Month: September 2024

Authored by Matthew Riffe via RealClearWire.com,

When it comes to celebrating Constitution Day, it may be considered atypical to think of the Declaration of Independence.

After all, the Constitution and the Declaration of Independence were two separate documents authored 11 years apart, written for two very distinct reasons, and penned by different authors.

Yet both documents were integral in creating the political philosophy of the United States of America. Both feature famous phrases that are studied and memorized by each rising generation of Americans in classrooms and on naturalization tests. Both documents have been invoked by politicians, activists, and leaders to strengthen arguments or to solidify a point.

Presidents, too, have used the Declaration and the Constitution in their speeches and writings. Abraham Lincoln once described the fundamental principles of the Declaration as an “apple of gold” that was framed by the Constitution, a “picture of silver.”

Before Lincoln, however, no figure tied the Declaration of Independence and the Constitution more closely together than James Wilson, an immigrant with a Scottish upbringing and education. Wilson was quite familiar with the founding texts, as he was only one of six men to sign both documents.

A student of the Scottish Enlightenment, Wilson was committed to the idea that government existed to secure the natural rights of individuals. Two years before the Declaration of Independence, he published a pamphlet titled “Considerations on the Nature and Extent of the Legislative Authority of the British Parliament.” In it, Wilson denied the legislative authority of Parliament and laid out an important teaching on political theory that would be echoed by Thomas Jefferson in the Declaration:

All men, are by nature, equal and free: no one has a right to any authority over another without his consent: all lawful government is founded in the consent of those who are subject to it: such consent was given with a view to ensure and to increase the happiness of the governed, above what they would enjoy in an independent and unconnected state of nature. The consequence is, that the happiness of the society is the first law of every government.

Noted historian Carl Becker argued that Wilson’s pamphlet laid the foundation “for the general theory which Jefferson was later able to take for granted as the common sense of the matter.”

In 1787, as a Pennsylvania delegate to the Constitutional Convention, James Wilson penned the first draft of the Constitution, including its famous opening “We the People.” More than any other delegate, he stressed the importance of citizens having a voice and representation in government.

Toward that end, Wilson used the Declaration for his constitutional arguments. In fact, he even commissioned a special copy of the Declaration to be made for the proceedings.

On June 19, 1787, Wilson read the Declaration, “observing thereon that the United Colonies were declared to be free & independent States; and inferring that they were independent, not Individually but Unitedly and that they were confederated as they were independent, States.”

On September 17, 1787, the delegates to the Constitutional Convention met for the last time to sign the document they had created.

During the ratification debates in Pennsylvania, Wilson once again used the Declaration as a device to further his argument for ratification.

In his speech on November 26, 1787, he claimed that the Constitution was the means to “the great end” the Founding Fathers hoped to accomplish.

It was a constitution that would produce the advantages of good, and prevent the inconveniences of bad government – a constitution, whose beneficence and energy would pervade the whole union, and bind and embrace the interests of every part—a constitution that would ensure peace, freedom, and happiness, to the states and people of America.

On December 4, 1787, he quoted Jefferson’s famous second paragraph of the Declaration and announced:

“This is the broad basis on which our independence was placed: on the same certain and solid foundation [the Constitution] is erected.”

The following July, the country celebrated its first Fourth of July under the new “supreme law of the land.”

In Philadelphia, James Wilson was the keynote speaker for the city’s celebration of independence.

With over ten thousand people in attendance, Wilson could not help but tie the Constitution to the day’s festivities. He closed his oration with a vision for the United States under its new Constitution:

“Peace walks serene and unalarmed over all the unmolested regions – while liberty, virtue, and religion go hand in hand, harmoniously, protecting, enlivening, and exalting all! Happy country! May thy happiness be perpetual!”

As we celebrate Constitution Day amid a presidential election filled with heated rhetoric, Americans should reflect on the political philosophy that is the bedrock of our nation: that both the Declaration of Independence and the Constitution ensure that “We the People” live out the true meaning of our creed that “all men are created equal.”

A ring of food thieves along the Jersey Turnpike has been caught and brought to justice this week.

The suspects are all from Philadelphia, according to the Philly Voice, who reported that they “face multiple counts of conspiracy, criminal mischief, burglary and possession of stolen goods”. 

The four people are connected to millions of dollars worth of thefts over the last three years and the arrests come at the end of a two month operation called “Operation Beef Bandit” (we swear we are not making this up). 

The thefts were taking place at service areas on the NJ Turnpike and included stealing meat, alcohol and seafood.

The Voice report says that early Friday, state troopers spotted two suspicious vehicles at the Molly Pitcher Service Area and four suspects tried to steal meat from a parked tractor trailer.

Police quickly arrested one suspect and, after a brief chase, another. Two others fled in a stolen car, crashing into a police car and two patrol vehicles before being caught.

Three troopers suffered minor injuries, with one treated and released from the hospital, the Voice report concluded. 

New Jersey State Trooper Sgt. Charles Marchan did not confirm if the suspects were linked to recent cargo thefts in South Philadelphia, which we have written about here on Zero Hedge.

Recall, in August, 350-400 pounds of tuna were stolen from a refrigerated truck at Samuels Seafood Co. In September, masked men took three pallets of seafood from Seventh Street and Packer Avenue. Earlier in the year, police reported thefts of snow crab, beef, salmon, and bourbon and last year thieves also stole 2 million dimes worth $200,000 from a truck parked at a Philadelphia Walmart. 

Authored by Marina Zhang via The Epoch Times (emphasis ours),

Researchers have identified 14 biomarkers that, if atypical at birth, may increase an infant’s risk of sudden infant death syndrome, or SIDS—a condition that has long puzzled doctors.

The study evaluated over 350 infants who died from SIDS and compared them to over 1,400 babies who did not die of SIDS.

“We may be able to identify infants at increased risk for SIDS soon after birth,” the researchers at the University of California San Francisco wrote in their study. This would help with prevention.

They also found that infants born to Hispanic and Asian mothers were at lowest risk of SIDS.

SIDS is the sudden unexplained death of a newborn under one year of age. It usually occurs during sleep. Though the cause of SIDS is unknown, babies who die of SIDS are thought to have problems in the way they respond to stress and how they regulate their heart rate, breathing, and temperature.

Babies that are male, are born prematurely, and have a genetic history of SIDS tend to be at a greater risk of SIDS, Dr. Joel “Gator” Warsh, a board-certified pediatrician who was not involved in the study, told The Epoch Times.

14 Metabolites Identified

The 14 biomarkers identified are metabolites, which are chemicals produced during metabolism. The metabolites are detected in newborn screening, which is done before the baby leaves the hospital.

Infants who developed SIDS tend to have lower levels of these metabolites than infants that did not develop SIDS.

These metabolites include:

• 17-hydroxyprogesterone, a hormone and precursor to cortisol, the stress hormone.
• Five amino acids, which are needed to make proteins.
• Eight acylcarnitines, which are key players in cell energy metabolism.

“These metabolites may point to metabolic, endocrine, and neurological abnormalities that could make infants more vulnerable to SIDS,” Warsh told The Epoch Times.

“The most noteworthy metabolic pattern revealed by our study was the significance of acylcarnitines to identification of the likelihood of SIDS,” the authors wrote.

Acylcarnitines are involved in transporting fatty acids for energy metabolism. Atypical levels of acylcarnitines may indicate “systemic dysfunction” of fatty acid metabolism, the authors said.

“Abnormalities in energy metabolism might lead to a lack of energy in critical tissues, including the brain and heart, which could contribute to sudden death,” Warsh said.

Warsh said that two more metabolites stood out to him. One was the hormone 17-hydroxyprogesterone and the other was the amino acid tyrosine. Having abnormal levels of 17-hydroxyprogesterone in SIDS may indicate a disrupted endocrine system, which can affect breathing and stress responses, Warsh said.

Tyrosine is involved in the production of neurotransmitters like dopamine and norepinephrine, which regulate stress and emotional responses.

“Disruptions in neurotransmitter production could lead to improper stress responses or autonomic dysregulation, both of which are factors associated with SIDS,” Warsh said.

Preventing Sudden Infant Death Syndrome

“There is no foolproof method to entirely eliminate the risk of sudden infant death syndrome,” Warsh said.

However, there are some ways that can lower the risk of SIDS:

• Proper sleep positioning: Infants should be positioned on their backs during sleep, whether for naps or overnight, Warsh said. This practice promotes airway openness and reduces the chances of suffocation.
• Using firm mattresses: Soft bedding, pillows, or stuffed animals should be avoided as they can impede breathing.
• Sharing room with parents: Infants should sleep in the same room as their parents for the first six months but should be placed in their own crib or bassinet to avoid accidental suffocation from bed sharing.
• Breastfeeding: Research has found that those who are breastfed have reduced chances of developing SIDS. One study showed that two months of breastfeeding reduced the chance of SIDS by nearly half. Breastfed babies are more easily aroused from deep sleep than formula-fed babies.
• Temperature control: Infants should be dressed in lightweight clothing and the room temperature should be maintained at a comfortable level. Overheating caused by excessive layers or elevated room temperatures can raise SIDS risk.
• Avoiding tobacco smoke: Tobacco smoke during pregnancy and after birth increases SIDS risks.
• Introduce pacifiers: Providing a pacifier at nap times and bedtime has been linked with lower risk of SIDS. However, pacifiers should not be mandated if the infant declines it.

Back in November 2020, when Steve Cohen completed his $2.4 billion purchase of the NY Mets, some joked that the purchase of the dismal baseball team, which according to many is the worst in the league, would eventually bring down the iconic hedge fund manager himself. In the end, while it may not have quite played out that way, the cynics were not that far off: As Bloomberg first reported, Cohen, who was the inspiration for the show Billions and an entire generation of “information arbitrage” investors, has stepped away from everyday trading duties at the firm he founded a decade ago.

While the 68-year-old billionaire and founder of Point72 Asset Management’s remains the funds co-CIO along with Harry Schwefel, he will no longer be investing clients’ capital. Cohen will be “taking a break from trading his own book and he feels he can have a greater impact by focusing on running the firm, driving strategic initiatives, and mentoring and coaching to the next generation of talent,” a spokesperson for Point72 said in an emailed statement.

Through thick and thin, Cohen had been one of the most iconic faces in the industry, successfully rebuilt his hedge fund into one of the world’s biggest after a costly insider-trading scandal, which we sniffed out several months in advance back in 2010. Yet even as he grew his firm into a $35 billion behemoth with more than 185 trading teams, and branched out into other interests, including his 2020 purchase of the New York Mets, he retained his own book that he traded regularly.

“There’s huge value in having Steve as an impactful mentor for our investment professionals,” Point72 spokesperson Tiffany Galvin-Cohen said in the statement. “He’s been doing this for 40 years, and he’s seen a lot. That’s what gives him the most satisfaction these days — helping people succeed and seeing it make a difference — and where he feels he can add the most value.”

Along with Millennium and Citadel, Cohen’s Point72, which started off as SAC Capital, was viewed as one of the original multi-strategy funds, and yet Cohen was always at the center of the trading floor, and could kill any trade he disapproved of. However, over time, the decentralization of Point72 accelerated, and now that its teams run a diverse range of strategies across equity long/short, macro and quant investment, no single trader, including Cohen, is material to the fund’s ability to generate profits. Yet, as Bloomberg notes, his move away from day to day trading will be a litmus test to determine whether multistrategy firms can thrive beyond their legendary founders such as Cohen, Englander and Griffin.

Cohen’s original claim to fame was a 30% annualized return atop his previous firm, then called SAC Capital Advisors, that paid a record $1.8 billion fine to settle a seven-year federal insider-trading probe. SAC pleaded guilty in 2013 to reaping hundreds of millions of dollars in illegal profits and allowing a culture of criminality that rewarded brazen insider trading. That however did not prevent his current firm from being a blowout success.

After SAC’s guilty plea, Cohen changed the firm’s name to Point72, returned client capital and traded using his own billions. However, by early 2018, he was back to managing money for outside investors who forgot about Cohen’s checkered past as they invested $12.8 billion in Point72 since 2020 and managed a record $35.2 billion as of July 1, showing that investors are still keen to back a hedge fund that’s driven by teams of traders. Point72 gained about 10% this year through August and is considering returning profits to clients in 2025, Bloomberg has reported previously.

Authored by Wanjiru Njoya via The Mises Institute,

Ludwig von Mises depicts the aim of revolutionary socialism as: “to clear the ground for building up a new civilization by liquidating the old one.” One of the main strategies in liquidating a civilization involves dismantling its legal and philosophical foundations. This role is fulfilled by activists who embark upon “sabotage and revolution” by subverting the meaning of words: “The socialists have engineered a semantic revolution in converting the meaning of terms into their opposite.”

George Orwell famously called this subversive language “Newspeak.” Peter Foster describes Newspeak as “a sort of totalitarian Esperanto that sought gradually to diminish the range of what was thinkable by eliminating, contracting, and manufacturing words.” 

Mises explains that dictators express their ideas in Newspeak precisely because, if they did not, nobody would support their schemes:

This reversal of the traditional connotation of all words of the political terminology is not merely a peculiarity of the language of the Russian Communists and their Fascist and Nazi disciples. The social order that in abolishing private property deprives the consumers of their autonomy and independence, and thereby subjects every man to the arbitrary discretion of the central planning board, could not win the support of the masses if they were not to camouflage its main character. The socialists would have never duped the voters if they had openly told them that their ultimate end is to cast them into bondage. (emphasis added)

In the proliferation of Newspeak, the reinterpretation of “human rights” has proved to be one of the most powerful weapons of sabotage and revolution. Activists have seized control of a vast empire of international law, NGOs, and human rights charities with a global network of staff who monitor respect for “human rights.” They wield their significant influence in the human rights industry to undermine human liberty by redefining the meaning of “human rights” to denote the antidiscrimination principle. Under the banner of equality and nondiscrimination, they restrict free speech and other human liberties. In other words, the doctrine of “human rights” now denotes the precise opposite: the destruction of human liberty.

The “human right” to non-discrimination

Human rights no longer mean what many might suppose: the right to life, liberty, and property. The vast corpus of human rights in international law has been categorized by Karel Vašák into three: civil-political, socio-economic, and collective-developmental. These categories are said to encompass negative rights (things the state must not do, such interfering with life, liberty, or property), positive rights (things the state must do, for example, provide citizens with food, shelter, education, healthcare, etc.), and rights of solidarity between citizens such as wealth redistribution through social welfare schemes and equal participation in economic progress through measures such as the minimum wage or equal pay.

Human rights organizations monitor progress against these categories and ensure that the legal system works in favor of socialist goals and against liberty. For example, the United Nations human rights program educates the public on the need to eradicate “hate speech” and interprets “equal protection” of the law, as a fundamental human right, to mean protection from hate speech. The UN says:

Addressing hate speech does not mean limiting or prohibiting freedom of speech. It means keeping hate speech from escalating into more something more dangerous, particularly incitement to discrimination, hostility and violence, which is prohibited under international law.

From that description, it can be seen that the UN takes a concept which is well-established in the criminal law, namely, prohibiting incitement to violence, and links it to notions of incitement to discrimination and incitement to hostility, which have never before been recognized as crimes. They annex discrimination and hostility to the charge of inciting violence because, if they did not, it would be immediately clear to everyone that criminalizing “discrimination” or “hostility” amounts to nothing less than Newspeakian crimethink.

The meaning of human rights

In his article, “There’s no such thing as Human Rights,” the British journalist Peter Hitchens argues that,

Human rights do not exist. They are an invention, made out of pure wind. If you are seriously interested in staying free, you should not rely on these flatulent, vague phrases to help you.

They are in fact a weapon in the hands of those who wish to remove your liberty and transform society, though this is probably an accident. It is only in the past 50 years or so that radical judges have realised these baseless declarations can be used (for example) to abolish national frontiers or give criminals the right to vote.

In that context, Hitchens is referring not to the ancient liberties protected by Magna Carta, but to the Newspeakian rights now enshrined in human rights instruments, such as the UN Declaration of Human Rights and the European Convention on Human Rights. Human rights have been transformed into wooly concepts which merely reflect political and partisan demands.

Murray Rothbard avoids the ambiguity surrounding the meaning of human rights by defining them as property rights. In the Ethics of Liberty, he explains:

…the concept of “rights” only makes sense as property rights. For not only are there no human rights which are not also property rights, but the former rights lose their absoluteness and clarity and become fuzzy and vulnerable when property rights are not used as the standard.

In the first place, there are two senses in which property rights are identical with human rights: one, that property can only accrue to humans, so that their rights to property are rights that belong to human beings; and two, that the person’s right to his own body, his personal liberty, is a property right in his own person as well as a “human right.” But more importantly for our discussion, human rights, when not put in terms of property rights, turn out to be vague and contradictory, causing liberals to weaken those rights on behalf of “public policy” or the “public good.”

Thus, the Rothbardian interpretation of human rights denotes the universal right to self-ownership and private property that vests in all human beings.

Bureaucratic reinterpretation

In practice, the meaning of human rights is subject to interpretation by courts or other law enforcement officials. Therefore, human rights ultimately mean only what they are interpreted to mean by law enforcement, not what they may theoretically, politically, or philosophically. Lowell B. Mason, an attorney and former chair of the Federal Trade Commission explains the significance of bureaucratic interpretation by observing wryly that:

When in private practice I never told clients what the law was; I always told them what the bureaucrats thought the law was… The legality or illegality of what you do often depends not on the words of a statute enacted by your elected representatives, but on the state of the collective liver of a dozen anonymous bureaucrats.

Being well aware of this, the goal of activists is to ensure that “human rights” are interpreted so as to advance their goals. This explains the concerted efforts to depict “hate speech” as a human rights violation. In this way the commitment of states to protecting “human rights” is transformed, through the prism of the antidiscrimination principle, into an edict to prohibit hate speech. The word “hate” is interpreted to mean having the temerity to disagree with socialists, and similarly, the word “equality” is interpreted to mean wealth redistribution to achieve equality of material conditions.

Mason explains how it is possible for bureaucrats, charged with law enforcement, to reinterpret the Constitution to suit whatever they think the law ought to achieve. No matter how carefully a law is drafted, it will always require interpretation, and this is where the bureaucrats strike as they purport to be applying the “evolving” meaning of the Constitution. Mason explains:

“Of course,” he will reassure you, “the Constitution still stands as a bulwark to liberty but it is a growing instrument that adapts itself to the times, and while it has not been repealed or amended, it has necessarily been reinterpreted so that due process (as it was known in the past) no longer unduly encumbers the administration of the law.”

Through Newspeak, the Constitution itself has been reinterpreted, enabling socialists to claim that they support free speech and also support the prohibition of “hate speech.” Mises explains that this subverts the concept of freedom into its very opposite: “Freedom implies the right to choose between assent and dissent. But in Newspeak it means the duty to assent unconditionally and strict interdiction of dissent.” In that sense, the concept of “hate speech” is not compatible with free speech. In denoting any dissent as “hate,” it is the very negation of free speech and freedom of thought. Through Orwellian Newspeak, ordinary words like “liberty,” “justice,” and “equality”—values that most people would support—have been subverted and harnessed to promote socialism.

What did the Secret Service chief mean by the below comments?

Ronald Rowe Jr., the Secret Service’s acting director, when giving a briefing Monday from West Palm Beach, described the challenges of protecting Trump and lessons learned going forward. While critics have pointed out the glaring failures that would allow two near-miss assassination attempts on the former president and Republican nominee carried out a mere two months apart, he defended his agency, saying it had put in place the “highest levels of protection” as directed by Biden, which consisted of “counter sniper team elements” and “local tactical assets.”

The Acting Secret Service Director then said: “There could be another geopolitical event that could put the United States into a kinetic conflict or some other– uh- some other issue, that may result in additional responsibilities and protectees of the Secret Service.”

The comment raised eyebrows among pundits who wondered if this means the Secret Service is expecting more such violent attacks on Trump or other high-profile American political leaders. He spoke of the recent assassination attempts as highlighting the need for a ‘paradigm shift’. With conflict now growing even hotter in Gaza, Lebanon, the broader Mideast region, and in Ukraine-Russia… was Director Rowe signaling there’s likely more such assassination attempts to come? Does he have intelligence which suggests so? Or was he just speculating? Watch below:

NEW – Acting U.S. Secret Service Director: “There could be another geopolitical event that could put the United States into a kinetic conflict or some other- uh- some other issue, that may result in additional responsibilities and protectees of the Secret Service.” pic.twitter.com/2KT4VJEqHP

— Disclose.tv (@disclosetv) September 16, 2024

Authored by Mike Shedlock via MishTalk.com,

A trio of Democrat Senators wrote Jerome Powell begging for a three-quarter point cut.

Letter to Powell

Here is the Letter to Powell from Sens. Elizabeth Warren (D-MA), John Hickenlooper (D-CO) and Sheldon Whitehouse (D-RI).

We write today to urge the Federal Reserve (Fed) to cut the federal funds rate, currently at a twodecade-high of 5.3 percent, by 75 basis points (bps) at the Federal Open Market Committee (FOMC) meeting on September 17 and 18, 2024. Given the Fed’s confidence in inflation moving towards its target of 2 percent and data indicating slower job growth, now is the time to swiftly move forward with rate cuts.

For months we have been calling upon you to cut the federal funds rate. As we wrote in June, the Fed’s elevated interest rates are not successfully addressing the remaining drivers of inflation, including housing costs—and might even be making them worse. We were encouraged to hear your remarks this past month when you acknowledged that “[t]he time has come for policy to adjust.” It is clearly the time for the Fed to cut rates.

In fact, it may be too late: your delays have threatened the economy and left the Fed behind the curve. Inflation has fallen to 2.5 percent, well below the mid-2022 peak of 7 percent and just above the Fed’s target of 2 percent. You have stated that the central bank is looking for “greater confidence” that inflation is moving to the 2 percent target, and it is clear that the inflation data is pointing in that direction.5 Indeed, one columnist warned investors to “adjust to the notion that inflation could soon undershoot the Federal Reserve’s 2% target.” At the same time, the unemployment rate has ticked up to 4.2 percent, from 3.5 percent in July 2023.7 In a Senate Banking, Housing, and Urban Affairs Committee hearing in July you noted that “[]in light of the progress we’ve made [] in lowering inflation…elevated inflation is not the only risk we face,” stating that cutting interest rates “too late or too little could unduly weaken economic activity and employment.” Employment numbers adjust slowly, so the Fed should frontload rate cuts to avoid sliding towards a potential crisis.

Last month you emphasized that the Fed “[does] not seek or welcome further cooling in labor market conditions,” but there is a real risk that that is happening.9 At the end of August 2024, the Bureau of Labor Statistics released their preliminary benchmark annual review of employment data, which revealed that there were 818,000 fewer jobs in the 12 months that ended in March of this year than were initially estimated. While these are not job losses, they do indicate that job growth has been much slower than the data previously indicated. Some conservative economists believe that job growth has been even weaker since then. The Economic Policy Institute (EPI) stated: “there is no reason why the Fed should be looking to generate a weaker labor market, but recent months have seen signs of a slight softening at the labor markets on the margin.” While the economy remains strong overall, this softening of the labor market offers further justification for lowering rates.

If the Fed is too cautious in cutting rates, it would needlessly risk our economy heading towards a recession. A number of economists have warned of this risk since July. Former president of the Federal Reserve Bank of New York, Bill Dudley, wrote, “dawdling now unnecessarily increases the risk.” The Committee must consider implementing rate cuts more aggressively upfront to mitigate potential risks to the labor market.

Thank you for your attention to this matter.

No Case, No Case, No Case

• There is no legitimate case for a three-quarter point cut.

• There is no case for political meddling with the Fed.

• There is no legitimate case for the Fed at all.

However, the one thing worse than the Fed would be to put Congress in control of money supply and interest rates.

This is why it was ridiculous for Trump to claim he could do a better job than the Fed.

When Trump made that statement I warned Democrats would do the same. Today they just did.

What’s Warren’s Angle?

• Help Kamala Harris

• Ask for 75 basis points to make 50 basis points look like the middle ground.

Understanding the Dual Mandate

July 31: Fed is Attentive to the Risks to Both Sides of its Dual Mandate

The Fed is concerned about inflation and jobs. It’s the latter that will be the bigger problem in the near-term.

August 23: Fed Does Not Seek or Welcome Further Labor Market Cooling

The market is cheering the Jerome Powell’s self congratulatory and market friendly speech at Jackson Hole. “Your mileage may vary,” said Powell. Indeed.

Undoubtedly, “Your mileage may vary,” is the most accurate thing Powell said today.

Two Fed studies have debunked the myth of inflation expectations, and so does common sense. ….

September 6: Payroll Report: Manufacturing Sheds 24,000 Jobs, Government Adds 24,000, Big Negative Revisions

Full Time Employment is -1,021,000 from a year ago!

Suddenly, there’s a 59 Percent Chance of Half-Point Interest Rate Cut by the Fed

This morning, I noted Suddenly, there’s a 59 Percent Chance of Half-Point Interest Rate Cut by the Fed

Reflections on the Fed’s Dual Mandate

I do not believe there should be a dual mandate.

Heck, I don’t think there should be a Fed. Nor do I think a goal of 2 percent inflation is a good idea, even if accurately measured.

But I didn’t create the mandate, Congress did. And that mandate gives the Fed cover to do whatever it wants.

A month ago I predicted a 50 basis point cut this month. Many people thought I was crazy.

Bear in mind that a prediction does not indicate support for the policy. It’s only a reflection of what I think is likely.

To understand the problem with big rate cuts, look ahead.

Looking Ahead

Deficits are massive, tariff hikes are inflationary, just-in-time manufacturing has been replaced by just-in-case stockpiling, demographics put upward pressure on wages while dramatically increasing the need for Medicare, and both Trump and Biden want more production in the US.

Every point in the above paragraph is inflationary.

Underlying inflation pressures are huge. Given neither party’s willingness to do anything to fix out of control spending, it’s the recent decline in the rate of inflation that’s transitory, not the increase in inflation.

Oil prices closed higher today, with WTI rallying strongly up to test $72 (after falling to the lowest in more than three years last week as the Chinese economy showed more signs of slowing).

“Speculation that China needs to go big on stimulus to support the economy have helped trigger buying from hedge funds, who last week held the most bearish view on oil in recorded history,” Saxo Bank noted.

For now, The Fed’s rate decision and inventory data will define the short-term trend.

API

• Crude +1.96MM (Exp. -0.5MM)

• Cushing -1.4MM

• Gasoline +2.34MM

• Distillates +2.3MM

Crude inventories built for a second week in a row (and product stocks also increased) last week. However, stocks at the crucial Cushing Hub drew down for the sixth week in a row (10th of the last 11 weeks)…

Source: Bloomberg

The ongoing drawdowns at Cushing mean ‘tank bottoms’ are in sight once again…

Source: Bloomberg

WTI dipped very modestly after the API data (despite the Cushing decline)…

Source: Bloomberg

Of course, expectations of an interest-rate cut from the Fed coming Wednesday (potentially stimulating a slowing U.S. economy) is also supporting oil.

“For the coming day or two the Fed move will be the dominant driving force … Oil fundamentals will indisputably take over the role of price-setting, for the immediate future, however, the cost of money in the world’s biggest economy will remain in focus,” PVM Oil Associates noted.

The market is pricing in expectations of a 50bps cut with a 70% probability.

Hot retail sales print and better than expected Industrial production data are not exactly what the doves wanted to see ahead of tomorrow’s big decision (25 or 50bps). Does this look like an economy that needs rate-cuts?

Source: Bloomberg

To complicate things further for traders, NikiLeaks (WSJ’s Nick Timiraos) said withholding a larger cut could raise awkward questions (and Goldman’s trading desk reminded that going back to Bernanke, the Fed typically delivers close to what the market is pricing in)… which is currently around 42bps of cuts tomorrow (70% odds of 50bps cut)…

Source: Bloomberg

Trading was ‘squeezy’ out of the gate with Small Caps soaring on the back of “most shorted” stocks. But that faded around the European close and ‘most shorted’ fell back to unchanged…

Source: Bloomberg

A similar picture occurred for Mag7 stocks, a big gap-up open quickly reverted lower, back to unchanged…

Source: Bloomberg

Goldman’s trading desk noted that volumes were muted and S&P top of book (liquidity) tracking significantly lower as most investors in wait and see mode.

• HFs much better for sale, selling macro products (short ratios elevated to 75%) .

• LOs are much better buys, though activity very light, with buy skews across macros, discretionary, and tech. 

By the close, only Small Caps held on to gains with the rest of the majors all languishing around unchanged…

Stocks and bonds remain in their own worlds… for now…

Source: Bloomberg

Treasury yields were higher on the day with the short-end lagging (2Y +4bps, 30Y +2bps). That left the long-end still lower in yield on the week, but the rest of the curve higher in yield…

Source: Bloomberg

The dollar rallied modestly on the day, ending a three-day down-streak…

Source: Bloomberg

Bitcoin surged back above $61,000 intraday today, erasing yesterday’s dump back below $58,000…

Source: Bloomberg

Oil prices continued their rebound, with WTI testing $72 intraday…

Source: Bloomberg

Gold leaked lower on the day, but held above $2560…

Source: Bloomberg

Finally, is it time for global liquidity to catch up to the equity market’s hope…

Source: Bloomberg

…or will tomorrow be the sell-the-news event as The Fed can’t hide its fear of a hard-landing?

Authored by Eric Lundrum via American Greatness,

The Democratic Party’s vice presidential nominee, Governor Tim Walz (D-Minn.), has failed to improve average test scores in his state of Minnesota despite spending billions of dollars to try to improve the state’s education system.

As the Daily Caller reports, Walz previously signed a bill in 2023 that aimed to spend $2.3 billion on improving the academic performance of students in the state. Although it marked the single largest investment in education in Minnesota’s history, the latest data shows that test scores have not improved after the bill’s implementation.

In the report from the Minnesota Reformer, test scores in 2019, when Walz first took office, showed that about 60% of Minnesota students were proficient in reading while 55% were proficient in math. In 2024, those rates have declined further, to only about half of students being proficient readers and just 45% being proficient in math.

Although the Chinese Coronavirus pandemic played a major role in the sharp decline, Minnesota saw a steeper drop in test scores compared to most states. Moreover, scores have not improved even two years after all lockdown measures were lifted. By contrast, in 2015 and 2017, the average math scores of Minnesota’s fourth grade students were about 10 points higher than the national average. In 2022, that rate dropped to just 4 points above the national average.

In a press release at the end of August, the Minnesota Department of Education made multiple excuses for the $2.3 billion bill’s failure to improve education standards.

“Long-term key investments from the 2023 legislative session are currently being implemented, including the largest funding increase for K-12 education in state history,” the statement read.

“Once fully implemented, these investments will positively impact students for many years to come.”

Marketed by Walz as the “Minnesota Miracle 2.0,” much of the funds were given directly to the school districts themselves.

Despite this, many districts continued to find themselves in debt, with the Minneapolis Public Schools (MPS) district facing a budget deficit of $116 million.

As the party’s nominee for vice president, Walz will face off against the Republican vice presidential nominee, Senator J.D. Vance (R-Ohio), in the first and only scheduled debate between the two on October 1st.