WTI Extends Gains After US Crude Stocks Hit Lowest Since 2022
Oil prices are extending yesterday’s gains this morning, after API reported a huge crude draw and the dollar weakness supportive. A military coup in OPEC-member Gabon added some risk premium to oil prices, however, as Keshav Lohiya, founder of consultant Oilytics, wrote in a note this morning, “oil markets are very quiet,” adding that crude has been supported by bullish inventory data.
Additional support for oil prices are headlines that Russia is discussing with its OPEC+ partners the possibility of extending oil-export cuts into October, but no decision has been made so far, Interfax reported, citing Deputy Prime Minister Alexander Novak in Moscow.
The big question is – will the official data confirm the API draw?
“Another sharp drop in oil inventories was reported by API. If the 11.5 mln barrel drop is confirmed, U.S. private oil stocks would be the lowest in a year,” Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a note.
API
Crude -11.486mm (-2mm exp)
Cushing -2.23mm
Gasoline +1.4mm (-1.3mm exp)
Distillates +2.46mm (-500k exp)
DOE
Crude -10.6mm (-2mm exp)
Cushing -1.5mm
Gasoline -214k (-1.3mm exp)
Distillates +1.2mm (-500k exp)
The official data confirmed API’s reported large crude draw and also Cushing stocks continue to fall…
Source: Bloomberg
The Biden administration added to the SPR for the 4th straight week (+594k barrels)…
Source: Bloomberg
The recent huge commercial draws have dropped crude stocks to their lowest since Dec 2022…
Source: Bloomberg
Stocks at the Cushing hub fell to their lowest since January
Source: Bloomberg
US Crude production remained at post-COVID highs, even as the rig count continues to plunge…
Source: Bloomberg
WTI was chopping around just below $82 ahead of the official data, and extending gains after…
Finally, we note that US demand could weaken as Hurricane Idalia hit the Florida coast early on Wednesday as a Category 4 storm before weakening to Category 3 with 120-mile per hour winds.
“While our primary concern goes out to FL residents, we also see the storm as a small headwind for the refining space. At this point, it doesn’t look like any refineries are in the path of the storm, keeping supply intact. However, FL is a major demand center, with EIA 2021 data showing gasoline consumption of 584mbpd (6.6% of US total), distillate consumption of 149mbpd (3.9% of US), and jet consumption of 134mbpd (9.8% of US),” Tudor, Pickering, Holt analyst Matthew Blair noted.
Part one of this article discusses the potential ramifications related to policy actions that China and Japan might take. These large U.S. Treasury bondholders could temporarily upset the Treasury market, but as we opined, we do not think they threaten our forecast for lower yields. Like China and Japan, inflation, deficits, and QT are stories bond bears are telling themselves to justify higher yields in the future.
Part 2 focuses on the inflation outlook, burgeoning fiscal deficits, and QT. Like China and Japan, any of the three factors we discuss in this article can briefly upset the bond market. But we do not see inflation, deficits, or QT as a cause of concern for longer-term bond bulls.
Inflation Expectations
Some are starting to worry that inflation is beginning to rise again. For example, Lawrence Summers shares the graph below, implying that prices will ramp back up.
Given the symbiotic relationship between bond yields and inflation, bearish bond traders are taking notice of new inflation worries. Gasoline, home prices, and some other goods and services are again on the uptick.
While some may be concerned about higher prices, implied inflation, as determined by the bond markets, displays no such fear. As we share below, five- and ten-year inflation expectations continue declining despite bond yields rising sharply.
CPI with realistic OER and rent prices would be lower than the CPI excluding shelter numbers graphed above. Ask yourself:” What would Fed monetary policy be if inflation was at the Fed’s target?”
The quote references the following graph showing that CPI excluding shelter is 1.019%.
Bottom line:
We think inflation readings will be lower in six months, albeit may bounce around current levels for a few months before declining. While some think inflation will rise, the markets, in aggregate, have no such concern as we share with implied inflation rates. Therefore, it’s tough to pin the recent yield increases on inflation expectations.
Debt and Deficits
Do federal deficits and associated debt issuance correlate with bond yields?
While many fear sharply increasing deficits will push yields higher, history argues the opposite. Since 1980, yields have fallen precipitously while debt to GDP has increased. Why?
Estimates from econometric studies of highly indebted industrialized economies indicate that the government expenditure multiplier is positive for the first four to six quarters after the initial deficit financing, then turns negative after three years. This implies that a dollar of debt financed federal expenditures will, ‘at the end of the day,’ reduce private GDP.
In other words, today’s stimulus is tomorrow’s burden.
Government debt is onerous. Since it is growing much quicker than tax revenue, lower interest rates are required to keep interest expenses affordable for the Government. Further, the burgeoning debt will reduce economic growth and inflation in time. As we show, debt has grown much faster than GDP, tax revenues, and federal interest expenses. However, due to higher interest rates, interest expense has grown more in the last three years than in the fifty years prior. The recent trend is unsustainable!
Bottom Line:
The market may rightly fret that more debt will increase yields. However, history argues the opposite. The Fed and Treasury know that issuing new debt and rolling over existing debt can’t be done much longer at higher rates. In early August, The Treasury Department announced that it was comfortable letting the share of bills outstanding increase above the recommended level to 22.4%. In other words, they are trying to avoid locking in higher rates for longer.
QT
The Fed is likely to continue QT even after they pause rate hikes. This means that bonds on the Fed’s balance sheet today must find a new home. While that may appear to be a bearish factor for bonds, it’s worth noting the Fed is not selling long-term bonds. They are only letting maturing bonds roll off their balance sheet. In fact, each month, they are a net buyer of long-term bonds. The Fed needs to buy bonds when the amount of their maturing bonds exceeds the $95 billion monthly objective.
The regional bank crisis resulted from banks having to realize losses on long-term bonds and loans. Those assets and their unrealized losses are still on bank balance sheets. The Fed is aware that higher yields risk reigniting the bank crisis. Do not be surprised if the Fed or Treasury initiates some yield control if rates increase. As we said in the deficits section, neither the Government nor the economy can afford higher rates. For more, read our article- The Government Can’t Afford Higher for Longer.
Bottom Line:
QT is a short-term measure employed to normalize the Fed’s balance sheet. We have little doubt that when the time comes, the Fed will again aggressively buy bonds to reduce interest rates and limit the financial fallout of higher rates.
They will do whatever it takes when the time comes!
Summary
Like any other financial asset, bond yields trade up and down minute by minute. The media and investors tell stories explaining each move. But often, gyrations are simply a temporary imbalance of buyers and sellers. China, Japan, inflation, deficits, and QT are frightening stories and headlines. But as we share in this article and its predecessor, they should not worry bond bulls willing to endure short-term yield volatility for significant long-term reward.
No doubt, the bearish factors in this article are concerning. That said, we think they dwarf compared to the opportunity that bonds present. Currently, 10-year notes yield 3% more than the long-term trend economic growth rate and trend inflation. The graph shows the natural economic growth rate is likely around 1%. Earning 4% or more in a 1% economy is the best yield premium bond investors have been paid in well over 20 years. The real question bond holders need to ask themselves is, are the 60-year economic trends in the graph reversing higher? If yes, rethink bonds. If not, get them while they are cheap!
With homeowners trapped by a record gap between current and effective mortgage rates…
…US Pending Home Sales were expected to return to decline in July (-1.0% exp) after rising in June for the first time since Feb. Instead, Pending Home Sales surged 0.9% MoM higher (second straight monthly gain), but the year-over-year sales remain down 13.8%…
Source: Bloomberg
By region, July pending sales rose the most in the West as meaningful price declines in the past year lured buyers, Yun said. They also increased in the South, but fell in the Northeast and the Midwest.
Rising mortgage rates, which surged this month to the highest level since 2000, have dealt a severe blow to affordability. With so many homeowners staying put, having locked in much lower rates years earlier, there’s a scant number of available properties. That’s kept prices elevated as result.
“The small gain in contract signings shows the potential for further increases,” Lawrence Yun, NAR’s chief economist, said in a statement.
“However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.”
Still, when one looks at both the pending and existing home sales index, it is difficult to share Larry’s enthusiasm. Also notable is the record disconnect between existing/pending transactions and new home sales which have been storming higher in recent months.
The pending-home sales report is a leading indicator of existing-home sales given houses typically go under contract a month or two before they’re sold.
Military Seizes Power In OPEC Nation Gabon As Wave Of Coups Sweep Africa
Following last month’s military takeover in Niger, a group of senior Gabonese military officers announced on national television they were seizing power in the central African nation,overturning results in a disputed presidential election four days ago.
Bloomberg reported the oil-rich nation (also an OPEC member) with a population of about 2 million saw dollar bonds tumble after military officers announced on television channel Gabon 24 that election results were canceled, borders closed, and state institutions including the Senate, National Assembly and Constitutional Court dissolved.
“In the name of the Gabonese people … we have decided to defend the peace by putting an end to the current regime,” one military office said. He said, “We call on the population for calm and serenity.”
You’re probably wondering where the heck is this tiny OPEC country… The former French colony is in central Africa and borders Cameroon, Equatorial Guinea, and the Republic of Congo.
If successful, the coup will be the eighth in West and Central Africa since 2020—coups in Mali, Guinea, Burkina Faso, Chad and Niger. Last month the military seized power in Niger. International Man’s Doug Casey explains more in “The Battle For Strategic Resources In Africa.”
For half a century, the Bongo family ruled the resource-rich country but has been recently accused of abusing power and amassing exorbitant wealth.
Military officials called themselves the “Committee of the Transition and the Restoration of Institutions” and said that “irresponsible, unpredictable governance” has led to a collapse in social cohesion.
Gabon Military: “On this day, August 30, 2023, we, the defense and security forces… on behalf of the Gabonese people and guarantor of the protection of institutions, have decided to defend peace by putting an end to the current regime.” pic.twitter.com/kboTBOmBaP
Bongo nor his government have reacted to the television appearance of the military. His whereabouts are unknown.
Bloomberg reported Gabon’s dollar bonds due June 2025 fell 11.54 cents to 81.76 cents on the dollar. Both June 2025 and November 2031 were the worst-performing in emerging markets in the session.
French miner Eramet SA, oil and gas producer Maurel & Prom SA, and a listed unit of TotalEnergies SE, which have operations in the country, slid in Paris trading.
Thousands of Gabonians took to the streets after the coup, the atmosphere is festive.
Meanwhile, the French mining company Eramet announced the suspension of operations in Gabon. pic.twitter.com/H6fOa4uQhC
Biased changes to ballot language spur lawsuit. Ohio Republicans failed in an attempt to doom an abortion rights ballot initiative by changing the threshold of votes needed for it to pass. Now, Ohio Secretary of State Frank LaRose—who said the attempt was “100 percent” about thwarting the abortion measure—has a new tack to stack the deck against it: using highly charged and potentially misleading ballot language.
Backers of the measure are, in turn, suing over the LaRose-approved ballot summary.
The measure, dubbed Issue 1, will be put to Ohio voters this fall and would amend the Ohio Constitution to make explicit that the state protects reproductive freedom.
It would add a “Right to Reproductive Freedom” section to the Ohio Constitution, stating that “every individual has a right to make and carry out one’s own reproductive decisions, including but not limited to decisions on: contraception; fertility treatment; continuing one’s own pregnancy; miscarriage care; and abortion. The State shall not, directly or indirectly, burden, penalize, prohibit, interfere with, or discriminate against either: an individual’s voluntary exercise of this right or a person or entity that assists an individual exercising this right” unless it “demonstrates that it is using the least restrictive means to advance the individual’s health in accordance with widely accepted and evidence-based standards of care.”
The proposed amendment goes on to say that the state could still ban abortion “after fetal viability” (defined as “the point in a pregnancy when, in the professional judgment of the pregnant patient’s treating physician, the fetus has a significant likelihood of survival outside the uterus”). However, post-viability bans could not apply in situations where “the pregnant patient’s treating physician” deems an abortion necessary “to protect the pregnant patient’s life or health.”
Backers of the amendment proposed putting its full text on the ballot. That seems like it should be pretty uncontroversial, no? When it comes to something as weighty as amending the state’s constitution, it’s good to give voters all of the context and facts.
But in a 3-2 vote last week, the Ohio Ballot Board—which contains LaRose as a member—rejected the idea that this fall’s ballots should include the amendment’s full text. Instead, they opted for summary language submitted by LaRose’s office.
The summary text characterizes the bit about post-viability bans and their exceptions by saying the amendment would “always allow an unborn child to be aborted at any stage of pregnancy, regardless of viability, if, in the treating physician’s determination the abortion is necessary to protect the pregnant woman’s life or health.”
It uses the phrase unborn child instead of fetus.
It leaves off any mention of specific reproductive rights other than abortion, omitting the amendment’s references to contraception, fertility treatments, continuing a pregnancy, and miscarriage care.
Instead of saying that the amendment would restrict “the State”—defined in the proposed amendment as “any governmental entity and any political subdivision”—from interfering with reproductive freedom, it says it would block “the citizens of the State of Ohio” from doing so.
And instead of saying the amendment would give Ohioans the “right to make and carry out one’s own reproductive decisions,” it says it would guarantee the right to one’s own “reproductive medical treatment.” Backers of the amendment suggest this change falsely implies that the amendment would make the state provide and fund abortions.
The new language “is blatantly misleading and purposefully inaccurate,” asserted Rep. Elliot Forhan (D–South Euclid).
“The entire summary is propaganda,” said Ohioans United for Reproductive Rights co-chair Lauren Blauvelt.
LaRose is “the public servant responsible for conducting free and fair elections in Ohio” but he’s “playing dirty to win. It’s wrong,” opined journalist Marilou Johanek in the OhioCapital Journal.
LaRose called the new language “fair and accurate.”
The Ohio Ballot Board is supposed to be a neutral arbiter of ballot language. But before voting on the language, board member and state Sen. Theresa Gavarone made it clear that she’s anything but neutral. “This is a dangerous amendment that I’m going to fight tirelessly against,” she said.
“Gavarone also claimed, as anti-abortion groups throughout the state do as well, that the amendment is ‘an assault on parental rights,'” but “neither the amendment nor the summary approved by the board mention parental rights of any kind,” notes the Ohio Capital Journal. “The senator continued her comments during the board meeting, saying the true nature of the amendment ‘is hidden behind overly broad language,’ despite the fact that the board summary took out pieces of the full text.”
This week, Ohioans United for Reproductive Rights filed a lawsuit challenging the proposed ballot summary, calling it “irreparably flawed” and aimed at misleading Ohioans into voting no on the proposal. The group is asking the Ohio Supreme Court to order the board “to reconvene and adopt the full text of the Amendment as the ballot language” or, alternatively, to “adopt ballot language that properly and lawfully describes the Amendment.”
FREE MINDS
First Amendment experts discuss age-verification laws. In a new panel discussion hosted by the Woodhull Freedom Foundation, First Amendment lawyers Lawrence Walters and Bob Corn-Revere have a wide-ranging discussion about age-verification laws, regulation of social media, and Woodhull’s case against FOSTA:
R Street Institute’s Shoshana Weissmann has been doing a series of columns about age-verification proposals. Her latest looks at how VPNs render enforcement impossible.
FREE MARKETS
Reminder: We can’t drug war our way out of fentanyl overdoses…
If you know that the DEA seized enough fentanyl last year to kill every American you should understand the impossibility of ending drug overdoses by stopping the supply of fentanyl. The drug war created the incentives that brought us street fentanyl. Interdiction can't stop it. https://t.co/jLLdHwZOAK
… and most fentanyl entering the U.S. is coming through legal ports of entry, not being smuggled over the U.S.-Mexico border. Reason‘s Fiona Harrigan noted this last year:
Despite the idea’s sticking power in certain circles, it’s inaccurate to say that undocumented immigrants crossing an open border are chiefly responsible for fentanyl arriving at the country’s doors. In reality, U.S. citizens carrying the drug through legal ports of entry are primarily to blame.
U.S. Customs and Border Protection (CBP) has reported an upward trend in fentanyl seizures over the past few years. From 2,800 pounds seized in FY 2019, CBP seized 11,200 pounds of fentanyl in FY 2021 and 12,900 pounds in FY 2022 through the end of August.
Seizures conducted by two distinct bodies within CBP combine to yield those numbers. The first, the Office of Field Operations (OFO), enforces immigration and customs laws at ports of entry—points where someone may lawfully enter the United States. The second is U.S. Border Patrol, which intercepts undocumented individuals and illegally imported goods between those ports of entry.
The vast majority of fentanyl seized in recent years has been obtained by the OFO, not Border Patrol. The drug was mainly seized from smugglers at legal ports of entry, not illegal border crossings. OFO seizures amounted to 2,600 pounds in 2019 (93 percent of the total fentanyl seized by CBP), 4,000 pounds in 2020 (83 percent), 10,200 pounds in 2021 (91 percent), and 10,900 pounds so far in 2022 (84 percent). The Drug Enforcement Agency confirms the port trend, saying that “the most common method employed [by Mexican cartels] involves smuggling illicit drugs through U.S. [ports of entry] in passenger vehicles with concealed compartments or commingled with legitimate goods on tractor-trailers.”
QUICK HITS
• “The Environmental Protection Agency removed federal protections for a majority of the country’s wetlands on Tuesday to comply with [the] recent U.S. Supreme Court ruling” in Sackett v. EPA, NPR reports. (More on the Sackett case from Reason‘s Ronald Bailey.)
• Journalist Stephen Lemons brings us updates from jury selection in the Backpage trial:
Court recessed till tomorrow in #Backpagetrial in federal court in Phoenix. They’re doing individual voir dire of jurors now. So far they’ve only gone through 10, leaving 100 to go. 1/ https://t.co/vXGOeLEKhw
During a discussion with the House Foreign Affairs Committee Tuesday, Gold Star father Mark Schmitz labeled Joe Biden a “disgrace” and an “asshole”.
The committee is investigating the botched Afghanistan withdrawal and the suicide bombing in August 2021 at Kabul airport that killed 13 U.S. service members
Schmitz, who lost his son during the attack, Marine Corps Lance Cpl. Jared Schmitz, said Biden has “more American blood” on his hands “than any president in U.S. history.”
“Not a single person has been held accountable,” Schmitz urged, adding “Our so-called leader can’t seem to even utter their names in public, not even once.”
Addressing Biden, he said ‘You, sir, stole their lives, their futures, their dreams and have ripped apart 13 families.”
“Two years has gone by, and where are we? To be frank, we’re knee deep in bulls***, is where we are,” Schmitz asserted, adding ““Everyone who held a key position in the military still has that position or has been promoted.”
Again addressing Biden, he continued, “we’ve seen the way you’ve been treating us as Gold Star families. And there couldn’t be anything more disgusting and cowardly than the way you have treated us. You are a disgrace to this nation. You have no business having ultimate command over our military, and I regret not saying that to your face when I had the opportunity in Dover.”
Watch:
Wow. Mark Schmitz, whose son was killed in Kabul during the Biden Afghanistan withdrawal, goes scorched earth.
Says the admin has the families “knee-deep in bullshit,” Biden is a “disgrace” to the United States, and Blinken/Austin need to “pack up their shit” and resign. pic.twitter.com/q1dWugT9an
In the age of mass Silicon Valley censorship It is crucial that we stay in touch. We need you to sign up for our free newsletter here. Support my sponsor – Summit Vitamins – super charge your health and well being.
Also, we urgently need your financial support here.
Add Q2 GDP To List Of Economic “Data” Revised Sharply Lower By Biden Administration
Another data point, another major downward revision lower.
In the past month, the Biden Department of Goalseeking Stuff Higher Before Quietly Revising It Lower The Next Month (BDOGSHBQRILNM) has been busy, and after slashing jobs, JOLTS, new home sales, housing starts and permits and industrial production, moments ago it took the machete to Q2 GDP, which in the first revision of the “data” was just cut to 2.1% (or rather 2.07% to be specific), down from an initial “red hot” print of 2.4% which turned out to be nothing more than some overzealous political activist’s excel adjustments, and well below the consensus estimate of 2.4%.
The revision according to the BEA, which stands for Biden’s Economic Alterations, “reflected a smaller decrease in inventory investment and an acceleration in business investment. These movements were partly offset by a downturn in exports and decelerations in consumer spending and federal government spending. Imports turned down.” In short, everything was uglier,
Taking a closer look at the data, we find the following changes to the bottom line:
Personal consumption added 1.14% to the bottom line print or just over half, up from 1.12% in the original print; annualized this comes out to 1.7% which was below the 1.8% estimate.
Fixed investment contributed 0.66%, down from 0.83%
Change in private inventories now subtracting 0.09% from the bottom line number, a big swing from the positive 0.14% print in the original estimate. And it will be revised even lower next month as more of the “shrink” emerges.
Net exports were also revised lower, with gross exports trimmed from -1.28% to -1.26%, while imports were revised from 1.16% to 1.04%
Finally the ever handy plug that is government consumption (which is a garbage concept since the government does not actually create anything of economic value in the economy but merely allocated graft and embezzlement of public funding), actually rose from 0.45% to 0.58% (of bottom line GDP). Without this revision, Q2 GDP would have printed below 2.0%
Separately, gross domestic purchases prices, the prices of goods and services purchased by U.S. residents, increased
1.7% in the second quarter after increasing 3.8 percent in the first quarter, above the 1.6% estimate last month but below the consensus 1.8%. Excluding food and energy, prices increased 2.4% after increasing 4.2%.
Personal consumption expenditure (PCE) prices increased 2.5% in the second quarter after increasing 4.1% in the first quarter. Excluding food and energy, the PCE “core” price index increased 3.7% after increasing 4.9%. This number was also revised lower from 3.8% and missed estimates of 3.8%.
Finally, the BEA reported corporate profits decreased 0.4% at a quarterly rate in the second quarter after decreasing 4.1% in the first quarter. Profits of domestic financial corporations decreased 12.1% after decreasing 2.3 percent. Profits of domestic nonfinancial corporations increased 0.9% after decreasing 5.0 percent. Profits from the rest of the world (net)increased 4.4 percent after decreasing 2.0 percent. Corporate profits decreased 6.5 percent in the second quarter from one year ago.
Needless to say, all this is a far cry from the rebound in corporate profits that companies themselves reported in their various GAAP and non-GAAP metrics, which is to be expected in a world where there is now an uncrossable chasm between economic data and its government fabrications.
And now we wait for the Altanta Fed to slash its Q3 GDPNow estimate from 5.9% to 1%, because at this rate the final Q2 GDP revision next month will print well below 2.0%
Biggest Drone Attack On Russia Since War Began Destroys At Least 4 Military Planes
Another huge drone attack on Russian territory has taken place in overnight and early hours of Wednesday morning, this time against an airport in the north-western Russian city of Pskov, which hosts military planes. It came amid broader drone attacks on six Russian regions.
Crucially, Pskov is a mere 20 miles from NATO member Estonia’s border, which sparked internet rumors that Estonia could have been involved, also given the city of Pskov is over 400 miles from Ukraine itself. International outlets are citing Russia’s TASS to report that at least four military transport planes were damaged in the attack.
Four Il-76 transport planes were damaged as drones pummeled the airport. “As a result of the drone attack, four Il-76 aircraft were damaged. A fire broke out, and two planes burst into flames,” TASS reported.
Given the apparent direct hit on no less than four large military planes, this marks one of the biggest and successful cross-border attacks from Ukraine since the war began. Crimea has also in the last days come under waves of drone attacks, and overnight Bryansk Oblast was also targeted, as well as the capital of Moscow and other locations.
In total the unprecedented overnight drone operation included strikes on the following:
Pskov’s “Kresty” Airport hit
Bryansk: One of Russia’s largest microchip plants hit
But Pskov regional governor Mikhail Vedernikov downplayed the significance, emphasizing that the airport will resume operations by Thursday and that there were not civilians hurt.
“According to initial assessments, nothing serious has occurred but it is hard to determine that at night. If everything is in order, the airport will resume normal operations on Thursday,” he said.
Pskov’s Kresty Airport is very close to NATO-member Estonia’s border…
“The defense ministry is repelling a drone attack on Pskov’s airport,” the governor had written previously as the attack unfolded.
According to The Independent, which analyzed circulating footage of the aftermath:
Footage shared by the governor showed smoke billowing over the city of Pskov and a large blaze. Unconfirmed media reports said between 10 and 20 drones could have attacked the airport.
A much better quality video of 2 burned down IL-76 military transport planes at the airfield attacked by Ukrainian drones in Pskov during the night. These drones are taking off from within Russia, just several kilometers away from their targets. 4x IL-76 and 1x Tu-22 destroyed. pic.twitter.com/jhoVH5N0Jg
Russian retaliation was swift, the same report said:
Moscow retaliated on Wednesday by launching a “massive combined attack” on the Ukrainian capital using drones and missiles, that killed two people and injured another.
It remains unclear what Kiev hopes to gain in strategic terms from such risky attacks deep into Russia’s territory, given it certainly escalates things without translating into any gains along the front lines for Ukraine.
Ukraine attacked 6 regions of Russia with drones. What is known so far:
– at about 0.30 Moscow time, the governor announced that a drone attack on the airport in Pskov was repulsed, there were no victims or injured. Flights at the airport were canceled for runway inspections.… pic.twitter.com/z2dGJmDjeH
Washington has long claimed that it does not “enable or encourage” such attacks inside Russia; however The Economistreported Sunday that intelligence provided by Western partners is frequently relied upon for such cross-border operations. Satellite targeting help is also likely a key factor.
A majority of Americans, more than seven in 10, don’t think President Donald Trump can get an impartial jury in his ongoing legal battles according to a new survey about Americans’ trust in the broader legal system.
The poll, conducted by Ipsos, surveyed Americans from the general population and the population of those who have served on juries in the past 10 years to learn their attitudes toward various aspects of the criminal justice system.
The poll found that former jurors were more likely than the general population to trust in the criminal justice system as a whole, including attorneys across all fields, judges, and state and local law enforcement.
They also had a nearly 20 percent more favorable view of their fellow citizens serving on juries than their peers: 76 percent of former jurors reported “a great deal” or “a fair amount” of trust in jurors, compared to 58 percent of non-jurors—the highest level of trust across both groups for all legal positions discussed.
But Americans are less optimistic about former President Donald Trump’s chances of receiving an impartial jury in one of the cases against him relating to his alleged illegal retention of classified documents. Only the documents case, one of four ongoing trials against the former president, was asked about.
In the survey, 1,017 members of the general population—those who haven’t served on a jury in the past 10 years—were asked, “If the cases against Donald Trump go to trial, how confident are you, if at all, that the court will be able to find and seat jurors willing to put aside their prior beliefs about Donald Trump and decide the case based on the evidence presented?”
Overall, 71 percent of those said they were not confident, including 30 percent who said they were “not at all confident” of this outcome and 41 percent who said they were “not too confident” about an impartial jury.
Only 28 percent expressed confidence that President Trump’s jurors could put aside their past perspectives. And the majority of those answering this way, 23 percent, said they were only “somewhat confident” of this outcome. Only five percent said they were “very confident” that President Trump could receive an unbiased jury.
Over the past several decades, Americans’ faith in the jury process, a constitutional pillar of American political life, has remained strong despite a corollary decrease in Americans’ trust of other types of political and legal institutions.
Faith in the jury process has survived several blows, including the acquittal of O.J. Simpson, who many believed to have murdered his wife and her friend, who was later acquitted. Politically-fraught outcomes, including the acquittal of George Zimmerman and Kyle Rittenhouse, and the conviction of Derek Chauvin on murder charges related to George Floyd’s death, have also failed to shake Americans’ core belief in the jury system.
However, the politically fraught criminal cases of the 45th president could erode faith in the system, as members of both the pro-Trump and anti-Trump factions will be unlikely to accept a jury outcome they think was unfair.
Most Cases in Left-Wing Jurisdictions
This problem is only compounded by the political composition of the jurisdictions where President Trump will be tried, as most lean substantially to the left on the political spectrum.
The case related to President Trump’s handling of classified documents will likely take place in Fort Pierce, Florida, part of a county that voted for President Trump in 2020, with jurors pulled from nearby areas.
But other cases against President Trump will be carried out in less favorable political environments.
The first criminal case against him, alleging that he paid adult performer Stormy Daniels hush money to cover up an affair in contravention of campaign finance law, will take place in Manhattan—where, in 2020, 86.7 percent of residents voted for President Joe Biden.
Another case filed against President Trump alleges that he sought to illegally overturn the 2020 election. That case will be held in Washington, D.C.—a place where President Trump received only 5.4 percent of the popular vote in 2020 compared to 92.2 percent for President Biden, and where many residents harbor memories and resentment over the Jan. 6, 2021, Capitol breach.
The most recent case filed against President Trump was filed in Fulton County, one of the counties of the greater Atlanta area where President Biden won 72.6 percent of the vote. Nearby counties similarly voted for President Biden by wide margins.
Given the political bent of the areas where the cases are being held, it is even more likely that supporters of President Trump will view any jury pool as suspect.
After the JOLTS data suddenly exposing cracks in the ‘oh-so-strong’ labor market, expectations were for a big slowdown in ADP’s employment report (from +324k the prior month to +195k this month). The actual print was worse than expected, adding only 177k – the lowest number since March 2023 – and we note that July’s data was revised up from +324k to +371k (even further from the BLS data)…
Source: Bloomberg
Job growth slowed notably last month, driven heavily by leisure and hospitality.
Job creation by hotels, restaurants and other employers in the sector fell to 30,000 in August after months of strong hiring.
All size cohorts saw gains in employment with Large employees adding the most
“This month’s numbers are consistent with the pace of job creation before the pandemic,” said Nela Richardson, chief economist, ADP.
“After two years of exceptional gains tied to the recovery, we’re moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”
The Services sector once again outperformed the Goods-producing sector as MidWest and the Pacific West saw job losses…
Source: Bloomberg
Wage growth slowed dramatically in August:
Job stayers saw a year-over-year pay increase of 5.9%, the slowest pace of gains since Oct 2021.
For job changers, pay growth slowed to 9.5%.
Source: Bloomberg
Finally, as a reminder, June and July’s ADP prints were dramatically higher than the BLS print…
Source: Bloomberg
Is The Fed’s tightening lag finally hitting the labor market? Presumably these pay growth data doesn’t include the recent union wins?
