Israel Takes Out 2nd Senior Hezbollah Commander In Less Than Two Weeks

Israel Takes Out 2nd Senior Hezbollah Commander In Less Than Two Weeks

Another senior Hezbollah commander has been killed in an Israeli airstrike in southern Lebanon on Wednesday. He was killed in a daytime strike on the coastal city of Tyre, in what appears a neighborhood or city area (according to widely circulating video).

Hezbollah in a statement confirmed the death Muhammad Nimah Nasser, also known as Abu Nimah. Regional reports say that he commanded Hezbollah’s Aziz regional division in southern Lebanon (one of three divisions operating there).

Hezbollah senior official Muhammad Nimah Nasser, who was killed on July 3, 2024. via TOI

His high rank within the organization is confirmed in the fact that the Hezbollah statement referred to him as a “commander” – which it reserves for only the most senior level operatives.

With the situation already on edge, given both sides are warning that ‘all-out war’ could be imminent, the marks the second high commander that Israeli has killed in less than two weeks.

Last month a commander named Taleb Abdulla, who headed the Nasr regional division, was taken out in an Israeli strike. Before that, in January the deputy head of the elite Radwan unit Wissam al-Tawil was killed.

The Associated Press reports that “In a video circulated by local media, residents rushed toward a charred vehicle with a large plume of smoke. Civil Defense said its first responders transported an unnamed wounded person to a hospital.”

Meanwhile, Israeli Defense Minister Yoav Gallant has told troops during a visit Gaza border that tanks currently completing their tasks in Rafah and now being pulled from the theater can be deployed in the north where they “can reach as far as the Litani” river. The Lebanon river lies 10 miles north of Israel’s border

“We are striking Hezbollah very hard every day and we will also reach a state of full readiness to take any action required in Lebanon, or to reach an arrangement from a position of strength,” Gallant said.

“We prefer an arrangement, but if reality forces us we will know how to fight,” the IDF chief continued. Israeli leaders have been under immense pressure to act more decisively against Hezbollah, given its daily rocket and drone attacks have meant some 80,000 to 100,000 Israeli residents of the north have been forced out of their homes for months, since near the beginning of the war last October.

Tyler Durden
Wed, 07/03/2024 – 15:05

via ZeroHedge News https://ift.tt/idI5vqc Tyler Durden

Fact-Checking The ‘Fact-Checking’ New York Times

Fact-Checking The ‘Fact-Checking’ New York Times

Authored by Daniel Oliver via American Greatness,

“They” just can’t let Donald Trump go. For them, Donald Trump is Evil personified.

But not for the rest of the world.

Here are some of the New York Times’s fact-check charges against Trump; here is why people no longer trust the New York Times.

Social Security

Trump said: “But Social Security, he’s [Biden’s] destroying it because millions of people are pouring into our country and they are putting them onto Social Security.”

The Times: “Mr. Trump has this backward. Undocumented workers often pay taxes that help fund Social Security. But, as the nonpartisan Congressional Budget Office once noted, ‘Most unauthorized immigrants are prohibited from receiving many of the benefits that the federal government provides through Social Security and such need-based programs as food stamps, Medicaid (other than emergency services) and Temporary Assistance for Needy Families.’

The facts: Biden has repeatedly pushed for giving illegal immigrants pathways to citizenship, including a plan and proposed legislation to provide up to 11 million illegal immigrants with U.S. citizenship and an executive order providing a pathway to citizenship for more than half a million undocumented spouses of U.S. citizens. Biden has specifically claimed that illegal immigrants have “increased the life span of Social Security because they have a job, they’re paying a Social Security tax.”

According to the Center for Immigration Studies, “Illegal immigration unambiguously benefits the Social Security and Medicare trust funds. However, amnesty (legalization) would reverse those gains and add extra costs.”

They note that “illegal immigrants tend to earn less and work fewer years in the U.S. than the average participant” and “if 10 million illegal immigrants receive amnesty, the total cost to Social Security and Medicare would be roughly $1.3 trillion, equivalent to a one-time transfer of 6 percent of GDP.”

In addition, a November 2023 report from the House Committee on Homeland Security found that “the annual cost just to care for and house the known gotaways and illegal aliens who have been released into the country under Mayorkas’ leadership could cost as much as an astounding $451 billion.”

How should Trump be graded on his assertion? Surely a B-, perhaps even a B. He raised the obvious issue, which is that the Biden administration, or any successor Democrat administration, will surely grant citizenship to all the illegals if it has the votes. The cost will be huge.

Nancy Pelosi’s responsibility for January 6

Trump: “Nancy Pelosi, if you just watched the news from two days ago on tape to her daughter, who’s a documentary filmmaker, or they say—what she’s saying, ‘Oh, no, it’s my responsibility. I was responsible for this.’ Because I offered her 10,000 soldiers who are National Guard. And she turned them down.”

The Times: “Mr. Trump is distorting what Representative Nancy Pelosi, then the House speaker, said. Ms. Pelosi did not admit to turning down National Guard troops. She does not have such authority.”

The facts: In a video filmed by Pelosi’s daughter, Pelosi, responding to someone who said “they (the Capitol Police) thought they had sufficient resources,” says, “They clearly didn’t know, and I take responsibility for not having them prepare for me, because it’s stupid because we’re in a situation like this.”

The former Republican Speaker of the House, Kevin McCarthy, has claimed that Pelosi was influential in rejecting a proposal to send National Guardsmen to the Capitol. And what evidence there is suggests that Pelosi seems to hold herself responsible for the National Guard’s not being present to deal with the rioters sooner.

What grade should Trump receive? At least a B. Perhaps even an A.

The Paris Climate Accord

Trump: “The Paris Accord was going to cost us $1 trillion, and China nothing, and Russia nothing, and India nothing.”

The Times: “This is misleading. . . . Under President Biden, the United States has pledged $11.4 billion annually by 2024 to assist vulnerable countries in developing clean energy and preparing for the consequences of climate change.”

The facts: The Heritage Foundation has estimated that staying in the Paris agreement would cost the U.S. over $2.5 trillion in aggregate GDP loss by 2035.

An analysis by McKinsey looking into the cost of reaching “net zero” emissions found that global spending by governments, businesses, and individuals would need to rise by $3.5 trillion a year, every year, in order to get to net zero by 2050.

China is no longer accepting international pressure through the Paris Climate Accord with respect to its own carbon emissions. And Putin has joked that 2 to 3 degrees of global warming would be “not so bad in such a cold country as ours.”

Trump’s grade? Obviously, a B. His basic point is correct: the costs are staggering, whether that cost is a trillion dollars or only half a trillion (and of course it depends on the length of time under discussion). He was also obviously correct about China and Russia—the point being that in the end, it would be the U.S. sacrificing economic progress to benefit the rest of the world, which has no plans whatsoever to sacrifice a penny of progress to appease the climate lobby’s dire predictions.

Iran

Trump: “Iran was broke with me. I wouldn’t let anybody do business with them. They ran out of money. They were broke, they had no money for Hamas. They had no money for anything, no money for terror.”

The Times: “Even under sanctions that were imposed by the Trump administration, Iran’s economy plugged along. It wasn’t strong, but it wasn’t broke, and it kept trading with many nations. Mr. Trump made no mention of the fact that his withdrawal from an Obama-era nuclear deal freed Iran to resume nuclear production.”

The facts: Trump is obviously exaggerating slightly here, but it is entirely factual that his actions to leave the Iranian nuclear deal and reimpose sanctions crippled the Iranian economy. Iran’s GDP contracted sharply in 2018 and 2019 (after Trump reimposed sanctions). Iranian oil exports dropped from 3.8 million barrels per day (early 2018) to 2.1 million barrels per day (October 2019). The Iranian currency, the rial, lost 50 percent of its value between early 2018 and December 2019. And inflation rose to an estimated 30.5 percent in Iran in 2018.

Trump’s grade. Probably a B. Definitely better than the grade of Iran’s economy.

Inflation

Trump: “He [Biden] caused this inflation.” (Fact: For 42 consecutive months of Biden’s presidency, inflation has remained above the Federal Reserve’s target rate of 2 percent.)

The Times: “This is misleading. Independent economic research has found that government stimulus spending approved by both Mr. Trump and Mr. Biden contributed to the soaring inflation the nation experienced in the first two years of Mr. Biden’s presidency. But no evidence blames government spending, by Mr. Biden or Mr. Trump, for the majority of the inflation the country experienced.”

The Facts: Even Democrat-friendly economists blasted Biden’s “American Rescue Plan” before he signed it. Jason Furman (chair of President Barack Obama’s Council of Economic Advisors) said: “It’s definitely too big for the moment. I don’t know any economist that was recommending something the size of what was done.”

Larry Summers, Obama’s National Economic Council director, said: “We’re taking very substantial risks on the inflation side. . . . We are printing money, we are creating government bonds, we are borrowing on unprecedented scales. Those are things that surely create more of a risk of a sharp dollar decline than we had before. And sharp dollar declines are much more likely to translate themselves into inflation than they were historically.”

Reading Trump’s blue book as a whole, we’d have to give him a grade of B. That’s about as good as it gets for a campaigning politician. Scored on a curve for politicking, he probably gets an A.

Be embarrassed New York Times. You flunked. If you were working for Trump, you’d be fired!

Tyler Durden
Wed, 07/03/2024 – 14:30

via ZeroHedge News https://ift.tt/pemzhfI Tyler Durden

FOMC Minutes Show “Vast Majority” Expect Economy To Cool, See Deflationary Effects Of AI

FOMC Minutes Show “Vast Majority” Expect Economy To Cool, See Deflationary Effects Of AI

Since the last FOMC statement on June 12, oil, gold, stocks, the dollar, and even some of the bond market are higher (in price)…

Source: Bloomberg

The shorter-end of the curve is now lower in yield since the last FOMC, but the long-end still higher (even with today’s yield tumble)…

Source: Bloomberg

The US macro picture has deteriorated even more significantly relative to expectations, now at its weakest since Dec 2015…

Source: Bloomberg

And thanks to today’s macro weakness, rate-cut expectations have risen back to the same levels they were immediately after Powell’s press conference…

Source: Bloomberg

So, given the hawkish shift in the DOTS, what does The Fed want us to know from today’s Minutes.

Here are the key takeaways from minutes of the Federal Reserve’s June 11-12 meeting, released Wednesday (via Bloomberg):

Willing to wait…

Officials did not expect it would appropriate to lower borrowing costs until “additional information had emerged to give them greater confidence” that inflation was moving toward their 2% goal

Economic expectations…

The “vast majority” of Fed officials assessed that economic growth “appeared to be gradually cooling

…and most participants remarked that they viewed the current policy stance as restrictive”

Officials said inflation progress was evident in smaller monthly gains in the core personal consumption expenditures price index and supported by May consumer price data that were released hours before the rate decision

They appear set of the narrative that AI will save the world too (through deflation)…

Participants highlighted a variety of factors that were likely to help contribute to continued disinflation in the period ahead. The factors included continued easing of demand–supply pressures in product and labor markets, lagged effects on wages and prices of past monetary policy tightening, the delayed response of measured shelter prices to rental market developments, or the prospect of additional supply-side improvements.

The latter prospect included the possibility of a boost to productivity associated with businesses’ deployment of artificial intelligence–related technology. Participants observed that longer-term inflation expectations had remained well anchored and viewed this anchoring as underpinning the disinflation process. Participants affirmed that additional favorable data were required to give them greater confidence that inflation was moving sustainably toward 2 percent

But The Fed seems divided on how to ‘react’ to data (markets or macro)…

Some officials emphasized the need for patience in allowing high rates to continue to restrain demand…

…while others noted that if inflation were to remain elevated or increase further, rates “might need to be raised”

A “number” of officials said the Fed needs to stand ready to respond to unexpected weakness, and several flagged that a further drop in demand may push up unemployment rather than just reduce job openings

WSJ Fed-Watcher Nick Timiraos chimes in to confirm the more dovish bias of the Minutes…

Read the full Minutes below:

Tyler Durden
Wed, 07/03/2024 – 14:09

via ZeroHedge News https://ift.tt/Vg0tBX4 Tyler Durden

“I Almost Fell Asleep Onstage” – Biden Blames Debate-Debacle On Jet-Lag, But…

“I Almost Fell Asleep Onstage” – Biden Blames Debate-Debacle On Jet-Lag, But…

Desperately trying to outrace a growing wave of pleas to abandon his reelection campaign, President Biden on Tuesday dubiously blamed his terrible debate performance on exhaustion from a busy June travel schedule. However, as he was speaking, the New York Times was firing yet another torpedo at his presidency, publishing an article in which various US and foreign officials said his mental lapses have grown more frequent and pronounced in recent months.    

Speaking at a campaign fundraiser in McLean, Virginia, Biden struck an apologetic tone as he acknowledged widespread Democratic disappointment in his Thursday debate with Donald Trump. He also tried to blame his performance — characterized by long pauses, garbled answers, a weak, raspy voice and slack-jawed staring when it wasn’t his turn to speak — on his June travel schedule. 

“I decided to travel around the world a couple of times…shortly before the debate. I didn’t listen to my staff … and then I almost fell asleep onstage. It’s not an excuse but an explanation.”

However, the timing of Biden’s international travel undermines his claim. He traveled to France for D-Day commemoration festivities from June 5 to 9. After returning to the United States, he went to Italy for a G-7 Summit on June 13 and 14. From there, he headed directly to a Los Angeles fundraiser on June 15. That was the end of it — the debate was 12 days after the travel whirlwind ended.  

Keep in mind, too, it’s not like Biden was schlepping a roller-bag through airports. It’s hard to imagine a more luxurious and rest-accommodating mode of international travel than what a US president experiences on Air Force One, to say nothing of the traffic-clearing motorcades that whisk him from point to point upon his arrival.

On top of that, Biden capped his travel with a restful stay at his Rehoboth Beach, Delaware home before spending the next week at Camp David preparing for the debate. There, his daily schedule reportedly started at 11 am with time allocated for daily afternoon naps. The travel excuse is all so implausible, even the fellow travelers at CNN can’t bring themselves to endorse it: 

Around the same time Biden was trying to convince donors that his obvious dementia is really jet lag, the Times delivered another broadside to the 81-year-old’s campaign, relating damning accounts from several US and foreign officials and others who say they’ve observed Biden in private and have seen a notable decline in recent months.

Here’s just a sampling from the lengthy Times report:  

  • “People in the room with him more recently said that the lapses seemed to be growing more frequent, more pronounced and more worrisome.”
  • “The recent moments of disorientation generated concern among advisers and allies alike. He seemed confused at points during a D-Day anniversary ceremony in France on June 6. The next day, he misstated the purpose of a new tranche of military aid to Ukraine when meeting with its president.”
  • “On June 10, he appeared to freeze up at an early celebration of the Juneteenth holiday.”
  • “On June 18, his soft-spoken tone and brief struggle to summon the name of his homeland security secretary at an immigration event unnerved some of his allies at the event, who traded alarmed looks and later described themselves as shaken up.”
  • “By many accounts, as evidenced by video footage, observation and interviews, Mr. Biden is not the same today as he was even when he took office 3½ years ago. The White House regularly releases corrected transcripts of his remarks, in which he frequently mixes up places, people or dates.
  • “He often confuses names and details and makes statements that are incoherent.”
  • “During a meeting…with President Volodymyr Zelensky of Ukraine, Mr. Biden spoke so softly it was almost impossible to hear.”
  • “[Italian Prime Minister] Meloni and the other leaders were acutely sensitive to Mr. Biden’s physical condition, discussing it privately among themselves.”
  • “Asked if one could imagine putting Mr. Biden into the same room with President Vladimir V. Putin of Russia today, a former U.S. official who had helped prepare for the trip went silent for a while, then said, ‘I just don’t know. A former senior European official answered the same question by saying flatly, ‘No’.”

As we’ve seen in recent days, others in Biden’s circle stepped forward to avow that he’s sharp and energetic behind closed doors. However, having seen Biden’s debate performance for themselves — and as more and more officials provide disturbing accounts of his decline — only the most self-deluding Democrats are willing to credit these reassuring accounts, or Biden’s jet lag excuse:   

Look for the Times report to accelerate the pace of demands for Biden to withdraw from the 2024 race. We’ve already seen the editorial board of the Times urge him to call it quits, along with the Atlanta Journal-Constitution and a variety of columnists and pundits. In a major milestone, the first federal elected official joined the growing chorus on Tuesday: Texas Democratic Congressman Lloyd Doggett issued a statement saying “I am hopeful that he will make the painful and difficult decision to withdraw.” 

Other Democratic officeholders, while stopping just short of urging Biden to quit, are striking him with daggers of their own. In an op-ed, Maine Rep. Jared Golden wrote, “While I don’t plan to vote for him, Donald Trump is going to win.” Similarly, Washington Rep. Marie Gluesenkamp Perez told KATU, “We all saw what we saw. You can’t undo that, and the truth, I think, is that Biden is going to lose to Trump…the damage has been done.” 

Tyler Durden
Wed, 07/03/2024 – 13:50

via ZeroHedge News https://ift.tt/a9OmnH8 Tyler Durden

Americans Are More Likely To Go To War With The Government Than Submit To The Draft

Americans Are More Likely To Go To War With The Government Than Submit To The Draft

Authored by Brandon Smith via Alt-Market.us,

In a national poll last month Americans were asked if they believed a new civil war was likely to happen within their lifetime. The establishment media was shocked to report that 47% of the population said yes. Those of us in the liberty media were not so surprised; I believe according to the evidence that we were already a short step away from civil war in 2021-2022.

There were A LOT of guys (millions) getting ready for the possibility of vaccine passport enforcement. Gun ownership in the US hit record highs during that time period and conservative/patriot groups saw a spike in public interest. As it turned out, the “conspiracy theorists” were right all along, there really was an organized agenda to eliminate constitutional protections…

If we had allowed the vax passport policy to take hold, our liberties would have been officially erased forever. Economic freedoms would be abolished. Access to the jobs market and trade would be impossible for anyone refusing the vaccine. Real-time tracking of the population along with a social credit system would have become the norm using mandatory cell phone apps. After that, America would essentially turn into a Chinese-style concentration camp.

A lot of people woke up during that period and realized that an attempt at a totalitarian state in the US was not only possible, it was happening right in front of them. Luckily, anti-mandate conservatives were loud enough and the majority of red states passed legislation to block lockdowns and vax passport efforts. The Biden Administration, the CDC, the WHO and globalist groups like the WEF abruptly backed away from their draconian programs and gave up on the mandates by the end of 2022.  And to anyone who actually believes the CDC numbers on total vaccinations are accurate, I have a bridge in Brooklyn to sell you…

That said, the same people are still in power today and those people are looking for another avenue to institute sweeping controls on the populace. One tried and true method for them to achieve that goal is to start a global war and then use the inevitable chaos and fear to bring in authoritarian measures. In other words, WWIII might be Plan B.

The signs of this plan are everywhere, but perhaps most disconcerting is the growing discussion among western nations about military conscription (the draft).

The most recent passage of the NDAA (National Defense Authorization Act) included a measure to automatically register all males ages 18-26 for the selective service list. To be clear, signing up for the selective service was already mandatory, the new NDAA only made it immediate instead of relying on young men to sign up on their own accord. There has also been a drive to automatically add women to the draft database.

Critics argue that the public is “overreacting” to the bill because it changes very little in terms of the draft scenario. What these people don’t understand is that it’s not the minor revisions in the NDAA that have the public concerned, it’s the overall increase in rhetoric surrounding the draft that matters. Numerous military officials in the US and Europe have mentioned conscription in the past year.

Chris Miller, the former acting Defense Secretary, publicly suggested that the government should bring back mandatory service.

Last month, a Washington DC-based think-tank group called Center For A New American Security (CNAS) released a report in which they war-gamed several conscription scenarios for a large scale mobilization against China. The Department of Defense used to run conscription simulations but has not done so in over 50 years (at least not any simulations that have been made public).  It should be noted that the CNAC’s financial supporter list is basically a Who’s-Who of globalist foundations and corporations from George Soros’ Open Society Foundation to JP Morgan.

The group found that the mobilization of a force of 100,000 new recruits within 200 days would be nearly impossible under current cultural conditions. They noted that the internet and social media present a significant obstacle, ostensibly because it allows people to share unfiltered information.

Even during the covid lockdowns, the insane level of control alphabet agencies and Big Tech companies used to throttle information was not enough to stop Americans from spreading the truth.

The think tank also suggested that any significant draft could only succeed if the public knew they could face real punishment if they refused to comply. Interestingly, in a recommendation to the president the report mentions that ‘older recruits’ should be targeted for conscription FIRST. It doesn’t cite a specific age group, but I find this suggestion highly suspicious – Older American men are more likely to resist any draft effort. Why go after us first, unless the goal is to remove us from the equation and throw us in prisons before we have a chance to organize?

If you think that these kinds of discussions are limited to smoky backrooms in Washington DC among military analysts, think again. Far-left media outlet Vox just published an article titled ‘The World Is Running Out Of Soldiers’, and it’s written as if that’s a bad thing.

Vox seems to be in favor of the war machine and they examine an extensive list of issues showcasing why a draft might be necessary. They specifically mention the Center for a New American Security report and even discuss why drone technology simply isn’t enough to fight the next big conflagration. These people want men (and women) to fill the current gaps in military recruitment and conscription is a built in measure, not only in the US but also in Europe.

Most Americans know that when the government and the media start talking about a sweeping societal change they know the citizenry isn’t going to like, they are trying to incrementally acclimate the public to the eventual enforcement.

The US government and media warnings about low military recruitment numbers have been endless, while “experts” assert that war is coming soon with Russia, China and perhaps renewed conflicts in the Middle East. European governments have also been promoting conscription propaganda while doom mongering over a possible Russian invasion.

The reality is that global elites aren’t “predicting” a war, they are preparing to CREATE a war from thin air. And, in order to create a global war they have to get people to show up and fight. But what if no one wants to fight? What if no one shows up? Conscription is the only answer. The question is, what will the population do when faced with forced military service and forced participation in a war between major national powers?

Public trust in the US government is at all time lows in 2023-2024. Less than 20% of the US population supports a return to the draft similar to what we witnessed during the Vietnam War. People have to care about motivations for a war before they’re willing to die in one. This has never been more true than it is today. Beyond that, we have to take into account who the war fighters are – Who does America typically send to fight and die?

In the past it has always been majority conservatives who joined the cause; the people who had the mental and physical capacity to fight along with the patriotic motivation. These are the front line combat soldiers – Not the rear echelon people. Not the logistics people. Not the mechanics and cooks and people working at a desk; the guys who actually pull the trigger.

The US military has spent the better part of the past seven years driving conservatives away from military service in favor of woke ideology and DEI propaganda. So who is left to do the real fighting? Well, what about progressives?

As the DC think-tanks are well aware, social media outrage over the mere mention of a new draft shows clearly that Gen Z isn’t going to comply with conscription. Progressives are terrified of the idea while conservative are highly suspicious. Not to mention, 70% of Gen Z is physically or mentally unfit to meet basic training standards anyway.

What about adding women to the draft? Doesn’t that double the conscription pool? No, it actually weakens the conscription pool because in order to draft women into combat roles basic training standards would have to be lowered dramatically. As the Marine Corp discovered experimenting with mixed gender units, inclusion of women in combat roles greatly reduces unit performance.  Any military that fields a large number of women under front line conditions will lose, badly.

The men that are qualified to fight are mostly conservatives and they aren’t going to go to war for the current administration. They certainly aren’t going to die for Ukraine and I doubt many are interested in dying for Israel either. If they fight a war it’s going to be here at home to remove pervasive and corrupt puppet officials along with their globalist puppet masters.

Now, whenever I bring up this possibility there’s always a contingent of government-stroking shills that claim this outcome is impossible. Next week I will be publishing an article outlining exactly why any administration seeking to go to war with a conservative citizenry will lose. To summarize, it’s a numbers game and the numbers are in our favor.

Recent surveys show that around 30% of adult Americans are now preppers. The Federal Emergency Management Agency (FEMA) reported a 50% increase from just 2017 to 2020 in people capable of up to 30 days or more of self-reliance. That’s a HUGE concentration of liberty minded people, tens of millions. Along with the 50 million+ gun owners in the US, it’s the largest army in the world by far.

To be sure, there are foreign threats out there. But, it’s hard to take the government’s cries for military readiness seriously when our borders are wide open and they are allowing millions of foreigners into the country every year without knowing who they are. No, the fight is going to be here at home, not overseas, and I think there are a number of political elites that understand this. A global war and forced conscription is their attempt at removing the “malcontents” before we cause them too much trouble.

*  *  *

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Tyler Durden
Wed, 07/03/2024 – 13:25

via ZeroHedge News https://ift.tt/yMEwKIQ Tyler Durden

Stocks, Bonds, & Bullion Soar Amid Political Panic & Macro Meltdown On Holiday-Shortened Day

Stocks, Bonds, & Bullion Soar Amid Political Panic & Macro Meltdown On Holiday-Shortened Day

Well that was a shitshow of a day… politically chaotic and macro-economically depressing on a holiday-shortened (super low liquidity) day (with FOMC Minutes due an hour after the close).

So BUY BUY BUY!!!!

Bonds, stocks, and gold all bid as collapsing ‘hard’ and ‘soft’ data (Challenger-Grey job cuts soared, ADP payrolls miss, continuing jobless claims surged, factory orders plunged, ISM Services puked)

Source: Bloomberg

…send the overall US macro surprise index to its weakest since Dec 2015…

Source: Bloomberg

…and spark panic-buying in STIRs, sending rate-cut expectations (dovishly) soaring…

Source: Bloomberg

This helped lift stocks (with Nasdaq and S&P outperforming) as The Dow and Small Caps ended approximately unchanged…

…as Mag7 dominated once again…

Source: Bloomberg

…as evidenced by the NVDA buyback machine being on fire today…

Bonds and stocks rallied for the second day together but since the debate – rates and stocks have decoupled in favor of a Trumpian victory bet…

Source: Bloomberg

The bad news was also good for bonds with yields tumbling across the curve (long-end outperforming) and all now lower on the week…

Source: Bloomberg

The dollar was dumped on the dovish bad news…

Source: Bloomberg

Oil prices spiked on the big crude draw (just like last night’s API) but reversed fast to end modestly lower…

Source: Bloomberg

Gold spiked back up to what appears to be a critical resistance level…

Source: Bloomberg

Bitcoin was clubbed like a baby seal, but found support at $60k amid more Mt.Gox headlines…

Source: Bloomberg

With a two year lag, the yield curve is screaming that VIX is way too low…

Source: Bloomberg

…and with jobless claims starting to rise quickly (and spread across states), means simultaneous stress on company balance sheets nationwide (more unemployment means lower demand, stressing the balance sheets of companies who will hang on to their employees for as long as they can) which feeds through to increased equity volatility.

Tyler Durden
Wed, 07/03/2024 – 13:00

via ZeroHedge News https://ift.tt/ios31MO Tyler Durden

Chicago’s Worst-In-Nation Pension Crisis Strikes Again

Chicago’s Worst-In-Nation Pension Crisis Strikes Again

Authored by Nick Binotti and Ted Dabrowski via Wirepoints.org,

Wirepoints recently warned in a Chicago Sun-Times oped that Chicago’s pension mess was going to get worse. As Chicago’s latest annual financial report shows, that’s just what happened.

Chicago’s pension shortfall across the city’s four major retirement funds – Municipal, Laborers, Police and Fire – rose to $37.2 billion total in 2023. That’s a 5% increase from $35.4 billion reported the prior year. Most of the increase is attributed to changes in actuarial assumptions and recent legislation that sweetened the cost-of-living pension benefit for thousands of police and firefighters.

Add in the Teachers Pension Fund’s $15.8 billion shortfall and Chicagoans are on the hook for $53 billion in unfunded pension liabilities. That’s over $45,000 owed per Chicago household to be paid off over time.

The Chicago teachers and municipal pension funds have the highest unfunded liabilities with both just under $16 billion. The police pension fund is next with nearly $14 billion. The fire and laborers pension systems have unfunded liabilities of $5.7 billion and $1.9 billion, respectively.

Chicago’s five largest systems are only 30% funded collectively. Only the Chicago Teachers Pension Fund has a funding ratio above 40%. Chicago’s municipal, police and fire pension systems each have funding ratios around only 22%, among the worst in the country for major pension funds.

Chicago’s pension debt continues to increase slowly and steadily year after year. It’s what we described as a “slow-boil” where Chicagoans are increasingly burdened with higher taxes for the same or less amount of services, disparately impacting the city’s most vulnerable.

Mayor Brandon Johnson Pension Working Group has yet to come up with a plan to cool down that boil. In an open letter to Mayor Johnson and an Oped in the Chicago Tribune, Wirepoints and the Taxpayer Pension Alliance outlined a number of actions the city could take to get some control over the problem.

Here are key measures of Chicago’s crisis we provided to the mayor on January 10, 2024:

Chicago’s pension costs and its unfunded liability make the city the extreme outlier nationally when it comes to the burden it creates on its residents and its budget.

The fixed costs of Chicago’s pension and general debts makes the city uncompetitive vis-a-vis the nation’s other big cities. Those costs will continue to negatively impact taxes and services, further pressuring the city’s out-migration, home values and quality-of-life issues.

Chicago’s pension funds are running out of money and are among the worst funded in the country when measured by the ratio of assets a plan has relative to its yearly payout. Those asset-to-payout ratios have collapsed to single digits over the last two decades, reflecting the funds’ fall towards insolvency. Healthy funds have a ratio of 20 or more.

Chicago can’t increase taxes without inflicting even more damage to its economic competitiveness. Chicago commercial property taxes are already the nation’s highest among big cities.

The city’s lack of competitiveness across fiscal and quality-of-life issues, including crime and education, has had a dramatic impact on Chicagoans’ home values. The expectation of higher taxes and cuts in services will continue to put pressure on Chicago home values.

The catch-all impact of the burdens and quality-of-life issues Chicagoans face is reflected by the city’s long-term population decline. When compared to the turn of the millennium, Chicago and Detroit are the only major cities to suffer a loss of people.

Chicago has the worst credit rating in the country among big cities with the exception of Detroit. Chicago was able to shed its junk rating only because of the billions in federal public and private aid during covid. The city’s pension crisis will reemerge as those federal funds dry up.

*  *  *

Chicago’s pension crisis will not be solved via more reamortizations, pension obligation bonds or tax hikes. Such “fixes” will only prolong and further exacerbate the city’s housing, migration and quality-of-life issues.  Instead, a comprehensive, long-term solution, based on actuarial best practices, is essential to restoring confidence and competitiveness to Chicago.

Tyler Durden
Wed, 07/03/2024 – 12:45

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Some thoughts on America for her 248th birthday

When the 56 delegates to the Second Continental Congress ratified the Declaration of Independence 248 years ago tomorrow, they were creating much more than a nation. They were giving birth to an idea.

America, at its core, is an idea. And it’s one that ranks as one of the greatest innovations in the history of human civilization, right up there with the wheel, the steam engine, the printing press, and the Internet.

The idea of America wasn’t born in 1776, however. By then it had already evolved over thousands of years.

The ancient Greeks embraced individual liberty, direct democracy, and a respect for the rule of law.

The Roman republic further refined Greek democracy and developed a more professional legal code. The early Roman Empire embodied peace through strength, ushering in nearly two centuries of geopolitical stability and economic prosperity under the Pax Romana.

The later Byzantine Empire fused Greek and Roman ideas with Judeo-Christian values. And by 1000 AD, the Republic of Venice– borrowing from Rome’s republican form of government– infused an early form of capitalism to this model.

The Dutch republic of the 1600s refined the concept of a powerful, free, capitalist society even further, as did philosophers like Rousseau, Montesquieu, John Locke, and Adam Smith.

So, when the Founding Fathers wrote the Declaration of Independence (and subsequently the US Constitution), they didn’t have to start from scratch; they drew from a rich, 2,000-year intellectual heritage of the giants who came before them.

This means that America is ultimately a composite of the very best ideas that human civilization ever had to offer— and the combined concept was then elevated to unprecedented heights.

Nothing is perfect, and America wasn’t either.

But based on this idea, the United States became the world’s largest economy in less than a century and the dominant global superpower about 80 years later. That is an unparalleled achievement which no other superpower in human history has come close to matching.

It’s also worth pointing out that the majority of the world’s most important innovations, from airplanes and air conditioning to cell phones and chocolate chip cookies, were either born or perfected in America.

Again, none of this is an accident. America’s success is deliberate outcome from combining the best ideas from 2,000+ years of human civilization… plus some disciplined execution and a little bit of luck.

Obviously, America has weathered challenges as well. The Civil War. The Great Depression. The turmoil of the 1960s.

But its foundation of economic potential, plus a baseline of social cohesion and shared values, have always allowed the nation to overcome… and for the idea of America to persist.

The country is now at an undeniable crossroads, and it’s not just about a single election.

There are obvious signs of national decline: rising inflation, mounting debt, diminished global standing, a loss of government dignity, and stinging embarrassments like the shameful withdrawal from Afghanistan.

Even the idea of America itself is on the ropes; there are powerful forces within government, media, and the education system who seek to redefine America’s core principles.

Capitalism has been demonized and reinvented. Individual liberty has given way to a radical woke ideology. And the concept of limited government is almost a punchline at this point.

Still, there is a plausible scenario in which America’s best days are ahead.

If politicians embrace the principles that originally fueled the country’s prosperity—such as capitalism and laissez-faire productivity—America could experience an economic boom not seen since the Industrial Revolution.

By cutting taxes, slashing anti-capitalist regulation, and embracing the free market, the increase in productivity could be staggering.

This boom would lead to increased tax revenue, i.e. funds which could rebuild the military, secure the southern border, save Social Security, curb inflation, balance the budget, and chip away at the national debt.

As China buckles under the consequences of its central planning and upside-down demographic pyramid (brought on by its idiotic “One Child policy”), the United States could easily reassert its global primacy.

The dollar’s status as the global reserve currency would be unquestioned, and the world could see a new era of global peace and prosperity.

This is not a pipe dream. It’s a genuine possibility.

The other possibility is that the government does nothing to arrest America’s decline.

The debt continues to spiral further out of control. Rising deficits trigger painful inflation. Excessive regulation stifles economic growth, leaving the economy stagnant and performing far below its full potential.

Individuals are constrained by politicians’ incessant and debilitating rules about how to live, what to buy, and what to drive. The social fabric continues to tear apart with idiotic mandates, censorship, wokeness, gaslighting, and a hatred for capitalism.

Unfortunately, that is the road the country is presently on. Yes, it can be fixed. They can change directions. And we certainly hope that happens.

But as we used to say in the military, hope is not a course of action. That’s why we have a Plan B.

Having a Plan B is not being negative or pessimistic. It’s certainly not irrational. And it’s not unpatriotic.

The fierce individuality to NOT bow down to circumstances is exactly what has allowed America to persevere so many times before.

And taking sensible steps to preserve, protect, and defend what you have worked so hard to achieve in life is about as core of an American value as it gets.

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After Being Wrong For Three Years, Marko Kolanovic Is Leaving JPMorgan

After Being Wrong For Three Years, Marko Kolanovic Is Leaving JPMorgan

In retrospect, it was the best call of this market cycle.

After he was bullish – and dead wrong – all the way down from the Jan 2022 all time high, JPM’s chief equity strategist Marko Kolanovic capitulated in late September 2022 when, as we reported at the time he turned bearish on the last day of the month. To us, this was the signal that the worst slump since covid was over and a historic meltup lay ahead.

We were right, and literally to the day, the market bottomed the day Kolanovic flip-flopped.

Actually, in retrospect we may have made another, just as good call: back in Feb 2023 we said that the rally won’t end until Wilson and Marko turn bullish.

That was also correct – with the S&P hitting a new record high on 32 days so far in 2024, yesterday being the latest one – but little did we know that instead of admitting defeat and pressing on, as so many of his peers do all the time, the Croatian would instead choose sepuku.

That’s right: back in February, Bloomberg reported that Mike Wilson (shortly before he capitulated and turned bullish) was tapped on the shoulder and stepped down from his role as chair of the bank’s Global Investment Committee.

However, the fact that he did eventually – finally – flip-flop back to bullish meant he at least got to keep his job.

Unfortunately for his JPMorgan colleague, it didn’t quite work out, and as Bloomberg reported this morning, Marko Kolanovic, technically the chief global market strategist of the world’s largest commercial bank and co-head of global research, is leaving the bank, according to an internal memo obtained by Bloomberg News.

Kolanovic, who had been at JPMorgan for 19 years, is “exploring other opportunities,” the memo stated. His Croat co-worker, Dubravko Lakos-Bujas, will lead market strategy and become chief market strategist, overseeing cross-asset, equity, and macro. Hussein Malik will be the sole head of global research. Stephen Dulake and Nicholas Rosato will co-lead fundamental research, a new team that brings together credit and equity research.

This is how Bloomberg describes Marko’s recent analytical (lack of) performance:

The move follows a disastrous two-year stretch of stock-market calls by Kolanovic. He was steadfastly bullish in much of 2022 as the S&P 500 Index sank 19% and strategists across Wall Street lowered their expectations for equities. He then turned bearish just as the market bottomed, missing last year’s 24% surge in the S&P 500 as well as the 14% gain in the first half of this year.

Indeed, while Marko was a phenomenal flow and derivatives analyst before he was promoted into the C-suite (in no small part thanks to the publicity we generated for him back in the day), unfortunately for him, that’s when politics intervened with his market analysis, and his work product started to suffer starting in 2018 and deteriorated progressively ever since. It got so bad that JPM’s own trading desk would frequently troll Kolanovic with their own repeatedly bullish – and correct – calls.

In any case, we wish Marko all the best and some advice: when he launches his own substack, don’t go the Zoltan route and seek $10,000 in monthly subscription fees. It just won’t work.

Tyler Durden
Wed, 07/03/2024 – 12:25

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Petrodollar Panic: Separating Fact From Fiction

Petrodollar Panic: Separating Fact From Fiction

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Recently, a few media outlets have warned of the imminent demise of the petrodollar agreement, commonly called the petrodollar. With such narratives comes investor anxiety. Consider the following article titles on the topic.

  • OPEC Will Sever Link With Dollar For Pricing Oil- The New York Times

  • The Petrodollar Is Dead and that’s a big deal- FX Street

  • After 50 Years, Death of the Petrodollar Signal End of U.S. Hegemony- The Street Pro

Before jumping to conclusions, let’s discuss what the petrodollar is and isn’t. With that knowledge, we can address concerns about the death of the petrodollar. Furthermore, we can discredit menacing headlines like- Petrodollar Deal Expires; Why This Could Trigger ‘Collapse of Everything.’

Before starting, we need to make a disclaimer. The New York Times article we bullet point above is not recent. We added it to show this is not a new story. The article dated June 1975 starts as follows:

LIBREVILLE, Gabon, June 9 — The oil‐producing nations agreed today to sever the link between oil prices and the dollar and to start quoting prices in Special Drawing Rights, the governor of the Iranian national bank, Mohammed Yeganeh, said.

What Is The Petrodollar?

In 1974, following the economically devastating oil embargo in which the price of crude oil per barrel rose four-fold, sparking a surge in inflation and weakening the economy, the U.S. desperately sought to avoid another embargo at all costs. U.S. politicians theorized that a stronger relationship with Saudi Arabia would go a long way toward achieving its goal.

Fortunately, the Saudis also hoped for a beneficial relationship with the U.S., and they needed a trustworthy investment home for their new oil riches. They also desired better military equipment. At the time, Saudi Arabia was running a huge budget surplus because of its windfall from high oil prices and relatively minor spending needs from within the country.  

While there was never a formal petrodollar pact, it is widely believed that the U.S. and Saudi Arabia had a handshake agreement to meet each other’s needs. Saudi Arabia was encouraged to invest its surplus dollars in safe, high-yielding U.S. Treasury securities. In exchange, the U.S. would sell Saudi Arabia military equipment. Both hoped a better relationship would be a productive byproduct. Such is the petrodollar agreement.

The Petrodollar Was Not Really About The Dollar

We think the petrodollar discussions were principally about Saudi Arabia needing a safe home for their surpluses and the U.S. seeking dollars to fund her large fiscal deficits. While the dollar would be the currency for said transactions, it was not likely the focus of the talks.

In dealing with the immense costs of the Vietnam War and ambitious social spending to pacify social unrest, America sought deficit funding. Saudi Arabia needed to invest its surpluses. Given the unprecedented liquidity and safety of the U.S. Treasury market compared to other options, the “agreement” made a lot of sense for both parties. Furthermore, because Saudi oil revenue would be used to buy dollar-based U.S. Treasury bonds, it made sense for Saudi Arabia to require other oil buyers to pay in U.S. dollars.

We share two graphs to better appreciate the deteriorating U.S. fiscal position at the time.

The first graph below highlights the deficits during the mid-1970s. Today, many would consider a $50—or $60 billion deficit minimal. But then, the deficits incurred were a sharp departure from the norm.

The second graph provides proper context. The nation was experiencing more significant federal deficits in the mid- to late 1970s than it faced during World War II. Given the immense spending on World War II, that fact was stunning to many people at the time.

Saudi Arabia Doesn’t Have Investible Dollars

Today, the situation is different. America still desperately needs funding, but Saudi Arabia doesn’t have budget surpluses to invest. Per a Bloomberg article entitled The Petrodollar Is Dead, Long Live The Petrodollar:

Fast forward to today, and Saudi Arabia doesn’t have a surplus to recycle at all. Instead, the country is borrowing heavily in the sovereign debt market and selling assets, including chunks of its national oil company, to finance its grand economic plans. True, Riyadh still holds significant hard currency reserves, some of them invested in US Treasuries. But it’s not accumulating them anymore. China and Japan have significant more money tied up on the American debt market than the Saudis do.

The Reserves Monopoly

Many believe the U.S. government bullies foreign countries into using the dollar, thus forcing them to have dollar reserves. Such seems logical as the reserves must be invested and can help fund our deficits.

We do not know what our politicians say to other countries behind closed doors. But we presume some “persuasion” presses other countries to use the dollar. Regardless, there are not many options for the dollar.

The U.S. offers other nations the best place to invest for four primary reasons. As we outline in Four Reasons The Dollar Is Here To Stay:

The four reasons, the rule of law, liquid financial markets, and economic and military might, all but guarantee the death of the dollar will not occur anytime soon. 

No other country has all four of those traits. China and Russia lack the rule of law and liquid financial markets. Russia also has a small and fragile economy. Europe does not have liquid enough capital markets or military might.

Gold and Bitcoin are often rumored candidates to usurp the dollar. For starters, they do not earn a return on investment. Possibly more problematic, their prices are incredibly volatile. There are many other difficulties precluding them from full-fledged currency status, which we will save for another article.

Summary

Notwithstanding whether there was a formal agreement, the petrodollar is not going anywhere. Even if Saudi Arabia accepts rubles, yuan, pesos, or gold for its oil, it will need to convert those currencies into dollars in almost all instances.

Consider that Saudi Arabia keeps its currency value pegged to the dollar, as shown in the graph below, courtesy of Trading Economics. They also hold approximately $135 billion of U.S. Treasury securities, a three-year high. Does it seem like Saudi Arabia is trying to disassociate from the U.S. dollar and U.S. financial markets?

Stories like those on the petrodollar and others on the “imminent” death of the dollar have been around for decades. Someday they will be right, and the dollar will follow the way of prior global reserve currencies.

But for that to happen there needs to be a better alternative, and today, nothing even close exists.

Tyler Durden
Wed, 07/03/2024 – 12:05

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