Month: August 2024

Today saw some respite in the recent rout for oil prices as WTI stalled its decline around $73 (just off six-month lows) as stocks bounced and lifted Treasury yields, supporting crude for now.

Concerns remain about the outlook for crude demand in China and the U.S. A run of softer-than-expected economic data late last week set in motion the stock-market selloff and weighed on oil futures, analysts said.

Downside appeared to be limited, however, by expectations that Iran would launch retaliatory strikes after it blamed the assassination of a top Hamas official visiting Tehran last week on Israel. U.S. officials have been pressing Tehran not to escalate the conflict, news reports said.

“Oil prices have fallen in the last few days in lockstep” with equities, with limited reaction to developments in the Middle East, Goldman Sachs Group Inc. analysts including Daan Struyven wrote in a note.

The big question is – will the streak of crude draws continue…

API

• Crude +0.18mm

• Cushing +1.07mm

• Gasoline +3.31mm

• Distillates +1.22mm

The five-week streak of crude inventory draws is over as API reports builds across the entire energy complex…

Source: Bloomberg

WTI was trading around $73 ahead of the API print and faded modestly lower, back towards six-month lows, after the across-the-board builds…

The U.S. Energy Information Administration predicts that crude oil prices will recover from recent losses as draws on global inventories accelerate in the second half of the year.

“Although crude oil prices have fallen recently, we continue to expect crude oil prices will rise in the second half of 2024,” the EIA said Tuesday in its monthly Short-Term Energy Outlook. The agency expects international benchmark Brent to return to between $85 and $90 a barrel by the end of the year.

The EIA anticipates withdrawals from global oil inventories will double to 800,000 barrels a day in the second half of the year from an estimated 400,000 barrels a day in the first half. A return to moderate inventory builds is predicted in mid-2025.

Via Wirepoints.org,

Led by Gov. JB Pritzker in national TV appearances, the political establishment in Illinois and Chicago is listing its triumphs as the Democratic National Convention in Chicago nears. Mayor Brandon Johnson, too, is “looking to spread his vision for progressive governance on everything from raising wages for workers in Chicago to achieving a ceasefire in Gaza,” as The Nation recently put it.

Through a progressive’s lens, successes are real: a higher minimum wage, establishment of the state as an abortion haven, a major capital budget, aggressive green energy mandates, welcoming and sanctuary policies for migrants and more. We publish those claims as they are made. Illinois may indeed be “the most progressive state in the nation and damn proud of it,” as Gov. Pritzker says.

But there’s another side to the story, thousands of pages long, of severely crippling results of progressive policies.

What follows is a summary of the other consequences of progressive policies for Illinois and Chicago. Each point is documented by facts and data. Links are to original sources or to Wirepoints reports that cite the original sources.

• Fleeing population and tax base

• Stagnant economy and job market

• Expensive and broken education system

• Rampant crime

• Suffocating taxes

• Pension crisis ignored

• Massive spending on illegal immigrants

• No equity – a failure by their own standards

• Economic policy centered on statism and doomed focus on renewable energy

• Free speech under assault and autocracy reigns

• Disastrous pandemic management yet no accountability

• Still more

For still more details, see our page linked here collecting all our pertinent articles and research grouped by topic.

*  *  *

Fleeing population and tax base

• The Census Bureau’s decennial count (2010-2020) showed Illinois was one of only three states to lose population over the decade. The bureau’s latest estimates show Illinois has lost another 240,000 in population since 2020.

• More than 1.5 million people on net have moved out of Illinois since 2000 according to IRS migration data. Illinois would have taken in an estimated $3.6 billion more in income tax revenue in 2022 alone were it not for that exodus.

• IRS migration data shows Illinois netted a loss of 87,000 residents and $9.8 billion in adjusted gross income in tax year 2022. Illinois’ losses were the nation’s 3rd-worst, behind only New York and California.

• Illinois had 24 U.S. House Representatives after the 1970 Census. Today it has just 17.

Stagnant economy and job market

• Illinois’ current unemployment rate of 5.0% is 3rd-worst in the nation.Chicago is ranked dead last among major cities for creating new millionaires.

• Illinois ranks 45th through 47th in the country in economic metrics used by the state’s own Commission on Government Accountability and Forecasting to compare itself to other states: GDP, employment and personal income.

• Illinois is a “net taker” from the federal government and has been since around 2019.

• Illinois’ credit rating and budgets were greatly assisted by the nearly $200 billion in covid funds distributed by the federal government to the state’s public and private sectors.

• Illinois has created no net new employment in five years – the nation’s 3rd-worst performance. Fewer people are on Illinois’ employment rolls today than when Gov. Pritzker took office.

• Annual state claims to “balanced budgets” aren’t true because, among other reasons, Illinois consistently underfunds its pension contributions by about $5 billion every year.

Expensive and broken education system

• Illinois has dismal student outcomes. Just 35% of students statewide can read at grade level and only 27% are proficient in math. It’s worse for minorities: Just 16% of black students and just 22% of Hispanics can read at grade level. In all, 1.2 million Illinois students can’t read at grade level.

• Illinois is spending nearly $24,000 per student in 2024, up more than 30% compared to 2019.

• Only 25% of Chicago Public School students can read at grade level and just 18% can do math. Yet CPS graduates 83% of its students. Chicago Public Schools spent nearly $30,000 per student in 2024, up 39% compared to 2019.

• Not a single child tested proficient in math in 67 Illinois schools. For reading, it’s 32 schools.

• The state’s accountability metrics are broken. Ninety-seven percent of teachers statewide are rated “excellent or proficient” and 83% of schools are rated “exemplary” or “commendable.”

• Based on Census Bureau data, Illinois spends the most per student of any state in the Midwest. Illinois’ total per student spend grew 98% between 2022 and 2007, the 3rd-largest increase of the nation’s 50 states.

• Illinois’ “evidence-based” school funding formula has failed. After seven years and $8.5 billion in dedicated funding to the formula, the number of students reading at grade level has not improved.

• While 19 states have adopted some form of school choice since 2023, Illinois politicians last year killed off the state’s only choice program: a small tax-credit scholarship.

Rampant Crime

• Chicago has led the nation in total homicides for 12 years in a row.

• Pritzker has said “violent crime in the City of Chicago … has been coming down for three years, in particular, over the last year” and frequently made similar claims. In truth, Chicagoans are suffering under a six-year high in violent crimes.

• Thanks to crime levels and overwhelmed police, if you’re shot, robbed or assaulted in Chicago, there’s a 50/50 chance there will be no police to respond to your 911 call.

• Since the implementation of the controversial SAFE-T Act which eliminated cash bail, Cook County’s jail population has fallen to its lowest levels in 40 years.

• Prosecuting criminals in Chicago and all of Cook County is in the hands of Kim Foxx, widely regarded as among the most pro-criminal prosecutor in the nation and notorious for dropping charges against actor Jussie Smollett. She was endorsed in both her election and reelection to Cook County State’s Attorney by the entire Illinois ruling progressive establishment.

Suffocating taxes

• Illinoisans pay the nation’s highest property taxes, the country’s 2nd-highest gas taxes and the 2nd-highest corporate income tax rate. Property taxes in Chicago are particularly staggering, with the highest effective commercial property tax rate (5.37%) among the nation’s biggest cities.

• All told, Illinois’ total tax burden ranking ranges from worst to 11th worst, though Illinois ranking probably has worsened since the last studies were done. At least 26 states have recently cut taxes while Illinois raised its by over a billion dollars.

• Pritzker’s 2025 budget disregarded kitchen table issues that actually matter, such as gasoline prices, property taxes, quality of education, inflation and jobs.

• Kiplinger has ranked Illinois the “least friendly state” for middle-class families.

• The south and southwest suburbs of Chicago were hit particularly hard by residential tax bills sent in July, sparking fears of a tax revolt. The median residential bill jumped by 19.9%, to $6,117. Most stunning of all, in 15 south suburbs median tax bills jumped by anywhere from 26% to 122%.

Pension crisis ignored

• Illinois has the worst pension crisis in the nation under most metrics.

• The unfunded liability for Illinois state pensions grew from $137 billion in 2019 (when Pritzker took office) to $142 billion in its most recent report.

• Chicago’s worst-in-nation pension crisis is worsening. Chicago’s pension shortfall across the city’s four major retirement funds rose to $37.2 billion in 2023. Add in the teachers fund, and Chicagoans are on the hook for $53 billion in unfunded pension liabilities – over $45,000 per Chicago household.

• The number of Illinois public sector workers or retirees with pension benefits or salaries exceeding $100,000 per year has jumped by 50% since 2018, now at 140,000.

• Illinois and Chicago have the nation’s worst credit ratings, largely due to the pension crisis.

• Pritzker and other Illinois officeholders refuse to consider an amendment to the state’s constitutional pension protection clause, dishonestly claiming that the federal Constitution would be an impediment. Other states prove it’s not so.

 Massive spending on illegal immigrants

• The true number of illegal immigrants in Illinois is likely 500,000 to 680,000, imposing a total taxpayer cost of about $6 billion per year.

• The City of Chicago has spent about $200 million of its own money on migrant care since 2022.

• In addition, Chicago schools are expected to spend up to $410 million extra this year for migrants.

No Equity – Failure by Their Own Standard

• By their own primary measure of success – “equity” – Illinois and Chicago have failed miserably. Study after study, looking at equity from many angles, says progressive equity efforts in Illinois and Chicago have flopped miserably.

• The biggest pension in the state, for teachers and school administrators, is structurally set up to shift money to the richest school districts. Lawmakers could easily fix that but don’t.

Economic policy centered on statism and doomed focus on renewable energy

• Virtually all major, recent Illinois announcements of new or expanding Illinois employment centers were induced through taxpayer subsidies. Most new major projects subsidized by the state are renewable energy projects, which are the centerpiece of Illinois central planning. They include subsidized facilities for Stellantis, Rivian, Lion Electric and Gotion.

• The Gotion project is particularly controversial. The Chinese company with multiple ties to the Chinese Communist party is scheduled to receive over $8 billion in state and federal subsidies for a plant that will cost the company less than $2 billion. The project is widely opposed by the public and is for manufacturing batteries for electric vehicles, demand for which is languishing. Full reporting on those facts and the rest of the Gotion controversy is collected in our special section here. Pritzker has expressly refused to answer any questions whatsoever about the project.

• Illinois is aggressively pursuing a goal of having one million EVs on the road by 2030, but Illinois would have to quadruple its current adoption rate for EVs to meet the state’s goals.

• In 2021, Illinois passed legislation to push 50% of its electricity production to renewable sources by 2040 and 100% from clean energy sources by 2050, which became law last year and was called by one of its sponsors “the most aggressive, most progressive climate bill in the nation.”

• Partly as a result of those policies, electricity costs have already risen 50% in much of the state with high risks of brownouts. As in most of the nation, many planned renewable electricity projects are now on hold because grid connections don’t exist, which may be prohibitively expensive to fix.

• Last month the state announced a major bet on quantum computing. Illinois will provide $200 million to PsiQuantum for a Chicago projected to create just 154 jobs. The state is also contributing another $500 million to the industrial park for quantum computing in which the facility will be located, which the state says will result in “thousands” of jobs. However, those additional jobs are entirely speculative at this point.

• Most recently, Lion Electric, an electric school bus maker that last year built a new Illinois plant with state incentives is struggling for survival. The project was highly touted by Pritzker, who projected 1,200 jobs by 2028. Lion also benefits from the $5 billion subsidy program for electric school buses championed by Vice President Kamala Harris, which is also failing.

Free speech under assault and autocracy

• Illinois has established itself as the state most hostile to First Amendment free speech rights. A list of examples is linked here. In one instance, a federal judge labeled a law the state was trying to defend as “stupid and likely unconstitutional,” so Attorney General Kwame Raoul gave up on the case.

• Illinois’ highly touted “ban on book bans”  is an empty, dangerous and hypocritical stunt. It delegates censorship powers to libraries and to an unelected national association headed by a self-described Marxist. It conflates questions of age appropriateness with censorship, and is a transparent attempt by the leaders of the cancel culture to wrap themselves in the flag of free speech.

• Pritzker has expressed views particularly hostile to established First Amendment law, saying on CNN that what the government deems to be lies should be subject to criminal prosecution.

• The University of Illinois maintains one of the most onerous “loyalty oaths” for faculty, demanding proof of their active commitment to wokeness.

• Illinois Congressmen have implored social media to do more censorship in at least five separate hearings where tech platform CEOs were grilled.

• During the covid pandemic, Illinois was ruled under 45 consecutive monthly emergency orders giving unparalleled power to the executive.

• For illegal immigrants, Illinois was ruled under 24 monthly emergency orders. The proclamations broadcast inducements for illegals to come, including “transport, emergency shelter and housing, food, health screenings, medical assessments, treatments, and other necessary care and services.”

• Illinois this year retroactively changed the rules on candidate slating for General Assembly elections, which targeted Republicans only. A lower court ruled against the law, which is now on appeal.

• Most recently Illinois passed a ban on employers from discussing “religious or political matters” at meetings where worker attendance is mandatory. Violations will be punishable with fines up to $1,000 per employee. It’s patently unconstitutional and absurdly overbroad.

Disastrous pandemic management yet no accountability

• A full list of covid response failures by the State of Illinois and City of Chicago is here, many of which were obvious errors even as they were being made. No remorse has been shown or accountability imposed.

• That list includes massive fraud in pandemic relief, suppression of dissent and conflicting data, unfounded projections portrayed as “science” and willful indifference to the rule of law.

• Most importantly, Illinois kept schools closed long after prevailing opinion and the CDC advised otherwise, among the greatest policy errors in healthcare history. 

Still more

• “After years of Republican failure, Pritzker says, Illinois Democrats have turned the state around.” In truth, Democrats have held the majorities in both houses of the Illinois General Assembly for 21 years and super majorities in both houses for 11 years. A Democrat has been governor for 17 of the last 21 years. Chicago has not had a Republican mayor for 93 years.

• A catalog of deceitful or dishonest claims by Pritzker and the state is here. 

• For voting, Illinois maintains aggressive mail-in voting rules, no requirement for picture IDs and the probably the most gerrymandered maps in the nation.

• Antisemitism has been the predictable result of DEI preached by JB Pritzker and his sister, Penny Pritzker. Like Penny Pritzker at Harvard, JB Pritzker’s tenure on Northwestern University’s board of trustees contributed to the current wave of antisemitism at the school.

• Illinois is in fact a moderate state not properly represented by its progressive political establishment. On virtually every major issue, Illinoisans are centrists.

• Mayor Johnson and Cook County Board President Toni Preckwinkle are among the nation’s strongest supporters of Universal Basic Income. Cook County claims its UBI program is the biggest in the nation. But neither Chicago nor the county have any way to pay for continuation of the programs, most of which have been paid for with temporary covid relief money.

• The commercial property “Doom Loop” is a growing concern. Chicago, like many cities, faces a frightening, downward spiral from declining office building valuations. Though the problem may derive primarily from the work-from-home trend, it’s worsened by Chicago crime. Actual, daily occupancy of downtown offices hovers around 55% of pre-pandemic levels. Lower valuations will force massive residential property tax increases or severe budget cutbacks.

• Johnson was elected mayor of Chicago despite his calls for defunding the police and justifying violent protests.

• Mayor Johnson routinely places blame for Chicago’s problems on racism, disinvestment and even Richard Nixon.

• Illinois progressives celebrate December 4 as Fred Hampton Day. Hampton was a member of the Black Panthers and advocated for violent, Marxist revolution.

• Pritzker’s approval rating is 41% according to the most recent poll by a major pollster. Mayor Johnson’s is 28%.

• “Social justice” principles guide investment of state cash. Illinois Treasurer Michael Frerichs remains an unapologetic champion of ESG (environmental, social, governance) investing. He manages an average balance of well over $100 billion of state money which he subjects to his social justice goals.

• A 2018 Cook County inspector general’s report concluded that more than $330,000 in property tax breaks and refunds that Pritzker received on a property he owned — in part by removing toilets to render the property uninhabitable — constituted a “scheme to defraud.” Pritzker repaid the county treasurer’s office, and said the repayment was not an acknowledgment of anything improper. A federal criminal investigation of Pritzker, his wife and brother-in-law was reported to have begun on the matter in October 2018, though nothing further has been reported on that.

As the world awaits an Iranian retaliation strike against Israel, Hezbollah Secretary General Hassan Nasrallah warned Tuesday of ‘strong and effective’ attacks on Israel.

The leader of the Lebanese militant group spoke on national television earlier Tuesday at the one-week memorial of Fuad Shukr, the group’s top military commander, who was killed in Israeli air strikes in Beirut. 

Iran “finds itself obliged to respond, and the enemy is waiting in a great state of dread,” Nasrallah said, adding that Hezbollah will respond “alone or in the context of a unified response from all the axis” of Iran-backed proxy groups “whatever the consequences.”

He added that “Israel is no longer as strong it was in the past and neither are its defensive capabilities. Israel is asking for help from the US, from the West, from Europe and from Arab regimes – this is evidence of Israel’s decline in prestige. The command and control centers, Iron Dome, ‘David’s Sling,’ and the Israeli and US satellites are on high alert – while today a missile fell east of Acre.”

“The entire region today is in the face of a real danger,” Nasrallah noted. He said, “Everyone needs to understand the risks in the current situation regarding Palestine, because if the Israeli government wins in the struggle over the West Bank and the Gaza Strip – then there is no Palestinian people, there won’t even be Al-Aqsa Mosque.”

Nasrallah also said the militant group will be targeting new Israeli high-value asset targets much deeper in the country than ever before. 

Listen here… 

⚡️⭕️[ENGLISH] 2024-08-06 Hezbollah secretary general Sayed Hassan Nasrallah speech live streamhttps://t.co/kbYAM5VJrf

— Middle East Observer (@ME_Observer_) August 6, 2024

Stay updated on the latest developments in the Middle East crisis:

• Iraq Base Housing American Forces Comes Under Brief Rocket Attack

• Putin’s Top Defense Officials Are In Tehran Amid Countdown To Zero Hour

• The Trigger For WWIII Just Arrived – What Are The Implications For Americans?

• Jittery Israel Braces For ‘Five Front’ War

Meanwhile, President Biden was briefed on Monday about preparations to support Israel should all hell break out in the Middle East.

Secretary of State Antony Blinken said officials are working “around the clock” to prevent a broadening conflict. 

Axios reported that Monday’s Middle East briefing with Biden and officials provided little details about the timing and nature of an Iranian attack. 

Biden said:

“We received updates on threats posed by Iran and its proxies, diplomatic efforts to de-escalate regional tensions, and preparations to support Israel should it be attacked again.”

Both U.S. and Israeli leaders have continued to ready their forces to respond to a heightened level of attacks across the Middle East.

“Israel is in a state of very high readiness for any scenario—on both defense and offense. We will exact a very high price for any act of aggression against us from any quarter whatsoever,” Israeli Prime Minister Benjamin Netanyahu announced in an Aug. 1 press statement.

Deputy Pentagon press secretary Sabrina Singh also announced that additional U.S. missile defense capabilities were deploying to the region on Aug. 2.

Singh said Defense Secretary Lloyd Austin had ordered additional ballistic missile defense-capable cruisers and destroyers to deploy to the CENTCOM area of operations, which covers Israel and the broader Middle East.

She said Austin also ordered another fighter squadron to the Middle East to bolster regional air defense capabilities and was readying to deploy additional land-based ballistic missile defense systems.

What remains a mystery is the timing of the potential Iranian retaliation – and really it’s impossible to know the scale of the attack. But what’s very likely is a direct assault on Israel by Iran or proxy forces that could very well drag in Western nations, such as the US. 

In markets, an exploding regional conflict could have major implications on the oil market.

So far, energy traders have shrugged off geopolitical concerns and instead focused on the demand woes of slowing economies in China and the US. 

Authored by Josiah Lippincott via American Greatness,

Megan Thee Stallion can twerk all she wants, but Kamala Harris remains the weakest Democratic presidential candidate since Walter Mondale.

The conservative influencers despairing at the apparent “energy” behind the DNC’s astroturfed social media rollout for Harris are in error. This race is Trump’s to lose. Kamala has no shot at legitimately winning the 2024 Presidential election. 

She is an absurd candidate running a ridiculous campaign. She is clearly not the consensus pick of the Democratic party for the presidency. We know this because no voter ever cast a ballot for her in the primary. Moreover, her appearance in the race is entirely inorganic—the product of Democrat insiders deposing the sitting president from running again for an office he very much insisted he should hang onto. 

Kamala is not a legitimate candidate for President. She is not popular. She is not inspiring. She has no base of support. She has no cogent policy proposals to better the country. She is a terrible public speaker with little to no grasp of national politics. She was airdropped into the 2024 campaign because her boss couldn’t string together a coherent sentence. She was selected as VP in the first place because she is a Black woman. 

Should the DC regime install Kamala, it will mean the end of our constitutional order and of free and fair elections. Kamala cannot legitimately win the presidency. Should the media declare her the winner on November 6, it would be an absurdity on the scale of journalists insisting that North Korean elections are free and fair.

Kamala’s campaign is the ultimate ritual humiliation for the American electorate. The 2020 results were bad enough. The DNC coup to remove Biden from the 2024 ticket was a stunning public admission that he was never the “most popular candidate” of all time and that the 81 million “votes” he “won” in 2020 were a mirage cooked up by ballot-harvesting, COVID protocols, and outright fraud.

American voters stomached, barely, that illegitimate result because Trump always had the potential to come back. As long as there was a reasonable possibility of Trump winning, voters were willing to tolerate the absurdity of the Biden “victory.” The legitimacy of the American electoral system therefore rests entirely on Trump’s shoulders.

The regime cannot survive the installation of another astroturfed and unpopular political leader into the highest office in the land. The weight of the sheer ridiculousness of it all will bring faith in our system of government crashing to the ground.

No reasonable person can believe that Kamala has any shot in this race. The entire Democrat campaign for the presidency has had to retool on the fly—they need new signs, a new rally schedule, and a new message—with only a dozen weeks to go in the race. Kamala possesses the worst of both worlds. As vice president, she both completely owns the legacy of the current administration but also has no real policy accomplishments to point to. Her brief foray as “border czar” was an unmitigated disaster

Harris has no real contact with voters either. In the 2020 Democratic primary, Kamala did so badly in early polls and was beaten so soundly by Tulsi Gabbard in an early debate that she had to drop out before voting in Iowa even occurred.

Kamala Harris isn’t just bad with voters; even her closest allies and staff dislike her. As California attorney general, she insisted that her subordinates greet her every day with a “Good Morning, General” and refused to engage with low-level employees. Her office as vice president was known to be a hive of discontent with an extremely high turnover rate.

Harris is a political radical once labeled the most liberal senator by GovTrack. She raised bail money for communist rioters during the 2020 riots. She supports gun confiscation and giving free healthcare to illegals. This isn’t popular among any significant sector of the American electorate. 

As it stands now, only a few thousand voters have even seen Kamala in person as a candidate. I have yet to see a single yard sign with her name on it anywhere I go here in Michigan. She is behind the power curve by months. Trump has already made multiple enormous public appearances in all of the swing states. Kamala isn’t even close to that kind of ground game. 

Whatever anyone in the media might say, politicians actually need to campaign. Kamala Harris cannot simply argue that she can win a national election by simply existing. The media already did that with Biden in 2020, with terrible results for Americans’ faith in our democratic form of government. 

Not only is Kamala a train wreck in her own right, but Donald Trump has never been more popular than he is right now. The lawfare cases against him are in freefall. His rallies have never been bigger, his message has never been sharper, and his supporters have never been more vocal. Major Silicon Valley figures and investors like Elon Musk are lining up behind Trump

To top it all off, Trump miraculously survived an assassination attempt on live television in heroic fashion. Trump’s enormous display of physical courage in the aftermath is one of the most iconic images in American electoral history. His chant of “fight, fight, fight” continues to energize his supporters.

The media and DNC can pretend that didn’t happen, but voters will remember Trump’s awe-inspiring display of virtue.

Trump is an unstoppable force in American politics. He has enormous support from the American middle and working class. His signs dot the landscape. The lines for his rallies stretch for miles outside of every venue where he speaks.

Kamala doesn’t stand a chance. Only outright fraud could possibly elevate her to the presidency, and that move would instantly destroy the last pillar of legitimacy holding up our political order.

Kamala is a line in the sand. If she can be installed in the presidency, then there is no reason to keep holding elections; the DNC and its media apparatchiks can simply make or break the presidency with a snap of the fingers. In this scenario, there is no longer any reason for patriotic Americans to serve or support the regime in DC. They must withdraw their consent and search for new guards for their future security. 

The 2024 Trump campaign sent the liberal hivemind into fits of hysteria. There is nothing these people wouldn’t do in order to keep Trump and his centrist policies of preserving our sovereignty and national renewal out of the White House. This is a deeply unstable time in American life. 

We can be certain of one thing, however: Kamala is not going to win a fair election in November. It is impossible.

A lack of ongoing collapse in the yen overnight (did BoJ quietly step in?)…

Source: Bloomberg

…and no new macro news to feed the recession narrative, provided just the recipe for a Turnaround Tuesday rally in stocks. Notice that the entire US equity complex moved together (no cycs vs defs or tech vs energy or small vs large diffs) and each time the indices tested back down to unchanged, a mysterious bid magically arrived. As we note below, once the S&P hit its 100DMA, all the majors started selling off, erasing a good chunk of today’s gains…

…most notably, the algos lifted the S&P perfectly to its 100DMA… and immediately reversed…

As Bloomberg noted, it’s an old cliché but the phenomenon known as Turnaround Tuesday – when markets rebound from a selloff at the start of the week – is an opportunity that shows up time and again in the data. The bad news is such recoveries don’t guarantee a bottom has been reached.

Investor psychology during a rout tends to begin with jitters on Thursday, hedging on Friday and all-out selling on Monday, according to Brent Donnelly, veteran trader and president of trading analysis firm Spectra Markets.

By Tuesday, the downdraft is primed for a reversal, he wrote in a note published Monday.

“I wouldn’t expect this to be a durable bounce,” said Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore.

“There is likely to remain volatility into October, November. Any counter trend rally today and persisting for a few weeks would be something to trim risk into.”

‘Most Shorted’ stocks squeezed up to a technical resistance level and stalled…

Source: Bloomberg

Mag7 stocks rebounded today but were unable to recover yesterday’s losses…

Source: Bloomberg

Overall, rate-cut expectations have retraced most of Friday’s surge (with 2024 expectations re-shifting back into 2025)…

Source: Bloomberg

For context – pre-payrolls, the market was pricing in 200bps of cuts to the end of 2025. At its peak yesterday, the market priced-in over 230bps of cuts and today that has drifted back to around 210bps.

The overall drop in rate-cut expectations pushed Treasury yields higher (with the long-end underperforming – 2Y +6bps, 30Y +10bps today). All yields remain below payrolls plunge highs for now…

Source: Bloomberg

The 2y yield tested up to 4.00% once again…

Source: Bloomberg

The dollar rallied back and erased yesterday’s losses…

Source: Bloomberg

Gold dipped back below $2400…

Source: Bloomberg

Oil limped very modestly lower today with WTI holding around $73…

Source: Bloomberg

Bitcoin extended its bounce off $50k yesterday, testing $57,000 intraday today…

Source: Bloomberg

Finally, usage of The Fed’s Reverse Repo facility plunged back below the $300BN mark for the first time since May 2021…

Source: Bloomberg

How long before liquidity fears start to reignite?

Authored by Jonathan Turley,

CNN has been fighting a defamation case brought after a segment by Jake Tapper that accused Zachary Young and his company Nemex Enterprises Inc. of preying on people seeking to flee Afghanistan, even suggesting that he was a type of human trafficker.

CNN’s new motion for summary judgment raised eyebrows in citing Sharia law to say that what Young was doing in rescuing people was unlawful under Islamic restrictions.

CNN recently lost a recent major ruling from Judge L. Clayton Roberts found that there was evidence of malice by CNN to support the higher standard needed for defamation. The evidence in the case is remarkably bad for the network after discovery of internal memoranda and emails.

The report at the heart of the case aired Nov. 11, 2021, segment on CNN’s “The Lead with Jake Tapper” and was shared on social media and (a different version on) CNN’s website. In the segment, Tapper tells to his audience ominously how CNN correspondent Alex Marquardt discovered “Afghans trying to get out of the country face a black market full of promises, demands of exorbitant fees, and no guarantee of safety or success.”

Marquardt piled on in the segment, claiming that up “desperate Afghans are being exploited” and need to pay “exorbitant, often impossible amounts” to flee the country.

He then named Young and his company as the example of that startling claim.

The damages in the case could be massive but Young had to satisfy the higher New York Times v. Sullivan standard of “actual malice” with a showing of knowing falsehood or a reckless disregard of the truth.

Judge Roberts found that “Young sufficiently proffered evidence of actual malice, express malice, and a level of conduct outrageous enough to open the door for him to seek punitive damages.”

The evidence included messages from Marquard that he wanted to “nail this Zachary Young mfucker” and thought the story would be Young’s “funeral.” After promising to “nail” Young, CNN editor Matthew Philips responded: “gonna hold you to that cowboy!” Likewise, CNN senior editor Fuzz Hogan described Young as “a shit.”

As it often done by media, CNN allegedly gave Young only two hours to respond before the story ran. It is a typical ploy of the press to claim that they waited for a response while giving the target the smallest possible window.

In this case, Young was able to respond in the short time and Marquardt messaged a colleague, “fucking Young just texted.”

After losing the earlier motion on malice, CNN’s lead counsel Deanna K. Shullman surprised many in the motion of summary judgment by turning to Sharia law in defense of CNN. She argued that

“this entire defamation case centers on Young’s accusation that CNN implied he engaged in illegal conduct when he arranged, for a substantial fee, to have women smuggled out of Afghanistan…[D]iscovery has indicated that those activities he orchestrated and funded, which involved moving women out of Afghanistan, almost certainly were illegal under Taliban rule.”

Young’s counsel objected and noted that the allegations were never that “what Young and other private operators were doing was illegal under Taliban law.”

It is hard to see how CNN would prevail on this summary judgment motion.

At most, this would seem a question that requires a finding of fact from a jury.

I would be surprised if jurors agree with CNN that the outrage expressed by the network was based on the violation of the draconian, oppressive laws of the Taliban.

Those were the very laws that these people were desperately trying to escape.

The case could not come at a worst time for CNN which has been struggling with low ratings, layoffs, and failing revenue.

A lawyer who worked on Donald Trump’s 2020 election campaign will dodge a potential jail sentence by cooperating with Arizona’s Democratic attorney general, who’s charged 18 defendants with election interference over their participation in post-election challenges. Trump hasn’t been charged — yet — and is currently described as an unindicted co-conspirator. 

According to the agreement, nine felony charges against attorney Jenna Ellis have been dropped in exchange for her committing to “completely and truthfully” testify, and to turn over documents that could help prosecutors trying to build a case that centers on what Democrats like to call “fake electors.” These were Republicans who were encouraged by the Trump campaign to meet on Dec. 14, 2020 and sign a certificate asserting that they were “duly elected and qualified” electors, on the assumption that Trump had actually won the state’s 11 Electoral College votes.  

“This agreement represents a significant step forward in our case,” said Attorney-General Kris Mayes in a statement issued Monday. “[Ellis’] insights are invaluable and will greatly aid the state in proving its case in court…I will not allow American democracy to be undermined — it is far too important.” In 2022, Mayes — who’s lauded by leftists for being openly lesbian and seeking to turn Arizona into an abortion safe haven for people in other states — defeated her Trump-endorsed opponent by just 510 votes out of more than 2.5 million.  

The remaining defendants — who’ve all plead not guilty — have been charged with nine felonies apiece, including forgery, conspiracy and fraudulent schemes. In addition to the self-proclaimed GOP electors, they include Rudy Giuliani and former Trump chief of staff Mark Meadows. 

The Arizona cases aren’t expected to reach the trial phase until next year. In June, lawyers for defendants filed challenges to the prosecution, saying it ran afoul of an Arizona law that, like similar statutes in other states, takes aim at what is called a “strategic lawsuit against public participation,” or “SLAPP.” A motion filed for charged Trump lawyer John Eastman asserted that…

“[Arizona’s anti-SLAPP law] is quite clearly aimed at preventing public officials from using the criminal process as a weapon to punish and prevent speech on political issues…Public officials have the right to voice their disagreement through open discourse guaranteed by the First Amendment, but they should not use indictments to silence their opponents, as the attorney general has tried to do here.” 

Ellis was also targeted by Georgia prosecutors. In October, she tearfully pleaded guilty to a felony count of aiding and abetting false statements and writing, telling a judge in an Atlanta courtroom that she regretted not having performed “due diligence” about the campaign’s claims of election fraud. “If I knew then what I know now, I would have declined to represent Donald Trump in these post-election challenges.” She was sentenced to five years probation, $5,000 in restitution, 100 hours of community service and was ordered to write an apology letter addressing the citizens of Georgia. 

During the 2020 campaign, Ellis described herself as one member of an “elite strike force team” of attorneys, and frequently shared a microphone with Giuliani. She reportedly urged Trump to try persuading Mike Pence not to open election results from contested states on Jan. 6, 2021.  

By Tsvetana Paraskova of OilPrice.com

The U.S. Department of Energy is allocating $2.2 billion in grants for upgrades of the grid to make it more resilient to extreme weather events and accommodate more renewable energy.

The funding from the DOE will add to private sector financing to support eight grid upgrade projects across 18 states.

According to the U.S. Administration, the DOE funding is expected to support the construction of more than 600 miles of new transmission lines and the upgrade of about 400 miles of existing lines so that they can carry more current.

“The first half of 2024 has already broken records for the hottest days in Earth’s history, and as extreme weather continues to hit every part of the country, we must act with urgency to strengthen our aging grid,” U.S. Secretary of Energy Jennifer Granholm said in a statement carried by Reuters.

As power demand grows, the share of renewables rises, and extreme weather events such as heat waves and winter freezes become more frequent, electric utilities say that the U.S. grid reliability will need significant spending, more than the expenditures in previous decades.

U.S. utilities and regulators have raised significantly their forecasts of peak power demand in the coming decade, as both expect exponential growth in electricity demand from data centers and new technologies such as generative AI.

Investments that have been pushed back in recent years have now become urgently needed to address grid reliability issues and expand the transmission infrastructure to meet growing demand and accommodate more solar and wind power in the system.

“The problem that we have right now comes from decades of lack of investment,” Pedro Azagra, chief executive at Avangrid, which operates utilities in New England and New York, told The Wall Street Journal last month.

“You cannot catch up in one minute,” added the executive, who said that Avangrid has hiked expenditures to address challenges in grid reliability.

By Satish Jindel, president of ShipMatrix Inc., a consultancy, and founding member of RPS (now FedEx Ground) who has analyzed trends in the parcel and less-than-truckload sectors for 30 years. Via FreightWaves

For decades, FedEx and UPS essentially functioned as a duopoly in the U.S. parcel delivery market. With few challengers, they made lots of money.

The second-quarter earnings release from UPS on July 23 shocked many investors, resulting in the stock dropping 12% within minutes of the earnings call. The big surprise was that UPS customers are downgrading from Air Express to Ground service and from Ground to the lower-priced SurePost, an economy service that involves injecting parcels into the U.S. Postal Service system for final-mile delivery.

If the market was paying attention to what the carriers were saying in prior earnings calls, they should have expected these changes. Both FedEx and UPS in recent years have touted how their improved Ground service made transit times faster than those of their competitors. In the process, they also created a competitor to their own Express and Deferred services.

Since 2019, UPS has expedited Ground transit times to the point that delivery time has fallen from three days to two days for 12% of lanes and from three days to two days for an additional 22% of its routes, allowing more express and deferred parcels to be converted to ground. Even SurePost, which takes one to two days longer than Ground service for delivery, has experienced transit time improvements for 7% of packages, prompting customers to downgrade service options.

The decline of Express and Deferred volumes actually started more than two decades ago. It began when FedEx acquired RPS (rebranded as FedEx Ground) and the industry guaranteed day-definite ground service. In 2000, the FedEx Express operating unit handled 2.92 million parcels per day. Throughput for fiscal year 2024, ended May 31, was 2.58 million parcels. During the same period, FedEx Ground daily volume has increased from 1.52 million to 10.7 million parcels.

Furthermore, with investment in multicarrier manifesting systems from companies like ProShip, and visibility and analytics from companies like ShipMatrix, shippers are now able to utilize cheaper and yet faster ground services.

A major inflection point has been the explosive growth of e-commerce over the past 10 years, which has resulted in 65% of all domestic parcels being delivered directly to consumers. And, with more online orders now fulfilled from local stores or by Chinese retailers like Temu and Shein bringing orders into gateway airports like Miami, Los Angeles, Dallas and Chicago, the last-mile deliveries are being done by smaller companies like Better Trucks, Jitsu, Veho, Uni-Uni and SpeedX, which operate with a lower cost structure. 

And, while these regional carriers may eventually lose the business to FedEx and UPS, the heightened regional competition forces the giants to operate in shorter shipping zones that have lower margins, resulting in lower yields per parcel. 

Equally important is the growth of private fleets by major retailers. Amazon delivering over 22 million parcels per day using drivers employed by its network of delivery service partners. Walmart is doing something similar.

“In Walmart U.S., over the last 12 months, 4.4 billion items were delivered the same or next day, with about 20% of those delivered within three hours,” Walmart CEO Doug McMillon stated on the company’s May 16 earnings call.

That means Walmart delivers over 4 million parcels per day from its 4,600 local stores by deploying alternate approaches, including the use of gig workers at companies like Uber Eats and DoorDash typically known for food delivery.

With the push over the past decade to fulfill online orders from facilities closer to the consumer, the percentage of parcels traveling shorter distances (less than 300 miles) has increased from 45% to 68% while those going 1,400 miles or more have shrunk from 17% to 10%.

The shift of large e-commerce retailers from Ground to SurePost and UPS’ rollout of a cheaper Ground Saver service with transit time of Ground plus three days illustrates that consumers will accept slower delivery for a lower price of the item. Even Amazon, which has pushed the envelope on faster delivery, is responding to low-cost competition from Temu and Shein. 

Amazon recently announced it will offer a discount marketplace for lower-priced items that are shipped from overseas directly to consumers within 10 days of an order by avoiding stocking at more expensive U.S. fulfillment centers. 

Given these monumental developments, by the 2026 peak season the private fleets of major retailers and local companies are positioned to deliver more parcels to residences than FedEx and UPS combined. We’re talking about more than 40 million parcels per day. FedEx and UPS leaders need to prepare for that future.

Authored by Samantha Flom via The Epoch Times,

A House panel is expanding its investigation into whether the Democratic fundraising platform ActBlue may be skirting or violating federal campaign finance laws.

Rep. Bryan Steil (R-Wis.), chairman of the House Administration Committee, launched the probe last fall amid allegations that ActBlue was facilitating the funneling of unlawful contributions to political committees across the country.

One of the committee’s initial findings was that ActBlue does not require online donors using a credit or debit card to provide a card verification value (CVV), a code meant to prevent fraudulent transactions.

Steil is now asking the Federal Election Commission (FEC) to change that.

In an Aug. 5 letter to FEC Chairman Sean Cooksey and Vice-Chair Ellen Weintraub, Steil urged the commission to initiate an emergency rulemaking process to require political campaigns to verify online donors’ CVV codes and bar them from accepting donations via prepaid credit cards or gift cards.

The congressman wrote, “This emergency rulemaking is necessary to reassure the American people that ActBlue is taking the necessary steps to protect its donors.”

He said that the platform’s current practices “invite the possibility of foreign donations,” and could also provide a vehicle for skirting campaign contribution limits via “straw donors.”

“These issues present a serious loophole to the transparency and integrity of the campaign donation process, and an emergency rulemaking is required to rectify these issues,” he wrote.

Neither the committee nor ActBlue returned requests for comment.

ActBlue, however, has referred to the allegations against it as “frivolous and false accusations.”

“This investigation is nothing more than a partisan political attack and scare tactic to undermine the power of Democratic and progressive small-dollar donors,” the organization said in a statement on Aug. 2 as Virginia joined the list of states scrutinizing its operations.

Accusing investigators of harassing staff and donors, the group added: “Republicans simply cannot accept that millions of Democrats are energized and engaged in the political process, and are instead resorting to political attacks and spreading false accusations.”

Steil’s request to the FEC was made as the committee launched the second phase of its probe.

According to a committee news release, “a wide array of sources” have come forward in recent weeks to voice concerns that ActBlue may have engaged in illegal activities.

Allegations include the laundering of unlawful—including foreign—donations, deliberately obscuring the identities and locations of cardholders by not requiring CVV codes, and accepting suspiciously large or frequent donations from donors on fixed incomes or with no history of such behavior.

Steil’s plan for preventing such violations includes passing legislation to require political committees to verify the CVV codes and addresses of donors using credit or debit cards. He would also prohibit political committees from accepting donations made via gift cards or prepaid credit cards and require campaigns to obtain donors’ “affirmative consent” for recurring contributions.

The attorneys general of Missouri, Virginia, and Wyoming are conducting their own investigations into ActBlue’s operations.

ActBlue came under scrutiny in March 2023 after O’Keefe Media Group published a report detailing atypical donation patterns among senior citizens who had used the platform to make political contributions. Individuals were recorded as having made thousands of donations—in some cases totaling upwards of $200,000—in just a few years’ time. But when asked about those donations, the seniors said they had no knowledge of them.

O’Keefe Media Group also found similar irregularities in data from WinRed, the Republican counterpart to ActBlue, though the House Administration Committee does not appear to be investigating that platform.