Month: July 2024

Authored by Jonathan Turley,

University of Virginia Assistant Professor Sethunya Mokoko took a break from teaching students to get the word out this week that the entire assassination attempt of former President Donald Trump was a staged event for suckers. Mokoko explained that it was just a ploy to get the votes of “idiots.”

He, however, is available to offer sage-like clarity that the Secret Service, local police, and the Trump campaign conspired to fake the assassination, kill a bystander, and seriously wound others to get the sucker vote.

He is not alone in this theory while others on the left are simply bemoaning that Thomas Matthew Crooks missed.

In his tweet, Mokoko said that security ”ignored [Crooks] because trump & secrete (sic) service staged theatrics to win idiots’ vote.”

So let me get the conspiracy down.

The Secret Service allowed a kid who flunked out of the high school shooting club as a bad shot to fire multiple rounds at the former president from a sloped roof at 130 yards in the hope that he would only wing him?

Mokoko previously taught at Clemson University, Gold West College, Long Beach City College and University of California, Long Beach, according to his Linkedin page.

His faculty bio states that Mokoko teaches “Race, Rhetoric, and Social Justice” and “Writing about Culture and Society.”

His focus is “teaching students to appreciate and value social justice rhetorics across media; to become rhetorically listening writers, readers, and viewers; and to understand how global rhetorics shape and define agency and identification.”

He is not alone. Within minutes of the assassination attempt, the staging theory was going viral and has been picked up by many on the left. For example, actress Amanda Seales took to social media to claim that Trump used fake stage blood and sound effects to stage his assassination attempt.

“That sh** was more staged than a Tyler Perry production of Madea Runs for President. I lived in Harlem long enough to know that gunshots do not sound like making popcorn on the stove.”

She does not explain how local fireman Corey Comperatore died from the fake bullets.

Others fueled the stage conspiracy theory.

Tennessee state Rep. Antonio Parkinson posted a statement that “I certainly hope this is not a staged act. But.”

Colorado state Rep. Steve Woodrow, D-Denver, declared “The last thing America needed was sympathy for the devil but here we are.”

Aberdeen, Wash., Mayor Douglas Orr declared “The shooter is dead so we will never know if this was staged. I hope I’m wrong, but because of his record of deceit, that’s the first thing that came to mind.”

Still others accepted that the shooting was real, but complain that Crooks should not have missed. Bellarmine University English instructor John James posted on Instagram: “If you’re gonna shoot, man, don’t miss.”

Jack Black’s Tenacious D partner Kyle Gass made a wish while performing with Black that the next assassination would not miss. Various people joined in on regretting that the assassination was not successful.

This is the very face of the age of rage and shows how it is both addictive and contagious.

Authored by Jonathan Turley,

“This is how republics collapse.” Those ominous words captured the hand-wringing, hair-pulling reaction to the dismissal of the Florida case against Donald Trump by Judge Aileen Cannon.

It was not just that she reached a conclusion long supported by some conservative lawyers and a Supreme Court justice.

To rule in favor of Trump in such a dismissal is, once again, the end of Democracy as we know it.

The 93-page order methodically goes through the governing cases and statutes for the appointment of prosecutors. There has long been a debate over how an attorney general like Merrick Garland can circumvent the constitutional process for the appointment of a U.S. Attorney and unilaterally elevate a citizen to wield even greater power.

With the expiration of the Independent Counsel Act in 1999, attorneys general have long relied upon their inherent authority to appoint “inferior officers” to special counsel investigations. The issue has never been conclusively ruled upon by the Supreme Court, even though lower courts have rejected this challenge.

The Trump ruling is certainly an outlier and the odds favor prosecutor Jack Smith on appeal. Many point to a challenge in 2019 in the D.C. Circuit to the appointment of Robert Mueller. The court found that “binding precedent establishes that Congress has ‘by law’ vested authority in the Attorney General to appoint the Special Counsel as an inferior officer.”

That is the view of many lawyers and judges. However, Judge Cannon disagreed and found a lack of clear authority for both the appointment and the appropriations used for Smith.

Nevertheless, legal experts were incredulous and irate. Jed Shugerman, a Fordham Law professor, is quoted as expressing shock that Judge Cannon is essentially saying, “I’m not bound by the DC Circuit, and I think they misinterpret this.”

He added that it showed an “astonishing level of dismissiveness.”

However, in point of fact, Judge Cannon is not bound by the D.C. Circuit. As a federal judge in Florida, she is bound by the 11th Circuit and, of course, the Supreme Court. She is allowed to reach a different conclusion on a matter of law.

Laurence Tribe, a law professor at Harvard University, declared that “Judge Cannon just did the unthinkable,” He added, “This finally gives Jack Smith an opportunity to seek her removal from the case. I think the case for doing so is very strong.” (Tribe previously declared that he was certain “without any doubt, beyond a reasonable doubt, beyond any doubt” that Trump could be charged with the attempted murder of former Vice President Michael Pence).

It does not matter to these critics that other lawyers and judges agree with Judge Cannon.

Justice Clarence Thomas recently expressed the same view in the Trump immunity decision in his concurrence. He did not view this as a settled question and wrote “if this unprecedented prosecution is to proceed, it must be conducted by someone duly authorized to do so by the American people. The lower courts should thus answer these essential questions concerning the special counsel’s appointment before proceeding.”

Yet these experts believe that a judge without a direct controlling case on the question should be removed for reaching the same conclusion as a member of the Supreme Court and at least two former U.S. Attorneys General.

Of course, these experts would be aghast at any suggestion that D.C. District Court Judge Tanya Chutkan should be removed after being reversed by the Supreme Court in the recent immunity opinion.

Such experts are not raising questions of bias over Chutkin’s rulings in favor of Smith or the similar pattern of Manhattan Judge Juan Merchan.

Yet Cannon is viewed as not simply wrong, but partisan in ruling for Trump.

How do republics collapse?

When judges are pressured or removed for ruling against favored parties.

When the system is undermined by leading political leaders who go to the steps of the Supreme Court to threaten justices that they “will pay the price” for ruling against one side.

When law professors call the courts the “enemy” and push to cut off air conditioning to coerce them to resign.

Alexander Hamilton once said that the Republic is preserved “through the medium of courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void.”

That does not mean that the trial courts are always right. That is why we have appellate courts. However, conflicting decisions are the norm in cases that make it to the Supreme Court. Indeed, the justices often wait for such divisions to occur before they finally resolve long-standing questions.

These demands for the removal of Judge Cannon are simply extensions of the same group think culture of the “defenders of Democracy.” This Republic will not “collapse” if Judge Cannon is right or if she is wrong. It is safe as long as judges are able to rule according to their understanding of the law, regardless of the demands of the perpetually and emphatically enraged.

Goldman’s Jordan Alliger released his latest supply chain congestion note on Monday, informing clients that for the first time in 1.5 years, the supply chain congestion index is on the verge of rising from two to three, with ten being the most congested. This resurgence in snarled supply chains is driven mainly by increasing container ship backlogs and soaring ocean container shipping rates. 

“While our weekly bottleneck scale remained slightly below the level of ‘3’ this week as the overall scale remained unchanged at ‘2’, the absolute level of our congestion index increased once again versus the prior week (+3.5% w/w; Exhibit 1); should next week’s index reading show an increase of just ~1%, the weekly bottleneck scale would push up to a level of ‘3’ for the first time in over a year and a half,” Alliger explained. 

He continued, “As noted last week, while the recent uptick bears monitoring as it continues to reflect a combination of steadily rising container ship backlogs and re-surging ocean container shipping rates (China-to-US ocean container rate was up over 500% YoY at the beginning of July), we stress that even at a scaled bottleneck reading of ‘3’ (should the index continue to rise from here), system-wide supply chain fluidity still appears quite favorable relative to the index reading of ’10’ experienced during peak levels of Covid-induced supply chain congestion.” 

A seasonal view of ocean container shipping rates between China/East Asia and North America’s West Coast is very concerning. Global container capacity is stretched thin due to ship reroutings from the southern Red Sea around Cape of Good Hope, which adds more time to sails. Robust demand for shipping could pressure rates higher. However, it remains to be seen if rates follow the 2021 summer surge. 

“The key question remains whether the last stumbling blocks around congestion ease in the US – notably the improving warehouses as well as the East Coast port backlogs. Should this continue to mitigate, then it is conceivable we could see the index being back to a ‘1’ in 2024,” Alliger pointed out. 

While congestion outside US East and West Coast ports is far from Covid highs, there are still signs of backlog at East Coast ports. 

The door-to-door shipping of a container from China to the US is now 48 days, down from +80 days during the supply chain mess in 2021-22. 

In a separate note, Apollo Management Chief Economist Torsten Slok warned supply chain stresses are coming back as container rates soar: 

Container freight rates are rising, and it currently costs $9,000 to transport a 40-foot container from Shanghai to New York. At the peak of Covid, the cost was $16,000, see the first chart below. The sources for the rise in transportation costs are Suez crossings significantly below normal levels, disruptions at some Asian ports, and growth in demand due to restocking. The rise in transportation costs is very specific to containers. Freight rates by truck, rail, and air have generally not increased by the same magnitude. Only the Baltic Capesize Index is trending significantly higher. Most importantly, if the global economy was slowing down rapidly, then all transportation costs would be falling. That is not what we are seeing, which suggests that global growth continues to be fine.

The critical takeaway is whether this emerging supply chain congestion gains momentum or is just a blip.

Authored by Matt Taibbi via Racket News,

The decision was announced at a White House briefing Monday morning. “In light of this weekend’s events, the president has directed me to work with the Secret Service to provide protection to Robert Kennedy Jr.,” was the quote from Homeland Security Director Alejandro Mayorkas.

It’s difficult to read the line “in light of this weekend’s events” and not see an admission on the part of the White House that Secret Service protection was previously being denied to Kennedy, Jr. for political reasons, or out of spite, if those are even two different things in this era. Whatever the original prerogative was for pushing the envelope with that denial, it seems to have been removed by series of paradigm-shattering news events, leading to a flurry of real and symbolic surrenders.

MSNBC likewise made an extraordinary decision Sunday night to pull Morning Joe, with CNN saying the network wanted to “to avoid a scenario in which one of the show’s stable of two dozen-plus guests might make an inappropriate comment on live television.” As with the Secret Service decision, MSNBC was making a major admission, essentially telling audiences its lead morning news show is either not really a news show, or that its format only holds up under something less than maximum scrutiny. I can’t recall a similar act of self-sabotage in media.

Meanwhile, in a move that went mostly unnoticed, Meta announced Friday that it was lifting restrictions on Donald Trump’s Facebook and Instagram accounts, with CNN citing company sources saying this was done “to ensure that Trump, the presumptive Republican nominee for president, would have equal standing with Democrat President Joe Biden.” The next day, after the attempt on Trump’s life that left firefighter Corey Comperatore dead, Axios ran a story about Democratic reaction. Burying the lede, they quoted a “senior House Democrat” at the bottom, saying, “We’ve all resigned ourselves to a second Trump presidency.”

There’s a longer story to be written about the sudden collapse of many of the core premises of the last eight years of American politics, in particular the notion that Trump is such a unique “existential” threat that the system would not bear treating him like any other politician. In conjunction with Trump’s documents case collapsing and a list of other retreats on the lawfare/prosecution front, we appear headed for a new world, though what that will look like remains very unclear. The two obvious options are retreat from the “at all costs” mindset and a double-down, the double-down being the pattern in the Trump era. Who knows yet, but it’s remarkable to watch.

Starting today, July 16, Amazon Prime members will have 48 hours to scour “amazing deals on products from top national brands and small business sellers”.

Originally conceived in 2015 to celebrate Amazon’s 20th anniversary, Prime Day has quickly evolved into a major shopping event, rivaling Black Friday and Cyber Monday. For Amazon, it has become a great vehicle to boost sales in the slower summer months, explaining why the event has been extended from 24 hours in 2015 and 2016, to 30 hours in 2017, 36 hours in 2018 and finally 48 hours since 2019. After having been forced to move Prime Day to the fall due to the pandemic in 2020, Amazon’s annual shopping holiday has been back in its original summer slot since 2021.

As Statista’s Katharina Buchholz shows in the following chart, based on estimates from Digital Commerce 360, Prime Day sales have grown significantly over the years. In 2020, total merchandise volume, including first and third-party sales passed the $10 billion milestone for the first time and 2021 saw $11.2 billion in sales. Since that year, however, growth has been slower, hitting $12.9 billion in 2023.

You will find more infographics at Statista

It is projected by Adobe to rise to $14.0 billion this year, which would be a step up in terms of growth.

The number of Prime members worldwide has grown from 150 million in January 2020 to more than 200 million in April 2021.

Since then, growth hasn’t been published by Amazon (always a telltale sign) while third-party analysts estimate the program to have been around 230 million members strong as of Q1 2024 – also marking a slowdown in growth.

Amazon Prime Day deals are only available to members, creating an incentive for consumers to sign up for the program or stay onboard.

Research has shown that Prime members outspend non-members by a significant margin, explaining why Amazon is putting so much effort into its membership program.

By Michael Every of Rabobank

There is a lot going on right now but take a step back and try to see the bigger picture.

In the US, Trump –iconically– survived a “mostly peaceful attempted assassination” (as the first, wildly mild headlines implied it); his Florida documents court case was dropped over the unconstitutionality of Special Counsel Smith, and the latter’s appeal won’t impact the November election; and, as the Republican convention gets underway with the head of the Teamsters union speaking(!), JD ‘Hillbilly Elegy’ Vance is Trump’s Vice-Presidential candidate, ensuring a MAGA policy tone if he wins. Vance is the first VP candidate with a beard since 1892, the last time a president –Cleveland– won re-election after losing his first attempt, and that two incumbent presidents failed to win re-election back-to-back. Indeed, House Democrats reportedly admit, off record, that they are now resigned to a second Trump presidency; the question may soon be if it’s a Red sweep of Congress and the presidency – though we’ve seen that outcome fail to appear before, of course. Markets are already pricing for a ‘Trump Trade’ but aren’t yet grasping its full logical permutations. Nor that the White House’s new electoral strategy also appears to be populism: President Biden wants to cap rent increases at 5%. (And this is to be imposed how?)

In Europe, France is prepping for the Olympics and les grandes vacances with no sign of a new government: a split in the leftist NFP alliance, with the Far Left LFI unhappy not all sing its tune, is matched by a split in Macron’s centrists over whether they should potentially work with the Socialists or the Republicans to try to get a workable majority. Elsewhere, Brussels will work in parallel to the current EU Presidency of Hungary’s Orban, and the EU is also waiting for the re-election of EU Commission President von der Leyen on Thursday, which appears on a knife-edge. A speech she is to give that day is seen as crucial to swinging support, as is her meeting today with Italian PM Meloni, who may or may not back her. As such, the critical (and controversial) report VdL asked former Italian PM and ECB President Draghi to prepare on exactly how Europe can achieve strategic autonomy has to wait. Having looked at the subject ourselves, we understand it is going to have to sacrifice a lot of sacred policy cows to produce any real beef.

In China, the CCP’s Third Plenum is underway which, following weaker than seen Q2 GDP, and June data which underlined yet again that consumer demand is lagging far behind industrial production. While previous Third Plenums have unveiled huge structural changes, and the market hopes this one will see huge fiscal stimulus to boost domestic demand to better match domestic supply, this appears wide of the mark. The Marxist-based ideological message from Beijing so far has been clear: production, production, and production. Not consumption, consumption, and consumption. Hence, it’s all China exports, exports, and exports, not imports, imports, and imports. Which guarantees world protectionism, protectionism, and protectionism, as we will now see even more of in both the US and the EU, Latin America, India, Indonesia, Turkey, etc. The larger question that markets again aren’t asking is what China does then: and it’s a short short-list of options, most of which neither Beijing nor markets will like much at all.

The bigger picture here is not ‘geopolitics’, or ‘populism’, or that ‘economic reforms’ are needed. It is to see that the global economy isn’t working as currently constituted. As I argued in 2020, politics now needs a new ideological “-ism” to tell it what it can (and can’t) do to change things now the ‘Washington Consensus’ is crumbling. But what comes next, exactly?

Making one case, ‘China’s subsidies create, not destroy, value’ argues, “Nearly 250 years after the publication of Adam Smith’s ‘The Wealth of Nations’ and the West has lost the economic plot.” The argument is that China’s much-discussed state subsidies to its EV and solar industries produce massive increases in value creation, massive goods deflation for consumers, and massive geostrategic benefits (for China), at low cost, without accruing most benefits to a few large shareholders.

“To be unable to comprehend this crucial point is to never have properly understood Adam Smith. ‘The Wealth of Nations’ was never about the pursuit of profits,” as the article notes, echoing ‘Adam Smith in Beijing’. “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest.” What we want from the butcher, the brewer, and the baker are beef, beer, and bread, not for them to be fabulously wealthy shop owners. What China wants from BYD and Jinko Solar (and the US from Tesla and First Solar) should be affordable EVs and solar panels, not trillion-dollar market-cap stocks. In fact, mega-cap valuations indicate that something has gone seriously awry. Do we really want tech billionaires, or do we really want tech?”

You know who this sounds like? JD Vance. Joe Biden and Janet Yellen. And, probably, Mario Draghi.

Yet, as I have argued since 2015, if everyone agrees this is the way forward, which it clearly is, then either we divide value chains globally via some kind of new Bretton Woods, which is not happening, or we enter into zero-sum competition that means rising protectionism and rival industrial policies; and that can end up in some very good, and some very bad, places. Think Potsdam/Yalta, at least. Think why we had Potsdam and Yalta at worst.

For Europe, it will have to mean if not tearing out, then folding down key pages in the rule books on fiscal, trade, industrial, labour, and monetary policy. Moreover, it implies massive rearmament, at speed. Some get this; many don’t – yet.

For the US, under a hypothetical Trump 2 presidency, it clearly means a neo-Hamiltonian policy of much higher tariffs and, perhaps in tandem, much looser liquidity conditions at home via leaning on the Fed. (The fact that I have not mentioned Powell’s speech yesterday until now is deliberate.)

It seems very unlikely that we would get anything as radical as Project 2025’s US return to the gold standard(!), but some already might see the above as dollar negative. Indeed, today I got the first tweet stating, “JD VANCE OPEN TO DEVALUING DOLLAR TO INCREASE EXPORTS”. However, it’s not that simple, especially as VPs don’t make policy.

Again, as noted here repeatedly, lower rates alone don’t direct capital towards value creation over billionaire creation: that needs regulation, suasion, or capital controls. Expect some! Moreover, lower US rates at home do not have to mean lower US rates abroad. US tariffs stops inflows of goods (for example, Asian and European firms may have to build factories and transfer tech to the US and produce there, as was the case with China until now). That means a halt in the outflow of trade-earned dollars to the global Eurodollar system; and that means a massive liquidity squeeze on the greenback abroad, even as the dollar is cheap(er) at home – you can almost see the fist pumping “USA! USA! USA!” The impact on commodity markets could also be ‘yuuge’.

Markets might get the dollar side of this argument to some extent, but I’m not sure they get all of what comes with it. After all, as the Asia Times article above also notes, “The business press has fallen into an at best lazy understanding of value creation. At worst, neoliberal befuddlement has damaged the brains of policymakers, rendering them incapable of diagnosing economic ills.“

Indeed. But perhaps 2024 marks a Hillbilly revival and a Silly Billy Elegy. Then again, if we mishandle what happens next geopolitically and geoeconomically, which will be hard to avoid, then we might yet all look back at today as a Silly Billy Eulogy.

After ugly earnings from Wells Fargo, a mediocre report from JPM and strong results from Goldman, this morning Bank of America became the latest major bank to report Q2 numbers which were mostly stronger than expected, however there were several rather notable red flags including a miss in FICC, Wealth and Investment Management, the company’s NIM came in below expectations while charge-offs hit a multiyear high. That said, at least initially, the market liked the results and pushed BAC stock up 4%, after trading and investment-banking results both topped analysts’ estimates and gave a forecast for net interest income that also exceeded expectations even though the Net Interest Yield this quarter missed consensus expectations yet again.

With that in mind, here is what BofA reported for the second quarter:

• Revenue $25.4BN, up 1% YoY and beating estimates of $25.22BN
  • Trading revenue excluding DVA $4.68 billion, beating estimate $4.53 billion
    • FICC trading revenue excluding DVA $2.74 billion, missing estimate $2.8 billion
    • Equities trading revenue excluding DVA $1.94 billion, beating estimate $1.73 billion
  • Wealth & investment management total revenue $5.57 billion, missing estimate $5.58 billion
  • Revenue net of interest expense $25.38 billion, beating estimate $25.27 billion
  • Investment banking revenue $1.56 billion, beating estimate $1.45 billion
• EPS $0.83, down 6% YoY and beating estimates of $0.80

Some more highlights from the quarter as reported:

And visually

Digging into the balance sheet, we find some more, if irrelevant, beats

• Return on average equity 9.98%, estimate 9.57%
• Return on average assets 0.85%, estimate 0.82%
• Return on average tangible common equity 13.6%, estimate 13.1%
• Basel III common equity Tier 1 ratio fully phased-in, advanced approach 13.5%, estimate 13.5%
• Standardized CET1 ratio 11.9%, estimate 11.9%
• Efficiency ratio 63.9%, estimate 64.2%

What was far more important is that for yet another quarter, Net Interest Yield dropped, sliding to 1.93% from 1.99% and missing the 1.95% estimate, as a result of “higher deposit costs.” Net Interest Income also missed, dropping to $13.7BN, below the $13.8BN estimate, dropping from $14.0BN and the lowest in years. This is how BofA explained the drop:

• NII decreased $0.5B YoY, as higher deposit costs more than offset higher asset yields, higher NII related to Global Markets (GM) activity, and modest loan growth
• Decreased $0.3B from 1Q24, driven primarily by higher deposit costs
• NII related to GM activity increased approximately $0.5B YoY and $0.1B from 1Q24

Curiously, while BofA conceded the disappointing Net Interest Income, it projected a very solid jump in the second half, one which would push it from $13.9BN (on FTE basis) to $14.5BN, with gains coming from Held to Maturity securities ($300MM), and slowing deposit rotation (up to $200MM), offset by a surprising forecast: a $225MM in NII decline due to no less than 3 rate cuts in the second half, in September, November and December!

Taking a closer look at the balance sheet, we find that BofA’s Q2 loans rose to $1.057 trillion, above the estimate of $1.05 trillion and higher both sequentially and YoY…

…. while total deposits $1.91 trillion, came in below the estimate of $1.93 trillion, and were a decline compared to Q1 as a result of the Fed’s balance sheet tapering which implicitly drains liquidity from the market.

BofA was kind enough to show once again that the Fed’s massive excess reserves have ended up in what we first correctly described over a decade ago: the bank’s deposits in excess of loans, which in Q2 amounted to $854 billion, down from a record high of $1.1 trillion in Q4 2021. Here are some more details:

• Deposits in excess of loans grew from $0.5T in 4Q19 and peaked at $1.1T in 4Q21; remained elevated at $0.9T in 2Q24
• Excess deposits stored in cash and investment securities
  • 52% cash and AFS and 48% HTM in 2Q24
  • Cash levels of $321B remained well above pre-pandemic ($162B in 4Q19)
• AFS securities mostly hedged with floating rate swaps; duration less than 0.5 years and marked through AOCI and regulatory capital
• HTM securities book has declined $106B since peaking at $683B in 3Q21; down $37B vs. 2Q23 and $9B vs. 1Q24
  • MBS of $448B down $9B, and U.S. Treasuries and other securities of $129B relatively flat vs. 1Q24
• The blended cash and securities yield was 160 bps above deposit rate paid in Q2

A much more concerning red flag emerges when looking at the bank’s asset quality: here we find that total net charge offs rose $35MM to $1.533BN, much higher than the $1.45BN expected, and the highest in years, driven by higher credit card losses. According to the bank, credit card loss rate jumped to 3.88% in 2Q24 vs. 3.62% in 1Q24. The bank’s provision for credit losses also jumped by $189 million to $1.5B sequentially; however the reserve release component was just $25MM in 2Q24 vs. $179MM in 1Q24. Expect this number to surge as the US economy slides into contraction, and as everyone imitated JPM which saw its reserve build spike in Q2.

There was a silver lining: BofA reported that nonperforming loans (NPLs) of $5.5B decreased $0.4B from 1Q24, driven primarily by the commercial real estate office portfolio.

And speaking of BofA’s CRE exposure, the bank dedicated a slide to recent developments here. Not surprisingly, while CRE as a percent of total loans has declined notably (from 21.2% in 2009 to 11.7% in Q2 24), it is effectively unchanged as a % of total loans and leases. And furthermore, the single largest CRE loan type remains the deeply stressed Office, which amounts to $16.3 billion (mostly among Northeast and California properties). And here is the big deal that nobody has noticed, and which could shock BofA stock in coming years. The bank projects $4.8BN in office maturities in H2 and another $8BN in 2025 and 2026. Good luck collecting these!

While none of that is good, there was some good news for BofA’s global markets where equity trading revenue beat as FICC missed again.

• Trading revenue excluding DVA $4.68 billion, beating estimate $4.53 billion
  • FICC trading revenue excluding DVA $2.74 billion, missing estimate $2.8 billion
  • Equities trading revenue excluding DVA $1.94 billion, beating estimate $1.73 billion

Some more details from the report:

Revenue of $5.5B increased 12% from 2Q23, driven by higher sales and trading revenue and investment banking fees

• Sales and trading revenue of $4.7B increased 9% from 2Q23; excluding net DVA, up 7%3
  • FICC revenue increased 3% (ex. DVA, down 1%) to $2.7B, below the $2.8BN expected, “driven by improved client activity and trading performance in mortgages, partially offset by a weaker trading environment in foreign exchange and interest rates products“
  • Equities revenue increased 20% (ex. DVA, up 20%) to $1.9B, beating estimates of $1.7BN, and “driven by strong client activity and trading performance in cash and derivatives“
• Noninterest expense of $3.5B increased 4% vs. 2Q23, driven by higher revenue-related expenses and investments in the business, including technology

Just how good is BofA’s market division: Here’s the answer.

But if markets was solid, Wealth and Investment Management disappointed, with revenue of $5.57BN dropping sequentially, and just below estimates, with Net Interest Income once again blamed. Some more details:

• Client balances of $4T increased 10% from 2Q23, driven by higher market valuations and positive net client flows
  • AUM flows of $11B in 2Q24;
• Average deposits of $288B decreased $8B, or 3%, from 2Q23
• Average loans and leases of $223B increased $4B, or 2%, from 2Q23
• Added ~6,100 net new relationships across Merrill and Private Bank in 2Q24
• 85% of GWIM households / relationships digitally active across the enterprise, up from 83% in 2Q232

Turning to the expense side of the business, things here were no better as compensation expenses rose to $9.83 billion, above estimates of  $9.77 billion, while total non-interest expenses $16.31 billion also printed higher than the estimate $16.3 billion, if below last quarter’s $17.2 billion.

And while we expect the market to realize just how painfully the under-reserves BofA will be hit in coming years as the bulk of its office loans default in the coming years, until then, here is a dose of optimism from CEO Brian Moynihan who said that “the strength and earnings power of our leading consumer-banking business is complemented by the growth and profitability of our global markets, global banking, and wealth-management businesses.”

Clearly this was enough for the generally dumb market to be convinced that all is well, and BofA stock is now up 4% having already gained 24% this year through Monday. It appears that the pain is deferred until late 2024 and early 2025, some time after the Trump admin takes over.

The full BofA Investor presentation can be found here: Link.

Authored by Stephen Katte via The Epoch Times (emphasis ours),

U.S. Secret Service Director Kimberly Cheatle says she plans to stay on in her role in the wake of the assassination attempt against former president Donald Trump at his Pennsylvania campaign rally on July 13.

It’s still unclear how 20-year-old Thomas Matthew Crooks was able to carry an AR-15 rifle to a rooftop at the Butler Farm Show Grounds and fire multiple rounds at the former president.

In a July 16 interview with the ABC, Ms. Cheatle said that while she agreed that an individual managing to fire multiple shots at a former president under the protection of the Secret Service was “unacceptable,” she is “absolutely” going to stay on, with no plans to resign.

The incident left one person in the crowd dead, two wounded, and former president Trump—the now-confirmed GOP nominee for president—with a bullet wound in his right ear. The shooter, Thomas Matthew Crooks, was also killed.

According to Ms. Cheatle, as the person in charge of the Secret Service, she will investigate this incident to ensure there is no repeat.

“The buck stops with me. I am the director of the Secret Service, and I need to make sure that we are performing a review and that we are giving resources to our personnel as necessary,” she said.

“It was unacceptable and it’s something that shouldn’t happen again.”

Shooter Seen Before Assassination Attempt

Multiple videos posted to social media show people gathered outside the rally event, listening to former President Trump speak, while they pointed to Thomas Matthew Crooks as he lay with his rifle on the rooftop. In the recordings, several people can be heard calling for the attention of law enforcement minutes before the first shots were fired.

At least one officer with Butler Township attempted to approach Thomas Matthew Crooks by climbing onto the roof where the shooter had positioned himself, but retreated when the shooter aimed the rifle at him.

Ms. Cheatle says the shooting then started.

“I don’t have all the details yet but it was a very short period of time. Seeking that person out, finding them, identifying them, and eventually neutralizing them took place in a very short period of time, and it makes it very difficult,” she said.

Ms. Cheatle said that local authorities were tasked with securing the building where the shooter had positioned himself, as it was just outside the perimeter of areas guarded by the Secret Service. She also said that local police were present inside the building.

“In this particular instance, we did share support for that particular site and that the Secret Service was responsible for the inner perimeter,” she said.

“And then we sought assistance from our local counterparts for the outer perimeter. There was local police in that building, there was local police in the area that were responsible for the outer perimeter of the building.”

Ms. Cheatle is expected to testify before a House Oversight Committee about the incident on July 22. President Joe Biden has also called for a review.

Biden, Mayorkas Stand by Secret Service Director

In a July 15 White House press briefing, the first since the assassination attempt, press secretary Karine Jean Pierre said that President Biden still has confidence in Ms. Cheatle to perform her duties as head of the Secret Service.

Ms. Cheatle is “working hard to examine what happened” and to ensure all the people under the Secret Services protection have the “needed security,” the press secretary said.

At the same time, U.S. Secretary of Homeland Security Alejandro Mayorkas said he has every confidence in the Secret Service to continue protecting those under its charge.

“I have 100 percent confidence in the United States Secret Service, and what you saw on stage on Saturday, with respect to individuals putting their own lives at risk for the protection of another, is exactly what the American public should see every single day,” he said.

Mr. Mayorkas also said he is committed to looking outside his department and the federal government for someone to lead an independent review of the service to ensure the process is fair and unbiased.

“The findings will indeed be made public. It is very important that we achieve transparency so that the American people have confidence in the work of the review and its findings and recommendations,” he said.

“We need to move with swiftness and urgency because this is a security imperative.”

In his first public appearance since narrowly escaping a fatal headshot from a 20-year-old would-be assassin at a Pennsylvania rally on Saturday, former President Donald Trump strode into the Republican National Convention to a hero’s welcome on Monday night. 

“As someone who’s been covering these conventions since 1964, that may have been the most electric moment I ever saw,” said CNN’s Chris Wallace. “That was quite extraordinary.” 

Trump appeared to be greatly moved by the experience of entering Fiserv Forum to the cheers of thousands of delegates, while Lee Greenwood performed “God Bless the USA.” His non-speaking appearance marked an emotional end to a day in which Trump also revealed that his running mate would be Ohio Senator J.D. Vance — and received the news that a US district court judge had dismissed the charges against him in a case about his handling of classified documents. 

JUST IN: Donald Trump has made his first public appearance at the party’s convention in Milwaukee, Wisconsin, today with a bandage over his ear: pic.twitter.com/izqlrWzNTr

— unusual_whales (@unusual_whales) July 16, 2024

Trump waved to the crowd and repeatedly mouthed “thank you” as he made his way to his seat, where he joined his 2024 running mate and listened to evening speeches. Also seated nearby: Tucker Carlson, House Speaker Mike Johnson and Florida Rep. Byron Donalds. 

Trump will address the convention on Thursday night, with a speech that will be quite unlike the originally-drafted version, according to the former president. Trump told the Washington Examiner that, rather than torching President Biden and the Democrats, he’ll use the address to promote a message of national unification: 

“The speech I was going to give on Thursday was going to be a humdinger.  Had [the assassination attempt] not happened, this would’ve been one of the most incredible speeches [targeting an opponent]. Honestly, it’s going to be a whole different speech now…It is a chance to bring the country together. I was given that chance.” 

Trump also told the Examiner that, as he rose bloodied from the stage in Butler, Pennsylvania, he chose to raise his fist to communicate that he was ok “and that America goes on, we go forward, that we are strong.” 

Americans are still shocked by the Secret Service’s stunning failure to thwart rifle fire from a man spotted by law enforcement some 28 minutes before he shot Trump, killed a spectator and critically injured two more. Part of the conversation on social media has focused on the presence of what appear to be obvious Diversity Equity Inclusion (DEI) hires in his protection detail — specifically, small-statured women who variously:

• Looked panicked 
• Struggled to merely re-holster a weapon 
• Seemed to shrink away from their obligation to sacrifice their body for the president 

Which secret service member is the DEI hire? pic.twitter.com/mYopfnB1fN

— Harrison Krank (@HarrisonKrank) July 14, 2024

With that in mind, two things were particularly notable about Trump’s security escort at the Republican convention — it was massive and it was thoroughly male. 

Tonight’s Secret Service… unburdened by what has been.

pic.twitter.com/tYzarkHoyj

— Chanel Rion OAN (@ChanelRion) July 16, 2024

Apparently, that’s Step #1 in making the Secret Service great again.