies."
The New York Times has meanwhile written that the optics have been made worse by Netanyahu's continued refusal to take any responsibility for failures to protect the nation, but simultaneously other senior officials have issued their own apologies and statements of deep regret:
Although many senior officials, including military and security chiefs and the defense minister, Yoav Gallant, have accepted some responsibility for Israel being caught so off-guard, Mr. Netanyahu has declined to do so. He has said several times, most recently at a news conference on Saturday evening, that after the war tough questions would be asked of everybody, including himself. Mr. Netanyahu has been in power for 14 of the past 16 years.
Mr. Netanyahu’s refusal to publicly accept blame has further shaken confidence in his leadership, which had fallen even before the war, in part because of his efforts to push through a judicial overhaul that sparked huge nationwide protests. Opinion surveys since Oct. 7 have indicated overwhelming public trust in the military and plummeting faith in government officials.
Families of Oct.7 victims, as well as loved ones of citizens still held hostage, have also been garnering media attention in their denunciations of Netanyahu's leadership.
But what can one family, or the families of the more than 200 held by Hamas, do to secure the release of their loved ones? Israel is at war, its leaders are bent on revenge and its armed forces on the verge of an invasion that could endanger the hostages. https://t.co/WYpHC9yJei
— max seddon (@maxseddon) October 28, 2023
For these and many other Israeli families, Netanyahu's "Mr. Security" Persona has fallen off and been exposed, as Bloomberg has written:
The aftermath marks what may be the ultimate test of Netanyahu’s political survival skills. Although Netanyahu, 74, deleted the post and issued a rare apology hours later, the calls for him to step down are becoming an ever-louder chorus. Critics are meanwhile increasingly emboldened to go as far as to question his ability to lead Israel as it wages a punishing war in Gaza.
Moshe Yaalon, his former defense minister, did so in a radio interview, saying the prime minister “is solely engaged in political maneuvering and his attitude is, ‘Let the nation burn.’ I don’t trust him to lead the military campaign.”
While this fight hasn't been featured much in Western press, the families' statements have driven a lot of reporting within Israel itself. They are urging a large-scale prisoner swap, given that from the start Hamas has demanded that thousands of Palestinians in Israeli prisons go free. But now that the IDF is actively operating deep inside Gaza Strip, this appears off the table in terms of a serious option Netanyahu is considering.
Authored by Alexander William Salter via The American Institute for Economic Research,
The US economy grew at a remarkable annualized rate of 4.9 percent this quarter, the Bureau of Economic Analysis reports. This was significantly faster than most analysts expected. Strong growth is good, but there’s some less-welcome news, too: Nominal (current-dollar) GDP grew at an 8.5 percent annualized rate. The implied inflation rate, 3.6 percent, suggests the Federal Reserve still has some work to do to tame inflation.
Remember the most recent CPI release showed core inflation, which excludes volatile food and energy prices, running at 3.87 percent. I argued the FOMC should hold rates steady when it meets at the end of the month. While I still think that’s right, I’m less confident than I used to be.
There’s another factor we have to consider: the turbulence in bond markets.
It’s no secret that bond yields have shot up in recent weeks. The current yield on a 10-year Treasury is approximately 4.90 percent.
Many commentators, and some Fed officials, think rising interest rates elsewhere in the economy can substitute for a Fed target-rate increase. But I don’t think this claim withstands scrutiny.
Greg Ip provided a good overview of the argument in his recent column:
Normally, a bigger deficit stimulates growth and causes the Fed to tighten monetary policy. But the latest run-up in yields doesn’t reflect higher expected growth, but a higher term premium — the added return investors demand to hold long-term bonds instead of shorter-term Treasury bills.
That higher term premium is a restraint on borrowing and spending now. As Richard Clarida, a former vice chair, put it, ‘Your past fiscal excesses show up as a headwind today.’ In other words, the bond selloff is giving the Fed an added reason not to raise interest rates, not exactly an incentive for Washington to quit borrowing.
This line of thinking seems plausible.
But it violates one of the most important rules of economic analysis: never reason from a price change.
We need to know why bond prices are falling, and hence yields rising, before we can discuss the implications for Fed policy.
Ip’s column suggests falling Treasury prices are explained by an unusually large supply of new Treasuries, driven by record peacetime deficits. Last fiscal year’s deficit was $2 trillion, or 7.5 percent of GDP. The Treasury Department had to offer large amounts of bonds to cover that fiscal gap.
What does this indicate about the natural rate of interest, which Fed policy is supposed to track? You offer a bond when you want to borrow money. Hence, an increased supply of bonds means an increased demand for loanable funds. All else being equal, when the demand for loanable funds rises, its price—the interest rate—must rise, too. Increased competition for scarce financial resources between the private and public sectors should drive up borrowing costs, and with it the natural rate of interest.
To keep monetary policy sufficiently tight in the face of a higher natural rate of interest, the Fed will need to target a higher nominal interest rate than would have been necessary had the natural rate of interest not risen. Hence, the market data imply nearly the opposite of what many commentators and policymakers recommend. Of course, it’s possible that the natural rate for longer-term borrowing contracts is rising while that of short-term contracts remains the same, i.e., that the term structure of interest rates is changing.
But if the yield curve is the explanation, then market forces aren’t "substituting" for Fed policy.
They’re simply reflecting an economic transition from one microeconomic equilibrium in the market for loanable funds to another.
I’m not sure which story is correct. But I’m confident that the narrative of rising bond yields standing in for Fed rate-target hikes doesn’t hold up. We’ll get a better picture of the path forward as additional data become available. Until then, hedge your bets.
House Republican opposition to Ukraine funding - a large part of why Kevin McCarthy was ousted by the Freedom Caucus - is solidifying under newly crowned Speaker Mike Johnson, who hand-delivered a report to President Biden with a list of demands.
In particular, the list - written by Rep. Mike Garcia (R-CA), informs Biden that Congress won't authorize any additional funds for Ukraine unless the administration answers a dozen questions about the path forward. Chief among them - how Biden and Ukrainian President Volodymyr Zelenskyy plan to win the war against Russia, and how long it might take.
"Failure to ask these questions, and a continued willingness by Congress to enable this carte blanche mentality to date, is, in my opinion, a dereliction of duty and a recipe for disaster that will enable a Ukrainian defeat and enhance Chinese aggression," said Garcia.
Johnson, meanwhile, has made clear that House Republicans won't bundle Ukraine aid and money for Israel's conflict with Hamas, as Biden wants.
On Sunday, Johnson told "Sunday Morning Futures" that Israel aid must be separated because it's a more "pressing and urgent need" that the House will act on this week.
"There are lots of things going on around the world that we have to address, and we will," he said, adding "But now what’s happening in Israel takes the immediate attention, and we’ve got to separate that and get it through."
What about no on Israel too?
Rep. Marjorie Taylor Greene (R-GA) on Sunday posted on X that she won't support any more foreign aid, including support to Israel, because of the national debt.
"I will be voting NO on all funding packages for the Ukraine war (as I have from the beginning) and now the Israel war," she wrote. "We have had over 10 MILLION people illegally cross our border since Biden took office and we are over $33 TRILLION dollars in debt with many major problems afflicting Americans."
🚨🚨🚨
— Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) October 29, 2023
I will be voting NO on all funding packages for the Ukraine war (as I have from the beginning) and now the Israel war.
We have had over 10 MILLION people illegally cross our border since Biden took office and we are over $33 TRILLION dollars in debt with many major…
She also responded to a tweet by Rep. Thomas Massie (R-KY), who raised the same point, saying "we simply can't afford it."
I’m voting NO as well.
— Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) October 30, 2023
We are $33 TRILLION in debt and our wide open border is a national security crisis.
How many of those voters were outside the US?@RepThomasMassie
Does @elonmusk give us the ability to know? https://t.co/ve3bKq0TyI
Johnson and McConnell headed for showdown?
With House Republicans tepid on Ukraine funds, Johnson is heading into a showdown with Senate Republican Leader Mitch McConnell (R-KY) - who says he wants to keep Ukraine aid and Israel aid tied together because he sees them as part of a larger global threat.
Johnson says he wants to “bifurcate” the issues of Ukraine and Israel, and he has signaled early support for a stopgap funding bill that would include steep cuts to nondefense spending, which Democrats say would have no chance of passing the Senate.
Beyond the next three weeks, McConnell wants to pass the regular appropriations bills before Christmas in order to boost defense spending, while Johnson has floated the idea of freezing federal funding with a stopgap measure lasting until January or April.
Johnson has also proposed offsetting $14 billion in aid to Israel with other spending cuts, an idea that will be controversial with Senate Republicans and Democrats alike. -The Hill
That said, Senate Republicans are growing weary of the blank check approach as well.
"We need to start breaking the mold around here. This isn’t working. We’re $33.5 trillion in debt. The old way of doing business has failed, is failing. We need to approach things differently. From my standpoint, within [the] Republican conference we need a different form of governance," said Sen. Ron Johnson (R-WI).
McConnell and Johnson also have vastly different views on abortion - with McConnell making clear that the decision should be left to the states, while Johnson - who is very religious, sees it as a national issue. Earlier this year, Johnson co-sponsored a bill declaring the right to life guaranteed by the Constitution applies to unborn children. He also introduced a bill in February to make it a crime to transport minors across state lines for an abortion without first satisfying parental involvement laws in the minor's state of residence.
"Paradoxically, McConnell finds it much easier to talk to [Majority Leader Chuck Schumer (D-N.Y.)] than his Republican counterpart in the House," said Ross K. Baker, a professor of political science at Rutgers University who has held several Senate fellowships.
Yet according to Sen. Ted Cruz (R-TX), "What Biden and Schumer are doing, which is holding Israel aid hostage in order to pass all of their other partisan priorities, is profoundly cynical."
By Jane Foley, Senior FX strategist at Rabobank
The Israeli government confirmed that it had begun a new phase in its war against Hamas on Friday. Over the weekend Israel sent more troops and tanks into Gaza and has reported that more than 600 military targets in the strip had been attacked, supported by the deployment of fighter jets. Since the October 7 terror attack on Israel and the commencement of the war, there has been a clear market reaction.
However, so far investors have shied away from panic. Recent visits to Israel by President Biden and US Secretary of State Blinken, in addition to Qatar-led negotiations between Israel and Hamas aimed at de-escalation, plus the deployment of US military equipment and troops to the region to disincentivise Iranian backed militia from opening new fronts have allowed markets to remain relatively calm. On Friday, crude oil touched their highest levels of the week as the market positioned itself for the weekend newsflow.
By contrast, oil prices have dropped back this morning on the view that the conflict has remained contained. Clearly, there is a risk that this view proves optimistic. Yesterday US National Security Secretary Sullivan commented that he sees “elevated risk” of a regional spillover from the war. In reference to the retaliation action taken on Friday by US fighter jets against weapons and communication facilities of Iranian backed militia, Sullivan warned that the US will keep responding to attacks on its troops by Iranian proxies. In response to Israel’s incursion in Gaza, Iranian President Ebrahim Raisi has warned that the action “may force everyone to act”.
National Security Adviser Jake Sullivan tells @margbrennan: “And we are vigilant, because we are seeing elevated threats against our forces throughout the region, and an elevated risk of this conflict spreading to other parts of the region.” https://t.co/i9UVikt5aJ
— annmarie hordern (@annmarie) October 29, 2023
Gold prices pushed higher into the weekend but have edged lower in early trade this morning. Similarly, US and European stock markets ended the session on Friday in the red, although US futures are performing better so far today. Friday’s drop in stocks saw the S&P 500 falling 10% below its July peak, which technically put it into ‘correction’ territory. Q3 corporate earnings have been reported to be broadly in line with expectations so far. However, it appears that the share prices of those that have disappointed have been hit with particularly sharp falls. This coincides with reports that stock analysts are on heightened alert for companies most sensitive to higher rates.
The yield on the 10 yr treasury edged lower into the close on Friday after the US September PCE deflator registered 3.4% y/y in line with expectations and matching the August reading which was revised down from 3.5%. The data were sufficient to reinforce speculation that the Fed will leave rates on hold at this week’s FOMC meeting. Short covering amid a pre-weekend flight to safety may also have been supportive factors for US treasuries on Friday, though in the week ahead investors will have to confront the issue of supply.
Orange juice futures hit a record high of $4.1195 per pound, up 10% on Monday morning. The frozen orange juice concentrate has soared 388% since March 2020 as weather and disease crush citrus supply in Florida, the biggest producer of oranges in the US.
David Branch of Wells Fargo recently told Yahoo Finance that Florida's orange crop is expected to come in around 713,000 tons, the smallest since the 1936-37 season. The US Department of Agriculture forecasts a 33% decline in citrus production for the 2022-23 season compared to last year's crop.
"Given where current [frozen concentrate orange juice] futures are trading coupled with lower domestic supply from Florida, I don't see prices coming down anytime soon," Branch added.
Also, hurricanes that slammed Florida in the last few years have wrecked citrus grove production in the Sunshine State. Brazil and Mexico have ramped up citrus exports to the US in recent quarters, but new estimates show yields have been lowered due to bad weather.
For consumers who are watching OJ prices at the supermarket soar higher and higher, it could take several years for supply woes to be alleviated, according to Luis Ribera, an economist at Texas A&M AgriLife Extension Service, who spoke with Yahoo Finance.
"If you're already part of a big player, you're going to invest more into your orchards," Ribera said, adding, "You would expect that in the next couple of years, things are going to get a lot better."
We suspect hyperinflating OJ prices will result in consumer behavior to shun this breakfast staple, which could ultimately drive prices lower.
By Simon White, Bloomberg markets live reporter and strategist
The week has started with the market taking a softer tone on the Israel-Gaza conflict, with Asian equities up again today after a strong close on Friday. The focus this week has shifted to US earnings, the Federal Reserve’s rate-setting meeting, and the Treasury’s quarterly refunding announcement (QRA), the latter two both on Wednesday. But it’s the BOJ, meeting on Tuesday, which has the biggest potential for a global macro upset.
There’s a lot of focus on the QRA this quarter, after the first step-up in issuance in two years at the last announcement in August helped catalyze the latest leg up in Treasury yields, to their post-GFC highs. The unusual amount of attention on the QRA, though, suggests it might end up being a bit of a non-event. Ditto the Fed, where they’re widely expected to remain on hold.
However, the BOJ has the bigger capacity for a surprise. The bank is expected to begin tightening policy at some point, by raising rates, taking them out of positive territory, and loosening yield-curve control. No change is expected at this week’s meeting, based on Bloomberg’s survey, but the BOJ pay less attention to market expectations than, say, the Fed (see "Yen Soars After Nikkei Report BOJ Considers Tweaking YCC Again To Allow 10Y Yields To Exceed 1%").
Dollar-yen has been bumping around the 150 level through most of October. The carry is a strong pull higher on the currency pair, but there is an enormous potential for a strong yen rally and even higher global yields when the BOJ tightens. The fall in vol adds to the potential for a larger upset.
A drop in yield curve control would make JGBs relatively more attractive at the margin. This, plus FX-hedge ratios that have been allowed to lapse while the yen has been weakening, would trigger a self-reinforcing yen rally that might catch many unawares in its speed and extent.
Further, global yields would be prone to rising more as Japanese investors sold some of their holdings. They have already been buying fewer USTs, with net purchases now negative over the last six months (FX hedging costs have made other DM debt less attractive to Japanese investors).
Ultimately, this will create a further problem for the Treasury as the largest foreign holder of USTs rows back on its ownership. US households have been the only net buyer of Treasuries. Given they anticipate higher inflation than the market, the government may have to get used to a much steeper yield curve to pay up for borrowing longer-term, or play the bill-issuance game a bit longer, which will get more problematic the closer the RRP (reverse repo) facility is to getting emptied.
Cross examination of Sam Bankman-Fried began on Monday, led by prosecutor Danielle Sassoon, who clerked for Justice Antonin Scalia and has a law degree from Yale and a bachelor's degree from Harvard.
Earlier in the day Monday, direct examination concluded with SBF trying to explain why he promised FTX was "fine" in a Tweet on the morning of November 7th, according to CNN. SBF explained away his tweet by saying it wasn't until the the evening that the market crashed and the company was "risking a solvency crisis".
And that wasn't even the best thing he said on Monday indicating he thought everyone else in the world was an idiot other than him...
SBF has "appeared flustered and anxious" while being questioned by Sassoon before in hearings, CNN wrote.
Sassoon started by hinting at Bankman-Fried's talent for narrative, which had convinced investors and clients to invest in his firm. Sassoon cited multiple occasions where Bankman-Fried had publicly lauded FTX's cutting-edge technology and dedication to user safety.
Then, she called out the fact that SBF had publicly endorsed regulation for crypto, according to CNN coverage of the trial. She asked SBF: "That was just for PR, wasn’t it?"
When he responded "no", she cited a conversation Bankman-Fried had with a journalist where he stated "f*ck regulators" and that his advocacy for regulation was "just PR". She also referenced another conversation where SBF called some customers “dumb motherf*ckers.”
Q: You called people on Crypto Twitter "Dumb motherf*ckers"?
— zerohedge (@zerohedge) October 30, 2023
SBF: A subset of them, yes. https://t.co/CHxugiBMA4
SBF, for the most part, appeared to play dumb. He claimed that "he didn't recall what he told reporters in various interviews," per CNN. When asked: "Do you recall saying FTX and Alameda acted separately?" he responded: “I’m not sure about the exact phrasing."
He also played dumb when it came to his congressional testimony:
AUSA Sassoon: The key principles you told Congress about, you review it, right?
— Inner City Press (@innercitypress) October 30, 2023
SBF: Yes.
AUSA: You were involved in drafting it?
SBF: I don't remember being involved in drafting it.
AUSA: You submitted it under oath?
SBF: Yep.
Recall Friday was the first day SBF took the stand in his own defense. While testifying on Friday, Financial Times reported that Bankman-Fried said he thought him and his team, “might be able to build the best product on the market” and “move the [cryptocurrency] ecosystem forward” by forming FTX.
At first he said there was “a ton of excitement, a ton of demand” for crypto, but that “the banks weren’t involved, the brokers were not involved”. FTX “turned out basically the opposite” of his goals of being the best product on the market, he said, noting "a lot of people got hurt".
According to FT, he also added: “I made a number of small mistakes and a number of larger mistakes,” stating that “by far the biggest mistake was that we did not have a dedicated risk management team . . . and there were significant oversights”.
When he founded Alameda in 2017, he admitted to having "absolutely no idea" how crypto worked, but thought “there might be really, really large arbitrage opportunities available”.
Authored by Jackson Richman, Eva Fu and Jan Jekielek via The Epoch Times (emphasis ours),
Florida governor and Republican presidential candidate Ron DeSantis warned on Oct. 27 that China is "the key player" behind the conflicts in Ukraine and Israel.
Appearing at an event hosted by the Heritage Foundation, a conservative think tank in Washington, in conjunction with The Epoch Times, Mr. DeSantis struck a hawkish tone toward Beijing, calling it a “key player” behind the conflicts in Ukraine and Gaza Strip.
"The CCP is keeping both Iran and Russia afloat financially," Mr. DeSantis said in his speech, using the acronym for the Chinese Communist Party. "China's purchasing massive amounts of Iranian oil on the black market, thereby enriching the mullahs and Russia is selling China gas and much, much more. And that is bolstering Russia's war machine."
Mr. DeSantis went on to say that the protracted conflict between Ukraine and Russia since February 2022 "will ultimately benefit China because it will distract America and it will deplete our already dwindling Western weapons and ammunition stockpiles."
And while the United States will support Israel in defending itself, he believes that China “like[s] the Hamas-Israel conflict.”
“Clearly the way the world has gone the last two years has benefits to China,” he said. “There’s no question.”
“The threat posed by the CCP requires our primary focus and attention right now. They are the first truly peer competitor that we have dealt with in our lifetimes."
The Biden administration has relaxed or failed to enforce sanctions on Iran, which has given drones to Russia and exports oil to China. Mr. DeSantis noted that Russia has been selling China gas and “much, much more.”
He blamed “bad decisions made by America's ruling class” for the economic leverage China now has over the U.S. economy, noting that the United States had given China most-favored-nation trading status and allowed Beijing to be part of the World Trade Organization.
"And China has grand ambitions. They seek to be the dominant power in the entire world and they are marshaling all their society to be able to achieve that objective," he said. "So this is a formidable threat and it requires a whole-of-society approach."
He warned that “a world that's dominated by CCP will see them export their authoritarian vision all across the world.”
“This will be a world marked by internet policing, artificial intelligence, facial recognition, and social credit scores. It will end up creating a global dystopia and this is a regime that you do not want to have control or influence over our society,” he said, comparing the China threat to the Soviet Union's effort to spread communism worldwide.
The death toll that the Chinese regime is responsible for over its 70 some years of ruling “may very well be the highest of any government in history and numbers in the 10s of millions,” and the regime’s coverup of the pandemic, he added, has “put the rest of the world in great peril.”
Mr. DeSantis pledged to reorient U.S. foreign policy to prioritize the Indo-Pacific region to defend U.S. national security. Deterring CCP aggression, he said, requires the United States to project strength, which he detailed as bolstering the U.S. military to deny Chinese ambitions toward Taiwan, unleashing “America's full economic potential,” ensuring U.S. technological dominance, and closing border loopholes.
The Florida governor has maintained a tough-on-China record during his tenure, including by restricting Chinese purchases of property in the state and banning the controversial Beijing-funded Confucius Institute program from school campuses. In September, he directed the Florida Department of Education to cut state funding for four schools, citing their “direct ties to the CCP” that he said "constitute an imminent threat to the health, safety, and welfare of these school’s students and the public."
During a Q&A with Mr. DeSantis, Heritage Foundation President Kevin Roberts and Epoch Times senior editor Jan Jekielek asked the governor if the issue of human rights should be tied to U.S. policy on trade with China.
"Traditionally, human rights have been linked to trade or trade has been linked to human rights," noted Mr. Jekielek, also the host of EpochTV's "American Thought Leaders."
"I think human rights is something that's good to stand for. What is the concrete interest? I do think it informs a concrete interest because this is one of the great weaknesses of the CCP," said Mr. DeSantis. "What they're trying to export around the world ultimately, is something that is going to suffocate human freedom. Their vision is a dystopian vision."
Mr. DeSantis' statements came hours before Chinese Foreign Minister Wang Yi met with President Joe Biden at the White House. The regime's top diplomat is in Washington for meetings with senior Biden administration officials, including Secretary of State Antony Blinken and National Security Advisor Jake Sullivan. The administration has framed its relationship with the regime as one of "strategic competition" rather than directly adversarial.
Along with warning about China, other topics Mr. DeSantis highlighted in his major foreign policy speech include the latest Hamas-Israel conflict, which began on Oct. 7 and consisted of the biggest single-day massacre of Jews since the Holocaust, and border security amid the crisis at the U.S.-Mexico border.
During his Q&A, Mr. DeSantis noted the trend of leftist governments in Latin America.
"We should have an updated version of the Monroe Doctrine for our own neighborhood in the 21st century," he said, referring to a late 19th-century principle that viewed attempts by Europe to intervene in the Americas as a potentially hostile act against the United States itself.
Mr. DeSantis emphasized the United States is now at “the decisive decade” to “arrest our country's decline” and tackle the challenge from China.
“At the end of the day, China has a lot of liabilities. They have a lot of weaknesses,” he said. “They want to maintain ironclad control over their population indefinitely,” but there are already cracks showing, and increasing, “because they are not doing what needs to be done for individuals to ultimately flourish.”
Authored by Steve Watson via Summit News,
Senator Rand Paul has warned that “the very existence” of the U.S. is under threat from Democrats and Republicans wanting to send “$100 billion to everyone,” in other countries.
In a Fox News interview, Paul warned that “they’ll bankrupt our country in sending money everywhere all over the planet,” adding “It is probably the greatest threat to our national security.”
Paul further urged that “The greatest threat to it is the national debt. We borrowed a trillion dollars in the last three months. It is out-of-control spending, and we are threatening the very existence of our currency, and perhaps our country, by this crazy, profligate spending.”
The Senator continued, “the big government Republicans in the Senate have already joined hands with the Democrats over here — they want $100 billion to everyone.”
“People forget we have to borrow the money or print the money because we don’t have the money,” Paul added.
Paul noted that while funding for Israel will continue, the new Speaker of the House Mike Johnson has “unilaterally put the kibosh on the big government sort of wastebasket approach of dumping in another $60 billion for Ukraine.”
“I think, actually, it’s going to stop,” Paul said.
Watch the latest video at foxnews.com* * *
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Iran-aligned Houthi rebels in Yemen have reportedly fired another missile aimed at Israel on Monday. An initial launch of a couple of missiles over a week ago saw a US warship of Yemen's coast intervene to shoot down the projectiles.
This time the Houthi missile flew over Saudi territory, putting the kingdom on a high state of alert. While fighting between the Saudi-UAE coalition and Yemen's Houthis has raged since 2015 (also with Washington backing), the last days have seen an uptick in fighting, which regional observers believe is connected with events in Gaza. Israel too sees Yemen as a dangerous 'pro-Iran' base of operations threatening the broader region. However, the Houthis are by and large an impoverished rag-tag regional rebel movement which sees Riyadh as trying to bolster an unpopular puppet government by force of superior air power.
"Saudi Arabia’s military has gone into a state of high alert following deadly clashes with Yemen’s Iran-backed Houthi rebels, who also tried to fire a missile over the kingdom toward Israel, according to people familiar with the matter," Bloomberg reports. The fresh clashes resulted in four Saudi soldiers dying in the southwestern Jazan Province on the border with Yemen, based on defense sources cited in the report.
Bloomberg additionally emphasizes that this shatters forward momentum made on a developing peace deal. "Before the escalation, the two sides were on the cusp of a deal despite the death of four Bahraini soldiers serving in the Saudi coalition in a Houthi drone attack last month," the report continues.
There's also Saudi-Israel normalization which remains a big question. It was only a little over a year ago that Saudi Arabia began opening its airspace for Israeli flights to pass through, and this summer saw the unprecedented opening up of the kingdom's airports to Israeli carriers.
But since the Hamas Oct.7 attack on southern Israel, and return strikes which have pummeled Gaza, resulting in a massive civilian death toll - the Saudi and Israel relationship has once again deteriorated. The hoped-for Abraham Accords are effectively dead, and some analysts have pointed out this is exactly what Hamas and its Iranian supporter wanted. Israeli carriers are now greatly scaling back flights over the region due to the new security threats.
As for the Houthis, the Shia group vying for full control over Yemen has also long been seen as supported from Tehran, having also received covert weapons shipments.
Netanyahu is meanwhile issuing new threats aimed at Iran:
🚨JUST IN - Prime Minister Benjamin Netanyahu:
— Mario Nawfal (@MarioNawfal) October 30, 2023
Iran is an axis of evil and terror and is working to finance Hamas
Hamas uses mosques to strengthen its military positions and keep civilians in harm's way
Calling for a ceasefire is a call for surrender, but we will not do that… pic.twitter.com/3sGzVWrxOR
Elsewhere in the Middle East on Monday, an American base in Iraq has once again come under attack. "Four Katyusha rockets on Monday fired at Iraq's Ain al-Asad air base which hosts U.S. and other international forces in western Iraq," security sources told Reuters.
Casualties were unknown in the immediate aftermath. "Rockets were fired from a desert area around 25km (15 miles) north of the base and Iraqi security forces launched a search for the attackers, two security sources said," the report continues.
Attacks on US forces in both Iraq and Syria are becoming a daily occurrence, despite the last Friday early morning airstrikes on 'Iranian targets' in Syria. The White House has warned of more 'decisive action' to come, but the reality is that the US occupation in Syria leaves American forces exposed.
Once again the fact that WW3 didn't actually break-out over the weekend sent VIX lower (after surging into the weekend for the 3rd week in a row), smashing stocks higher and havens/hedges such as oil, crude, bonds, the dollar, and bitcoin all declined.
But, with the tsunami of potential catalysts for chaos this week such FOMC and payrolls (excluding geopolotical ones), the market's expectations for volatility are dramatically higher than they were at the September FOMC...
Source: Bloomberg
The compression in VIX prompted gains in stocks (more hedge unwinds than short-squeeze) with The Dow leading and Small Caps lagging. Some late-day selling wiped a bit of lipstick off this overall pig but a solid day (that admittedly felt very fragile)
Financials outperformed (while Energy stocks lagged) on the day with the KBW Bank Index rallying to erase Friday's losses...
While tech outperformed, TSLA was trounced on battery demand fears (and some chatter about X's valuation). Back below $200 to its lowest since May...
0-DTE traders fought the downtrend all day once TSLA hit its Put Wall around $200...
Today was not really driven by a short-squeeze as 'most shorted' stocks ended flat (admittedly after an opening jump)...
Source: Bloomberg
Was today the start of something bigger?
As Nomura's Charlie McElligott pointed out, the trick now is whether all this YE performance management “Net Down” de-risking and monetization incentivization” positioning has further room to run - because if it does NOT and sellers have already completed de-risking, a Beta rally melt-up would be an awful outcome for funds without enough exposure on.
As a reminder, Systematic positioning in Equities has been slashed on the realized Vol grind and downside price momentum:
McElligott fears a vicious feedback loop for a rally into YE: if we get
1) a big “Puts monetized” theme...
2) Vols bleed further from “rich” current iVol levels,
then there’s 3) $Delta to BUY as hedges get unwound, and from there,
you have 4) potential waves of “Synthetic Short Gamma,” as Funds both Active and Systematic become the dreaded “buyers higher” and have to add-back Exposure the more we rally
Maybe, or as UBS' trading desk pointed out, maybe not. Mega cap tech, consumer cyclicals and banks are outperforming side by side which makes me wonder if what we are seeing Monday is also a reversion of the year-end tax trade with only one trading day left for Oct. year-end funds, similar to what was seen at the beginning of October after investors sold both winners and losers in late September. Usually by November, investors are starting to look for opportunities to play reversion when it comes to the tax trade.
The Oct 31 mutual fund year-end tax-loss selling is over.
— zerohedge (@zerohedge) October 30, 2023
Nasdaq rallied up to its 200DMA today...
The S&P 500 moved into "correction" territory on Friday, down over 10% from the July highs. Meanwhile the benchmark small-cap Russell 2000 index went through its June 2022 lows and back to levels last seen in November 2020, around the time that Pfizer announced the first successful Covid-19 vaccine trials. In fact, it's now back to levels it first breached in November 2018.
Source: Bloomberg
When you factor in the huge inflation over this period, that's some serious real-adjusted declines. So for all the optimism surrounding US equities this year it really is only a handful of huge companies that's skewing the positivity.
And speaking of companies skewing performance, if one strips away the Mag 7 stocks, the non-tech heavy SPW, NYA, CWI, RTY equity indices are now all at or below 200wma and down for the year.
Source: Bloomberg
The Treasury Refunding announcement (smaller than expected for this quarter) prompted yields to jump lower briefly, but the following quarter was increased and yields started to leak back higher. By the close, bond prices were lower across the baord (yields up with the belly underperforming)...
Source: Bloomberg
30Y yields dropped twice to 5.00% and bounced today...
Source: Bloomberg
The dollar slipped lower on the day...
Source: Bloomberg
The yen spiked (yen strengthened against the dollar) after headlines on the BoJ considerinag djustemnts to its YCC program tonight...
Source: Bloomberg
Spot gold prices fell back from their spike on Friday, holding around $2,000 (up from just over $1,800 before the attack on Israel)...
Source: Bloomberg
Oil prices tumbled with WTI down over 4%, erasing all of its post-Israel-attack gains (not helped by weak German economic data)...
Finally, financial conditions continue to tighten - now at their tightest in a year...
Source: Bloomberg
When, if ever, will these tighter financial conditions start to weigh on the macro-economy?
Authored by James Howard Kunstler via Kunstler.com,
“The post-mortem on the disastrous Biden years will be one of incredulity at how Joe Biden, of all people, was ever placed in charge.”
- James White
The fog of war has never been so dense...
what with the years-long sustained psy-ops of the US Intel “Community” against the American people...
the lawfare operations of the Democratic Party against innocent patriots...
the homicidal depredations of the pharma-government complex...
the Cultural Marxists’ weaponization of language against common sense and common decency...
the Neocon warhawks’ serial failed crusades to control faraway lands of dubious national interest...
and the relentless mendacity of the sell-out Big Media.
It’s a wonder that anybody might venture a coherent thought, or that such a thought might survive transmission from person to person intact, without a sadistic beat-down or a dishonest, tactical inversion of meaning along the way. A thought such as: the Jews have a right to exist in a place called Israel.
This is now up for debate around the world, whereas it had been accepted as self-evident by many civilized states a few weeks ago.
The military pundit Scott Ritter acted out a spectacular mental melt-down on video the other day. Among the statements he made were: “We need the Israeli army to be destroyed, to suffer defeat” . . . “Israel is the greatest threat to peace in the world” . . . “Political Zionism is a rabid dog and must be killed” . . . “I’m glad Hamas is winning” . . .
It’s far from clear what Scott’s definition of Zionism is, but Dictionary.com says: “a worldwide Jewish movement that resulted in the establishment and development of the state of Israel and that now supports the state of Israel as a Jewish homeland.” That’s pretty standard across many dictionaries. So, is Scott Ritter calling for the cancellation of Israel? Sounds like it, a little bit. He’s not alone. That has been the dream of most of Islam in the region for seventy-five years. Now, a great multi-nation jihad rises to expel what the Iranians like to call “the Zionist Entity,” as if it were some scaley thing that slithered out of a UFO. Even the American Ivy League is rooting to drive Israel into the sea.
Among the reasons Scott Ritter reviles the Israelis is that they are too weak and incompetent to defend themselves. Their stand-by army of reservists, he says, are too soft and flabby to hump a standard-issue soldier’s kit into a war-zone — and Gaza is the worst sort of urban war-zone. They’ll fall down and have heart attacks the first time they try to run a hundred yards (which could be true, considering Israel’s 90 percent Covid vaxx uptake and the likely resulting non-symptomatic myocarditis present in young men there). Israeli intel sucks, he says. Israel’s sense of superiority, their notion of being the chosen people, must be smashed. Israeli soldiers should go into Gaza and be shot to pieces, he advises. Scott’s intemperance is… something to behold.
Three weeks ago, the Middle East was on the verge of putting through the Abraham Accords that would have “normalized” relations between Israel and several states of the Arabian Peninsula, exchanges of ambassadors, openings to trade and such. Other Islamic nations in North Africa were expected to join anon. And just before the October 7 Hamas attack, Saudi Arabia was about to hold normalization talks with Israel. That’s all out the window.
Scott Ritter’s proposed initiative goes like this: Call a cease-fire and halt the bombing of Gaza. Israel must commence direct face-to-face negotiations with Hamas — no intermediaries! — for the exchange of hostages and prisoners and to begin groundwork toward a two-state solution, that is, the creation of a Palestinian state alongside Israel.
For decades, that two state solution has been hung up on two sharp thorns.
One is the practical question of where that Palestinian State would be. The common idea is that it would be the disputed zone called the West Bank (of the Jordan River) plus Gaza. The West Bank was occupied by Israel in the aftermath of the 1967 Six Day War, as was the Gaza Strip and the Golan Heights on Israel’s northern border with Syria. Israel eventually returned the Sinai Peninsula to Egypt in 1982, and Israel ended its occupation of the Gaza Strip in 2005. Gaza has been self-governing since, with internal conflict between its Hamas and Fatah factions. Gaza has been used as a launching site for rocket attacks in Israel ever since, regularly upending attempts to negotiate a lasting peace. Israel, on the other hand, has installed over 600,000 settlers in the West Bank, said to be in violation of international agreements.
The second thorn that hangs up any plausible peace is the Palestinians’ overt declarations in the Hamas charter, for instance, that Israel has no right to exist and must be destroyed. Iran, too, has for years notoriously declared its intention to “wipe Israel off the map.” That is hardly a viable pre-condition for settling this long quarrel. “From the river to the sea, Palestine will be free,” goes the chant. Notice that the Islamic nations surrounding Israel refuse to admit any Palestinian settlers. Egypt, Jordan, Syria, will not take them. Why is that? I’ll tell you: because they understand that the bellicose, fractious Palestinians will bring them trouble.
Western Civ, weakened, broke, and mind-fucked, now faces a fast-unifying multi-nation Jihad that looks more and more like World War Three.
The pressure is on for Israel to re-think its furious response to the savage attacks of October 7. Yet, the threat to its survival has never been so stark.
There is little appetite for the US to get involved, though reports out of the war fog indicate that there might be as many as 5,000 US soldiers already inserted into the Gaza campaign alongside IDF soldiers. We have plenty of reason to worry that US towns and cities could be the next target, since no one really knows how many Jihadis have crossed into our country from Mexico under “Joe Biden’s” wide-open border policy. What a moment to be leaderless!
* * *
Support his blog by visiting Jim’s Patreon Page
With intense controversy over Gaza continuing to drive the news and with the conflict being a heated topic of conversation among ordinary Americans, it's only natural and to be expected that voting constituents would seek answers from the their elected representatives.
One activist, who says he voted for Democratic Senator from Pennsylvania John Fetterman, attempted to do just that days ago. Daniel Kovalik, a 55-year-old former professor and human rights lawyer, paid a ticket to attend an event with Fetterman, who in the wake of Hamas Oct.7 attack on Israeli civilians said, "Now is not the time to talk about a ceasefire...We can talk about a ceasefire after Hamas is neutralized."
Kovalik is seen on camera at the event confronting Fetterman over his stance, at a moment the Gaza death toll had surpassed 7,000 killed in airstrikes. Kovalik asked the senator for a response: "Ten thousand people in Gaza have been killed, half are children. The pope is calling for a ceasefire, the UN has called for it." he said. "I'm just asking, you're a good guy, I voted for you, I know you're a nice guy, this is important."
I just took on @JohnFetterman for his failure to support a ceasefire for #Gaza and was assaulted. Come see the violence inherent in the system. pic.twitter.com/QOTKHNAnfE
— Dan Kovalik (@danielmkovalik) October 29, 2023
But instead of engaging what appears to be an honest inquiry (Kovalik even says at one point he voted for Fetterman), Sen. Fetterman walks away and a staffer violently pushes Kovalik away, through restaurant doors and out into the street.
As Newsweek explains of what happened next:
Fetterman, who had remained silent while listening to Kovalik, can be seen walking away as the former professor is physically pushed out of the building.
The person taking the video, who keeps on filming, can be heard saying that the staff member who pushed Kovalik away had "just assaulted" him, as he was only talking to the senator.
The clip of the tense encounter has since gone viral, receiving around three million views. Fetterman has been among those Congressional leaders, which has included both sides of the aisle, seeking robust and muscular support for Israel at a moment fears ratchet of broader regional war.
But The Intercept has recently reported he's received severe pushback from within his own ranks, writing that
"Sixteen former campaign staffers of Sen. John Fetterman, D-Pa., have penned a letter urging their onetime boss to back a ceasefire between Israel and Hamas, telling him that “it is not too late to change your stance and stand on the righteous side of history.” The open letter comes as Fetterman, a consistent supporter of Israel, has defended its war on Gaza and is the latest effort by former or current U.S. government employees urging an end to the violence.
To be sure, Fetterman has long demonstrated that he has trouble forming coherent on the spot answers in terms of verbal responses. So his silence when confronted by Kovalik could at least in part be due that, especially given the complexity of the issue.
Authored by Jim Quinn via The Burning Platform blog,
“Truth is treason in an empire of lies.” – George Orwell
“The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. …We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized.
Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons… who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.” – Edward Bernays – Propaganda (1928) pp. 9–10
“Axis of Evil” seems to be interchangeable, based upon who the Deep State needs to be the enemy at any given time. Bush junior first coined the phrase in his January 29, 2002 State of the Union speech when describing Iran, Iraq and North Korea. Of course, we know his Deep State handlers then falsified claims of 9/11 involvement and WMDs, to take out Sadaam and steal his oil. The barely cogent doddering old fool senator McConnell this week declared Russia, China and Iran as the new “Axis of Evil”. You notice Iran is still in the club, but they now consider two nuclear armed superpowers to be evil and enemies. Kim Jong Un must be so disappointed at being kicked out of the club.
I always thought the quote above, attributed to Orwell, was really from Ron Paul. Either way, we are most certainly living in an empire of lies, where the war on truth is relentless and never ending. As the quote from Bernays reveals, the war on truth has been consciously waged for at least a century, and probably for centuries, as the invisible government of men behind the curtain manipulate the minds of the masses with propaganda, lies, disinformation, and misinformation, in order to control and profit from the false narratives they spin. The UN, WHO, and WEF truly are the real “Axis of Evil” in our world today.
They are the front organizations for a globalist cabal of billionaires, bankers, and their armies of psychopathic bureaucrats, corrupt politicians, media mouthpieces, satanic pedophiles, and blood thirsty generals intent on blowing up the world. All three diabolical organizations are focused on implementing their overlords’ Great Reset agenda of depopulation, central bank digital currencies, social credit scores for the plebs, 15 minute city gulags, living in 300 square foot pods, forced transition to an all EV society, confiscation of firearms to insure their control, making the peasants eat bugs while they dine on Filet Mignon and lobster, and convincing you you’re happy owning nothing while they own everything.
There have been a lot of wars in the 50 years since the Deep State killed JFK in 1963. And every one has been a failure. Traditional war has accomplished nothing. Vietnam – failure. Iraq – failure. Afghanistan – failure. War on Poverty – $15 trillion of your tax dollars spent since 1965 and poverty is worse, with Democrat run urban ghetto shitholes worse than 3rd world countries. War on Drugs – over $1 trillion spent since Nixon declared war in 1971, with tens of thousands in prison and drug use at all-time highs, when taking into account Big Pharma created addictions.
War on Terror – over $8 trillion spent since 9/11, along with the implementation of a surveillance state Orwell couldn’t have conceived in his darkest nightmares, and now parents and grannies are classified as domestic terrorists. Meanwhile, real terrorists can saunter across our southern border and be transported by our government anywhere they choose. War on Covid – at least $6 trillion directly with your tax dollars, but trillions more in the destruction of businesses, jobs, and lives. And of course the proliferation of wars on CO2, fossil fuels, farmers, meat, white people, biology regarding gender, the Constitution, and common sense, continue unabated, as they all contribute to the Great Reset agenda.
The War on Truth is relentlessly fought by our ruling class and their co-conspirator minions in the regime media and Silicon Valley tyrant social media propagandists. Orwell and Bernays were contemporaries, but had entirely divergent viewpoints regarding truth. Orwell saw authoritarian governments suppressing truth as an existential evil.
Bernays was so annoyed by the Nazis giving his propaganda book a bad name, he changed the narrative and started calling it public relations. He was enthusiastically in favor of an invisible government of men manipulating the masses into thinking whatever they want them to think by obscuring the truth and employing psychological techniques to mold the beliefs of the unsuspecting masses.
Bernays‘ techniques have been taken to a new level with the advent of technology in the 21st Century. The ability to lie, misinform, fake, and shroud the truth has never been easier, especially after decades of government indoctrination in public schools designed to dumb down the masses, make them obey authority, feel rather than think, and never question the approved establishment narrative. Never has this been more true than with government reported economic statistics. If you want to see how fake the government statistics are, just go to John Williams’ site Shadowstats to get the truth.
This past week, the regime media was ecstatic about the 4.9% 3rd quarter GDP report and Biden was so excited he was drooling and shitting his pants while taking credit for our stupendous economy. What they fail to mention is government spending is a major component of the GDP calculation, and your friendly government drones added $1.1 trillion to the national debt in the 3rd quarter to artificially boost GDP. In addition, they used an inflation rate of 3.0% in their calculation. Without the artificial government borrowing and spending, and using the real inflation rate of 8% to 10% you are experiencing in the real world, and the real GDP is really -5% or worse.
The most laughable of all the fake government statistics is the reported unemployment rate of 3.8%. Only a proud Woman’s Studies graduate who has been jabbed eight times, still wears a mask alone in their Prius, and has an I Support Ukraine and I Support Israel flag in their social media profile, could possibly believe that drivel. There are 267 million working age Americans, with 162 million employed. Of course, 26 million of those jobs are part-time and another 4 million people are working multiple jobs. So, 40% of the working age population are not working. Only 50% have a full-time job. The government just pretends 100 million working age people choose not to be employed. So they don’t count.
The economy is so good, those people not in the labor force have decided to camp out permanently in homeless encampments across the nation. Shadowstats calculates the true unemployment rate at 25%. Do you think 3.8% or 25% is closer to the truth? Anyone with an IQ above room temperature realizes Bidenomics has been disastrous for the average American and is reflected in Biden’s approval ratings and consumer expectations about the future being the lowest since Great Financial Crisis in 2012. Wall Street cheered retail sales reportedly up 0.7% in September, when critical thinking people realize they are up due to inflation. Real retail sales are negative.
They need to keep you believing all is well until they decide to pull it, when they believe it is in their best interest to do so. They will position themselves to benefit from a financial collapse. They will continue to push their climate emergency tripe, even though the facts unquestionably support the opposite of what their narrative spews relentlessly. Facts don’t matter to the Great Reset disciples. But facts don’t cease to exist.
“Facts do not cease to exist because they are ignored.” ― Aldous Huxley
The climate narrative is solely designed to increase your taxes, reduce your freedom, and enrich the globalist cabal who believe they can manipulate you into doing whatever they tell you to do. Truth has no part in their agenda. The only way to defeat these psychopaths is to keep hammering away with truth, despite the hate, censorship, and canceling thrown our way.
“The further a society drifts from truth the more it will hate those who speak it.” – George Orwell
“In a time of deceit telling the truth is a revolutionary act.” – George Orwell
Society is lost in a blizzard of lies. They lied about Russia’s involvement in the 2016 election. They lied while impeaching Trump twice. They lied about the “armed” insurrection on January 6 where no one was armed. They continue to lie while weaponizing the judicial system against Trump. They lied about George Floyd and BLM. They lied about the origins and risks of Covid. They lied about the safety and effectiveness of their “vaccines”. They continue to lie about the deaths caused by this toxic concoction. They lie about Putin’s motivations. They lie about the Ukraine war. They are lying about the Israel – Hamas conflict. They are going to lie us into World War 3, unless we stop them by courageously speaking the truth, no matter the consequences.
“There was truth and there was untruth, and if you clung to the truth even against the whole world, you were not mad.” – George Orwell
“Never be afraid to raise your voice for honesty and truth and compassion against injustice and lying and greed. If people all over the world…would do this, it would change the earth.” ― William Faulkner
Their war on truth will fail, just as all their other self serving wars have failed. We will get no truth from the regime or their globalist overlords. It is up to average Americans to speak the truth, listen to and comprehend the truth, and become the truth which will be the only chance to stop this madness. I do believe the existing social order of psychopaths in suits will be swept away during the denouement of this once in a lifetime crisis. Before they are defeated and vanquished there will be much bloodshed, pain, and sacrifice necessary to achieve victory.
We can change the earth, by holding tight to the truth. It is time to become heroes.
The ADL, which now exists to fuel censorship of opinions which diverge from establishment orthodoxy, has bent the knee to Chaya Raichik, better known on "X" as 'Libs of TikTok.'
Last Tuesday Raichik threatened to sue the ADL for including her in their "Glossary of Extremism."
"ENOUGH IS ENOUGH. I’m calling on the @ADL to immediately remove my name from their ‘Glossary of Extremism.’ Not only have they defamed me, they also lumped me in with terrorist organizations like Hamas," she wrote on X. "They have until Oct 31st to remove this defamatory entry before I’m forced to take more action."
ENOUGH IS ENOUGH. I’m calling on the @ADL to immediately remove my name from their “Glossary of Extremism.” Not only have they defamed me, they also lumped me in with terrorist organizations like Hamas. They have until Oct 31st to remove this defamatory entry before I’m forced to… pic.twitter.com/lJTsmgO454
— Chaya Raichik (@ChayaRaichik10) October 24, 2023
Over the weekend, she was removed from the glossary.
BREAKING: The ADL finally caved after immense pressure and threats of legal action and REMOVED my name from their Glossary of Extremism! pic.twitter.com/6qCioQTsNp
— Chaya Raichik (@ChayaRaichik10) October 28, 2023
The move was widely celebrated as a victory for free speech.
Excellent! "ADL removes Libs of TikTok’s @ChayaRaichik10 from ‘Glossary of Extremism’ after threat of legal action"https://t.co/I28N4sdvhP
— Tammy Bruce (@HeyTammyBruce) October 29, 2023
And of course, arguments have broken out.
A media matters article making a claim is not "examples."
— Seth Dillon (@SethDillon) October 30, 2023
I didn't ask if she's been blamed for bomb threats. I know she has. I asked how her reporting amounts to a terror campaign. Do you think media matters is running a terror campaign when they attack Chaya and death threats…
The ADL is most recently known for remaining silent for more than a week after the Canadian parliament honored an actual Nazi.
Authored by Zachary Stieber via The Epoch Times (emphasis ours),
Two Democrats in the U.S. House of Representatives are departing Congress after the drama-filled month that saw the House remove Rep. Kevin McCarthy (R-Calif.) as speaker and later elect his replacement.
Rep. John Sarbanes (D-Md.), 61, will leave Congress in 2025 after serving for nearly two decades, he announced on Oct. 26.
Mr. Sarbanes worked with nonprofits before entering the House in 2007 and said he has found himself "drawn back to that kind of work—wanting to explore the many opportunities to serve that exist outside of elected office."
"With that in mind, I have decided not to seek re-election in 2024. While I am making this announcement today—specifically for the benefit of candidates interested in running for my seat in next year’s election—I’m not going anywhere for the next fourteen months. That’s what’s left in my term and I’m committed to finishing strong," he added.
The longtime member said the decision to leave was not easy but that he feels hopeful about America's future because the new Democrat leadership "is making all the right moves to bring Democrats back into the majority in January 2025."
Rep. Jeff Jackson (D-N.C.), 41, who just assumed office in January after nine years in the state Senate, also said he is not running for reelection in 2024.
Mr. Jackson said in a video statement he will run for North Carolina attorney general in a bid to "go after political corruption."
Mr. Jackson's move stemmed from North Carolina's redistricting, approved Wednesday by the GOP-controlled state legislature. The updated map reworks multiple districts Democrats currently hold to favor the GOP.
That includes North Carolina's 14th congressional district, which covers most of Charlotte.
The new map could be challenged in court.
Reps. Wiley Nickel (D-N.C.), 47, and Kathy Manning (D-N.C.), 66, are also facing tougher battles. Mr. Nickel said in a statement he would not run in any of the "gerrymandered districts" and would decide on running at all only after "the courts have spoken." Ms. Manning said before the vote that the map was made "to ensure Republicans win more House seats so they can maintain control of the U.S. House of Representatives" and that she would keep fighting "to make sure the people of North Carolina get the representation they deserve."
Republicans currently control the House with 221 members. Democrats have 212. There are two vacancies.
Republicans outperformed Democrats in the 2022 midterm elections, flipping control of the lower chamber. Democrats retained control of the Senate, gaining one seat there.
Eleven other Democrats have already said they're leaving Congress to retire or run for another office, including Reps. Katie Porter (D-Calif.), Andy Kim (D-Calif.), and Jennifer Wexton (D-Va.). Five Republicans are not running for reelection, including Reps. Debbie Lesko (R-Ariz.), Jim Banks (R-Ind.), and Dan Bishop (R-N.C.).
The Democratic Congressional Campaign Committee has not yet commented on Mr. Sarbanes and Mr. Jackson leaving office. Delanie Bomar, a spokeswoman for the National Republican Congressional Committee, said that Mr. Jackson "has had one foot out the door for months, and it’s about time he stepped aside to make room for a representative who truly cares about serving North Carolina in Congress."
Mr. Sarbanes represents Maryland's 3rd congressional district. Maryland is a blue state, and Mr. Sarbanes easily won the last election with 60 percent of the vote.
Political handicappers rate the seat as safe for Democrats, meaning Democrats are expected to keep control of it.
Only one Democrat has declared for the race so far, nurse Kristin Lyman Nabors. No new announcements have been made as of yet in the wake of Mr. Sarbanes' pending retirement. Several state lawmakers have been floated as potential candidates.
North Carolina's 14th congressional district, on the other hand, could be flipped by Republicans, especially if the new map holds.
The redrawn district went for then-President Donald Trump with 58 percent of the vote, versus 48 percent for President Joe Biden, according to a Politico analysis.
No Democrats have announced a bid yet for the redrawn seat. U.S. Army veteran Pat Harrigan, a Republican, had already announced a bid.
The districts represented by Ms. Manning and Mr. Nickel also went for President Trump in 2020 while a fourth district, represented by Rep. Don Davis (D-N.C.), 52, is also closer to even.
Some political handicappers moved North Carolina's 1st Congressional District, represented by Mr. Davis, to a toss-up in light of the new map.
Mr. Davis highlighted the development on social media.
"We need your help, now more than ever, to win this one again," he said, asking for donations.
Former Rep. Mark Walker (R-N.C.), 54, who was running for North Carolina, said Wednesday he would seek to represent the redrawn 6th Congressional District, which is represented by Ms. Manning.
New House Speaker Mike Johnson (R-La.), elected after about a month of drama, has endorsed Mr. Walker.
Mr. Walker left the House in 2021 and lost a bid for a U.S. Senate seat in 2022.
On Monday, McDonald's reported that revenue was up 14% on the quarter in what the burger company attributed to "strategic menu price increases."
The company beat expectations of $6.58 billion for the third quarter, raking in $6.69 billion in revenue, according to Refinitiv (via NY Post).
While the company didn't reveal which of its items had increases, and how they applied them to the company's 13,513 domestic restaurants and 38,000 abroad, one branch in Darien, CT is charging as much as $18 for a Big Mac combo meal, which includes a medium soft drink and medium fries.
That same combo in Times Square costs $13.69 - so it's all over the place, and we suspect 'strategic' doesn't just mean which items they're hiking prices on, but where.
CFO Ian Borden told investors on the Q3 phone call that US prices did increase in the third quarter - but wouldn't specify by how much. He did say that he expects the increases to come out to just over 10% for the full year - the second consecutive 10% annual price hike.
Redditors are aghast:
Meanwhile, many consumers have said that fast food has already gotten so expensive, it’s no longer worth it.
One Reddit user asked in now-viral thread: “What is no longer worth it because of how expensive it has become?”
The top-rated response: “most fast food.” -NY Post
"A ‘value meal’ at McDonalds now costs just as much as a meal at a lot of sit down restaurants like Applebee’s," another Redditor claimed. "Remember when McMuffins were $2 for $3?" replied another?
Right now, the McDonald's app in NYC shows the cheapest option on its "$1 $2 or $3" menu is a small order of french fries - for $2.49!
Meanwhile, the company is also charging new franchisees in 2024 will have to pay an increased 5% royalty fee, the first such increase in three decades from 4%, plus a percentage of gross sales and other fees.
And once again, the Babylon Bee is spot on...
By Adam Andrzejewski of Open the Books Substack
By making concessions to the Mullahs who operate the world’s largest state sponsor of terror, the Biden Administration has directly or indirectly pumped more than $50 billion into their coffers enabling untold violence and international destabilization, threatening our our allies and implicating our energy supply chain – just as the Administration also instituted unprecedented handcuffs on U.S. energy independence.
It allowed the sale of Iranian oil worth approximately $40 billion.
It allowed the sale of electricity to Iraq, bringing in an estimated $10 billion to the regime.
Most recently, it released another $6 billion to Iran in Iranian cash. Fortunately for all, the current custodian of that cash, Qatar, has agreed to hold onto those payouts for now.
Despite universal opprobrium and hard sanctions on Iran, Yale University and The Johns Hopkins University have partnered with Iranian entities for research in country since 2013 on the U.S. taxpayer’s dime. Both universities hold massive endowments and don’t need the taxpayer’s help. Furthermore, both were recently criticized for not rebuking the Hamas terrorist attacks on Israel.
Iranian Oil: The Mullahs increased oil exports by about 1.5 million barrels a day during Biden’s presidency according to The Committee to Unleash Prosperity founded by the economists Stephen Moore, Lawrence Kudlow, Arthur Laffer, and Steve Forbes:
“This has put roughly $40 billion more into the coffers of the Iranian government,” according to the committee’s investigation.
Loosening Iranian oil sanctions accompanied decline in domestic U.S. oil production by some 700 million barrels a year, thanks to the administrations resolute anti-fossil fuel polices.
The Wall Street Journal wrote, “there’s no question the U.S. decision to ease enforcement of oil sanctions against Iran has aided Israel’s enemies.”
By not enforcing oil sanctions, cash flowed to Tehran, which then had billions more to fund Hamas, Hezbollah and other terrorist groups.
The Organization of Petroleum Exporting Countries, or OPEC, reports Iran’s oil production jumped more than ten-percent from 2.6 million barrels a day in April, to 3 million in August.
Richard Goldberg of the Foundation for the Defense of Democracies points out that not enforcing Iranian oil sanctions also helps China: Iran’s oil increased production can’t be accomplished by sanction evasion alone.
“That number likely reflects a policy of non-enforcement of sanctions,” Goldberg said. “With the administration pursuing so-called ‘de-escalation’ policies with both Iran and China simultaneously, tacitly approving increased Iranian oil exports to China is one way the White House can offer concessions to both regimes.”
Reuters reported on the increased OPEC output: “Iran, which has been boosting supply despite U.S. sanctions, also pumped more, with output hitting the highest level since 2018.” That’s the year Washington re-imposed sanctions.
Iranian electricity: Earlier this year, Iraq made another $10 billion in frozen assets available to pay for natural gas that Iraq buys from Iran.
U.S. sanctions prevent Iraq from paying Iran directly for the gas, and Tehran had cut supplies, plunging already electricity-starved Iraq into blackouts. That lead to an Iraqi plan to barter with Iran, sending its oil as payment for Tehran’s natural gas.
$6 billion in unfrozen Iranian assets: The Wall Street Journal news side published an exclusive on October 8th, that since August, Iran helped plot the Hamas attack on Israel.
It’s impossible to miss that this took places as the Biden Administration unfroze $6 billion in disputed Iranian funds.
In the communique announcing the accord, the U.S. agreed to release five Iranians held in the U.S. and the $6 billion, in exchange for freeing five U.S. citizens illegally held in Tehran. For the Mullahcracy, crime pays — they got their guys and the money.
The funds at issue had been in South Korea. The money was transferred to Doha, Qatar, along with a fig leaf suggesting they will be expended only for “humanitarian” spending, such as food and medicine. Obviously, $6 billion for food and medicine frees up another $6 billion for terror and violence.
As The Hill said, “Iran has access to $6 billion that it did not have access to three months ago.”
Secretary of State Antony Blinken insists the money wasn’t used to attack Israel.
“Not a single dollar from that account has actually been spent to date,” Blinken said. “It’s very carefully and closely regulated by the Treasury Department to make sure that it’s only used for food, for medicine, for medical equipment.”
Somehow, the Biden Administration, which is expert in spending other people’s money, simply cannot understand the $6 billion boost it gave to terrorists.
U.S. federal grants spent in Iran: Our auditors at OpenTheBooks.com searched the federal checkbook for direct payments to entities in Iran and found that U.S. agencies have funded American universities doing work in Iran with Iranian institutions.
It’s unclear how this partnership happens when U.S. sanctions are in place.
From 2016 to 2021, the U.S. Department of Health and Human Services gave Johns Hopkins University $538,000 in the form of a mental health research grant for a project the university did in conjunction with Tehran Medical Science University – a subdivision of the Iranian government.
The description states a contract
“will cover effort for Dr. Larry Wissow [Johns Hopkins] to have the role of co-pi of the grant. Activities will include weekly meetings with Dr. Mojtaba the other co-pi and with Dr. Sharifi, the leader of the Iranian research team, to oversee the ongoing conduct of the project. Dr. Wissow will have primary responsibility for drafting analysis plans and for creating the de-identified data set that will be deposited with NIMH. He will also participate in drafting and submitting manuscripts developed from the study data.”
For perspective on its spending, Johns Hopkins’ spokeswoman Jill Rosen pointed to the university’s position of leading the nation in research spending for the 43rd consecutive year, with $3.2 billion spent in FY 2021.
The National Science Foundation also funded $17,000 for Yale University to do doctoral dissertation research in Iran.
Both universities have large endowments — $40.7 billion for Yale, and about $8 billion for Johns Hopkins — and Yale, among other Ivy League schools, is being criticized for not rebuking the Hamas invasion of Israel.
U.S. officials won’t say that Iran “gave the green light” to Hamas to attack Israel, as reported in The Wall Street Journal, or otherwise was directly involved in the planning or funding of the Oct. 7 attack.
But U.S. National Security Advisor Jake Sullivan said in an October 10th White House press briefing:
“Iran is complicit in this attack in a broad sense because they have provided the lion’s share of the funding for the military wing of Hamas, they have provided training, they have provided capabilities, they have provided support, and they have had engagement and contact with Hamas over years and years. And all of that has played a role in contributing to what we have seen.”
Sullivan continued, “Now, as to the question of whether Iran knew about this attack in advance or helped plan or direct this attack, we do not — as of the moment I’m standing here at the podium — have confirmation of that.”
According to unclassified U.S. documents,
‘‘Iran has historically provided up to $100 million annually in combined support to Palestinian terrorist groups, including Hamas, Palestinian Islamic Jihad (PIJ), and the Popular Front for the Liberation of Palestine-General Command.’’
The U.S. knows Iran funds Hamas. Therefore: Freeing up $6 billion in a cash-for-hostages deal, trading $10 billion from Iraq for natural gas, or increasing Iranian oil output and revenues by $40 billion means America gave Iran billions in leeway it could use to empower Hamas, and indeed Iran’s entire terror network, to the detriment of our allies.
“We know that there were meetings in Syria and in Lebanon with other leaders of the terror armies that surround Israel, so obviously it’s easy to understand that they tried to coordinate,” said Gilad Erdan, Israel’s ambassador to the United Nations. “The proxies of Iran in our region, they tried to be coordinated as much as possible with Iran.”
Biden Pays, Rockets Fly: Administration Sent $1 Billion In Palestinian Aid After Trump’s Freeze | OpenTheBooks.Substack.com | October 17, 2023
Biden Reversed Trump’s Foreign Aid Freeze To Expand Palestinian Funding—$6.3 Billion Since 1953 | Forbes | Adam Andrzejewski | May 2021
U.S. Resumption of Foreign Aid To The Palestinians | Congressional Research Service | April 2021
Mortar And Rocket Attacks Against Israel By Date | The Jewish Virtual Library, A Project of AICE | 2001 to the Present
Authored by Tom Ozimek via The Epoch Times (emphasis ours),
IRS Commissioner Danny Werfel faced a grilling by lawmakers on Capitol Hill this past week, where he hinted that there's a chance that the agency will—contrary to its repeated pledges—increase tax audits of Americans earning under $400,000.
The question of whether the IRS will use some of the $80 billion or so funding boost to increase tax enforcement of people making less than $400,000 has been a contentious issue.
IRS and Treasury Department officials have pledged not to increase audit rates for this group of Americans, while Republicans and others have argued that this pledge is either false or wishful thinking.
Treasury Secretary Janet Yellen has directed the IRS not to raise audit rates above historical levels for this group of taxpayers, while Mr. Werfel has repeatedly made the same pledge.
But a watchdog recently cast doubt on this promise, warning that Americans making less than $400,000 could inadvertently get caught in an enforcement dragnet because the IRS doesn't have a clear definition of "high-income" and its enforcers use an outdated $200,000 high-income threshold as their default.
Meanwhile, the latest data on the tax gap (the difference between taxes owed and paid to the government) show that it has jumped from $601 billion to $688 billion, putting pressure on the IRS to ramp up enforcement and bring in more money for all the Biden administration's big spending plans.
At the Oct. 24 hearing on Capitol Hill, Rep. Gary Palmer (R-Ala.) pointed out that former IRS Commissioner John Koskinen once testified that increasing tax audits as a way to reduce the tax gap was not an advisable strategy.
“One of your predecessors, John Koskinen, testified before this committee in 2015, and he said it would not be advisable to audit your way out of the tax gap, yet that’s exactly what you’re trying to do,” Mr. Palmer said.
In a bid to increase tax collections, the IRS has vowed to increase tax enforcement on corporations and high-income filers in a "sweeping, historic" crackdown on what it says are wealthy tax evaders.
In his line of inquiry, Mr. Palmer implied that the IRS' appetite to boost collections would mean some lower-earning Americans could get caught up in that effort.
Mr. Werfel said he had instructed staff at the IRS not to raise audit rates for lower-earning Americans but hinted that there's some chance this could (inadvertently) happen, and only time will tell.
After Mr. Palmer questioned Mr. Werfel, Rep. Virginia Foxx (R-N.C.) pressed the IRS chief to explicitly guarantee that the IRS wouldn't raise audits on Americans making less than $400,000.
“The so-called Inflation Reduction Act gave the IRS an additional $80 billion in funding. I think we can all agree that that’s an incredible amount of money. Even after Congress trimmed this amount down to nearly $60 billion in the Fiscal Responsibility Act, how many new agents does the IRS plan to hire?” she asked.
Mr. Werfel sought to deflect by focusing on all the other hires that the IRS is planning.
“We’re hiring not just agents. We’re hiring customer service reps, accountants, agents," he said. "We have published our three-year view of staffing, which I’m very confident on because I can make key assumptions about needs and market trends. We are at 90,000 today, and I think over the next three years, we should be over 100,000, but not much over 100,000."
Asked how many tax enforcement agents there would be among this figure, Mr. Werfel replied: “We should be hiring about 8,000 total by the end of 2025.”
“You are guaranteeing that you will not increase the number of audits of people making less than $400,000 a year?” Ms. Foxx then asked.
“That is my marching order to the IRS," Mr. Werfel replied before adding that "if we fall short of that, I will be held accountable for it," hinting that, even with the best of intentions, there's a chance that the IRS might fail to make good on this promise, much like the watchdog has warned.
"But we will publish those rates,” Mr. Werfel added, referring to tax audit rates for Americans earning less than $400,000, suggesting that time will tell how closely the agency's growing army of tax enforcers will follow his orders.
"A little while ago, you said you had control of the IRS," Ms. Foxx said. "So we'll come back to you with that," she added, suggesting that Republicans intend to hold Mr. Werfel to account over the $400,000 tax audit pledge.
Some time ago, the Treasury Inspector General for Tax Administration (TIGTA), which is the watchdog overseeing the IRS, carried out a review to assess the IRS's strategy to train employees hired to audit high earners and big businesses that underreport income.
The watchdog report includes scathing criticism of the IRS for lacking a clear definition of "high-income" earners—despite the very same watchdog asking the IRS to look into developing a better definition years ago.
"The IRS does not have a unified or updated definition for individual high-income taxpayers," the watchdog said in the report, which notes that the IRS uses different definitions of "high-income" depending on context as various IRS programs address different compliance issues across different parts of the filing population.
"The high-income terminology is being used loosely inside the IRS with no common understanding of what the term means,” the watchdog said.
The watchdog recommended in 2015 that the IRS reevaluate the appropriate income thresholds for its high-income and high-wealth strategy.
But despite its recommendation to the IRS nearly a decade ago to reevaluate its income thresholds, the IRS "made no changes," the watchdog said, noting that the tax agency cited "internal data analysis results and resource constraints."
Further, the IRS continues to rely on old tax examination activity codes adopted half a century ago with the Tax Reform Act of 1976, which used a $200,000 threshold to measure high-income returns.
"This amount is equivalent to more than $1 million in 2023, but the IRS still uses $200,000 as the default high-income threshold," the watchdog said, adding that the $200,000 threshold is "no longer a reasonable standard for high earners given inflation since 2005."
Generally, the IRS uses the examination activity codes to plan the number of tax-related examinations, although, since 2019, its Large Business and International (LB&I) division has been using a modified planning method based on resource allocation.
One of the watchdog's recommendations was for the IRS to establish a definition for high-income taxpayers for examination compliance purposes and that, “at a minimum, the IRS should accept the Treasury secretary’s $400,000 directive as the new high-income floor on which IRS leadership can focus enforcement efforts.”
The IRS disagreed with the watchdog's recommendation. It asserted in a statement included in the report that a "static and overly proscriptive" definition of high-income taxpayers for audit purposes "would serve to deprive the IRS of the agility to address emerging issues and trends."
The watchdog commented on the IRS' pushback, saying that the definition need not be "static" and income thresholds should be adjusted based on economic and complexity factors—otherwise, there's a risk that the agency will break its pledge not to audit more Americans earning less than $400,000.
"When the high-income thresholds are set too low, the result can be higher numbers of inefficient examinations," the watchdog said. "When the definition is too low, the base of taxpayers earning those incomes is wider so that the IRS does many more audits in that category in order to achieve desired audit coverage."
The watchdog said that, under the circumstances of a lack of a clear definition of "high-income," the IRS would not only be conducting more audits on lower-earning Americans (contrary to its pledge not to), but it would also be less effective in its stated goal of closing the tax gap.
The watchdog also said that the IRS's lack of action in response to the TIGTA recommendation in 2015 to reevaluate its income thresholds means that the IRS is in a difficult position if it hopes to meet its pledge not to raise audit rates above historical norms for Americans earning less than $400,000.
Currently, "there is no way to identify the complete population of taxpayers that meet the criterion of $400,000 or more specified by the current Treasury Secretary," the watchdog added.
The IRS partially agreed with the watchdog's recommendation to refine its examination activity.
"The IRS agreed to identify the best method to identify and track high-income examinations as part of the work being undertaken to implement the Treasury Secretary's directive to not increase audit rates for households making less than $400,000 and small businesses," the IRS said in a statement included in the report.
But the watchdog responded by saying this isn't good enough.
"The IRS's partial agreement and planned corrective action will not satisfy the intent of our recommendation, and additional actions are needed," TIGTA said in a comment.
"The IRS should establish examination activity codes for additional TPI increments, which will help the IRS identify noncompliance at different income levels," the watchdog added. TPI stands for "taxpayer profile increment."
When The Epoch Times asked the IRS for comment on the watchdog's rejection of the IRS's response to its recommendation, the tax agency pointed to its original response included in the report.
ChatGPT maker OpenAI has signed the largest office building deal in San Francisco in five years, following comments from CEO Sam Altman earlier this year that remote work or hybrid work for startups is malarkey.
The San Francisco Chronicle reported that OpenAI closed a deal with Uber to lease two of its buildings from its Mission Bay headquarters - 1455 and 1515 Third St, representing 486,600 square feet. This is the largest office lease deal in the crime-ridden metro area since 2018.
"We are glad that in a competitive office real estate market, our employee-friendly, award-winning and sustainable buildings clearly stood out," Uber's spokesperson told the Chronicle.
The spokesperson continued, "By right-sizing our space needs we can bring our teams closer together, exercise rigorous cost management, and bring more foot traffic to the businesses of Mission Bay. This is a win-win-win."
OpenAI spokesperson Hannah Wong told the newspaper, "We are leasing two buildings from Uber in Mission Bay, which will provide the space needed for our growing team and are thrilled to continue scaling our company in San Francisco."
Earlier this year, at an event in San Francisco, Altman told attendees that the idea of remote work becoming the norm has faded:
"I think definitely one of the tech industry's worst mistakes in a long time was that everybody could go full remote forever, and startups didn't need to be together in person and, you know, there was going to be no loss of creativity.
"I would say that the experiment on that is over, and the technology is not yet good enough that people can be full remote forever, particularly on startups."
Altman's move to expand operations in San Francisco's beleaguered office market won't save it as the vacancy rate has topped a record high 35%.
Mayor London Breed, who had to recently reverse failed progressive policies - after sparking a violent crime wave - applauded OpenAI's "major investment" in the city.
The irony here is that AI could displace millions of jobs, especially those in white-collar industries, and force many of them from remote working jobs back into the office.
Authored by Tom Ozimek via The Epoch Times (emphasis ours),
Newly minted House Speaker Mike Johnson (R-La.) said President Joe Biden lied about his involvement in his family's business affairs and engaged in a coverup, with the Louisiana Republican vowing that the impeachment inquiry into the president would continue as he now wields the power of the gavel.
Mr. Johnson made the remarks in an Oct. 26 interview with Fox News' Sean Hannity, in which he said that removing President Biden from office is a real possibility in light of the evidence that has emerged suggesting that the president may have engaged in bribery.
"We have the receipts on so much of this now," Mr. Johnson said, referring to evidence that includes bank records showing tens of millions of dollars paid to various shell corporations linked to Biden family members, including the president's son, Hunter Biden.
While President Biden has denied any involvement in his son's business affairs, the GOP-led House Oversight Committee has released over 20 examples of evidence tying the president to Hunter Biden's business dealings.
"There’s a lot of smoke here, and we’re going to find out very soon how big the fire is," Mr. Johnson said.
Records obtained through the panel's subpoenas to date reveal that the Bidens and their associates have received over $20 million in payments from a variety of foreign entities, with the committee listing these in a timeline of the Bidens' "influence peddling."
"It's a real problem," Mr. Johnson told Mr. Hannity, adding that the evidence that has emerged thus far is the reason the Republicans launched an impeachment inquiry into President Biden in mid-September.
"That's the reason that we shifted into the impeachment inquiry stage on the president himself because if, in fact, all the evidence leads to where we believe it will, that's very likely impeachable offenses," he said. "That's listed as a cause for impeachment in the Constitution—bribery and other high crimes and misdemeanors."
"Bribery is listed there," he continued, adding that the evidence the GOP has collected so far "looks and smells a lot like that."
At the same time, Mr. Johnson threw cold water on the idea that Republicans would push for impeachment before all the evidence has been thoroughly vetted and a solid case is in place.
"I know people are getting anxious, and they're getting restless, and they just want somebody to be impeached," he said. But "we don't do that, like the other team," he said. "We have to base it upon the evidence and the evidence is coming together, we'll see where it leads."
"We're going to engage in due process, because, again, we're the rule-of-law party," Mr. Johnson said.
While on the campaign trail, then-presidential candidate Mr. Joe Biden insisted that he had no role whatsoever in his son's business dealings. He would later state publicly that he had no involvement in or knowledge of his family's business affairs.
Mr. Johnson told Mr. Hannity that he believes the evidence that has emerged thus far shows that the president "lied directly multiple times about his involvement and knowledge of his son's business dealings. We all know that now," before adding that President Biden "has been involved in covering it up."
The foundation of the president's repeated denials has been shaken by a growing pile of evidence, however. First, there were the explosive revelations of the contents of the Hunter Biden laptop. Then, there were statements made by Hunter Biden's former business associate Tony Bobulinski, and more recently a series of bombshell disclosures made by Devon Archer, former business partner of the president's son.
A readout of some of Mr. Archer's key revelations from July 31 closed-door testimony before Congress include that Hunter Biden put his father, who was then vice president, on speakerphone during business meetings over 20 times and that the elder Biden was put on the call to sell "the brand." While Republicans saw Mr. Archer's testimony as proof that the president lied when he denied involvement in his son's business dealings, the president's supporters insisted the conversations amounted to "casual" small talk and that, at most, Mr. Hunter Biden had peddled the "illusion of access" to his father rather than the real deal.
The White House downplayed the significance of Mr. Archer's testimony, with spokesperson Ian Sams saying it failed to provide the kind of bombshell evidence of wrongdoing that Republicans claimed.
“It appears that the House Republicans’ own much-hyped witness today testified that he never heard of President Biden discussing business with his son or his son’s associates or doing anything wrong,” Mr. Sams said in a statement at the time.
But later, in an interview with Tucker Carlson, Mr. Archer said that President Biden's claims of having no involvement in his son's business dealings are "categorically false."
"He was aware of Hunter's business. He met with Hunter's business partners," Mr. Archer said. He insisted that the claim that the president was in no way involved in his son's business affairs is "not factually right."
More recently, congressional investigators found evidence of a $200,000 "direct payment" to President Biden from family members, with some Republicans saying this is further evidence of the president's alleged involvement in his family's business affairs.
"This summer, Joe Biden said: 'Where's the money?'" House Oversight Committee Chairman Rep. James Comer (R-Ky.) said in an Oct. 20 statement. "Well, we found some."
In announcing the impeachment inquiry in mid-September, then-House Speaker Kevin McCarthy (R-Calif.) said President Biden lied about his knowledge of his family’s foreign business dealings. "Eyewitnesses have testified that the president joined on multiple phone calls and had multiple interactions, dinners, resulting in cars and millions of dollars into his son’s and his son’s business partners' [accounts]," Mr. McCarthy said at a Sept. 12 press conference.
“We know that bank records show that nearly $20 million in payments were directed to the Biden family members, and associates, through various shell companies. The Treasury Department alone had more than 150 transactions involving the Biden family and other business associates that were flagged as suspicious activity by U.S. banks," he added.
During the first impeachment hearing on Sept. 28, witnesses said that evidence uncovered thus far suggests misconduct on the part of the Biden family, though more is needed to support impeaching the president.
"While I believe that an impeachment inquiry is warranted, I do not believe that the evidence currently meets the standard of a high crime and misdemeanor needed for an article of impeachment," Jonathan Turley, a law professor at the George Washington University Law School, testified.
In a memorandum to Republicans released ahead of the first hearing, GOP leaders noted that they've gathered evidence that the Biden family and their associates received more than $24 million from 2014 to 2019. President Biden served as vice president until early 2017.
The money was transmitted "through an exceedingly complex chain of transactions that made it difficult to track the flow of these funds," they said in the memo.
After the BoJ's malarkey overnight, it was Europe's turn to make economic headlines this morning and sure enough it did not disappoint (well it did, but vol traders were excited).
In the third quarter the Eurozone economy contracted by 0.1% compared to the second quarter, below expectations of 0.0%. This is the first decline since Q2 2020 (amid the COVID lockdowns).
There is wide dispersion in the growth figures published so far for individual member states, ranging from -2.5% q/q in Lithuania to +0.5% q/q in Belgium.
Among the largest member states, Spain (+0.3% q/q) and France (+0.1 q/q) managed to grow, while Europe’s biggest weak spot is also its largest economy, Germany, which revealed Monday that output shrank by 0.1% in the third quarter.
Additionally, Euro-area inflation eased to its lowest level in more than two years as the bloc’s economy shrank following an unprecedented ramp-up in interest rates.
Consumer prices rose 2.9% in October - down from the previous month’s 4.3% and better than the 3.1% median estimate in a Bloomberg survey analysts.
Rabobank economists wrote in a note this morning after the data that they believe the Eurozone will enter a mild recession, followed by a period of sluggish growth.
Although it is rather difficult to precisely estimate the exact effect, undoubtedly, higher interest costs should put a lid on growth. Meanwhile, the labour market will likely loosen somewhat, but we expect that it remains structurally tight.
This both puts a floor under an economic contraction (since consumers can uphold their consumption) and a lid on economic growth as companies struggle to find qualified workers.
Foreign demand is unlikely to be able to substantially lift the Eurozone growth figure, as we expect a struggling Chinese economy and a US recession in 23Q4-24Q1.
However, they warn that there are some serious risks to this rather benign outlook :
The most obvious one being a further escalation of the war in the Middle-East, which could lead to seriously higher energy prices.
The economic impact of higher energy prices could be bigger than it was last time around. Governments no longer have the same fiscal firepower to cushion the blow, due to the increased cost of borrowing, whilst at the same time most consumers can’t rely anymore on a glut of pandemic savings. Indeed, in most countries, household savings adjusted for inflation are close to their pre-pandemic level.
Meanwhile, companies are also in a worse position to handle a new energy price shock. They already face (or are about to face) significantly higher financing costs and increasing labour costs, whilst the slowing economy likely means that they can’t fully charge those higher costs to their customers.
The economic price of a renewed energy shock could therefore be larger.
The GDP reading stands in stark contrast to the US, which last week reported bumper growth between July and September, while also managing to bring down inflation, but after all that... the euro is rallying against the dollar...
Source: Bloomberg
Why is the euro rallying?
Bloomberg's Simon White has some thoughts.
GDP disappointed slightly to the downside, as did CPI, although expectations were skewed to the downside by softer-than-expected German inflation data on Monday.
GDP and especially CPI, though, are lagging economic indicators, and give us little insight about what is going to happen.
Leading data for inflation and growth have shown nascent signs of turning higher in Europe, which would indicate a re-acceleration in inflation and less negative economic growth than is currently anticipated.
On top of that, the ECB will be concerned about wage growth, which in real terms is positive and rising quickly.
Euribor futures are basically unchanged after the data, which makes sense given it is only telling us what has already happened. But the cuts priced in for next year are looking vulnerable if leading data maintains its momentum.
Simply put, leading data (not the lagging data released today) for the eurozone showed early signs of stickier inflation and a stabilization in the economic outlook. If sustained, that would mean market expectations for a rate cut by June are premature.
Futures were higher and European bourses were solidly in the green on the last day of the month, extending yesterday's blistering rally which sent the S&P 1.2% higher and which took place after most of the mutual-fund year-end tax loss selling had exhausted itself during last week's rout. As of 7:45am, S&P futures were higher by 0.2%, Nasdaq 100 futs gained 0.1%, while Europe's Estoxx 50 outperforms, higher by around 1% on the day with materials sector outperforming. Treasury yields are lower after the US Treasury reduced its estimate for federal borrowing for the current quarter, citing stronger-than-expected revenue; the dollar was weaker against most major currencies, except the yen. Oil prices are edging higher after dropping in the prior session. Israel stepped up ground operations in Gaza and struck more targets in Lebanon and Syria overnight.
In premarket trading, Samsung Electronics profit beat expectations and it pointed toward a memory chip recovery, AB InBev also outpaced estimates and the performance of its peers, while Vans and North Face owner VFC plunged more than 6% after pulling its full-year guidance. Sarepta Therapeutics cratered 46% after saying results from its Embark Phase 3 study of Elevidys in patients with Duchenne muscular dystrophy between the ages of 4 through 7 years missed its main goal. Here are some other notable premarket movers:
European stocks are also higher. The Stoxx 600 gains 0.7% with the real estate subindex the biggest outperformer, fueled by a continued retreat of bond yields. Swiss pharma giant Roche plunges on a disappointing drug study, pulling the sector lower, while fossil fuel giant BP slides after its third-quarter report missed expectations. Here are the most notable movers:
And while stocks may struggle to keep their early gains, the biggest mover overnight was the Japanese yen which plunged the most in two months after the Bank of Japan made only minor changes to its policy settings, disappointing many who had expected more after the bank had leaked a far more bombastic report to the Nikkei. In its wishy-washy announcement, the BOJ halfheartedly ended YCC, saying the 1% cap on the 10Y would now be a reference rate, inviting bond bears to promptly test out how much higher yields will rise. Meanwhile, the implosion in the yen is sparking even more inflation which as noted below, is already crushing Kishida's approval polling, and ensures that there will very soon be a major scandal between the Japanese government and the BOJ.
“This is the first critical test of whether Japanese officials care about the speed of JPY depreciation or specific levels,” said Simon Harvey, head of fx analysis at Monex Europe. “Thankfully for them lower Treasury yields are delaying any urgency for an answer, but any unexpected hawkish comments from Chair Powell tomorrow or a larger issuance in longer-date Treasuries could force the issue as soon as tomorrow.”
“It looks like loose monetary policy is likely to stay in place for some time to come,” he wrote in a note. “They are now in a corner and cannot afford to allow long-term bond yields to rise much further.”
The prospect of a weaker yen and negative interest rates means Japanese equities are in line for more gains, according to Charles-Henry Monchau, chief investment officer at Bank Syz. The Nikkei 225 added 0.5% on Tuesday, bringing its year-to-date rally to 18%. Japan's gains stood in stark contrast to the rest of the global equity market. The S&P 500 is on track for a 2.8% retreat in October, a third monthly loss.
Elsewhere in Asia, stocks dipped led by Chinese equities, after data showed the nation’s factory activity fell back into contraction in October. The MSCI Asia Pacific Index slipped as much as 0.6%, erasing a small early advance after the China PMI figures, which also showed an expansion of the services sector unexpectedly eased. Consumer discretionary and materials were the worst performers. Earnings remain a big focus in what is the second-busiest week this reporting season for Asia. China’s Ganfeng Lithium and Japan’s Panasonic were among the biggest losers on the regional gauge after their results.
Equities in Japan advanced after the central bank announced its decision to keep its easy monetary policy, making only minor changes to its yield-curve-control settings.
In FX, the Japanese yen tumbled over 1% versus the dollar after the Bank of Japan tweaked its yield curve control policy but disappointed hawks by once again taking a more dovish way out, one which is sure to spark more inflation and lead to a collapse of the already extremely unpopular Kishida government. The euro was is one of the best performing G-10 currencies meanwhile, rising 0.5%, despite euro-area CPI coming in below forecasts and GDP shrinking back into contraction!
In rates, treasuries rallied along with bunds and gilts. US 10-year yields fall 8bps to 4.82%, bull-flattening with futures near top of day’s range into early US session, with yields richer by 3bp to 8bp across the curve. Treasuries were well supported overnight, following the Bank of Japan’s modest policy tweak, saying the 1% level for JGB 10-year yields is now a reference point and adopts a flexible bond-buying stance, disappointing investors who expected a clearer policy signal. Core European rates lag Treasuries, while bunds held gains after Euro-area inflation eased to its lowest level in more than two years. US yields richer by up to 8bp across long-end of the curve, flattening 5s30s spread by 1.8bp on the day — 2s10s spread tightens over 4bp vs. Monday close with front-end underperforming; US 10-year yields around 4.82%, richer by 7.5bp on the day and outperforming bunds and gilts by 3.5bp and 0.5bp in the sector.
In commodities, oil prices rebounded after a steep drop yesterday as investors tracked developments in the Middle East. Israel struck more targets in Lebanon and Syria overnight, while stepping up its ground operations in Gaza. West Texas Intermediate rose 1% to near $83 a barrel. Spot gold climbed 0.1%.
Bitcoin was flatish on the session, holding around the $34.5k mark, with action contained and very much rangebound thus far as we await key US catalysts including the ECI before the week's main Tier 1 events begin from a US perspective.
US economic data includes 3Q employment cost index (8:30am), August FHFA house price index, S&P Case-shiller house prices (9am), October MNI Chicago PMI (9:45am), consumer confidence (10am) and Dallas Fed services index (10:30am)
To the day ahead now, data releases include the Euro Area flash CPI release for October, as well as the Q3 GDP release, both of which came below expectations, with GDP once again contracting. Over in the US, there’s the Employment Cost Index for Q3 (8:30am), August FHFA house price index, S&P Case-shiller house prices (9am), October MNI Chicago PMI (9:45am), consumer confidence (10am) and Dallas Fed services index (10:30am). From central banks, there are several ECB speakers including Vice President de Guindos, and the ECB’s De Cos, Visco, Muller and Nagel. Lastly, today’s earnings releases include BP, Pfizer and Caterpillar.
Market Snapshot
Top Overnight News from Bloomberg
A more detailed look at global markets courtesy of Newsquawk
APAC stocks traded mixed amid a deluge of data releases at month-end including disappointing Chinese official PMIs, while participants also digested a slew of earnings releases and the conclusion of the BoJ’s live meeting. ASX 200 finished flat as strength in real estate, financials and the consumer sectors was offset by underperformance in mining stocks and after the weak factory activity data from Australia’s largest trading partner. Nikkei 225 was initially choppy after Industrial Production and Retail Sales missed estimates although the index was later supported following the BoJ policy announcement in which the central bank announced a less aggressive than anticipated tweak to YCC. Hang Seng and Shanghai Comp were pressured following disappointing PMI data which showed China’s factory activity returned into contractionary territory for October, while there were also plenty of earnings releases including from the likes of Bank of China, BYD and PetroChina.
Top Asian News
European bourses are in the green, Euro Stoxx 50 +0.8%, following a mixed APAC handover and solid US lead with the region unreactive to the latest CPI & GDP metrics. APAC trade was mixed on account of numerous data points including soft Chinese official PMIs. Sectors are mostly firmer though Energy lagging given benchmark pricing and a poorly received update from BP while Healthcare slips after a disappointing drug update from Roche. At the other end of the spectrum, Chemical names outperform given cost-cutting measures from BASF. Stateside, futures are modestly firmer and have been moving directionally with European peers ahead of US data and a handful of earnings, ES +0.3%. Caterpillar Inc (CAT) Q3 2023 (USD): EPS 5.52 (exp. 4.79), Revenue 16.8bln (exp. 16.59bln), Financial Rev 822mln (exp 766mln), Adj. Operating Income 3.50bln (exp 3.09bln).
Top European News
FX
Fixed Income
Commodities
BOJ
Geopolitics
US Event Calendar
DB's Jim Reid concludes the overnight wrap
On Halloween, the Bank of Japan (BOJ) has decided not to scare markets too much this morning and has only tweaked its yield curve control settings marginally by allowing 10yr Japanese government bond yields to increase above 1% - redefining it as a loose "upper bound" rather than a rigid cap. The central bank’s modest policy shift has led to a decline in the yen, slipping as much as -0.76% to 150.17 per dollar as investors were pricing in the risk of a greater change in the BOJ’s accommodative monetary policy stance. The Nikkei (+0.49%) is seeing gains as weakness in the yen is helping provide an additional boost. Meanwhile, yields on 10yr JGBs reached 0.957% early in Asia trading (from 0.89% at the previous close) before paring back slightly to 0.942% as we type and ahead of the press conference. Inflation forecasts have been increased but it still feels to us that the BoJ are very optimistic about the likelihood of hitting the 2% target so if we're correct the YCC will be abandoned soon.
Moving on to other Asian equities, markets are mostly trading lower this morning after the latest batch of PMI data from China showed economic momentum continuing to wane in the world’s second biggest economy at the beginning of fourth quarter (more on this below). In terms of specific index moves, the Hang Seng (-1.77%) is leading losses across the region with the KOSPI (-1.32%), the CSI (-0.66%) and the Shanghai Composite (-0.38%) also trading in the red. S&P 500 (-0.38%) and NASDAQ 100 (-0.57%) futures are moving lower after a strong day yesterday. Yields on 10yr USTs (-2bps) are slightly lower at 4.87% as I type .
Coming back to China, the official manufacturing PMI unexpectedly contracted to 49.5 (50.2 expected) in October from 50.2, signalling renewed weakness in the sector. At the same time, the non-manufacturing PMI also dropped to 50.6 (52 expected) from 51.7 in September. The disappointing data suggests that the economy is still struggling despite better-than-expected Q3 GDP data reported recently. This might partly explain the stimulus package last week. Elsewhere, retail sales in Japan rose +5.8% y/y in September (v/s +5.9% expected), softening after four straight months of accelerating growth. It follows an expansion of +7.0% in August. Meanwhile, industrial output shrank -4.6% y/y in September and worse than expectations of -2.3% whilst the jobless rate dropped to 2.6% as expected in September from 2.7% previously.
Before the Bank of Japan announcement, risk assets saw a solid rally yesterday as investors grew hopeful that a material escalation in the Middle East would be avoided for now, particularly relative to concerns last Friday. That helped drive a major decline in oil prices, with WTI Crude (-3.78% to $82.31/bbl) erasing its rise since Hamas’ attack on Israel on October 7. Moreover, the Israeli shekel (+1.09%) saw its best daily performance in that time against the US Dollar, whilst gold (-0.42%) also lost ground, having closed above $2,000/oz on Friday for the first time in months. So in terms of the assets most sensitive to an escalation, it was one of the largest moving days since the current conflict began.
That backdrop helped support a recovery in global equities, with the S&P 500 (+1.20%) putting in its strongest session in two months after losing ground in 8 of the 9 previous sessions. However, it was fixed income that saw some of the more interesting moves, since yields on 10yr Treasuries were back up another +5.8bps to 4.89% ahead of the Fed’s decision and the Treasury refunding announcement tomorrow. Yields briefly rallied by c. 3bps after the Treasury reduced its net borrowing estimate for the current quarter to $776bn from the $852bn it had expected back in late July. However, this estimate was close to our rates strategists’ expectations, and bonds more than reversed the move by the close.
The 2s10s Treasury curve steepened another +0.8bps to close at -16.2bps. That’s the steepest that the 2s10s curve has been since July 2022, and means that the curve has steepened by over 60bps in just over a month. Clearly we’ve still got a bit further to go before the curve has a positive slope again, but if we did get back into positive territory, that would end the longest sustained period of inversion for the 2s10s yield curve since 1980. Remember from my CoTD last week here that every recession in the last 70 years has followed an inversion that had steepened up considerably from the most inverted point.
Over in Europe, sovereign bonds outperformed after the flash October CPI prints for Germany and Spain both surprised on the downside. In Germany, CPI fell to 3.0% on the EU-harmonised measure (vs. 3.3% expected), which is the lowest it’s been since June 2021. And in Spain, it came in at 3.5%, which was two-tenths higher than the September figure, but still beneath the 3.8% expected by the consensus. So that was some good news ahead of the Euro Area-wide CPI print today, which our European economists now see tracking at 3.0% for headline and 4.1% for core (vs BBG consensus at 3.1% and 4.2%, respectively). The data helped yields fall across the Euro Area with those on 10yr bunds (-0.9bps), OATs (-1.7bps) and BTPs (-6.9bps) all coming down on the day. The 10yr BTP-Bund has declined by a sizeable 11bps in the three sessions since last week’s ECB meeting.
Alongside the inflation data, we had the latest growth numbers out of Germany, which showed Q3 GDP only contracted by -0.1% (vs. -0.2% expected), and the Q1 and Q2 figures were revised upwards as well. But even with the better-than-expected news, this is hardly showing a booming economy, and our German economists point out that GDP has still stagnated over the last 18 months. They keep their full-year growth forecast for 2023 at -0.5% (link here) with 2024 at +0.3%, expecting growth to remain around stagnation in Q4-23 and Q1-24.
With all that in mind, equities put in an strong performance yesterday, with the S&P 500 (+1.20%) and Europe’s STOXX 600 (+0.36%) both moving higher on the day. The NASDAQ rose by +1.16%. It was broad-based advance for US equities, with 23 of 24 S&P industry groups rising on the day. The one exception was autos (-4.09%), which were weighed down by a -4.79% decline for Tesla on concerns over Chinese competitors, UAW agreements elsewhere in the sector, and production cuts from battery maker Panasonic which hinted at softer EV demand. The small cap Russell 2000 underperformed the broad rally (+0.63%) after hitting its lowest level since November 2020 on Friday. As my CoTD showed here yesterday, the Russell 2000 is now at levels in real price terms that it first surpassed in 2015. So beneath the surface and without the Magnificent Seven, US equities continue to correct from very high valuation with inflation helping in that process.
Elsewhere yesterday, the UK housing market showed little sign of a revival, as mortgage approvals in September fell to an 8-month low of 43.3k (vs. 44.5k expected). Furthermore, the latest M4 money supply data showed a year-on-year contraction of -3.9%, which is the fastest decline since August 2012. The releases come ahead of the Bank of England’s policy decision on Thursday, where they’re widely expected to keep rates on hold at 5.25%.
To the day ahead now, and data releases include the Euro Area flash CPI release for October, as well as the Q3 GDP release. Over in the US, there’s the Employment Cost Index for Q3, the Conference Board’s consumer confidence for October, the MNI Chicago PMI for October, and the FHFA house price index for August. From central banks, there are several ECB speakers including Vice President de Guindos, and the ECB’s De Cos, Visco, Muller and Nagel. Lastly, today’s earnings releases include BP, Pfizer and Caterpillar.
Shares of JetBlue Airways Corp. slid 7% during premarket trading in New York. This drop came after the budget airline warned about increasing headwinds that are anticipated to result in a larger-than-anticipated loss for the fourth quarter. Additionally, the company fell short of Wall Street estimates for both loss and revenue in the third quarter.
"While we faced challenges in the quarter, including significant weather-related impacts and rising fuel prices, our Crewmembers rose to the occasion, focusing on what we can control to mitigate these headwinds and provide our customers with great service," Robin Hayes, JetBlue's CEO, wrote in a statement, adding the airline is positioned for less turbulence "in 2024 and beyond."
JetBlue reported a loss of $153 million, equivalent to 46 cents per share, in the third quarter. This compares with the previous year's third quarter when the airline had a net income of $57 million, or 18 cents per share. The adjusted loss for the recent quarter was 39 cents per share, exceeding the FactSet consensus estimate, which predicted a loss of 25 cents per share. Revenue also fell 8% to $2.35 billion, below FactSet consensus estimate of $2.38 billion.
Third Quarter Results:
Adjusted loss per share 39c, estimate loss/shr 28c
Operating revenue $2.35 billion, estimate $2.37 billion
Passenger operating rev. $2.20 billion, estimate $2.23 billion
Adjusted net loss $129 million, estimate loss $91.7 million
Adjusted Ebitda $32.0 million, estimate $64 million
Available seat miles 17.36 billion, estimate 17.34 billion
Revenue passenger miles 14.78 billion, estimate 14.65 billion
Load factor 85.1%, estimate 84.4%
Average passenger fare $201.73, estimate $198.16
Operating expense per available seat mile $14.45, estimate $14.12
Yield per passenger mile 14.89c
Joanna Geraghty, JetBlue's President and COO, said:
"We continue to see healthy travel demand during peak periods and the fourth quarter holidays. However, industry capacity is outpacing domestic demand during off peak travel periods.
"For the fourth quarter, our growth will be driven primarily by international as we proactively work to manage our capacity and reduce schedules in off-peak periods."
Fourth Quarter Forecast:
Sees adjusted loss per share 35c to 55c, estimate loss/shr 21c
Sees revenue -6.5% to -10.5%
Sees available seat miles +0.5% to +3.5%
Year Forecast:
Sees adjusted loss per share 45c to 65c, saw EPS 5.0c to EPS 40c, estimate loss/shr 35c (Bloomberg Consensus)
Sees revenue +3% to +5%, saw +6% to +9%
Sees available seat miles +5% to +7%, saw +5.5% to +8.5%
Besides JetBlue, several other airlines have warned about slowing US air travel demand:
Investors have dumped airline stocks since mid-July on souring demand outlooks from carriers.
At the start of October, Morgan Stanley US equity strategist Michelle Weaver told clients to expect a "chilly season for travel" as headwinds mount for consumers.
Shares of Caterpillar are tumbling more than 5% in premarket as investors fear the industrial bellwether's latest report indicates machinery demand peaked. That, as Bloomberg's Joe Deaux writes, "bodes ill for the economic outlook, already facing headwinds from the Fed’s aggressive tightening."
A quick look at Q3 earnings, which actually were stronger than expected after Caterpillar posted better-than-expected revenue in its construction equipment business, while sales from mining as well as its energy and transportation businesses were weaker than analysts’ anticipated.
Analysts warned that sales in Caterpillar’s biggest business markets — construction and mining — would be a drag on third-quarter earnings, though they also suggested the weakness should be offset by stronger growth in energy and transportation. Helping damp the slowdown has been healthy end-market demand for Caterpillar and other machinery makers.
And while revenue and profit in the third quarter were better than expected...
... the industrial bellwether said in its earnings presentation slides that its order backlog plunged $2.6 billion from the prior quarter.
Not only did the backlog drop Q/Q, but it also slumped by $1.9 billion YoY, which is the first decline the company has reported since 2020 as it battled through global pandemic shutdowns. The collapsing backlog for the company - which is viewed as an economic bellwether because its machines dot construction, mining and energy sites around the world - is an ugly sign for future demand.
CAT shares tumbled 5% in premarket trading, underperforming the S&P by double digits and sending the company back in the red for the year.
CAT's earnings presentation is below (pdf link)
US employment costs unexpectedly accelerated in the third quarter, heightening concerns that a strong labor market risks keeping inflation above the Fed’s target.
The employment cost index, a broad gauge of wages and benefits, increased 1.1% in the July-to-September period (above the 1.0% rise expected) after rising 1% in the second quarter.
Source: Bloomberg
Compared with a year earlier, the ECI was up 4.3%, the smallest annual advance since the end of 2021. Still, that’s well above the typical pace seen in the years before the pandemic.
Source: Bloomberg
While wage growth picked up slightly within private industry, salaries at state and local governments surged.
Source: Bloomberg
We already knew this was happening...
Why oh why is wage/price inflation so sticky?
— zerohedge (@zerohedge) October 27, 2023
Well, it's not because of private workers: here wages and salaries rose just 3.9%, the lowest in 2.5 years.
It's all government workers, where wage growth was 7.8%, just shy of a record high! pic.twitter.com/v46KyqekMg
Bear in mind that while there are a number of other earnings metrics published more frequently - including average hourly earnings figures from the monthly jobs report - economists tend to prefer the ECI because it’s not distorted by shifts in the composition of employment among occupations or industries.
This prompted a spike higher across the yield curve with the short-end affected most...
Source: Bloomberg
Bidenomics and the Re-Inflation Reduction Act is buggering up The Fed's cunning plan.
Home prices rose for the 5th straight month in August (the latest data released by S&P Global Case-Shiller today), up 1.01% MoM (better than the 0.8% rise expected).
Source: Bloomberg
The ongoing MoM rises pushed the YoY gain in home prices at America's 20 largest cities up 2.16%, the most since January 2023. The National Home Price index rose even faster at 2.57% YoY.
Chicago, New York, and Detroit all saw major home price rises (+5.0%, +4.9%, and +4.8% YoY respectively). Las Vegas, Phoenix, and San Francisco remain lower YoY (-4.9%, -3.9%, -2.5% respectively).
But, judging by the resumption of the rise of mortgage rates since the Case-Shiller data was created, we would expect prices to also resume their decline...
Source: Bloomberg
Inventory is going nowhere, buyers and sellers are stuck (affordability for the former and the mortgage cost gap for the latter), and The Fed isn't cutting rates any time soon. Not pretty...
Authored by Simon White, Bloomberg macro strategist,
A recovery in US stocks into year-end hinges on whether an expected strong upswing in earnings growth will be enough to counteract a weakening technical and liquidity backdrop.
Information is surprise. This was a concept formulated by Claude Shannon in his groundbreaking Information Theory, the foundation of digital computing. The true content of information comes not from what is expected, but from what is unexpected. Nowhere is this more valid than in markets, which have their most outsized moves when there are surprises.
They can be endogenous and exogenous, and naturally a rapid escalation in the conflict in the Middle East would represent a negative surprise of the latter type for the market. But if we focus on endogenous surprises, then there is potentially a sizable positive one in the pipeline in the shape of US earnings.
That’s signaled by multiple leading indicators, which are pointing to an increasingly pronounced and protracted recovery in large-cap earnings growth, which fell to flat from an annual rate of more than 50% last year.
First, there is the manufacturing ISM, which has been persistently rising all summer. This points to earnings surprising to the upside in the coming months, with trailing earnings beginning to outperform forward ones.
The manufacturing ISM crops up all over the place in macro analysis because it’s one of the best standalone leading indicators for global stock markets and the economy.
Tailwinds for earnings are also in the pipeline from a weaker dollar. It has strengthened in recent months, but economy-market relationships operate with lags. The lagged impact from the weaker dollar since last year is unlikely to have had its full positive impact on US earnings yet.
There should be more where this came from as the dollar is likely to re-establish its weakening trend based on leading indicators for the currency.
More companies have already been positively surprising on their earnings, which also points to stronger profit growth. We’ll get more color on this as another raft of US companies announce their 3Q earnings this week.
Additionally, there are increasing signs that the US may avoid a recession and global growth will experience an upturn. The exports of small, open economies are reliable leading indicators for the world economy. South Korean exports look to have bottomed and started turning up, which typically leads to a rise in the earnings growth of large-cap US companies.
A rise in earnings, though, is not a shoo-in for higher prices. The P/E ratio at least needs to remain steady. Leading indicators are pointing in that direction just now, but a re-acceleration in inflation, which I expect at some point next year, will eventually be a negative for P/E ratios.
But before that, liquidity is a burgeoning risk for stocks. First, there is excess liquidity, the difference between real-money growth and economic growth. Rising excess liquidity has been a key tailwind for risk assets this year, but it’s showing the first signs of rolling over. If that gathers momentum, then what has been a positive for stocks will morph into a headwind, counteracting in whole or in part the tailwind from an upswing in earnings.
Liquidity will also be affected by the decisions of the Treasury, as the size of the fiscal deficit increasingly shifts the US toward fiscal dominance, where government borrowing and spending decisions overwhelm monetary policy.
As important as the amount Treasury borrows is how much its issuance is skewed toward bills. That’s been the case this year, which has meant money market funds (MMFs) have been able to absorb most of the new borrowing. MMFs have bought bills by drawing down on the RRP (reverse repo) facility, cushioning what would otherwise have been a large hit to liquidity.
Bills are now more than 20% of total UST debt outstanding, a level around where the Treasury has aimed to cap issuance in the past. A skew back toward bond issuance and away from bills is likely soon (confirmed by the Treasury) and is a non-trivial risk for the market as borrowing necessarily moves away from MMFs – holders of low-velocity reserves – to holders of high-velocity reserves such as US households.
The Marketable Borrowing Estimates released on Monday indicated a bond-bearish skew to expected issuance, but it’s on Wednesday with the recommending financing schedules we’ll get more information on the breakdown between bond and bill issuance.
To add to risks, the technical backdrop for the S&P is deteriorating. Along with several measures of breadth, one of the best – and simplest – guides to the medium-term trend of the market is on the threshold of turning negative.
The 13-26 week moving-average crossover for the S&P turned positive in February, about a month before the index bottomed and then began its rally. The crossover is very close to going back to negative-trend territory, when the market tends to struggle or sell off.
Earnings are poised to surprise strongly to the upside in the coming months. But it’s hard to be sure whether that will be enough to catalyze a strong year-end rally given the conflicting messages from technicals and liquidity.
All in, it’s difficult to disagree with Stanley Druckenmiller’s comments to Paul Tudor Jones at last week’s JP Morgan/Robin Hood conference: “It’s not exactly an environment that excites me about paying 20%-30% above the multiple for equity prices … I don’t find the equity market as a whole that interesting.”
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