Month: June 2023

After a stellar 2Y, and a medicore 5Y auction, moments ago the Treasury completed the week’s coupon issuance with the sale of $35 billion in 7Y paper in another impressive auction.

The high yield of 3.839% was just above last month’s 3.827%, and the highest since February; it also stopped through the When Issued 3.850% by 1.1bps, the biggest stop through since January.

The bid to cover was even more impressive: at 2.65, it was the highest January’s 2.69 and well above the recent average of 2.51.

The internals however, were the most remarkable: Indirects took down 75.3%, the highest since January and far above the six-auction average of 68.4%. And with Direct Bidders awarded 17.3%, Dealers were left holding just 8.1% of the auction, the third highest on record.

Overall, a stellar auction, in no small part driven by the massive month-end pension fund rebalancing demand (out of equities and into fixed income which we discussed previously) which led to aggressive bidding now that coupon supply is over for the next two weeks, and one which helped push yields across the curve to session lows, providing a modest boost to high duration risk assets.

Biden has Iraq on the mind, apparently… maybe he reads ZH? Yesterday we highlighted how ‘climate envoy’ John Kerry took quite an earful from a French TV host over the US invasion of Iraq.

In an epic Freudian Slip which reveals so much irony and truth, President Biden said Wednesday in an impromptu televised interview while traveling that Russia’s Vladimir Putin is “clearly losing the war in… Iraq“. 

BREAKING: President @JoeBiden says Russian President Vladimir Putin “is clearly losing the war in Iraq” WATCHpic.twitter.com/tMv7WhBrZZ

— Simon Ateba (@simonateba) June 28, 2023

It was just on Sunday that popular French journalist Darius Rochebin blasted Kerry, Biden’s “special presidential envoy for climate”, for Washington’s hypocrisy when it comes to the admin’s Russia and Putin talking points…

Rochebin posed the following: “We have to judge Putin for crimes of aggression, of course. But you, the Americans, you committed the crime of aggression in Iraq.” Rochebin then asked Kerry: “These countries of the Global South say, should we judge George Bush? Why isn’t Bush judged in the same way?”

Biden isn’t the only one getting caught in consequential gaffes and embarrassingly ironic statements this week. 

Below is what NATO Secretary General Jens Stoltenberg had to say on the “German regime” in a press conference which kicked off the alliance’s military exercises in Lithuania at the start of the week.

NATO chief Jens Stoltenberg’s all time epic Freudian slip

“What we’re seeing in Russia over the last days demonstrates the fragility of the German regime”

German Minister of Defense: “German regime?”

[nervous laughter]

“No, sorry. The Russian regime”pic.twitter.com/7nYNdUgQOT

— Dan Cohen (@dancohen3000) June 26, 2023

Events in Ukraine and the West’s anti-Moscow punitive measures, both on the military and economic fronts, have certainly demonstrated that fragility cuts both ways. 

But perhaps both Stoltenberg and Biden said it best in their initial ‘gaffes’, even if it remains that the rich ironies therein are lost on them. 

This is hilarious:

John Kerry is on a tour flamboyantly depicting Russia as a rouge state for invading a sovereign country, only for French journalist @DariusRochebin to remind him the US has invaded multiple countries, and Kerry himself voted to authorize the Iraq War. Watch: https://t.co/i90JH3KAyO

— Glenn Greenwald (@ggreenwald) June 26, 2023

Biden’s “Iraq” comment is also likely to provide further fuel to French media as it confronts John Kerry and other US admin officials.

Bit of a Freudian slip – about those who lost the war in Iraq and thus became “pariahs around the world.” https://t.co/X8FikbOBka

— Glenn Greenwald (@ggreenwald) June 28, 2023

Authored by Samantha Flom via The Epoch Times (emphasis ours),

Reps. Matt Gaetz (R-Fla.) and Marjorie Taylor Greene (R-Ga.) will seek to defund the Office of the Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) under a little-used House rule.

In a June 26 letter (pdf) to House Appropriations Committee Chairwoman Kay Granger (R-Texas), the lawmakers announced their plans, holding that the ATF had been “weaponized” against U.S. citizens by the Biden administration.

“The leadership at the ATF has proven unable or unwilling to see that the ATF respect the rule of law and not act where Congress has not legislated,” they wrote. “Instead, the ATF abuses its rulemaking authority, legislating through the executive and making a mockery of the separation of powers mandated by the Constitution.”

In February, internal documents outlining the ATF’s federal firearms licensee (FFL) inspection guidance were leaked to the press. The documents revealed that the Biden administration’s “zero tolerance” policy had made it easier to revoke the licenses of gun store owners.

In their letter, Gaetz and Green noted that under the policy mere “clerical errors” could result in such revocation.

“The ATF has even made it a matter of official policy to shut down gun stores by making perfection the standard in record keeping—a standard the ATF itself could not meet,” they wrote. “Since the Biden Administration has announced its new ‘zero tolerance’ policy in 2021, Federal Firearms Licensees have faced the highest revocation rate in 16 years.”

They continued: “The ATF has shown itself incapable of operating within the confines of its statutory authority, and we must force a change. Hence, I write to inform you that I intend to use the Holman Rule to defund the Office of the Director of the ATF in the next available appropriations period.”

Zero Tolerance

In a previous statement provided to The Epoch Times, Erik Longnecker, deputy chief of ATF Public Affairs Division, downplayed the Biden administration’s policy to revoke federal firearms licenses for “willful violations” of the law.

“A willful violation occurs when a federal firearms licensee commits the violation with an intentional disregard of a known legal duty or with plain indifference to their legal obligations,” Longnecker said. “Most federal firearms licensees operate in compliance with federal laws and regulations. In Fiscal Year 2022, only 90 federal firearms licenses were revoked out of almost 7,000 compliance inspections.”

However, at a June 26 field hearing in Shalimar, Florida, Gaetz and Greene further criticized the policy and the ATF, which they castigated as a “clown show,” holding that the administration was trying to circumvent the Second Amendment.

“They want to make it impossible to exercise Second Amendment rights, and what better way to do this than to make it difficult to purchase a firearm?” Gaetz noted. “Make no mistake, the ATF is going after Americans and FFLs are just in the way.”

During the hearing, local gun store owners and manufacturers testified as to how they had personally been affected by the Biden administration’s policies.

Chris Smith, the owner of Gulf Coast Gun and Outdoors, noted that his business was recently inspected after his business posted pictures on social media of staff members dressed up as ATF and FBI agents for Halloween.

“It seemed that the intent was to shut me down from the moment that they walked in,” Smith said, noting that his staff overheard an agent saying, “I bet they aren’t laughing at us on Facebook now.”

Smith also said that an agent cited his business for a form they said had been improperly filled out by a customer when it was supposed to be filled out by staff.

“One of my employees confirmed that the portion [the agent] was referring to was his own handwriting, but the ATF agent still cited us for the form.”

Read more here…

In the run-up to this morning’s address, The White House has been fact-checked by the Twitterati and several mainstream media organizations in their claims of success. But, putting aside all the talking points being spewed – and defended – the public remains deeply skeptical of President Biden’s economic record.

The claims begin with jobs-jobs-jobs as President Biden proudly proclaims his administration has “created more jobs in two years than any previous administration.”

Twitter’s Community Notes addressed this mal-information by providing the context that this ‘creation’ is merely ‘allowing’ people to go back to work after the government locked them out of their jobs…

If you are a visual learner, this chart should help – does that look like ‘job creation’ or a return to pre-COVID norms enabled by President Trump?

Then there’s inflation.

Based on CPI, the cost of living rose 8% during President Trump’s 4 year term (1.94% per year). In his first two and a half years, President Biden has overseen the cost of living for Americans rise almost 16% (a stunning 6.25% per year on an annualized basis).

And while we continue to hear about ‘real’ wages rising, the fact is – based on BLS data – there is no evidence at all of rising real wages as Americans have seen their increased cost of living outpacing their wage gains on a YoY basis for 26 straight months…

But before we move to the main event, here’s none other than The Wall Street Journal’s Greg Ip to pour a little col reality sauce on the utopian propaganda you’re about to experience:

“Bidenomics,” is a vision intended to “grow the middle class” and build stuff such as roads and factories. This doesn’t tell us much about what distinguishes Biden from other presidents, though. Don’t they all claim to want a stronger middle class and more roads and factories?

His early agenda was also not particularly novel.

The Rescue Plan was old-fashioned Keynesian demand stimulus, notable mostly for its sheer size. Biden’s staff designed it with the economy of 2009 in mind, when newly elected President Barack Obama and Biden, his vice president, faced a deep recession to be followed by a sluggish, yearslong recovery.

Biden’s team is still sticking to that narrative. In a memo released this week, his political strategists Anita Dunn and Mike Donilon write that Biden “faced an immediate economic crisis when he took office.”

Actually, he didn’t.

By January 2021, the economic crisis brought on by Covid-19 was largely over, even if the health crisis wasn’t. As lockdowns were lifted and vaccines approved, businesses were furiously rehiring. Payroll growth averaged 800,000 a month over the last six months of 2020, in percentage terms the strongest such streak preceding a new president’s inauguration since 1952.

The American Rescue Plan, in other words, was designed to bolster demand in an economy that already had plenty.

But it’s logically inconsistent for Biden to disown inflation while taking credit for tight labor markets since they are mirror images of the same thing: an overheated economy. While economists debate how much stimulus contributed to this overheating, they agree it played a part. Voters are thus less inclined to give Biden a pass, especially since Republicans, and even some Democrats, keep reminding them of the connection.

Simply put: taking credit for everything good and none of the bad is more than a bit disingenuous – but that is where we are and don’t expect the MSM to question the narrative they are fed.

Watch the President live here (due to start at 1300ET):

Appendix: just for fun…

Biden’s unemployment rate is worse than Putin’s.

What was already a terrible year for oil trader (and political activist) Pierre Andurand has just gotten worse.

One month after we reported that the French trader and oil permabull had suffered an already record loss of 46% through May 19, today we learn that Andurand’s losses accelerated in June, with his hedge fund slumping to its worst-ever phase of decline, and seeing its AUM cut by more than half in less than 6 months.

According to Bloomberg, the flagship Andurand Commodities Discretionary Enhanced Fund, which makes leveraged bets, fell by another 7% this month through June 23, extending this year’s losses to about 51%.

While Bloomberg writes that it’s not clear what led to the recent losses, it safe to say that the continued slide in oil – in big part thanks to Joe Biden’s relentless drain of the Strategic Political Reserve – was the culprit.

Andurand – who is vehemently anti-Putin yet who benefited immensely from the oil squeeze prompted by the Ukraine war in 2022 which sent Brent soaring above $120, earlier this year predicted that oil prices may exceed $140 a barrel by the end of 2023. But those bullish calls have met with the commodity sliding on elevated inventory levels, a torrent of supply from Russia and rising shipments from two of OPEC’s most troubled exporters, Iran and Venezuela.

The money manager, who generated a 7x increase in his clients’ invested capital over the previous three years, has been hit by his worst-ever phase of losses for the strategy. The fund that Andurand runs with no set risk limits has lost money every month this year.

Andurand has been among several high-profile hedge fund traders who have seen fortunes turn after a strong gains last year. Said Haidar’s Jupiter macro money pool and billionaire Chris Rokos macro hedge fund suffered double-digit declines after volatile markets in March, while veteran macro trader Adam Levinson shut down his hedge fund after being hit by losses.

Authored by Jonathan Turley,

I recently wrote a column entitled “Who is Lying? Merrick Garland or the Whistleblowers?” after the allegations of IRS whistleblowers and the categorical denial of Attorney General Merrick Garland on the Hunter Biden investigation.

I noted that it would not be a difficult question to answer given the highly specific account of the whistleblowers of meetings, including witnesses.

Now the New York Times has confirmed one of the key allegations. While the newspaper buried the major fact in the 21st paragraph of the story, it confirmed that U.S. Attorney David Weiss did attempt to bring additional charges in California and D.C. but was blocked.

Many have observed that the placement of the disclosure in the Times is a classic example of “burying the lede.” If this were Bill Barr, the confirmation of the story would have been a banner headline. Instead, the confirmation is found in with the baggage 21 cars down the train. That is where you will find this bombshell:

“But in mid-2022, Mr. Weiss reached out to the top federal prosecutor in Washington, Matthew Graves, to ask his office to pursue charges and was rebuffed, according to Mr. Shapley’s testimony. A similar request to prosecutors in the Central District of California, which includes Los Angeles, was also rejected, Mr. Shapley testified. A second former I.R.S. official, who has not been identified, told House Republicans the same story. That episode was confirmed independently to The New York Times by a person with knowledge of the situation.”

If the New York Times is confirming that the “episode” was the repeated blocking of Weiss, Garland stands contradicted in statements that he has made for months, including just days ago. Garland appeared irate at the suggestion that Weiss was denied any opportunity to bring charges anywhere:

He stated

“As I said at the outset, Mr. Weiss, who was appointed by President Trump as the U.S Attorney in Delaware and assigned this matter during the previous administration, would be permitted to continue his investigation and to make a decision to prosecute any way in which he wanted to and in any district in which he wanted to… I don’t know how it would be possible for anybody to block him from bringing a prosecution, given that he has this authority.”

He also denied the allegation that Weiss asked for special counsel status.

I am not sure what is worse: that Garland was clueless or duplicitous. Despite my support for his nomination, Garland has not been a success at Justice. Indeed, from the start, he seemed to shrink from view.

There is also a danger of willful blindness on the part of Garland in avoiding such knowledge as underlings undermined Weiss. We simply do not know, but we need to know.

In speaking with people at Justice, Garland does not appear to be a hands-on manager in the model of Bill Barr. While he cannot be called a figurehead, he is certainly not someone who conveys operational or active control of the department.

If Weiss was refused the ability to charge in two other jurisdictions, the key question is whether he did in fact ask for special counsel status. If so, Garland could be facing serious consequences, even an impeachment effort.

The coverage by the New York Times suggests that the media may be forced to cover this story albeit reluctantly. For Democratic members, it is now becoming even more embarrassing. Democrats unanimously opposed the release of the recent evidence and have opposed efforts to investigate the Biden corruption scandal.

What is clear is that Congress now has ample basis to pursue these answers fully and aggressively. With both potential criminal and impeachable questions, the authority of Congress is at its apex in using subpoenas to get to the bottom of this scandal.

An attorney for former President Donald Trump slammed the Biden DOJ for leaking a tape to CNN featuring Trump allegedly discussing a classified document with an author and publisher working on Mark Meadows’ memoir, in front of two Trump staffers, at his Bedminster, New Jersey club in July 2021. The document pertains to the US military’s war plans against Iran.

“Here’s the good news, we know who leaked it and that’s the DOJ, because I didn’t have it. The DOJ did. They keep everything close to their chest until they realize they’re losing … so then they leak something and tell the American people, ‘listen to what he said,’” attorney Alina Habba told “Fox News Tonight” host Lawrence Jones. “Well, let’s think about what he said. He said what the presidential record act says. The president has the right to declassify documents. Who doesn’t? A non-president. A senator like Joe Biden when he had classified documents and took them out 40 years ago, 30 years ago and had no right to do it.”

CNN aired the two minute clip on Monday, during which Trump joked about former Secretary of State Hillary Clinton’s server in her Westchester, NY home.

“I can tell you who hasn’t done any leaks and who has been listening to everything the judge said and that’s Donald Trump. President Trump was told by a judge he can’t talk about any of the evidence, so explain to me how then, evidence is being leaked the week that Hunter Biden is getting indicted … misdemeanor charges for things that he should have been going to jail for, let’s be honest and if it was a Trumper, would have gone to jail for, but nobody talks about that,” said Habba, adding “What do they want to talk about? ‘Trump, Trump, Trump, submarine,’ oh, I know, release a tape. Release a tape saying what? The presidential record act allows a president to declassify documents.”

“He is the only person who has the power to single-handedly do that. That’s what the tape says.”

“There better be some consequences” for the leak, she added.

Meanwhile, CBS‘s Catherine Herridge notes that the classified documents in question, regarding the Iran plans, weren’t among the charges levied against the former president by special counsel Jack Smith earlier this month (fast fwd to the last 15 seconds for the buried lead!).

Former President Trump heard in audio recording seeming to show and discuss secret documents at his NJ golf club. The Iran memo isn’t among the records underlying Trump’s illegal retention charges, a source confirms @CBSNews pic.twitter.com/UgPQeRRPYt

— Catherine Herridge (@CBS_Herridge) June 28, 2023

But, of course, that ‘fact’ never stopped the MSM from spreading this leaked recording as some smoking gun.