Tucker Carlson has done it again.

On Thursday night, the Fox News host laid bare the Biden administration’s escalating war against political enemies.

Watch:

(h/t The Last Refuge)

The Supreme Court has ruled in favor of the Biden administration on Thursday, which sought to end the Trump-era “Remain in Mexico” policy that requires asylum seekers to wait in Mexico until their case is heard, instead of being allowed to await their hearings in the United States.

The court ruled 5-4, with Chief Justice John Roberts and Justice Brett Kavanaugh joining the three liberal judges in the majority.

The program, officially known as Migrant Protection Protocols (MPP), resulted in a 75% drop in illegal crossings according to former acting commissioner of Customs and Border Protection, Mark Morgan, calling it “the most significant game-changer” in immigration policy at the time.

“That’s on the outer limits of the estimates, [which] are coming from the American intelligence community. … This is what they’re expecting,” Bensman said. “They’re saying it could be as low as 12,000 a day. But to give you some context, we’re at [6,000] and 7,000 a day right now, which is just too big to handle at present.”

President Joe Biden had suspended the MPP on his first day in office in January 2021 and the Department of Homeland Security (DHS) officially terminated it in June. But the administration restarted the policy in early December 2021, in El Paso, Texas, after it was ordered by a lower court to do so.

U.S. District Judge Matthew Kacsmaryk had ruled on Aug. 14, 2021, that the Biden administration had to revive the program, after Texas and Missouri sued the administration for having ended the MPP, saying that the decision worsened conditions at the border.

The Supreme Court had declined to intervene on Aug. 24 after the Biden administration filed an emergency motion requesting a stay of Kacsmaryk’s order, only to change their mind after the Biden DOJ asked them to hear the case on the grounds that the appeals court decision was made in error.

President Joe Biden in his Thursday press conference from the Madrid NATO summit claimed that he’s never waivered on supporting a new F-16 sale to Turkey, also emphasizing in response to a reporter’s question that there was “no quid pro quo” with Erdogan regarding Finland and Sweden’s entry into NATO.

“Biden at press conference says the United States should sell Turkey the F-16 fighter jets but adds there was no quid pro quo in relation to Ankara’s lifting of its veto for Finland and Sweden,” a Reuters correspondent writes of his latest statements. “Says Congress approval needed for sale but he’s confident that can obtained.”

The day prior, the US assistant secretary of defense for international security affairs Celeste Wallander previewed the White House stance in saying, “Strong Turkish defense capabilities contribute to strong NATO defense capabilities.” She added, “The US Department of Defense fully supports Turkey’s modernization plans for its F-16 fleet.”

Concerning the assertion that there was “no quid pro quo”, the statements come the day after Biden and Erdogan met on the sidelines of the two-day NATO summit. One regional report emphasized of that meeting:

On the same day, Biden thanked Erdogan profusely for revoking his opposition to the entry of Finland and Sweden into NATO.

“I want to particularly thank you for what you did putting together the situation with regard to Finland and Sweden,” Biden told Erdogan at a meeting on the sidelines of the NATO summit in Madrid.

So it looks precisely like Turkey’s sudden flip on the NATO membership question was centered on the US offering to grease the wheels and fully back and expedite approval for the F-16 transfer.

Starting in October, Turkey said it formally requested of Washington approval to buy 40 Lockheed Martin-made F-16 fighter jets and nearly 80 modernization kits, which would upgrade its current fleet of fighter jets. 

Erdogan’s government had been consistent in denouncing Swedish and Finish “support” for Kurdish “terrorist” groups, namely the outlawed PKK and its affiliates, for example in northern Syria. The two countries agreed this week to designate it a terrorist organization, while agreeing to other demands of Ankara regarding things like extraditing alleged terror operatives back to Turkey.

Was the F-16 deal Erdogan’s “reward” for lifting objections over Finland and Sweden’s accession? It certainly appears so.

By Michael Every of Rabobank

I-Bear-Ian

Apart from a downwards revision to Q1 GDP that made an already bad number look really ugly, most of yesterday’s main action took place in Iberia: and everything there was even worse. As a result, markets are truly I-Bear-ian.

After the Fed’s Mester (in the US) stated policy tightening was only getting started, is likely to mean 75bps in July, getting to 3-3.5% Fed Funds by year end, and to over 4% by early 2023, we also got the usual collection of central-bank warblers-in-chief in Sintra, Portugal.

Powell stated the global economy is in a “new world”, which is something this Daily has been trying to tell people like him for a long time. He also admitted, “We understand how little we understand inflation,” which is something covered here recently. He underlined fears that inflation will stay above 2% for a long time as we transition into a higher inflation regime, and that his job “is literally to prevent that from happening. And we will prevent that from happening.”

That appears to be a response to Mohamed El-Erian warning of the dangers of the Fed doing something the market is not considering: cutting –which the market is pricing in, and ever sooner– and then having to *hike* rates again. Indeed, either the Fed don’t understand how little they understand about inflation, and a deflationary crash looms – Powell was closer to admitting a recession lies ahead; or the market doesn’t understand how little they understand about inflation, and after deflation, a further wave of inflation returns, as during previous high inflation regimes.

Once retailers have slashed inventory at fire-sale prices they have to restock. Those goods are going to cost much more due to the commodity price increase we are already seeing, despite the drop from the peak in most of them. Cut rates now and watch commodities go straight back up again. For now the focus is on the euphemism of ‘demand destruction’, meaning missing out, going hungry, or risking death by starvation: the mildest version is US citizens driving less, or, alongside warnings of July 4 airport chaos to match that in Europe, flying less. Yet in time the focus might shift back to the structural inflation built into this “new world”.    

For example, few in Sintra are following the geopolitical angle properly. Russia just said it is considering buying the FX of “friendly countries” to alleviate upwards pressure on RUB, which due to a collapse in imports and high commodity prices is very strong, albeit in virtually non-existent USD- and EUR- cross markets. On crosses nobody looks at now but soon may, CNY/RUB has gone from around 12 to 24 to 8 this year, and RUB/INR from 1.0 to 0.50 to 1.5. That doesn’t mean Russia is ‘strong’, but it does mean the West is weak; and that a friend/foe FX dynamic is playing out. Indeed, Reuters reports an Indian firm is buying Russian coal and paying in CNY to avoid the US dollar, something unseen in 25 years. It may be just one case: but is it ‘monkeypox’ or ‘Covid’?

In short, the Fed has more work to do, and pain to cause, to keep the dollar top dog vs. rising commodities and rivals. Cutting rates might boost global dollar liquidity, but not geopolitics. As such, the US is geostrategically better off hiking until things break in the Eurodollar space, and then offering swap lines only to friends.

Which takes us back to Sintra again. There, the ECB’s Lagarde didn’t understand how little she understands about inflation or what is about to happen in the Eurodollar space. As Spanish CPI hit 10% and Germany’s only dipped to 7.6% due to subsidies that last three months, Lagarde admitted a low inflation environment is unlikely to return, and the post-Covid and Ukraine world “is going to change the framework and the scenario in which we operate.” That means changing the ECB’s interest rates too: which is going to hurt a lot. Especially when Lagarde added states shouldn’t hand out broad fiscal stimulus to cushion inflationary blows, and another ECB voice implied the more fiscal stimulus seen, the more hawkish monetary policy will have to be.

We also got hints about the ECB’s new anti-fragmentation tool (AFT) about to go live. Yet our ECB team conclude AFT “can only disappoint. The announcement in July could be pretty empty if the ECB wants to maintain as much ambiguity as we expect.” Moreover, it implies a flatter curve because “If the ECB manages to strike the right balance, this probably enables more rate hikes, shifting the short-end of the curve higher. If the AFT disappoints, renewed safe-haven demand should depress long-dated yields.” (See here for more.)

You think that was all I-Bear-ian? It gets worse. In Madrid, the NATO summit saw the US announce a massive permanent increase in its military deployment to Europe, from Spain and the UK to Romania and the Baltics. Europe, for all of the talk of re-arming, is still mostly doing the catering – and Ukraine’s President Zelenskiy also stated he needs $5bn a month to keep the lights on and the war going. Much, MUCH more needs to be spent, by Europe, on arms – NOW. The 2% of GDP NATO target was designed for a fully-functioning military during peacetime, not a paper tiger during wartime. Yet isn’t that fiscal stimulus, and so higher rates?

With economies slumping, money tight, and people deeply unhappy, it’s the political cliché the neoliberal/Bloombergian/QE generation of market participants have never even heard of: “guns or butter”. How do you tell your people you need guns when they can’t afford butter? Perhaps by telling them they will never be able to afford butter again if they don’t have guns. But let’s see Europe try to do that: and we will all see what happens to them in time if they can’t. One thing is for sure: more things are going to have to change in this “new world” than rates.

And it gets far worse than that. NATO’s updated Strategy Concept says:

“The Euro-Atlantic area is not at peace. The Russian Federation has violated the norms and principles that contributed to a stable and predictable European security order. We cannot discount the possibility of an attack against Allies’ sovereignty and territorial integrity. Strategic competition, pervasive instability and recurrent shocks define our broader security environment. The threats we face are global and interconnected.”

Is that message clear enough for markets?

Russia “is the most significant and direct threat to Allies’ security and to peace and stability in the Euro-Atlantic area. It seeks to establish spheres of influence and direct control through coercion, subversion, aggression and annexation. It uses conventional, cyber and hybrid means against us and our partners. Its coercive military posture, rhetoric and proven willingness to use force to pursue its political goals undermine the rules-based international order.”

‘Don’t do business with Russia’ is the market message.

China’s “stated ambitions and coercive policies challenge our interests, security, and values. The PRC employs a broad range of political, economic, and military tools to increase its global footprint and project power, while remaining opaque about its strategy, intentions, and military build-up. The PRC’s malicious hybrid and cyber operations and its confrontational rhetoric and disinformation target Allies and harm Alliance security. The PRC seeks to control key technological and industrial sectors, critical infrastructure, and strategic materials and supply chains. It uses its economic leverage to create strategic dependencies and enhance its influence. It strives to subvert the rules-based international order, including in the space, cyber and maritime domains. The deepening strategic partnership between the PRC and the Russian Federation and their mutually reinforcing attempts to undercut the rules-based international order run counter to our values and interests.”

Yet ‘keep doing business with China’ is still the market message(?) How much louder does NATO’s geopolitical signal get before markets suddenly wake up in shock, as with Russia? We shall see.

On a related note, as Xi Jinping prepares to visit Hong Kong, which gets the top headline on Bloomberg, the Financial Times just underlined that the must-have university degree in China right now is Marxism. Those who have studied Marx are being snapped up left, left, and not center to help firms navigate their way through the increasingly ideological local landscape of historical materialism, dialectics, labor surplus value, the reserve army of labor, the circulation of commodities, M > C > C(MP) > C+ > M+, constant vs. variable capital, and fictitious vs. productive capital. (As you can see, I’m covered for an alternative career path: are you?)

This ideological trend was covered last year in ‘Pro-Fund or Profound Revolution?’, which underlined that common prosperity is not “regulatory change”, as almost every other analyst bravely opted to call it. Regardless of the bottom-picking game in Chinese assets, which can deliver rich pickings to some, claims of things being “uninvestable” might ultimately mean more against the political and geopolitical backdrop described above. Or the US FCC calling to ban TikTok “because it harvests swathes of sensitive data.” People have known that for ages but chose not to act on it “because markets”: now welcome to a “new world”.

Consider doing extra political-economy reading round Marx. Not as a geopolitical Cold War hedge, because that is being done by TikTok users, hedge-fund billionaires, ‘I wish both sides well’ types, ‘we don’t do politics’ technocrats, and ‘I’d like to teach the world to sing in perfect harmony’ choir members. Rather because if we keep mismanaging the Western economy, there are going to be lots more Marxists here too. Or worse, as Martin Wolf was saying.

The best Marxist analysis such as Kalecki also got big calls like negative rates right when the smartest quant guys got it totally wrong. However, it’s Lenin’s ideas on what happens during the ‘highest stages of capitalism’ that better match where we are all sadly drifting today. He was also the one who said, “The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.”

“you look for the person who will benefit, and uh, you know”https://t.co/OohPP2z7mt pic.twitter.com/eihUEmmi1V

— zerohedge (@zerohedge) June 27, 2022

And, today, via lower asset prices, driven by a necessary drying up of fictitious capital. Crypto appears to be heading for the crypt, despite Bloomberg TV coverage like in this link: did anyone really understand any part of it? And in New Zealand, the RBNZ just said its housing market fundamentals may be changing, and that house prices will likely move back towards more sustainable levels. In May they had forecasted a 15% drop in house prices from their peak. Imagine if that is seen everywhere globally. Imagine if that is optimistic given higher rates, higher inflation, lower real wages, and lower employment.

So, “Asset speculators of the world, unite!” – in the hope we can ignore geopolitics and cut rates again soon with no side effects. They will take heart from Japanese industrial production -7.2% m-o-m this morning vs. -0.3% consensus. Not so much from China’s PMIs, where manufacturing was up to 50.2 vs. 50.5 consensus, but services leaped from 47.8 to 54.7, also vs. 50.5 consensus. Either all those pictures of empty Chinese streets are fake news, or service centers dealing with emigration inquiries are working triple shifts (as the term ‘runxue’, or running away, massively trends).

I-Bear-ian indeed, as we scramble for month- and quarter-end re-positioning.

Russia has taken a major step in trying to demonstrate to Western powers that it’s serious about freeing up grain passage off Ukraine’s coast and in the Black Sea, with on Thursday its military announcing the complete withdrawal of forces from Ukraine’s Snake Island.

The Russian Defense Ministry (MoD) said in a statement that the purpose is to free the passage of Ukraine’s grain exports in a “goodwill” measure. “On June 30, as a step of goodwill, the Armed Forces of the Russian Federation completed their tasks on the Snake Island and withdrew from the garrison stationed there,” the MoD said.

“Thus, it was demonstrated to the world community that the Russian Federation does not hinder the efforts of the UN to organize a humanitarian corridor for the export of agricultural products from the territory of Ukraine,” it stated further.

The statement then called on Ukraine’s government to clear its mines earlier placed on the sea coast and in ports which the Kremlin says is the major impediment blocking sea transit. The northwest Black Sea island has been under control of the Russian military since the start of the conflict, making the retreat of Russian forces a rare and significant battlefield de-escalation there.

However, Ukraine disputed Russia’s version of events, rejecting that it was a voluntary “goodwill” withdrawal initiated by the Russian side, instead claiming that it was Ukraine’s military that drove the Russians from the island.

The head of Ukraine’s army, Valeriy Zaluzhny, stressed his forces had liberated the island. “I thank the defenders of Odessa region who took maximum measures to liberate a strategically important part of our territory,” he said on Telegram. Kiev has said its forces mounted a major series of strikes.

And a representative of Ukrainian President Volodymyr Zelensky’s office, Andriy Yermak, confirmed that Russian forces have indeed exited the island, writing on Twitter: “KABOOM! No Russian troops on the Snake Island anymore. Our Armed Forces did a great job.”

Bloomberg noted that upon the announcement Chicago wheat futures fell as much as 1.3%, and then pared the loss to trade higher on the day.

Russia has consistently claimed it’s not responsible for establishing ‘safe passage’ corridors on Ukraine’s coast due to the presence of thousands of Ukrainian sea mines. The crisis has stoked global prices for vital food products from grains to cooking oils, and fertilizer and fuel. As hundreds of millions of people come under threat of near future famine conditions due to Ukraine not exporting its grains, particularly in the Middle East and Africa, the United Nations has scrambled to broker a deal with the help of Turkey, which controls access to Black Sea waters through its straits.

Ukraine says that it forced Russia to withdraw from Snake Island on two speedboats

Clashes between Ukrainian and Russian forces continue even though Russia claims it left voluntarily to facilitate grain exports

— Samuel Ramani (@SamRamani2) June 30, 2022

Meanwhile, hours after the Russian withdrawal announcement, there are emerging conflicting reports that there could still be clashes on Snake Island.

Authored by Gary Bai via The Epoch Times,

As Elon Musk’s Twitter following sprinted past the 100-million mark this week – a milestone the billionaire shares with Barack Obama, Justin Bieber, Rihanna, Katy Perry, and Cristiano Ronaldo – his followers are noticing atypical behavior: he is not posting.

The Tesla and SpaceX CEO, while vocal on some of the most contentious headlines—such as the Clinton campaign’s Spygate scandal, media silence on Jeffrey Epstein’s sex trafficking case, and union influence on the Democratic Party—stayed uncharacteristically quiet on Twitter for a week amid several high profile events his followers would normally expect him to comment on.

These events include the most consequential ruling impacting the abortion debate in the United States in half a century, plus other things more relevant to Musk himself—his June 28 birthday and cuts to the Tesla workforce, and the closure of its California office.

145 Tweets Per Week

According to Axios, the rocket-and-automotive engineer-in-chief posted an average of 145 tweets and retweets per week over the five weeks leading up to June 16, the day SpaceX employees sent a letter to the company’s executive board complaining about their CEO’s Twitter posts. Musk’s Twitter streak slowed down after June 16, Axios reported.

“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” the letter reads, first reported by The New York Times on June 16.

Some of the complaining employees were fired a day after the publishing of the New York Times article, reported the news agency. Musk alluded to the firing decision in response to another Twitter user’s post on June 17.

🤣🤣

— Elon Musk (@elonmusk) June 17, 2022

Musk’s last posts were tweeted on the same day as the Twitter board unanimously approved his 44-billion-dollar offer on June 21.

Not long after, Musk told attendees of the Qatar Economic Forum that there were a few “unresolved matters” before he could seal the deal, including fake accounts, shareholder approval, and debt financing.