Month: September 2024

Authored by John & Nisha Whitehead via The Rutherford Institute,

“In questions of power then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

– Thomas Jefferson

Public trust in the government to “do what is right” understandably remains at an all-time low.

After all, how do you trust a government that continuously sidesteps the Constitution and undermines our rights? You can’t.

When you consider all the ways “we the people” are being bullied, beaten, bamboozled, targeted, tracked, repressed, robbed, impoverished, imprisoned and killed by the government, one can only conclude that you shouldn’t trust the government with your privacy, your property, your life, or your freedoms.

Consider for yourself.

Don’t trust the government with your privacy, digital or otherwise. In the more than two decades since 9/11, the military-security industrial complex has operated under a permanent state of emergency that, in turn, has given rise to a digital prison that grows more confining and inescapable by the day. Wall-to wall surveillance, monitored by AI software and fed to a growing network of fusion centers, render the twin concepts of privacy and anonymity almost void. By conspiring with corporations, the Department of Homeland Security “fueled a massive influx of money into surveillance and policing in our cities, under a banner of emergency response and counterterrorism.”

Don’t trust the government with your property. If government agents can invade your home, break down your doors, kill your dog, damage your furnishings and terrorize your family, your property is no longer private and secure—it belongs to the government. Hard-working Americans are having their bank accounts, homes, cars electronics and cash seized by police under the assumption that they have allegedly been associated with some criminal scheme.

Don’t trust the government with your finances. The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are being forced to foot the bill for the government’s fiscal insanity. The national debt is $35 trillion and growing, yet there seems to be no end in sight when it comes to the government’s fiscal insanity. According to Forbes, Congress has raised, extended or revised the definition of the debt limit 78 times since 1960 in order to allow the government to essentially fund its existence with a credit card.

Don’t trust the government with your health. For all intents and purposes, “we the people” have become lab rats in the government’s secret experiments, which include MKULTRA and the U.S. military’s secret race-based testing of mustard gas on more than 60,000 enlisted men. Indeed, you don’t have to dig very deep or go very back in the nation’s history to uncover numerous cases in which the government deliberately conducted secret experiments on an unsuspecting populace—citizens and noncitizens alike—making healthy people sick by spraying them with chemicals, injecting them with infectious diseases and exposing them to airborne toxins. Unfortunately, the public has become so easily distracted by the political spectacle out of Washington, DC, that they are altogether oblivious to the grisly experiments, barbaric behavior and inhumane conditions that have become synonymous with the U.S. government, which has meted out untold horrors against humans and animals alike.

Don’t trust the government with your life: At a time when growing numbers of unarmed people have been shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety, even the most benign encounters with police can have fatal consequences. The number of Americans killed by police continues to grow, with the majority of those killed as a result of police encounters having been suspected of a non-violent offense or no crime at all, or during a traffic violation. According a report by Mapping Police Violence, police killed more people in 2022 than any other year within the past decade. In 98% of those killings, police were not charged with a crime.

Don’t trust the government with your freedoms. For years now, the government has been playing a cat-and-mouse game with the American people, letting us enjoy just enough freedom to think we are free but not enough to actually allow us to live as a free people. Freedom no longer means what it once did. This holds true whether you’re talking about the right to criticize the government in word or deed, the right to be free from government surveillance, the right to not have your person or your property subjected to warrantless searches by government agents, the right to due process, the right to be safe from militarized police invading your home, the right to be innocent until proven guilty and every other right that once reinforced the founders’ belief that this would be “a government of the people, by the people and for the people.” On paper, we may be technically free, but in reality, we are only as free as a government official may allow.

Whatever else it may be—a danger, a menace, a threat—the U.S. government is certainly not looking out for our best interests, nor is it in any way a friend to freedom.

Remember the purpose of a good government is to protect the lives and liberties of its people.

Unfortunately, what we have been saddled with is, in almost every regard, the exact opposite of an institution dedicated to protecting the lives and liberties of its people.

“We the people” should have learned early on that a government that repeatedly lies, cheats, steals, spies, kills, maims, enslaves, breaks the laws, overreaches its authority, and abuses its power at almost every turn can’t be trusted.

So what’s the answer?

For starters, get back to basics. Get to know your neighbors, your community, and your local officials. This is the first line of defense when it comes to securing your base: fortifying your immediate lines.

Second, understand your rights. Know how your local government is structured. Who serves on your city council and school boards? Who runs your local jail: has it been coopted by private contractors? What recourse does the community have to voice concerns about local problems or disagree with decisions by government officials?

Third, know the people you’re entrusting with your local government. Are your police chiefs being promoted from within your community? Are your locally elected officials accessible and, equally important, are they open to what you have to say? Who runs your local media? Does your newspaper report on local events? Who are your judges? Are their judgments fair and impartial? How are prisoners being treated in your local jails?

Finally, don’t get so trusting and comfortable that you stop doing the hard work of holding your government accountable. We’ve drifted a long way from the local government structures that provided the basis for freedom described by Alexis de Tocqueville in Democracy in America, but we are not so far gone that we can’t reclaim some of its vital components.

As an article in The Federalist points out:

Local government is fundamental not so much because it’s a “laboratory” of democracy but because it’s a school of democracy. Through such accountable and democratic government, Americans learn to be democratic citizens. They learn to be involved in the common good. They learn to take charge of their own affairs, as a community. Tocqueville writes that it’s because of local democracy that Americans can make state and Federal democracy work—by learning, in their bones, to expect and demand accountability from public officials and to be involved in public issues.

To put it another way, think nationally but act locally.

As I make clear in my book Battlefield America: The War on the American People and in its fictional counterpart The Erik Blair Diaries, there is still a lot Americans can do to topple the police state tyrants, but any revolution that has any hope of succeeding needs to be prepared to reform the system from the bottom up. And that will mean re-learning step by painful step what it actually means to be a government of the people, by the people and for the people.

As we have been writing for the better part of the last year, the next AI trade continues to look like it’s going to be energy. And now, both BlackRock and Microsoft are making it known that they understand this, too. 

Yesterday it was reported that the two industry giants are prepping the launch of a $30 billion AI investment fund that’ll see Microsoft build data centers and energy projects to meet the demands of AI, according to the Financial Times.

BlackRock’s new infrastructure investment unit, Global Infrastructure Partners, is launching a major investment fund with Microsoft and Abu Dhabi’s MGX as general partners. Nvidia will provide advisory on factory design and integration.

The FT wrote that the partnership aims to tackle the massive power and infrastructure needs of AI development, which is expected to strain current energy systems. AI’s computing demands far exceed past technologies.

The partnership seeks to raise up to $30bn in equity, with plans to leverage an additional $70bn in debt.

In a statement, Larry Fink said: “Mobilizing private capital to build AI infrastructure like data centers and power will unlock a multitrillion-dollar long-term investment opportunity.”

Brad Smith, Microsoft’s president, added: “The country and the world are going to need more capital investment to accelerate the development of the AI infrastructure needed. This kind of effort is an important step.”

Jensen Huang of Nvidia added: “Accelerated computing and generative AI are driving a growing need for AI infrastructure for the next industrial revolution.”

The upcoming fund is the latest by a major asset manager to address the rising energy needs of generative AI and cloud computing. Earlier this year, Microsoft committed $10bn to renewable energy projects with Brookfield Asset Management and aims for 100% zero-carbon energy by 2030, the Financial Times concluded. 

The International Energy Agency predicts global electricity consumption by data centers could exceed 1,000 terawatt-hours by 2026, more than double the 2022 level.

In the U.S., which houses a third of the world’s data centers, electricity demand is surging for the first time in 20 years. A report from Grid Strategies shows five-year electricity demand projections in the U.S. have nearly doubled, from 2.6% to 4.7%.

For those who missed it, in our note “The Next AI Trade” from April of this year, we outlined various investment opportunities for powering up America, most of which have dramatically outperformed the market.

A favorite name of ours has been the Sam Altman-backed Oklo, which we have highlighted as the potential solution to the extreme forthcoming demands in energy as a result of artificial intelligence. It makes nuclear power plants, ranging from 15 MWe to 50 MWe, utilizing liquid metal reactor technology, in soon-to-be everywhere small modular reactors. 

Authored by Joel Warsh via The Epoch Times (emphasis ours),

Robert F. Kennedy Jr.’s article in The Wall Street Journal brings urgent attention to the chronic disease epidemic gripping the United States. Regardless of your thoughts on RFK, we can all agree that our children deserve to be healthy. While we may not all agree on the path to achieving that goal, it is clear that something must be done to change the current trajectory of our nation’s health.

Nearly 50 percent of children and 60 percent of adults are living with chronic illnesses such as obesity, diabetes, and heart disease. As health care costs skyrocket and life expectancy stagnates, it’s clear that the current system is not addressing the root causes of these issues.

In his article, RFK Jr. outlined several key reforms to address these problems, including overhauling pharmaceutical regulations, banning harmful pesticides, and promoting preventive health education in medical schools. While these reforms are crucial steps toward tackling the crisis, I believe we must go even further to truly reverse the chronic disease epidemic and transform the nation’s health.

For those who haven’t read RFK Jr.’s plan, here is a quick summary of his main points:

• Reform the Prescription Drug User Fee Act to reduce pharmaceutical industry influence on the Food and Drug Administration (FDA).
• Prohibit U.S. Department of Agriculture nutrition panel members from profiting from food or drug companies.
• Review and possibly limit direct-to-consumer pharmaceutical advertising.
• Prevent National Institutes of Health (NIH) funds from going to researchers with conflicts of interest.
• Cap drug prices to align U.S. costs with international standards.
• Restrict Supplemental Nutrition Assistance Program (SNAP) benefits from being used to buy unhealthy foods such as soda.
• Revisit U.S. pesticide and chemical standards to align with stricter global regulations.
• Require nutrition education and functional medicine in medical schools.
• Reform crop subsidies to promote healthier food production.
• Reinstate Presidential Fitness Test standards for American physical health.
• Allocate more NIH research funds to preventive and holistic health approaches.
• Expand Health Savings Accounts (HSAs) to give Americans more control over health care choices.

Expanding on RFK Jr.’s Ideas: A Comprehensive Plan for America’s Health

While I agree with much of what RFK Jr. proposes, I believe the plan does not go far enough to address the deep-seated health issues facing the United States today. Below are additional strategies I would recommend to create a healthier America and truly tackle the chronic disease epidemic.

National Emergency Declaration for Health

The first step in making America healthy again should be to declare a national health emergency addressing the chronic disease crisis. This would allow for the launch of a National Wellness Campaign, similar to past anti-smoking or COVID-19 efforts. The campaign would focus on public education about diet, exercise, and mental health and allocate substantial funds toward prevention and wellness, rather than just treatment.

Recreate the Food Pyramid: A Simpler, Healthier Approach

It’s time to overhaul the outdated food pyramid and replace it with a simpler, more effective model that prioritizes real, whole foods, and cooking at home. At the base of the new pyramid should be fresh, locally sourced, and organic foods—fruits, vegetables, eggs, regenerative and free-range animal products. The next tier should consist of lightly processed foods, such as whole grains, beans, and dairy, which retain their nutritional integrity. At the very top, the smallest section, should be heavily processed foods, which should be consumed sparingly. The focus should be on simplicity: eating fresh, local, organic foods whenever possible and emphasizing home-cooked meals. This approach would guide people to make healthier choices and foster a deeper connection with food and cooking.

Tax Incentives for Healthy Living

To encourage Americans to adopt healthier lifestyles, the government could offer tax breaks or credits for individuals who maintain a healthy lifestyle. This could be verified through annual check-ups, and deductions could be provided for gym memberships, healthy food purchases, and participation in community sports. These incentives would create a financial reward for healthy behavior. Providing a universal HSA as proposed above is a great adjunct to tax deductions

Corporate Wellness Mandates

Companies with more than 100 employees should be required to offer wellness programs that include fitness classes, nutritional counseling, and mental health services. To encourage participation, tax breaks or insurance discounts could be offered to employees who take advantage of these programs.

School Reform: Physical Activity and Healthy Nutrition

School environments play a critical role in shaping children’s health habits. We should reform school lunch programs to remove processed foods, excess sugars, and artificial dyes, replacing them with fresh, nutrient-dense options. In addition, schools should increase physical activity time and require that every school maintain gardens that produce fruits and vegetables for students.

Educational Reform for Health Literacy

True health education must be mandatory from elementary school through high school. This curriculum would focus on nutrition, physical fitness, mental health, and first aid, equipping children with the knowledge and habits they need to live healthier lives.

Urban Planning and Urban Agriculture for Health

New urban developments should include green spaces and community gardens, bike lanes, and pedestrian-friendly zones to encourage physical activity. Community gardens should also be promoted as a way to increase access to fresh, locally grown food. City council positions could be created to plan and maintain these gardens, providing fresh food and educational opportunities for communities. Every community across the United States should be encouraged to create a food garden that produces local, regenerative food.

Regulation of Food Industry Marketing

To protect children, stricter regulations should be implemented on the marketing of unhealthy foods, especially during children’s television programs. We should also ban the use of cartoon characters to promote sugary snacks.

National Sugar Tax

Introducing a nationwide tax on processed sugar, including sugar-sweetened beverages and high-sugar processed foods, could help reduce consumption. The revenue from this tax could be directed toward public health initiatives such as nutrition education and wellness programs. This was done with smoking and it can be done with processed sugar.

Health Care Provider Incentives for Preventive Care

The health care system must shift from a focus on treating illness to preventing it. Reimbursement models should reward preventive care, encouraging doctors to focus on lifestyle interventions that keep patients healthy. Health care providers should be incentivized to collaborate with nutritionists, therapists, and fitness counselors, ensuring comprehensive preventive care.

End Political and Corporate Conflicts of Interest

To reduce conflicts of interest, a five-year waiting period should be implemented, preventing FDA officials or pharmaceutical executives from moving into senior roles in the other sector. Additionally, Big Pharma, Big Food, and Big Health companies should be prohibited from funding political campaigns.

Insurance Coverage for Preventive Services

Insurance companies should be required to cover preventive health services, including exercise classes, gym memberships, nutrition counseling, and wellness programs. This could be capped at a reasonable amount annually, to ensure that more Americans can afford to prioritize their health.

Transitioning Monocrop Subsidies

Over the next one to two decades, the government should gradually shift subsidies away from monocrop farming (such as corn, wheat, and soy) and toward healthier food production, including small family farms. Farmers transitioning to sustainable and organic practices should receive financial rewards to promote healthier, environmentally friendly agriculture.

Leadership for Future Health Policy

In shaping the future of health policy, we need leaders who stand outside the influence of Big Pharma and Big Food, and who genuinely care about the well-being of our children. Two such individuals are Calley Means and Dr. Casey Means, both of whom should be offered prominent positions in shaping the country’s health policies, if they are interested. Their vision for health is deeply rooted in love, care, and an unparalleled understanding of the systemic issues that drive the chronic disease crisis. They are among the few, in my opinion, who prioritize making children and adults healthier, rather than lining their pockets or being swayed by corporate interests. Their clear, coherent, and realistic health plan offers hope for a brighter, healthier future for the United States. By giving them a platform in government, I believe we can move closer to real, lasting change that prioritizes health over profit.

Conclusion

By expanding on RFK Jr.’s proposals with a stronger focus on prevention, nutrition, and holistic wellness, we can take meaningful steps toward reversing the chronic disease epidemic in the United States. These additional strategies offer a comprehensive approach to transforming our nation’s health, ensuring future generations are empowered to lead healthier, happier lives.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Via Greg Hunter’s USAWatchdog.com,

Legendary financial and geopolitical cycle analyst Martin Armstrong predicted less than a month ago that there would be another assassination attempt on Donald Trump’s life, and the Deep State was going to do everything possible to start a war with Russia. 

He was right on both counts.  All the chaos, debate fraud and push for World War III comes down to the Deep State knows it cannot cheat enough to put Kamala Harris into the White House in November. 

Forget the phony polls where they all say Kamala is running neck and neck with Trump. 

Armstrong says his “Socrates” computer program shows Kamala’s real approval rating is around 10%, and all his computer models say Kamala is going to lose big in November no matter how much they cheat. Armstrong says, “Just about everybody in politics looks at Socrates now because its track record on politics has been phenomenal for 30 years.  They know what is going on.”

So, is the Biden Administration panicking with this second clumsy attempt to assassinate Trump while playing golf?  Is our own government trying to kill Trump because they know they cannot win? 

Armstrong says, “I believe so. . . . Look, these people have been warmongers. . . . This is their power.”

”  They have gotten so close to destroying Russia, which is their end goal here.  Handing long-range missiles to Ukraine, this is like hiring somebody to kill your spouse and then saying, well, he shot, I didn’t. . . .

Trump and RFK Jr. are against war…My concern here is they need to create war before January, if not even before the election.  I think this is what all this stuff is about with the long-range missiles to shoot into Russia.  If Trump does get in, they have to trap him into war. 

The whole nonsense about Russia Gate and all the rest was because Trump is against war…

The neocons called Trump Putin’s puppet because Trump will not engage in war against Russia.  This is what this is all about.”

Will the demonic Deep State try yet another assassination of Trump? 

Armstrong says, “I would not put it past them.  Maybe next time they use Monkey Pox or Bird Flu.”

”  Look, Trump represents a real threat to their power.  If Trump gets in, the neocons are out.  Who wrote that recent article for the Washington Post that said Trump would be a “dictator”? 

It was Victoria Nuland’s husband.  Why?  Because Victoria Nuland was thrown out of Trump’s Administration. 

She has been in every administration except Trump’s. . . . This is the neocons against the American people.  The computer has been showing that this may be the very last election we have.  Just look at the chaos that has been going on at this stage.”

Armstrong is afraid that Putin may be overthrown in Russia because his response has been too timid against NATO. 

Armstrong says, “Putin knows the neocons want war, and he won’t take the bait.”  Armstrong is also afraid that if Putin does get booted out of office, then the people who replace him will be far worse, and brutal war would follow.

Armstrong says the evil people in Washington will hide in bunkers when the atomic weapons drop on the rest of America.  He thinks a big problem coming will be shortages in everything –including food.  If there is bigger war, the economy will plunge, and interest rates will skyrocket.  Greatest Depression here we come.

In closing, Armstrong says, “The Deep State is scared to death of Trump winning in November because he now knows how to play the game. . . . and Secretary of State Tony Blinken is running the country” because we know Joe Biden is not.

There is much more in the 50-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with Martin Armstrong as he gives his analysis on trying to kill Trump and starting a world war before the 2024 Election for 9.17.24.

* * *

To Donate to USAWatchdog.com Click Here

If you want to attend Armstrong’s 2024 World Economic Conference in Olando, FL, Nov. 8, 9 & 10, 2024, or register for streaming of the event, click here.

There is free information, analysis and articles on ArmstrongEconomics.com.

50bps cut… uber-dovish Dots… Powell pushed back… stocks end red, dollar and yields end higher.

“The US economy is in a good place and our decision today is designed to keep it there,” said Fed Chair Pay Powell during the press conference.

So a crisis-level 50bps rate-cut at record highs for stocks and home prices, just two months ahead of the election is warranted because the “economy is in a good place.”

The next time the Fed meets, voters will have already cast their vote for the next president.

Powell on incorporating political factors into Fed decisions:

“We just don’t do that.”

But Kamala liked it:

“The Fed’s rate decision is welcome news for Americans.”

And none other than Democratic Congresswoman Maxine Waters of California applauded the Fed’s rate cut in a statement:

“I am pleased that the Fed has not only remained independent, but shown the importance of remaining independent as it followed the data and not politics.”

Republican Senator Kevin Cramer of North Dakota criticized the Fed’s move in a post on social media:

“The Federal Reserve claims political independence. They could have waited to move rates until after the election to confirm it. 25 basis points would’ve received minor grumblings, but the claim rings hollow with 50 basis points.”

It’s a good job The Fed is “strongly independent”!!!

Was it Trump or Biden who promised in April that “before the year is out there’ll be a rate cut?” https://t.co/F8XjS8JmYt

— zerohedge (@zerohedge) September 18, 2024

The kneejerk reaction across all markets reversed considerably during Powell’s presser as he poured a little cold water on expectations.

“The committee is not in a rush,” said Powell, and with that stocks started to puke lower as he added that “we will move as fast or as slow as we think is appropriate.”

Powell stole the jam out of the equity market’s donut when he tilted hawkish by noting that “no one should look at the 50bps cut and say this is a new pace.”

But realistically, the DOTs said it all, with members desperately lurching lower in rate-cut expectations.

• In June, 4 FOMC members expected no rate-cuts in 2024, 7 members expected 1 rate-cut in 2024, 8 members expected 2 rate-cuts.

• In September, only 2 FOMC members had priced in 2 rate-cuts by year-end, 7 more saw 3 rate-cuts, 8 more saw 4 cuts by the end of 2024 and one lone uber-dove (Goolsbee?) expected 5 rate-cuts in 2024…

Source: Bloomberg

So much can change in 3 months when the government is fooling most of the people with fake data all the time

US Jobs Revised Down By 818,000 In Election Year Shocker, Second Worst Revision In US History https://t.co/IZ6b2StAMB

— zerohedge (@zerohedge) August 21, 2024

And Fed rate expectations for 2024 tumbled (and 2025 dropped too – though was already pricing in a super dovish Fed)…

Source: Bloomberg

Additionally, Powell pissed in the punchbowl by stating that we’re probably not going back to the era when trillions of dollars worth of sovereign bonds were trading negatively and says the neutral rate is probably much higher than it used to be – but doesn’t know where that level is.

So let’s survey the damage…

Stocks kneejerked higher with Small Caps exploding almost 2.5% at their highs on the FOMC statement and SEP. The S&P 500 also briefly hit a new record high. However, once Powell started speaking, all the majors reverted lower (back into the red)…

The footprint of Small Caps pump and dump was very evident in the ‘most shorted’ basket today…

Source: Bloomberg

The Dollar Index puked bigly on the FOMC statement but rallied all the way back as Powell spoke…

Source: Bloomberg

USDJPY may help clarify the flip-flop as FX markets start pricing in the next US inflation surge as the yen spiked on the FOMC statement then puked hard on Powell’s prevarications…

Source: Bloomberg

Gold exploded up to a record high $2600 before sliding back as Powell spoke…

Source: Bloomberg

We encourage readers to use our exclusive partners JM Bullion for all your precious metals purchasing needs.

Bonds and stocks remain in world’s of their own still since the last FOMC meeting in July – stocks slightly higher (no recession, soft landing), bond yields down dramatically (recession, hard landing)…

Source: Bloomberg

Treasury yields all tumbled on the FOMC statement and pushed back higher as Powell spoke. The 2Y remained lower (unchanged on the day) while the long-end rose 7bps on the day!

Source: Bloomberg

The yield curve (2s10s) crashed into ‘inversion’ briefly before bear-steepening back up to recent highs…

Source: Bloomberg

Bitcoin kneejerked up above $61,000 before sliding back to unchanged on the day…

Source: Bloomberg

Crude prices declined on the day, whipsawed around by the DOE dats showing a big draw at Cushing and then by Powell and his pals going full dove-tard!

Source: Bloomberg

Finally, will Powell’s legacy be that of Arthur Burns?

Source: Bloomberg

Of course, let there be no doubt that if inflation re-accelerates from here, you can bet on the fact that Trump will get the blame completely.

Authored by Felix Ng via CoinTelegraph.com,

California Governor Gavin Newsom passed a tough new law to crack down on politically-themed artificial intelligence deepfakes during elections. 

It comes only weeks after Elon Musk re-posted a parody of a Kamala Harris campaign ad on X that garnered millions of views and used AI-powered voice manipulation to make it seem Harris called herself an incompetent presidential candidate. 

In late July, Newsom specifically pointed to Musk’s post and vowed to sign a bill “in a matter of weeks” banning the practice.

The governor of California just made this parody video illegal in violation of the Constitution of the United States.

Would be a shame if it went viral. https://t.co/OCBewC4vOb

— Elon Musk (@elonmusk) September 18, 2024

The new law, known as AB 2839, takes effect immediately and effectively bans people and groups from knowingly sharing election deepfakes and other “materially deceptive content.” 

Existing laws only prohibit the distribution of materially deceptive audio or visual media of a candidate within 60 days of an election. The new law expands the ban to 120 days before an election in California and, in some cases, 60 days after an election is held.

Newsom also signed two other laws aimed at taking down political AI deepfakes on the same day, though they won’t be in effect until January.

Source: Gavin Newsom

One of the laws, AB 2355, will require labels to be put on political advertisements generated or substantially altered with AI. 

The other, AB 2655, requires social media platforms with more than one million California users, such as Facebook and X, to block deceptive content relating to elections during specified periods. 

It will also make platforms liable for failing to remove content within 72 hours of receiving a report from a user.

All three laws only apply to California, and it is understood that the governor signed the bills during a fireside chat with Salesforce CEO Marc Benioff at the Dreamforce conference in San Francisco. 

“It’s very different from other bills that have been put forth,” Ilana Beller, an organizing manager of the democracy team at consumer advocacy organization Public Citizen told The New York Times. 

Meanwhile, Newsom signed an additional two bills, AB 1836 and AB 2602, on Sept. 17, which aim to give greater protection to performers over the use of their digital likenesses. 

Gavin Newsom (bottom left) signs AI bills to protect performers against AI misuse. Source: Instagram

The fake Harris campaign parody ad, posted on July 26, has reached 25.4 million views on X alone and is still available on the platform today.  

Musk later defended his retweeting of the original post at the time, mocking Newsom:

“I checked with renowned world authority, Professor Suggon Deeznutz, and he said parody is legal in America”

The Teamsters announced on Wednesday that they will not endorse any candidate for president after a shocking internal poll found that more than half of Teamsters members back former President Donald Trump in the upcoming election.

One of the largest unions in the country which endorsed Joe Biden in the 2020 election, the Teamsters found that 58% of members polled back Trump vs. 31% for Harris.

This marks the first time since 1996 that the union hasn’t endorsed a candidate.

“For the past year, the Teamsters Union has pledged to conduct the most inclusive, democratic, and transparent Presidential endorsement process in the history of our 121-year-old organization — and today we are delivering on that promise to our members,” said Teamsters President Sean O’Brien in a statement.

TEAMSTERS RELEASE PRESIDENTIAL ENDORSEMENT POLLING DATA

“For the past year, the Teamsters Union has pledged to conduct the most inclusive, democratic, and transparent Presidential endorsement process in the history of our 121-year-old organization—and today we are delivering on… pic.twitter.com/CnFNN9uosx

— Teamsters (@Teamsters) September 18, 2024

Roughly an hour after releasing the poll, the Teamsters announced they would not support any candidate in this election.

“This year, no candidate for President has earned the endorsement of the Teamsters’ International Union.’

Teamsters say they will not endorse a candidate for U.S. President. “The General Executive Board of the International Brotherhood of Teamsters on Wednesday elected not to endorse any candidate for U.S. President.” pic.twitter.com/d3AgUn6vLA

— Caitlyn Kim (@caitlynkim) September 18, 2024

Trump met with Teamsters officials in January to court their endorsement, while Harris met Monday with the group’s leadership in Washington D.C.

Developing…

Well, once again the majority – make that the vast majority – of “economisseds” were dead wrong, and as we noted earlier, 105 of 114 economists predicted a 25bps cut… and were wrong. But don’t blame them: it really is the Fed’s fault – again – because while odds of a 50bps rate cut were only 10% as the Fed entered its “blackout period”, these surged after an unprecedented media leak campaign in the past week pushed 50bps odds to 70% (and yes, we can now confirm that Powell used Nick “Nikileaks” Timiraos not once but twice in the past few days to ease the blow of the 50bps cut), which brought us to today, when the Fed shocked with a 50bps rate cut, and slashed its expectations for the 2025 rate cut…

… even though the conditions from June until September were barely changed:

• 2025 GDP forecast unchanged
• 2025 unemployment rate up just a fraction, from 4.2% to 4.4%
• 2025 core PCE dip tiny from 2.3% to 2.2%

And somehow that justified the FOMC predicting an additional 3 rates cuts from June to September and a whopping 4 additional rate cuts in 2025!!!

Just don’t call it political.

In any case, here is a snapshot of some of the kneejerk Wall Street reactions to today’s Fed rate cut, which as the Fed itself now admits, was far behind the curve as the economy was clearly in far worse shape than the Fed dared admit.

Diane Swonk, KPMG Chief Economist

“This was a huge victory for Jay Powell”

Anna Wong, Bloomberg Economics:

“The first question in Powell’s presser was what information caused the FOMC to opt for the larger cut, and Powell mentioned the Beige Book. We’ve long thought Powell gives strong consideration to the anecdotal information in the Beige Book — and the latest version was extremely downbeat. The Beige Book also was the key piece of information that led to Powell’s’ dovish pivot last December.”

More from Bloomberg Economics:

“The FOMC concluded one of its most suspenseful meetings ever by cutting rates 50 basis points, while cautioning markets that this type of jumbo cut won’t be the norm. The updated dot plot suggests a gradual path of rate cuts going forward, suggesting the Fed sees the 50-bp move as a preemptive one that will be enough to stabilize the labor market. The median participant still sees real GDP growing at a solid pace of 2% this year.

“In our view, the 50-bp cut was the right move with the labor market clearly weakening. If the economy is indeed heading toward a soft landing, the unemployment rate will likely stabilize at 4.4% as the Fed foresees. We think this move has increased the chance of that outcome.”

Ira Jersey, Bloomberg Intelligence:

“The 2024 median dot shows another 50 bps of cuts by year-end, but there’s a large minority thinking only one further cut might be needed. Market pricing hasn’t shifted toward the risk of fewer cuts this year. Chair Powell’s comments on this score may cause this pricing to move if he’s not as dovish as the median dots suggest.”

“The long-end dots are interesting, and over time the steepening of the curve may come in. The long end’s modest selloff reflects the market’s view that inflation might increase as the Fed cuts so aggressively.

“We’re not convinced this will turn into a trend, and see bull steepening continuing further. The 2025 dots moving lower by 75 bps wasn’t a shock at this point: The question is, will the market believe 2.75-3% terminal floor, or price for more?”

Kathy Bostjancic, Nationwide Chief Economist

“There’s more work to be done — and quickly. We foresee the Fed needing to continue to rapidly lower interest rates to underwrite a soft-landing – which is our baseline forecast.”

Nancy Tengler, CEO at Laffer Tengler Investments

“Stocks love a good Fed put. I think the Fed may have jumped the gun at 50 bps. The economy is slowing but still strong. Productivity robust and unit labor costs moderate. Unemployment may indeed rise but we are not seeing layoffs—JOLTs still a very large number, well above pre-pandemic levels. My criticism of the Fed has been a myopic focus on backward looking data. This feels like that. A single weak employment report and here we are.”

Eric Orenstein, senior director at Fitch Ratings

“The Fed’s 50bp rate cut likely adds downward momentum for mortgage rates, which have already come down materially since May as treasuries have rallied. While not enough for a full scale refi boom, an average 30-year rate approaching 6% does open up a meaningful slice of the market for refinancing. Mortgage originators stand to benefit, and will likely find the toughest times already behind them.”

Dean Baker, Center for Economic & Policy Research

“It is good that the Fed has now recognized the weakening of the labor market and responded with an aggressive cut. Given there is almost no risk of rekindling inflation, the greater boost to the labor market is largely costless. Also, it will help to spur the housing market where millions of people have put off selling homes because of high mortgage rates.”

Seema Shah, chief global strategist at Principal Asset Management:

“Despite the skepticism around economic need for an aggressive 50 bps cut, markets can and should only celebrate today’s move — and will continue to celebrate over coming months. We have a Fed that will go to historic lengths to avoid a hard landing. Recession, what recession?”

Maxine Waters, House Democrat and Court Jester:

“I am pleased that the Fed has not only remained independent, but shown the importance of remaining independent as it followed the data and not politics.”

Last – and least – here is Elizabeth Warren, Indian shaman of the Cherokee tribe

“This cut in interest rates is yet another acknowledgement that Powell waited too long to reduce rates. The Fed has finally changed course to follow its dual mandate on prices and jobs. Lower rates mean relief for consumers and aspiring homeowners. More rates cuts are needed.”

d

 

The Pentagon has taken the rare step of deploying US Army ground forces to an Alaskan island on fears that Russian and Chinese warships are coming closer and closer to America’s shores.

Some 130 soldiers have been sent to an uninhabited, remote island in the Aleutian chain of western Alaska following a series of Russian and Chinese military assets being spotted of the coast, including warplanes. 

For example, just the past week saw a grouping consisting of 8 Russian planes and four navy vessels come close to Alaska. Moscow and Beijing recently ordered stepped-up joint patrols and naval drills in the Pacific region.

“It’s not the first time that we’ve seen the Russians and the Chinese flying, you know, in the vicinity, and that’s something that we obviously closely monitor, and it’s also something that we’re prepared to respond to,” Pentagon spokesman Maj. Gen. Pat Ryder described.

The island in question where US troops are newly deployed is called Shemya Island, which lies some 1,200 miles southwest of Anchorage.

The Army is calling it a “force projection operation” which began on Sept.12.

Below is the latest press release from the North American Aerospace Defense Command complaining of recent incursions in the Alaska Air Defense Identification Zone (ADIZ) off Alaska:

At least two High Mobility Artillery Rocket Systems (HIMARS) have been placed on the island, which has a US Air Force air station dating back to WWII.

According to more background on the location:

Shemya Island is home to the COBRA DANE radar system, operated by the United States Space Force (previously the Air Force oversaw it), that is used for tracking ballistic missiles and similar objects. It is also home to an air station.

The Aleutian Islands were also a battleground during World War II, with the Japanese military seizing several of the islands before the United States retook them. 

Already this year, Russian planes have buzzed the ADIZ off Alaska some 25 times, according to US defense sources. At this rate, a new record will be set by year’s end.

Authored by Michael Lebowitz via RealInvestmentAdvice.com,

Not surprisingly, Donald Trump and Kamala Harris are taking opposite approaches to modifying the corporate tax code. If enacted, both proposals would significantly impact corporate profits and, thus, share prices. Currently, the plans are only campaign promises. History repeatedly reminds us that many political promises are meant to drum up votes.

“Read my lips, no new taxes” – George H.W. Bush 1988.

Predicting whether Trump or Harris will be the next president is challenging. Moreover, even if you know who will win, it’s even trickier to assess which legislation they will focus on and which bills can get through Congress.

Markets handicap unknown scenarios all the time. In some cases, stock prices can move violently as the odds of an event occurring change. Since corporate taxes may be the most significant short-term political factor affecting stock prices, it’s worth understanding what both candidates propose, allowing us to try and stay a step ahead of the market handicappers.

Furthermore, with the recent history of Donald Trump’s 2017 corporate tax cuts, we quantify which companies are best suited to take advantage of or be penalized by a change to the tax code.

Current Corporate Tax Code And History

The following graph charts the Federal corporate tax rate and the effective tax rate companies have actually paid since World War II. Trump’s 2017 Tax Cuts and Jobs Act (TCJA) reduced tax rates from 35% to 21%. The only other significant cut in America’s history of corporate taxes was in 1986, when President Reagan reduced them from 46% to 34%.

Like personal taxes, corporations have many loopholes. Thus, the effective tax rate can vary widely by company. Evaluating how tax rates affect corporate bottom lines in the aggregate is important but can be critical at a company level.

This article only addresses the proposals from the point of view of corporate profits. We do not opine on how they could impact the deficit or economy.

Donald Trump’s Tax Proposals

Trump’s current tax proposal calls for a tax reduction for corporations from 21% to 15%. However, the reduction would solely be for companies that make their products in America. Companies that “outsource, offshore or replace American workers” will not be eligible.

What’s unclear is whether companies can divide their revenue for tax purposes based on where goods are manufactured. Furthermore, how will companies providing services be taxed?

Also for consideration is the “Bonus Depreciation” tax break from the 2017 TCJA. The legislation allowed companies to depreciate 100% of equipment purchases in the year it was acquired. Previously, they could only write down the value of equipment over time according to its useful life.

The Institute of Taxation and Economic Policy (ITEP) analyzed the impact of the accelerated depreciation rule on 25 of the biggest beneficiaries (LINK). They write:

The federal statutory corporate income tax rate is 21 percent, which means that if corporations enjoyed no special breaks or loopholes at all, they would pay 21 percent of their profits in taxes. As a group these corporations used many kinds of tax breaks to drive their effective federal income tax rate down to 12.2 percent. For the whole group of companies, accelerated depreciation accounts for 86 percent of those tax breaks.

Some corporations have used accelerated depreciation to drive their effective tax rates down to single digits during this five-year period. These include Verizon, Amazon, Walt Disney, Con Edison, General Motors, Dish Network, and others.

While the accelerated depreciation has been a boon to some companies, the amount a company can depreciate declines over time. In 2024, a company can only depreciate 60% of equipment costs versus 100% from 2018 to 2022. Each year forward, the amount drops by 20%. In 2027 and beyond, it will be phased out unless it’s extended.

Kamala Harris’s Tax Proposals

Harris’s proposal is more straightforward to analyze. She supports raising the corporate tax rate to 28% for all companies. In addition, she would like to increase the corporate stock buyback tax from 1% to 4%.

Under her plan, companies would see a 7% increase in tax rates which essentially claws back half of Trump’s 2017 TCJA tax legislation.

Congress ultimately has the power to change tax rates. Ergo, whether it is Trump or Harris, it will be hard to change the tax code if one of the two houses of Congress is the opposing political party. The chart below from Gavekal Research shows the possibilities.

Analyzing The S&P 500 Companies

With some background on the candidate’s proposals, we now evaluate the constituents of the S&P 500 to assess the impact of the Trump tax cut. The analysis helps gauge which stocks are most at risk of tax hikes or could benefit from further tax reductions.

Our analysis is based on corporate tax data from 2010 to current for the 503 current S&P 500 stocks. To help improve the quality of the analysis, we only assessed companies with at least four years of earnings data before the Trump tax cuts and six years afterward. Further, we avoided companies with volatile earnings. That criteria narrowed the list to 306 companies.

Of this subset of the S&P 500, the average tax rate before the tax cut was 26.74%. Since then, it has been 17.37%. Almost 90% of the companies saw their effective tax rates decline. On average, the 306 companies’ earnings were 9.36% greater than they would have been.

We summarize the data for you because there are over three hundred companies.

The following table organizes the data by sector. Utilities were the apparent biggest beneficiary of tax cuts. This was partly from the bonus depreciation and recent tax incentives to promote green energy.  

On the other side of the coin is real estate. The cut was not meaningful because these companies tend to pay very little taxes. As shown, the rest of the sectors tended to gravitate around the average. 

The following table shows the largest stocks by market cap. We left out five stocks due to earnings volatility.

Who Pays If The Harris Plan Is Law

The following table lists the companies that saw an improvement of at least 20% to their bottom lines due to the 2017 change in the tax code. Some of these stocks may be at most risk if Harris’s tax plan to boost rates to 28% passes. Those with effective tax rates closer to 28% may be the least affected.

Part of the Harris plan is to raise the buyback tax rate from 1% to 4%. Doing so will weigh on the bottom lines of those perpetually buying back significant amounts of shares. Furthermore, some of these companies may find it more advantageous to increase their dividends instead of buybacks.

The following graph from Uptrends shows the top ten buyback programs of 2024. Clearly, Apple, META, and Google may have the most to lose from the potential tax increase.

Who Wins If Trump’s Plan Is Enacted

Conversely, those with the highest effective taxes and domestic production capabilities may benefit the most. Given that we do not have data on production facilities, we can only share the companies with the highest effective post-2018 tax rates.

In addition to the potential tax cut, we must consider any changes to the bonus depreciation roll-off schedule. Trump could try to bring back the 100% depreciation in year one or stop the bonus depreciation percentage from declining.  

To help us in this endeavor, we share the following table from ITEP with the biggest beneficiaries of the bonus deprecation.

Summary

As we sit here today and assess the stock market and individual stocks from a political perspective, it appears a Trump victory may provide investors with more potential upside. We are solely basing the argument on their respective tax cut proposals.  

The graph above shows that the S&P 500 rocketed by 35% in the two months following the passage of the legislation. Furthermore, the market rose before the legislation as investors gained confidence the legislation would pass Congress.

One can argue the gains were short-lived, as the market gave up its gains shortly after. Contrarily, higher corporate profits due to lower tax rates are an important factor driving the market significantly higher since 2017.