Month: September 2024

Authored by Maggie Miller via RealClearFlorida,

In the heart of Riviera Beach, Florida, a company called K12 Print is redefining what it means to do business in America. This isn’t just about profits and productivity for John DiDonato, the CEO and founder. While financial success is part of the equation, his deeper mission is to help revive a vital cornerstone of the American economy: manufacturing. DiDonato’s vision for K12 Print is rooted in the belief that manufacturing can be a catalyst for change—not just for the company, but for the country and its communities.

There is an ongoing conversation surrounding onshoring, especially following COVID when the global supply chain was disrupted. Businesses are considering it, but don’t see the way forward. K12 Print knows the way, and it is done through investing in human capital.

“You shouldn’t overlook an enterprise zone,” DiDonato advises. “Yes, for the tax benefits you may find, but mostly for the community you will find there—a community hungry for opportunity.”

Setting up shop in an enterprise zone wasn’t just a business decision for DiDonato; it was a strategic move to breathe new life into American manufacturing and, by extension, into the local community of Riviera Beach. He saw potential in establishing a manufacturing base where it was most needed, offering jobs and training to local residents, and revitalizing the local economy.

“I thought as the company grew, it could actually change the city,” DiDonato reflects.

For DiDonato, the decline in American manufacturing isn’t just an economic issue; it’s a societal one. He believes that the offshoring of manufacturing jobs has eroded the foundation of the American middle class and limited opportunities for many young people, particularly those in inner cities. According to DiDonato, manufacturing is crucial for creating wealth and maintaining a healthy economy.

“Manufacturing is the only thing that creates wealth,” he says. “In order to have a healthy economy, you need a strong manufacturing base. We’ve outsourced so much of our manufacturing that it’s affecting our economy and the opportunities available to our young people, especially in inner cities.”

DiDonato points to countries like China, which have focused heavily on manufacturing and trade skills, resulting in rapid economic growth and job opportunities. The U.S., on the other hand, has seen a decline in its manufacturing sector. According to the U.S. Joint Economic Committee, since January 2000, the United States has lost over a quarter of all domestic manufacturing jobs, a decline of over 4.7 million. DiDonato believes this is a major factor in the economic challenges faced by many American communities today.

“When I was a young man in manufacturing, I learned how to make things by making them. That’s not something you can teach in a classroom,” DiDonato explains. “If we keep offshoring our manufacturing, not only do the jobs go, but the technology and innovation follow. We need to bring manufacturing back to America so our kids can be at the forefront of creating and building new things.”

K12 Print’s business philosophy is rooted in a passion for redemption and an understanding that mistakes are a part of life. DiDonato’s co-owner, Jim Wahlberg, has personally felt the effects of redemption and looks for ways to offer the same to others. He said, “We are all subject to redemption. It takes the love and mercy of others and the resolve to do whatever it takes to continue to push forward.”

“There are bad circumstances, but there aren’t bad children. The majority of our kids in America are good kids that just need to be given an opportunity,” DiDonato said.

DiDonato believes there’s a valuable place for hands-on skills in the modern economy. While businesses across the country have struggled to fill vacancies, K12 Print has found success by thinking outside the box. According to DiDonato, the key lies in offering practical training that prepares employees for the demands of manufacturing work, regardless of their educational background.

This inclusive hiring approach extends to individuals with past mistakes on their records. DiDonato believes in giving people who have served their time a second chance to rebuild their lives. He doesn’t believe the consequences of past mistakes should follow someone forever, provided they’re willing to work hard and seize the opportunities given to them.

Angel Peña, a longtime employee of K12 Print, is a testament to this philosophy. For Peña, K12 Print has been more than just a job—it’s been a second chance at life. “I was a stubborn kid, grew up in the foster system, and made bad decisions,” says Peña. “A lot of people closed doors on me because I was a convicted felon. But K12 Print looked at me as a person, not just my past. They gave me hope and a future.”

There are many ways to invest in the community. And K12 Print believes that investment should go further than the current workforce. K12 Print is committed to breaking the cycle of poverty by investing in underserved youth. DiDonato takes a portion of the company’s profits and redirects them into local initiatives, such as the Boys and Girls Club, providing transportation and technology resources to help children in the community. This investment is part of his broader strategy to create a more inclusive and supportive environment for future generations.

“By investing back into the community, we’re not just helping individuals; we’re helping to build a more successful and peaceful society,” DiDonato explains. “If we can reach more executives who think, ‘We can do that too,’ we can start to make a real difference. It’s important for our leaders to understand that kids, especially those in inner cities, aren’t bad—they just need opportunities and people who care.”

DiDonato’s vision for K12 Print is one of hope and practical action. By setting up his business in Riviera Beach and focusing on local talent, he’s not just making it work in America—he’s making it matter. This is what it means to be Made in America.

Maggie Miller is a Real Clear contributor. Maggie is a former news anchor and reporter in New York and Alabama. She is a graduate of the University of Florida.

Authored by Matt Taibbi via Racket News,

Since the last presidential debate between Donald Trump and Joe Biden ended the latter’s re-election bid, newshounds are emptying Thesauruses in search of maximalist language to describe the import of tonight’s clash between Kamala Harris and Trump. “With no other debates scheduled between Ms. Harris and Mr. Trump,” the New York Times writes, “the face-off figures to be one of the highest-stakes 90 minutes in American politics in generations.”

It’s also likely to be one of the most abhorrent, ear-splitting, cliché-ridden, factually unmoored, cringe-inducing live TV spectacles ever. Or the worst, at least, since the last debate. Pre- and post-debate commentary will be critical. The notion that the press heavily influences perception of who “wins” and “loses” debates has been a tired media saw since the 1960 Kennedy-Nixon affair, but audiences are tougher now. They are more likely to see through narrative-shaping efforts.

That doesn’t mean post-debate talking points are irrelevant. As we learned the last time, cable stations have become messaging platforms for delivering pronouncements of behind-the-scenes oligarchs. We will know whether Emperor Obama (or Brennan, or whoever is really running the country) gives tonight’s performance a thumbs-up or thumbs-down within minutes of the MSNBC/CNN roundups.

As usual, I’ll be viewing the debate with Walter Kirn through the lens of a drinking game. We’ll watch the whole event, plus check in on the after-event commentary, beginning at 8:45 pm ET:

For YouTube, click here.

For Rumble, click here.

Or just visit @mtaibbi.

NOTE: The object of a drinking game is to add drama to oft-excruciating TV affairs and also to make light of participants by predicting pre-packaged attack lines. I try to make rules even-handed, which means rules aimed at both candidates’ tendencies. I strongly advise refraining from hard liquor, as a single rule can sometimes be a hospital risk (“The idea…” last time upended some players). I bought a case of Modelo for tonight’s affair, which sounds dull, but I’m anticipating a long night. Walter and I will see you soon. Without further ado, tonight’s rules:

DRINK EVERY TIME:

1. Harris uses the words felon, extreme, threat to democracy, or for the people.

2. Trump uses the words communist, socialist, radical or Marxist. Double-shot for tampon.

3. Harris talks about her experience dealing with predators, scammers, cheaters, perpetrators, or special interests.

4. Trump invokes the Kamala crime wave or defund the police, or says something like They destroyed San Francisco or You can’t buy a loaf of bread without getting shot. Any story of this sort qualifies (“These Haitians, it’s unbelievable. Who would eat a cat?”). Non-negotiable double-shot for literally third world conditions.

5. Harris says Let me be clear, I’m talking, or “Not going back.” Take a SMALL SIP ONLY whenever she mentions the middle class. Take a full drink when Donald Trump only cares about himself.

6. Trump says illegal, sanctuary, Border Czar. Double shot when Harris protests she wasn’t.

7. Harris cackles. Trump does “stank face” or “pinchy hands.”

8. Harris mentions the opportunity economy, price gouging or bringing down costs. Double for groceries. If both candidates mention groceries, take an aspirin.

9. “CHECK, PLEASE!” Drink if Harris runs out of things to say and has to be reminded she still has time left. (Drinking game trivia: this rule was originally written for Joe Biden years ago.)

10. “BILLIONS AND BILLIONS!” Drink when Trump rattles off a statistic that’s off by a factor of 10x. Double if he tells us how many people were just shot in Chicago and how it was worse than Afghanistan. (He may substitute Philadelphia tonight).

11. From Harris: sales tax, bipartisan, reproductive freedom, different vision. Drink for any mathematically perfect tautology/redundancy (e.g. deadlines of time). More than three seconds of stoned-looking hesitation is a drink. Strike your companion if you hear joy.

12. From Trump: so crazy, beautiful, fake, beating the hell, never been anything like it. Drink when he says any national problem was completely eliminated when he was president and complains the media lies its face off about it. You may also drink for take a bullet or the “pull down that chart” story if you feel under-served.

    Tune in tonight to the livestream at 8:45 pm for an additional MYSTERY RULE.

IN THE POST-DEBATE COMMENTARY, DRINK WHEN:

• Any pundit uses a legal metaphor to describe the Harris performance (“A great closing argument,” “She proved beyond a reasonable doubt tonight,” “Tonight, America is her jury”)

• “Move the needle” (if a performance did or did not)

• “Trump was incoherent/rambling”

• Harris showed she was “calm” or “pragmatic”; “We saw a real leader tonight”

• The real opinion of Barack Obama is written on the face of an otherwise evasive David Axelrod; full tumescence of Brian Stelter is detected; Chris Hayes completely agrees with whatever Joy, Rachel, or Jen just said

FINALLY, THE WALTER KIRN RULE:

You must finish your bottle and arm yourself if a technical breakdown or broadcast interruption takes place in the middle of a one-sided debate.

Investigative journalist Chris Papst of Fox45 News’ Project Baltimore revealed that a Maryland high school unknowingly allowed an illegal alien MS-13 gang member, at the center of a murder investigation, to enroll after local, state, and federal authorities failed to inform the school’s administration of the student’s criminal background. Tragic events like this should never be happening in the first world. Yet, the news cycle is becoming inundated with these types of horrific events because of disastrous open southern border policies pushed by the Biden-Harris team. 

The story begins with illegal alien and MS-13 gang member Walter Martinez, who was 16 years old and murdered Kayla Hamilton in 2022. Months before the murder, Martinez walked across the open southern border and was apprehended by the US Border Patrol. He was then sent to a sponsor in Maryland. 

BREAKING: Fox45 has learned an MS-13 gang member, in the country illegally, was attending a Maryland public school while he was the primary suspect in a vicious murder. He was just sentenced to 70 years in prison. And he was allowed to be a student in a public school AFTER he… pic.twitter.com/BenjBtu9xl

— Chris Papst (@chrispapst) September 8, 2024

Fox’s Papst laid out a timeline of Martinez’s illegal entry into America to the murder of an American citizen to his time at a Maryland public school. 

• In March 2022, Martinez entered the United States illegally through Texas as an unaccompanied minor. He was apprehended by Border Patrol and sent to live with a sponsor in Maryland.

• By July 2022, Martinez moved to a mobile home in Aberdeen where he later killed Kayla.

• By the fall of 2022, as police waited for the DNA results, Martinez had been placed in foster care with Child and Protective Services. He then enrolled at Edgewood High School.

• In January 2023, the DNA results came back, and Martinez was arrested.

• In August 2024, he pleaded guilty to murder and was sentenced to 70 years in jail.

The victim’s mother, Tammy Nobles, told Papst, “When I start from the very beginning and get to the very end, they’re like, ‘wow, that is a really crazy story,” adding, “And I say, ‘it is a crazy story. But it’s a true story.’ It’s the worst pain that a parent can ever get.”

Nobles explained the illegal alien “wrapped a cord around my daughter’s neck and her mouth, then just left her on the floor, like trash.” 

An MS-13 gang member attended a Maryland high school as murder suspect, but the school says it was not told about his past. According to charging documents, Walter Martinez, in 2022, was quickly identified as a primary suspect in the murder of Kayla Hamilton. As a minor and MS-13… pic.twitter.com/u2HfbdZthZ

— Project Baltimore (@Project_Bmore) September 10, 2024

Martinez, a native of Salvador, was the top suspect and was detained by police shortly after Kayla Hamilton’s death. There was surveillance video and an audio recording placing him at the scene of the crime. Martinez was read his Miranda Rights, and police sent out his DNA for testing. However, testing took six months, and while that was underway, he was enrolled into a Maryland public school, surrounded by hundreds of kids.

“It makes me angry,” Nobles said, emphasizing, “You’re sitting there putting this monster into high school with other people’s children, and you’re putting children at risk. Look what he did to Kayla.”

Papst pointed out, “Think about this for a minute. After Kayla was murdered, Martinez was quickly identified as a primary suspect, according to charging documents. As a minor and MS-13 gang member in the country illegally, several organizations were involved in the investigation: Aberdeen Police Department, Maryland State Police, FBI, Immigrations and Customs Enforcement, and Child and Protective Services.” 

Yet none of the local, state, and federal agencies mentioned above informed the school system; nevertheless, the parents of the school about the illegal alien’s criminal status.

The story is crazy and absolutely disheartening, and it was made possible by the Biden-Harris team, who allowed this to happen.

Here’s Papst’s full report: 

The nation is sleepwalking into disaster. 

Authored by Paul Joseph Watson via modernity.news,

Ahead of tonight’s debate, a CNN journalist suggested it was unfair for people to ask too much “policy detail” of Kamala Harris and that it was the media’s “job” to point that out.

The comments were made by Natasha S. Alford during a discussion of what to expect during this evening’s head to head between Harris and Trump.

“How does she have an opportunity on the one hand to do what needs to get done and also straddle that?” Alford was asked.

“Well I think this is where the fourth estate comes in, this is our job, right, as journalists tomorrow?” she responded.

.@NatashaSAlford says, “It’s our job as journalists” to bail Kamala out when she’s unable to defend her record as both a dangerous liberal and a failed Vice President pic.twitter.com/57bnQePEjk

— Trump War Room (@TrumpWarRoom) September 10, 2024

“To actually push on the policy questions because what I do feel is that people are pushing for a higher standard of policy detail that they’ve actually pushed Donald Trump for,” she added.

In other words, don’t give Kamala too many hard questions about policy, despite that literally being the entire point of the debate.

Also, don’t grill her too much on things that matter, despite that being the entire point of journalism.

Harris has notoriously avoided talking about her what her actual policies will be and has only agreed to one major interview so far, during which she had to have her running mate Tim Walz sat next to her.

Kamala is known to be bad at unscripted performances and initially reported to demand ABC News let her use notes during the debate.

As we highlighted earlier, the media is already setting the narrative to declare Kamala the “winner” of the debate if she merely doesn’t rise to any personal insults Trump directs her way.

Harris has almost entirely avoided press conferences and answering any questions thrown at her by journalists, who appear perfectly happy to let her off the hook.

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Authored by Steve Watson via modernity.news,

Commerce Secretary and Kamala Harris surrogate Gina Raimondo found herself on the end of a rare moment where a CNBC anchor called out Harris’ complete lack of engagement with the press and the American people since being installed as the Democratic nominee.

“Squawk Box” co-host Joe Kernen was having none of it when Raimondo claimed Harris is “reaching out” to people, that “she’s spending her time talking to Americans,” and “She has a punishing schedule.”

“She hasn’t talked to the press, Gina. I know you’re a surrogate, but the American people are frustrated,” Kernan countered.

He continued, “The media is frustrated with the amount of access anyone’s gotten to her for the past 41 days.”

“We’re finally going to have a debate tomorrow night because she sat down for one interview that was taped and then cut down,” the anchor added.

“Certain little things came out from it, but it has been a masterclass in avoiding any questions and nothing has been made clear by her,” Kernan urged.

He added, “Maybe it’s been made clear in drubs and drabs from her policymakers when it comes out in print or off a teleprompter at one of her scripted speeches.”

“She’s been impossible to pin down on anything because she hasn’t given any access. The American people deserve it,” Kernan concluded, then asking Raimondo “Wouldn’t you agree?”

She despondently responded, “yes.”

Kamala surrogate Gina Raimondo found herself on the end of a rare moment where a CNBC anchor called out Harris’ “masterclass in avoiding any questions.” Report here: https://t.co/4S2AVgDBJG pic.twitter.com/TNTvn5jvm1

— m o d e r n i t y (@ModernityNews) September 10, 2024

Oof.

Finally someone in the media telling it like it is.

As we previously highlighted, Raimondo was called out during an interview last month for falsely suggesting Donald Trump made up statistics that were released by President Joe Biden’s Bureau of Labor Statistics.

The former governor was swiftly hit by a brutal fact check.

“It is though from the Bureau of Labor,” said the reporter.

“I don’t, I’m not familiar with that,” said Raimondo.

Apparently, she’s “not familiar” with the existence of the Bureau of Labor Statistics, a department of the U.S. government that has been around for 140 years.

The report announced that job growth throughout the 12 months ending in March would be revised downward by 818,000 jobs, equating to 0.5% of total jobs, the biggest number for decades.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

By Daphne Howland of RetailDive

Summary

• After declaring it would liquidate because no buyer could be found, LL Flooring on Friday said it has signed an agreement with private equity firm F9 Investments, its largest shareholder, for a going-concern sale of the business. 

• The deal is expected to close at the end of the month, subject to approval by the U.S. Bankruptcy Court for the District of Delaware and closing conditions. LL Flooring, formerly known as Lumber Liquidators, filed under Chapter 11 last month with plans to close nearly 100 stores.

• Per the agreement, F9 Investments will acquire 219 stores and their inventory, a distribution center in Sandston, Virginia, plus LL Flooring’s intellectual property and other assets. The firm has put up a deposit of $4.1 million in cash, per court documents.

The month before LL Flooring’s bankruptcy filing, F9 published an open letter to LL Flooring’s shareholders, urging them to vote for its slate of board nominees, slamming the board for what F9 executives said were its failures and warning that the board was making “poor and puzzling operational and financial decisions that are jeopardizing the [company’s] future.”

By then it had been a little over a year after LL Flooring’s board rebuffed a takeover proposal from F9 subsidiary Cabinets to Go for $5.76 per share in cash, saying the offer “significantly undervalues LL Flooring,” but noting that the company was “open to engaging further on any opportunity that we believe will deliver appropriate value to all our shareholders.”

LL Flooring previously told the Delaware bankruptcy court that pressure in the home improvement sector took a toll on its business. Vendors began to withhold shipments as the company began to have trouble paying its bills, which made it difficult to continue operating.

Working closely with vendors continues to be in focus as LL Flooring prepares to remain in business after all, according to a statement from CEO Charles Tyson.

“We are pleased to have reached this agreement with F9 Investments for a going-concern sale following significant efforts by our team and advisors to preserve the business and maintain ongoing operations,” he said. “As we move through the court-supervised process toward the approval and completion of this transaction, we remain committed to continuing to serve our valued customers and working closely with our vendors and partners. I continue to be appreciative of the ongoing focus and efforts of our associates to provide the best experience for our customers.”

With both the presidential debate and CPI prints on deck, traders were not in an adventurous mood today, and after a rocky last few days of trading, where stocks first dropped 1.7% Friday only to rebound 1.2% on Monday, Tuesday saw a mini rollercoaster, as emini futures first dropped, then gained, only to slide to session lows after Europe closed, before recovering all losses and closing near session highs, and just around 5,500, a key psychological resistance level.

Today’s moves were so phlegmatic that not even the 0DTE crew tried to move stocks much either way.

And speaking of phlegmatic, this is how Goldman’s trading floor described today’s market “uninspiring tape and eerily quiet intraday trading (again) which is concerning…… no smoking gun on this sharp move lower but feels like risk is to the downside in an illiquid and low volume tape. Tonight’s must watch debate between Kamala Harris and Donald Trump has unnerved investors more than before the June event with Joe Biden.”

The market got some much needed tailwind thanks to Oracle, which surged to an all time high after reporting solid results…

… and supported the AI trade just as it was about to crack the most important long-term support levels.

Strength in Mega Cap Tech, up 1.3%, helped offset the cyclical weakness: AI Winners were up 70bp, while Defensives rose 35bp, with the bid led by Wireless, Utilities and Real Estate.

Which is not to say there were no casualties: banks got crushed after first Goldman and then JPMorgan warned that Q3 revenues and the full year Net Interest Income outlook would likely disappoint, sending their stocks sharply lower…

… with the largest US bank at one point tumbling the most since the covid crash. A far more ominous plunge, however, took place at Ally Financial: one of the largest US auto loan lenders finally admitted what everyone else knew already: both delinquencies and charge offs are surging, and results in one of the biggest drop in ALLY stock on record.

The rest of the market was generally solid and closed in the green, with the exception of energy…

… and with good reason: ahead of today’s presidential debate where inflation and the price of various goods will be a key topic, it was imperative that oil be hammered, and sure enough, Brent plunged 3.3%, one of its biggest one-day drops of 2024, sending the price to 2021 levels.

Of course, the last time oil was here, it then promptly doubled int he next 3 months, and while another war doesn’t appear imminent, the fact that hedge funds are the most bearish on oil they have ever been…

… suggests that a historic short squeeze may be looming, especially since Goldman warned that while financial demand may be low (boosted by historic shorting), physical demand remains quite resilient.

As such, it wouldn’t take much work by Saudi Arabia and OPEC+ to spark a massive squeeze, an April 2020 in reverse if you will, as all those who are short oil are unable to find deliverables to cover. And so we wait.

Oil and banks aside, however, the action remained choppy at the index level with no change to the broader narrative even as micro headlines pick up. As UBS notes, “the market remains surprisingly resilient despite the increased activity in equity capital markets and high yield issuance, Election uncertainty and growth concerns with crude oil down 4%. Brent dropped below $70 for the first time since December 2021 after China’s weak import data adds to oversupply concerns .”

UBS warns that “a lack of liquidity is contributing to the choppiness. Lots of investors remain on the road attending various conferences and the uncertainty around the Fed cut pace and the election is keeping investors on the sideline and will not go away near term.” And the punchline: “investors are already set up very defensively (look at recent action in defensives like Staples and Wireless names ) and/or there is plenty of cash on the sidelines as last week’s healthy equity capital markets activity and performance showed.”

Defensive is correct, and one need look no further than the record takedown by foreign (Indirect) buyers in today’s 3Y auction…

… which led to continued buying on the short-end, and pushed the 2s10s curve – which until last week had just emerged from the longest stretch of inversion on record – to the most steep it has been since the summer of 2022.

Bonds were not the only “flight to safety”: so was bullion, which extended its rebound from Friday’s swoon to trade just shy of its record high…

… and even bitcoin appears to once again be catching a more solid bid.

And now, all attention turns to the bloodbath that will be the Kamala-Trump debate in a few hours.

Authored by Jeremy Portnoy via RealClearInvestigations,

Topline: The Federal Emergency Management Agency is refusing to help some local governments pay for storm recovery while its aid fund faces a $6.2 billion deficit. The White House keeps blaming Congress for not providing enough money, but the fiscal crisis is partially FEMA’s own fault.

FEMA has $8.3 billion in “unliquidated obligations” set aside to help victims of storms from before 2012, according to a Department of Homeland Security Office of Inspector General report titled “FEMA’s Inadequate Oversight Led to Delays in Closing Out Declared Disasters.” It is money that FEMA has promised to spend in the future, but it’s unclear when or if it will actually help American families.

Meanwhile, the money can’t be used to help victims of hurricanes from this summer.

Key facts: FEMA grants must be used before a “period of performance” deadline. If the deadline is extended, FEMA officials are supposed to provide a detailed written justification.

FEMA has recently extended deadlines by up to 16 years for $7 billion of grants, sometimes without explanation, according to the OIG report.

For example, FEMA set aside billions to help the Northeast recover from Hurricane Sandy in 2012. The money was supposed to be used up by October 2016, but FEMA extended the deadline to September 2026. $4.5 billion of it was still unused as of last year and is unavailable for victims of this year’s storms.

The extensions are awarded based on “subjective” criteria, the report says. Auditors wrote that “As a result, the potential risk for fraud, waste, and abuse increases the longer a program remains open.”

Even when extensions are not granted, FEMA does not always enforce its deadlines. There was $9.4 million set aside for grants with deadlines over 12 months ago as of June 2023, according to the report. FEMA recouped an additional $5.7 million while the audit was taking place.

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.

Background: The inspector general report is the latest controversy in what has been a challenging year for FEMA. There were a record 28 storms that each caused over $1 billion in damages last year, and there have been 19 so far this year.

In July, the Government Accountability Office reported that FEMA greatly underestimated how much money it would need to spend on the Covid-19 pandemic and had not requested enough money from Congress over the last few years.

The agency’s Disaster Relief Fund nearly ran out of money this August, and FEMA was forced to pause 650 projects that were not deemed essential for “life-saving services.” The same thing happened in October 2023 and seven other times since 2001.

Yet FEMA continues to approve new expenses related to the Covid-19 pandemic, even though the public health emergency officially ended in May 2023.

Summary: There’s no use in obligating billions of dollars to help victims of natural disasters if the money is just going to sit in a bank account.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

With the stock market rollercoaster stuck in “down” mode today, it is probably not a surprise that the flight to safety would be strong to quite strong, and sure enough moments ago when the US sold $58BN in 3Y paper, the demand was the strongest since at least last summer.

Pricing at a high yield of 3.440%, the 3Y auction was not only 37bps below last month’s 3.81% and the lowest since August 2022, but also stopped through the 3.457% When Issued by 1.7bps, the biggest Through since August 2023 and the 4th biggest on record.

As one would expect for a auction with big demand, the bid to cover jumped to 2.662 from 2.551, above the recent average of 2.564.

The internals, however, were the most impressive feature of today’s auction, with Indirects awarded 78.24%, up from 64.4% last month, and the highest on record!

With little room left for the other two groups, the breakdown was almost equal: Directs took down 11.3% and Dealers were left ith just 10.4%, the second lowest on record.

Overall, this was a stellar 3Y auction, and it indicates that the market is certain that the Fed will cut by at least 25bps next week, with some still expecting a 50bps cut.

Yesterday we said that the latest consumer credit numbers, which saw a bizarre surge in credit card debt as consumers – their savings now depleted and at record low levels – now have to charge their credit card for every day staples, were the “last hurrah” for consumption in the US.

It didn’t take long to get confirmation, when first JPMorgan shocked the market when its president Daniel Pinto warned that the bank will not hit its (or the Wall Street consensus) previous Net Interest Income target, sending the stock plunging the most since June 2020…

… which however was followed by a far more dramatic crash in the shares of Ally Financial, which plunged as much as 18%, their biggest one-day drop since March 2020, after the auto lender’s management presented at the Barclays 22nd Annual Global Financial Services Conference.

What sent the stock crashing is CFO Russ Hutchinson warning about weaker credit and net interest income trends quarter-to-date relative to expectations; specifically Hutchingson said that in July and August, they saw auto delinquencies soar a whopping 20 basis points compared to their expectation, while net charge offs (NCOs) were up ~10 bps compared to their expectations.

Confirming that the pain is mostly linked to the firm’s retail auto loan book, Hutchinson said that borrowers have shown signs of vulnerability throughout the year and August US jobs data underscored those stresses.

“Over the course of the quarter, our credit challenges have intensified,” Hutchinson said on Tuesday. “Our borrower is struggling with high inflation and cost of living and now, more recently, a weakening employment picture.”

He also said that the firm may experience some underperformance, he said, adding that Ally will evaluate reserves to cover bad loans and increase them if needed. Needless to say, the sudden confirmation that the bottom is falling out of auto loans is something the market was apparently unaware of, and confirms that US consumer are once again picking and choosing on which accounts to default first.

Hutchinson said the firm will focus more on capital and expenses moving forward, though is not updating its guidance at this time.

Commenting on the announcement, KBW analyst Sanjay Sakhrani said that management pointed to weaker credit trends quarter-to-date compared to expectations

“Clearly the guide was disappointing and begs the question if this is ALLY-specific or a canary in the coal mine,” he writes.  “We still think the stock remains a compelling longer-term opportunity with rates on the decline, but concede this revision is not a good look,” he noted, sidestepping commentary on how those who bought the stock per his reco ahead of today’s 18% plunge must feel.

RBC analyst Jon Arfstrom, who also has an “outperform” rating on the crashing company, wrote that “while these are manageable increases relative to the prior guidance, we believe the relatively quick increase in the NCO and delinquency direction is something that investors will question”

Ally’s announcement sparked a stock liquidation frenzy among all consumer-facing card issuers, including Bread Financial -9.7%, Synchrony Financial -8.6%, Capital One Financial -6.9% and Discover Financial Services -6.9%.