Month: October 2023

By Mish Shedlock of Mishtalk

Let’s count the ways…

Key Ideas

• Voters are now more likely to see the Republican Party as capable of governing, tackling big issues and keeping the country safe compared with the Democratic Party.
• By a 9-point margin, voters also see the Democratic Party as more ideologically extreme than the GOP.
• The trends against the Democratic Party are largely driven by worsening perceptions among its own voter base, which suggests that the party will have to rely more than ever on negative partisanship to keep control of the White House.

Those are not my thoughts. That’s what the latest Morning Consult poll shows.

In a significant reversal from the last presidential election year, U.S. voters are now more likely to see the Republican Party as capable of governing, keeping the country safe and tackling the big issues compared with the Democratic Party. These crossing trend lines provide a stark contrast from the lead-up to 2020, when Morning Consult surveys showed public opinion on the same questions was more static.

Both parties are also trending in different directions on two other characteristics that voters favored Democrats on in 2020. Voters have become less likely to see the GOP as stale, and more likely to say this descriptor fits the Democratic Party. And over that same time frame, voters increasingly say the GOP is responsible.

It’s not just that some voters have lost faith in the Democratic Party’s stewardship of the country — they also see the party as moving asymmetrically away from ideological moderation.

By an almost double-digit margin, voters are now more likely to say the Democratic Party is “too liberal” than they are to say the GOP is “too conservative.” That’s another big change from 2020, when roughly equivalent shares viewed both parties as too ideologically extreme.

Claim Everything is Working

Bidenomics In a Nutshell

1: Hand out free money via unwarranted subsidies to ease the pain of stupid regulations

2: Stoke massive inflation in the process

3: Brag that it is working.https://t.co/Fn5hxUlUln https://t.co/TsmuNV6HBQ

— Mike “Mish” Shedlock (@MishGEA) September 28, 2023

People elected Biden (barely) for two reasons. The first being he wasn’t Trump. The second being they expected him to be a moderate.

Then instead of bringing the nation together as promised, Biden morphed into the Progressive’s dream candidate stoking inflation with every decision.

Voters are upset. They want action on the border. They want better schools. They are fearful of inflation.

They don’t want to give up their gas stove. They don’t want to be forced into a high-priced EV when the infrastructure isn’t ready.

They did not expect Biden to be like Trump.

Biden is telling people how great the Bidenomics economy is, how he’s providing the most jobs, that he is best this and the best that, and the economy is humming, and he is bringing inflation down at the fastest pace in history.

Whatever. It seems so hollow because it is hollow. And voters see right through it.

Other than being much more polite in his delivery, Biden may as well have said, “I built a wall and Mexico paid for it”.

Somehow it seems harder to lie and get away with it when you are in power than when you aren’t.

Bidenomics In a Nutshell

1. Hand out free money via unwarranted subsidies to ease the pain of stupid regulations
2. Stoke massive inflation in the process
3. Brag that it is working.

Here’s the deal. You can run against Trump once and win if your key message is “I’m not Trump.”

But can you do it twice with nothing more than inflation and a more polite delivery to back it up?

A 15-year-old Michigan teen is two facing felony assault charges after she was caught on video launching a metal chair at her teacher’s head during a heated argument with another student.

The teacher, who attempted to break up the fight, turned her back to the assailant when the chair was hurled at the educator, striking her in the head and causing her to drop to the floor where she did not move for approximately seven seconds.

The Genesee County Prosecutor’s office made the arrest following the “unacceptable act of violence,” which went viral last week, ABC 12 reports.

A teacher in Flint, Michigan is knocked unconscious after a student threw a chair at her head. This happened in Flint Community Schools in Michigan pic.twitter.com/T8La7gCgAJ

— Libs of TikTok (@libsoftiktok) September 29, 2023

The teacher was found lying on the ground by the school resource office, who entered the classroom to break up the fight, according to Flint Police Chief Terence Green. 

Both girls involved in the fight were placed under arrest, while the unnamed teacher was quickly rushed to the hospital. She has since been released and is “doing well.”

“We are committed to ensuring that our schools are safe and conducive to learning for all scholars, and we take this responsibility very seriously,” wrote the district’s superintendent, who said that the girl who threw the chair will be held accountable.

As the NY Post notes, former Detroit Police Chief James Craig said “This video perfectly captures the sad state of Education in Michigan – no sense of order or direction, no respect for teachers, and worst of all, NO LEARNING,” adding “Failure to educate young Michiganders is a recipe for increased CRIME, upticks in UNEMPLOYMENT, and SOCIETAL DISORDER. Michiganders deserve better.”

Craig is planning to run as a Republican in the upcoming Senate race.

This video perfectly captures the sad state of Education in Michigan – no sense of order or direction, no respect for teachers, and worst of all, NO LEARNING.

Failure to educate young Michiganders is a recipe for increased CRIME, upticks in UNEMPLOYMENT, and SOCIETAL DISORDER.… https://t.co/AiQJ5wRQ2F

— Chief James Craig (@chiefjamescraig) September 29, 2023

Via The Epoch Times,

Yet another bus carrying illegal immigrants arrived in downtown Los Angeles Sept. 30, marking the 20th such arrival since June.

“One bus with migrants on board from Texas arrived around 1:45 p.m. today at Union Station,” read a statement from Mayor Karen Bass’s office.

“This is the 20th bus that has arrived. The city has continued to work with city departments, the county, and a coalition of nonprofit organizations, in addition to our faith partners, to execute a plan set in place earlier this year. As we have before, when we became aware of the bus yesterday, we activated our plan.”

When three busloads with 109 illegal immigrants arrived Friday, Ms. Bass noted that “Governor [Greg] Abbott continues to put vulnerable lives in jeopardy with limited food and water on multi-day bus journeys to Los Angeles.”

On X, the Coalition for Humane Immigrant Rights (CHIRLA) confirmed the arrival of 27 asylum-seekers Saturday with no children. It did not specify from which nations they had come.

While the collective expected 109 illegal immigrants to arrive Friday, it only assisted 65, citing that some of them may have been picked up by family members or sponsors, or some left immediately upon their arrival at Union Station.

Of the 65 illegal immigrants, 16 were children and there were 35 family-units, meaning migrants who traveled with a spouse, partner, a child or children. Additionally, 36 were female and 29 were male.

According to the CHIRLA, which is a member of the L.A. Welcomes Collective, a network of nonprofit, faith groups, and city and county services that respond to the arrival of migrant buses, a third of all illegal immigrants arriving in Los Angeles by bus have been children.

“When migrants arrive in California—more than 434,000 have arrived in California since 2019—we receive them, integrate them into society, and they in turn contribute positively to our way of life. The Golden State is an immigrant state and that will not change,” CHIRLA wrote on X.

Los Angeles Mayor Karen Bass speaks onstage during EMILYs List’s 2023 Pre-Oscars Breakfast at The Beverly Hilton in Beverly Hills, Calif., on March 7, 2023. (Araya Doheny/Getty Images for EMILYs List)

The Clergy & Laity United for Economic Justice, another member of the collective, wrote on X they learned of two of Friday’s buses early Friday morning. The lack of information resulted in “stretching our resources for greeting people with dignity and respect, helping them reunite with family and connect with sponsors,” according to CLUE Justice.

“It is abhorrent and cruel of Gov. Abbott to send human beings who are tired, hungry and yearning for a safe haven on a 30-hour bus ride without regard for their care, journey or destination,” CHIRLA wrote on X.

“It is clear he is trying to disrupt our efforts, but we will persevere.”

Jorge-Mario Cabrera, director of communications for CHIRLA, told City News Service since June a third, 35 percent of illegal immigrants arriving on buses from Texas are children, which is one of many reasons the collective condemns Mr. Abbot’s actions.

Mr. Cabrera also noted some “folks [illegal immigrants] told us that L.A. was not their destination. They were just told to get on that bus.” Many had not eaten in three days, he added.

The collective usually gets tips hours ahead from volunteers, organizations or from good Samaritans about the arrival of a bus. The route of buses from Brownsville are easier to predict, Mr. Cabrera said, but when they are sent from different cities like Del Rio, it’s “difficult to guess when they’ll arrive.”

Migrants who have crossed into the U.S. from Mexico in Eagle Pass, Texas, on Aug. 25, 2023, enter a Border Patrol vehicle to be taken to a processing facility. (Suzanne Cordeiro/AFP via Getty Images)

Illegal immigrants received a medical check up, and no one was in need of serious medical attention. Mr. Cabrera reiterated the collective will support them with basic needs as they are met by their family or sponsors.

Mr. Cabrera said he hopes the buses will slow down and stop altogether because Gov. Abbott is using illegal immigrants as “political pawns” without regard to their health. But he knows that is less than likely as the political season takes shape.

Texas Gov. Abbott has been arranging the trips under Operation Lone Star (OLS), saying Texas’s border region is “overwhelmed” by immigrants crossing the Mexican border. OLS is a joint operation between the Texas Department of Public Safety and the Texas Military Department along the southern border between Texas and Mexico.

In a recent interview with Fox News, Mr. Abbott said “What we’ve seen is when Democrats have to face up to the reality of what Texas has to deal with every single day, they adopt the same approach that Texas has.”

“We need the president to start enforcing the immigration laws of the United States of America, period,” he added.

Texas Gov. Greg Abbott speaks at a news conference in Beaumont, Texas, on Oct. 17, 2022. (Brandon Bell/Getty Images)

Ms. Bass has complained that Mr. Abbott’s office does not share enough information with Los Angeles about the shipments. She told KNX that if Mr. Abbott’s concerns and actions were legitimate and sincere, then “someone in the government and Texas would notify us and coordinate with us.”

“We hear about the buses headed our way when they’re on the way. We have no idea who’s going to be on the bus, how many people it is or what condition they’re going to be in when they get here,” she said.

“Sometimes they haven’t had any food, barely had enough water.”

The Los Angeles City Council approved a motion on June 9 seeking to formally establish the city as a sanctuary city.

Last month, the council approved a motion calling for the City Attorney’s Office to investigate whether crimes were committed on or before June 14, when Mr. Abbott sent 42 illegal immigrants to Los Angeles in the first of the shipments.

Donald Trump is, if anything, very skilled at reading the room, or in this case reading the overall mood of the country.  In 2015, suggesting that looters become free game for law enforcement and that they should fully expect to be shot while leaving stores might have been the kind of comment that lost him the election.  Or at least it would have garnered a tidal wave of outrage and debates over police overreach.  Today, the public is tired of certain groups of malcontents being allowed to do whatever they please whenever they please without consequences simply because of their supposed victim group status.

President Trump offers his solution to solving the dramatic increase in looting and organized retail theft:

“We will immediately stop all of the pillaging and theft. Very simply if you rob a store, you can fully expect to be shot as you are leaving that store.”

The Anaheim… pic.twitter.com/HQR7s7pzDx

— Charlie Kirk (@charliekirk11) September 29, 2023

In this day and age, skipping past the arrest process and shooting looters sounds reasonable even to crowds in Anaheim, California.  The pendulum always swings the other direction, and in some cases it swings hard.

Longer clip on empowering business owners and security/police to shoot looters: pic.twitter.com/X8FqbYGFNl

— Charlie Kirk (@charliekirk11) September 29, 2023

With numerous Democrats either lying about the ongoing spike in crime across the country or defending the practice of mass theft as a form of righteous “reparations” or activism, the perception among criminals is that it is now open season, and perhaps they are even justified in their actions.  According to Dems, the criminals are the good guys.

The perception among conservatives and moderates is that progressives fully intend to let America burn while gaslighting the public about how the fire is not that hot.  Americans are obviously not buying it.  Since 2022, polls show that at least 78% of Americans believe crime is rising across the nation with 56% saying they have seen a direct increase where they live. 

These poll results led to an extensive corporate media campaign over the course of 2023, in which journalists used faulty and incomplete stats to argue that crime is actually going down.  In reality, a host of Democrat run cities and states are withholding full reports on their crime statistics while the Federal Government adjusts the manner in which they collate the data.  This readjustment conveniently started during the covid lockdowns as crime began to skyrocket. 

Needless to say, the country is fed up.  However, it should be noted that Trump seems to focus particularly on law enforcement as being held back from doing their jobs while overlooking the reality that property owners in many areas hit with theft are also held back from defending themselves and their businesses.  Fear of targeted prosecution is real, with blue cities aggressively pursuing jail time for people stopping a crime, specifically if a minority happens to be harmed.   

The first line of defense is not local law enforcement, it is the property owner.  When something bad happens, they will be the first people on the scene.  The question of freeing up police to do their jobs is secondary to the question of the attempted degradation of the right to self defense.  Making shop owners safe to shoot looters regardless of the kinds of politicians and prosecutors that run the cities they live in would more likely have the kind of impact on crime that Trump describes.  

Via Greg Hunter’s USAWatchdog.com,

Renowned geopolitical and financial cycle expert Charles Nenner has been warning his war cycles were turning up. 

Nenner says, “It happens like clockwork in the second decade of a new century.” 

Nenner says it’s a lot like the stock market running out of gas, and he warns,

“It’s like a stock market that is topping.  First, the weak stocks go down.  Then, the indexes are still holding up, and then the big ones go down. 

Now, you see for instance, Apple also came down, but first, the small stocks came down.  It’s already happening, but you only see the results suddenly when the whole thing crashes…

Americans seem to have no worries about the war that could be coming. I don’t want people to lose sleep, but the pact is forming. 

It is China, Russia, North Korea and Iran.  They are going against the United States that does not have a functional army anymore…

Who do the Americans think they are?  It’s over, they can’t rule the world anymore.  If they are going to fight all these countries, I don’t think it is going to end well.”

Does Nenner see the American Empire ending?  Nenner says,

“I think it ended already, but we just don’t know it yet. 

One of the signals of end of empire is bad education, which we have. 

Another signal is the lifespan of people is shorter than for the people before. 

What do you want me to say?  It does not look good, does it? 

Another signal is your children have it worse than the generation before. 

So, there is a whole list of signals, and it points to the United States is in trouble…

I would be short America . . . and I would go long the BRIC countries (Brazil, Russia, India China).

Nenner says the stock market is on its way to being “substantially lower, but not just yet.” 

Nenner also sees the cycles for gold, silver, bonds and real estate all going lower from here, but gold and silver will be going back up longer term.  The only thing Nenner likes right now are short-term Treasury bonds.  The dollar will hold up for now, but it is headed much lower in the not-so-distant future.  Nenner also likes energy, but it is cycling down at the moment. 

Nenner says, “Inflation goes up and down” and warns, “Inflation is starting another up trend.”

This round of inflation is probably going to be very painful for the common man.

There is much more in the 41-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with renowned cycle analyst and financial expert Charles Nenner for 9.30.23.

*  *  *

To Donate to USAWatchdog.com Click Here

There is free information and analysis on CharlesNenner.com.

You can also sign up to be a subscriber for Nenner’s cutting edge cycle work with a free trial period by clicking here.

Buyers of physical oil across the planet are experiencing an acute supply shortage and are facing some of the highest premiums for supplies they’ve seen in months as plunging stocks at the largest US crude storage hub send shockwaves cross markets from Asia to Europe and the Middle East.

As Bloomberg reports, US crude cargoes on offer in Asia are being offered at the costliest premium this year. The spread between Brent and Middle East oil has jumped to the highest since February while the premium for near-term US supply is close to the highest since July 2022.

Behind the soaring premiums is Cushing, Oklahoma, the delivery point for benchmark US crude futures, which helps to set the price of oil across the Americas and beyond. As we have noted in recent weeks, inventories at the hub are now sitting just above seasonal lows last seen in 2014, and are effectively at the level known as “tank bottoms” below which inventories are for the most part unusable.

Cushing Tank bottoms pic.twitter.com/z8Rr20mR5B

— zerohedge (@zerohedge) September 27, 2023

Stockpiles at Cushing, Oklahoma tumbled below 22 million barrels last week, the lowest since July 2022, and have dropped for seven straight weeks, reaching the lowest level at this time of the year since at least 2018. At these levels, many traders consider inventories to already be at the lowest levels that allow tanks to function normally.

The situation is forcing some traders to pay up big for last-minute supplies at Cushing. The prompt futures spread, which closely tracks supply and demand at the site, surged above $2 a barrel on Wednesday, the highest since July 2022.

Meanwhile, the US refinery maintenance season is getting underway, which will prevent the storage hub from draining to absolute lows. Still, exports remain a wild card for balances, given that demand for American oil is high amid OPEC+ supply curbs, meaning domestic users will likely have to pay up to keep barrels in the US.

Operationally, pulling oil out of tanks when levels fall below the so-called “suction line” is difficult and expensive, and the quality of crude can be compromised by the presence of water and sediment. For now, traders are expecting stockpiles to halt their decline by October and possibly start building up again, depending on how exports shape up. Indeed, this week’s drawdown was less than 1 million barrels — the first time that’s happened since early August.

Cushing’s role in global oil markets has also diminished in recent years since the US lifted an export ban. Most barrels now flow straight from the prolific oilfields in Texas’ Permian Basin to the coast, where they are shipped to overseas buyers.

“Cushing can stay at minimum operating operating levels for an extended period of time,” said Scott Shelton, an energy specialist at ICAP. “It’s now a transit point to the US Gulf Coast and a supply point for Cushing-based refiners.”

The latest surge in US crude spreads also fueled a jump in Brent spreads, with the prompt spread climbing above $2 as well, to the widest in a year.

All that’s happening just as the world was already facing a tight supply situation with Saudi Arabia and Russia cutting output. In recent months, the US had helped fill a void left in the market, routinely sending more than 4 million barrels every day to sate global appetite. Between overseas shipments and strong domestic demand, stockpiles quickly declined in the US. Now there’s a question of whether those flows will continue.

“We’re running out of oil – you can see how low storage is at Cushing,” said Gary Ross, a veteran oil consultant turned hedge fund manager at Black Gold Investors LLC. “If we’re running out at Cushing, then we’re running out in Europe, because it relies on US exports. If the US exports less, then where is Europe going to get its oil from?”

As supplies collapse, cargoes of WTI Midland crude for January delivery to Asia are being offered for sale at premiums of $9 a barrel above benchmark Dubai oil, according to traders who buy and sell the grade. That would be the highest premium seen this year, data compiled by Bloomberg show. Actual trading will likely start next week, giving more clarity on how much stronger the market for US barrels has gotten.

Abu Dhabi’s Murban crude also surged against Dubai on the ICE Futures Abu Dhabi exchange. Although spot cargoes of Middle Eastern crude will only begin trading in the coming weeks, the premium of the grade — often compared with WTI Midland — increased to the highest since February/

In the futures market, the surge is already apparent. The tightness in US supplies narrowed the gap between US crude and international benchmark Brent to under $3 a barrel, the smallest since May last year. Meanwhile, the spread between Brent and Middle East’s Dubai marker — also known as Brent-Dubai EFS — has skyrocketed

While there’s been a lot of angst over the shrinking US inventories, there are yet to be any concrete signs of a slowdown in American exports.

“Waterborne exports in October are still likely to come in close to 4 million barrels a day,” said Matt Smith, oil analyst at Kpler. “The lagged impact of the tightening Brent-WTI spread means we may not see the full impact until November’s loadings.”

For November and beyond, it’s still likely exports will hover around the 4 million barrels a day level, Smith said, citing strong domestic shale production.

Traders also point to inventories being fairly robust in the Gulf Coast region as a sign that US exports could continue to remain strong for a few weeks. At the same time, heavy seasonal refinery maintenance work in the US alongside turnarounds in Europe should also offer a cushion and free up some supplies.

Already, prices for WTI in Midland and WTI at Houston are weakening relative to prices at Cushing. If that continues, it could re-open the arbitrage window to ship crude profitably to Asia. It should also help to send more barrels to Cushing.

Still, there are signs that some European refiners are having to pay up for immediate supplies.

Angola’s Sonangol sold four cargoes as much as $1.50 a barrel above offer prices over the past week, with three of the shipments likely going to Europe. Those cargoes would usually be destined for Asia — the atypical trade pattern reflects some of the market’s sharp swings this week.

“The premiums are going nuts everywhere,” Ross said. “The Saudis have tightened this market up dramatically.” Almost as if Saudi Crown Prince MBS doesn’t care much for Joe Biden’s sole election “strategy” of keeping gas prices low – fist bumps notwithstanding…

… especially now that the US SPR is half-empty and any continued drainage would lead to catastrophic collapse at the salt caverns that hold US emergency inventories, sending oil prices to new record highs.

Authored by Zachary Stieber via The Epoch Times,

More than 277,000 COVID-19 cases among people who received COVID-19 vaccines were reported to the U.S. Centers for Disease Control and Prevention (CDC) in 2021 but not disclosed to the public, newly obtained files show.

Some 144,349 cases among partially vaccinated people were reported by 32 jurisdictions to the CDC across three months in 2021, according to some of the files, which were acquired by The Epoch Times through the Freedom of Information Act.

Partially vaccinated has been defined by the CDC as a person who received at least one dose of a vaccine. People were described as fully vaccinated if at least 14 days had elapsed since they completed a primary series.

The Moderna and Pfizer primary series consisted of two doses while Johnson & Johnson’s consisted of one dose.

The cases were recorded in California, Maryland, New York, Texas, and 28 other jurisdictions in April, May, and June 2021 and reported to the CDC.

The CDC never disclosed the numbers to the public.

“These data on partially vaccinated persons were not reported publicly but rather, were collected to ensure that that they were being appropriately excluded from the numbers of vaccine breakthrough cases as described as a best practice on the CDC website,” staffers at the CDC’s National Center for Emerging and Zoonotic Infectious Diseases told The Epoch Times in a letter.

On a webpage advising state and local officials on how to analyze patterns of COVID-19 by vaccination status, the CDC recommends excluding people who only received one Moderna or Pfizer dose or analyzing them separately.

The exclusion is recommended “because only people that have received all of the recommended primary series doses and have had the required duration of time to form a protective immunological response after vaccination (14 days, per the definition) would be expected to receive the full benefit of the COVID-19 vaccination,” the CDC said. “In general, the immunological response to a primary vaccination series usually takes 2–4 weeks. Only partial protection is provided to partially vaccinated persons.”

Stopped Reporting

The CDC stopped reporting post-vaccination infections among the fully vaccinated, or breakthrough cases, in May 2021, after disclosing that 10,262 breakthrough infections were reported to the agency by 46 jurisdictions through April 30, 2021.

The CDC said that 995 of the cases resulted in hospitalization and 160 resulted in death.

The CDC said it shifted to only reporting breakthrough cases that resulted in hospitalization or death “to help maximize the quality of the data collected on cases of greatest clinical and public health importance.”

It’s not clear how many infections in the partially vaccinated that the CDC did not disclose before led to hospitalization or death.

The Centers for Disease Control and Prevention (CDC) headquarters in Atlanta, Ga., on Aug. 25, 2023. (Madalina Vasiliu/The Epoch Times)

Changed Definition

The CDC initially defined a breakthrough case as people who tested positive seven or more days after completing a primary series but changed the definition to testing positive at least 14 days after completion of a primary series after emailing about “vaccine failure,” documents obtained by The Epoch Times showed.

“CDC made the change to the definition of a breakthrough infection time period due to the most current data that showed that the 14-day period was required for an effective antibody response to the vaccines,” a CDC spokesman told The Epoch Times recently via email.

The CDC’s National Center for Emerging and Zoonotic Infectious Diseases falsely said in the new letter that it never changed the definition.

“Since COVID-19 vaccine breakthrough surveillance began (January 2021), the definition of a breakthrough infection has been the same,” the center claimed.

The CDC has not sent a correction as of yet. It has made other false claims during the COVID-19 pandemic, some of which remain uncorrected.

The CDC also said that some of the partially vaccinated numbers were reported on one of its webpages, but a review of archived versions of that page did not show that to be the case. The page, which has been taken down, said that cases among the partially vaccinated were excluded.

Hid Other Cases

Another 133,000 post-vaccination cases occurred among Medicare beneficiaries through September 2021, according to Humetrix, a contractor that analyzed the data. The case count excluded partially vaccinated people.

Humetrix provided the data to the CDC in August 2021, according to other documents obtained through the Freedom of Information Act.

The CDC spoke in meetings with the Advisory Committee on Immunization Practices, the CDC’s panel of vaccine advisers, and the Vaccines and Related Biological Products Advisory Committee, which advises the U.S. Food and Drug Administration, after receiving that data but did not present it to either one.

The meetings resulted in the approval of Pfizer’s vaccine and the authorization of a Pfizer booster. The CDC then recommended both for wide swaths of the U.S. population.

The CDC declined to comment on withholding the Humetrix data.

British Prime Minister Rishi Sunak was forced to clarify the UK’s stance on sending troops to Ukraine, after newly appointed Defense Secretary Grant Shapps unveiled ongoing discussions about expanding the UK-led training program for Ukrainian troops, and potentially sending British instructors back into the country, while offering Kiev unspecified naval support in the Black Sea.

After a visit to the Salisbury Plain training ground on Friday, Shapps told The Telegraph that “I was talking today about eventually getting the training brought closer and actually into Ukraine as well.”

During his trip to Kiev earlier this week, the new defense chief, who took his post after a government reshuffle a month ago, apparently saw an “opportunity” to bring more things “in country.” Shapps explained he meant “not just training,” but also weapons manufacturing, and he praised the British arms giant BAE Systems for its plans to localize in Ukraine.

“I’m keen to see other British companies do their bit as well by doing the same thing. So I think there will be a move to get more training and production in the country,” he added.

In his discussions with the Ukrainian President Vladimir Zelensky, Shapps also reportedly said that Britain’s Navy could play a role in “defending commercial vessels” in the Black Sea, according to The Telegraph.

“Britain is a naval nation so we can help and we can advise, particularly since the water is international water,” he said, without elaborating what kind of help he offered Zelensky.

It didn’t take long for two things to happen: i) Russia condemning the proposal and warning it would accelerate WW3, and ii) the UK backtracking.

On Sunday, former Russian President Dmitry Medvedev who currently serves as the deputy head of Russia’s Security Council, suggested that British soldiers training Ukrainian troops in Ukraine would be legitimate targets for Russian forces, as would German factories producing Taurus missiles should they supply Kyiv. Medvedev, who is deputy chairman of Russia’s Security Council, and has become one of the most hawkish and anti-Western figures in Russian politics, said such steps by the West were bringing World War Three closer.

In a post on Telegram, Medvedev first slammed Shapps’s proposal to deploy military instructors to Ukraine, in addition to training Ukrainian armed forces in Britain or other Western countries as at present.

“(This will) turn their instructors into a legitimate target for our armed forces,” Medvedev wrote on Telegram. “Understanding perfectly well that they will be ruthlessly destroyed. And not as mercenaries, but namely as British NATO specialists.”

Medvedev then turned his focus to Germany, vilifying those who want Berlin to supply Ukraine with Taurus cruise missiles that could strike Russian territory and try to limit Moscow’s supply to its army.

“They say this is in accordance with international law. Well, in that case, strikes on German factories where these missiles are made would also be in full compliance with international law,” Medvedev said.

“These morons are actively pushing us towards World War Three,” Medvedev said.

Realizing that he probably does not want his government to end in a mushroom cloud, British PM Rishi Sunak quickly backtracked and during a visit to Burnley on Sunday, said he wanted to make the situation “absolutely clear,” explaining that Shapps did not mean British soldiers would be deployed in Ukraine during the conflict with Russia, claiming there was “some misreporting” of comments by Defense Secretary Shapps, who floated the idea; he did however say that the UK has been training Ukrainian soldiers on British soil for “for a long time.”

According to the PM, the defense secretary actually meant that “it might well be possible one day in the future for us to do some of that training in Ukraine.”

“But that’s something for the long term, not the here and now, there are no British soldiers that will be sent to fight in the current conflict. That’s not what’s happening,” he insisted.

London continues to provide military training to the Ukrainians, but it’s “doing that here in the UK,” Sunak assured.

US Republican congresswoman Marjorie Taylor Greene also voiced alarm over Britain’s apparent plans to send troops to Ukraine, writing on X (formerly Twitter): “They’re going to start World War III” and that “the US cannot participate” in such a deployment, stressing: “No American troops” in Ukraine.

Since the start of its military operation in Ukraine in February 2022, Moscow has repeatedly argued that the provision of arms, intelligence-sharing and training of Kiev’s troops already means that Western nations have de facto become parties to the conflict.

Former President Trump is suing Christopher Steele, the former MI-6 spook who assembled the infamous “Steele Dossier,” a collection of fabricated Kremliny rumors about Donald Trump, which was funded by Hillary Clinton’s 2016 campaign via a law firm intermediary, and primarily sub-sourced from a Russian analyst, Igor Danchenko – who was later found not guilty of giving false statements to the FBI.

After the former spy was commissioned by Fusion GPS, a DC-based intelligence outfit hired by the DNC and Clinton’s campaign for various election-related deeds (and which employed the wife of a high-ranking DOJ official, and was accused of taking money from the Russian government, and met with the Russian Trump Tower meeting operative hours before she met Don Jr. to allegedly offer ‘dirt’ on Hillary Clinton’s activities in Russia), the Steele Dossier was made public in January 2017 after BuzzFeed published several memos written by Steele, purporting to detail Trump’s alleged “activities in Russia.”

Yes, the same Russia where a Hunter Biden-linked company accepted a $3.5 million payment from the wife of the former mayor of Moscow in 2014, who Joe Biden met with according to former Hunter partner Devon Archer. And the same Russia where Bill Clinton snagged $500k for a 2010 speech & hung out with Russian President Vladimir Putin at his house, right before the Uranium One deal went down with the Hillary-run State Department (and Bill sought State’s permission to meet with a Russian nuclear official).

The documents don’t indicate what decision the State Department finally made. But current and former aides to both Clintons told The Hill on Thursday the request to meet the various Russians came from other people, and the ex-president’s aides and State decided in the end not to hold any of the meetings with the Russians on the list.

Bill Clinton instead got together with Vladimir Putin at the Russian leader’s private homestead. -The Hill

Anyhow…

The Steele dossier was used by the Obama DOJ and the intelligence community to smear Trump as a Russian asset. Its various fabrications were legitimized under the guise of a legitimate DOJ investigation, and featured frequent strategic media leaks, ‘expert’ opinions, and manipulated evidence such as an email altered by former FBI attorney Kevin Clinesmith, which was used to renew a wiretap warrant on Trump Campaign adviser Carter Page.

Then there was the fraudulent ‘Alfa Bank Server’ allegation made by Clinton campaign lawyer Michael Sussman, who pleaded guilty to not telling the FBI that he was Hillary’s employee when he alleged that Trump was directly communicating with the Kremlin via a covert server.

Steele peddled the dossier to the State Department – which then passed it along to former FBI deputy assistant director of counterintelligence Peter ‘We’ll stop Trump‘ Strzok. Steele also met with the DOJ’s Bruce Ohr (whose wife, as we noted above, Fusion GPS employee), who he told that Russia had Trump “over a barrel.”

(Bruce Ohr was consequentially demoted for making “consequential errors in judgement” for failing to inform his supervisors for his role in Russiagate, and retired on Sept. of 2020 “after his counsel was informed that a final decision on a disciplinary review being conducted by Department senior career officials was imminent”).

Then there was the infamous ‘pee tape’ allegation that Trump paid prostitutes to urinate in a bed in Moscow where Barack and Michelle Obama had stayed, and that the Kremlin had a tape of the whole thing.

The 35-page dossier was publicly disavowed by high ranking FBI officials, including the bureau’s former deputy director Andrew McCabe, who told lawmakers in November 2020 that he would have never approved the Carter Page wiretap if he’d known the dossier was inaccurate.

And now, Trump is suing Steele…

According to the Independent, the 77-year-old former president is bringing a data protection claim against Steele, and his consulting firm Orbis Business Intelligence, in the UK.

“Proceedings have been issued on behalf of President Donald J. Trump against Orbis Business Intelligence Limited. The claim relates to breaches of UK Data Protection law arising from the inaccurate processing of the President’s personal data by Orbis following the publication of the false ‘Steele Dossier,’” said Trump attorney Tim Lowles.

“The President’s claim seeks remedies including that the inaccurate data contained within the Steele Dossier be erased or rectified together with the payment of damages,” the statement continues.

On October 16, a two-day hearing will commence according to the report, citing a High Court order published Thursday.

Steele has defended his work, telling the Oxford Union in March 2022: “What is being called the dossier was actually a series of single-source intelligence reports over a period of time, if you like, almost a running commentary on the election campaign and Russia’s perspective on it — and it comes from the Russian perspective of the telescope if you like,” adding “The sources were Russian, they were reporting on how Russia saw it, and of course, that may in some cases be rather different than how it was viewed in America at the other end of the telescope.”

By Peter Tchir of Academy Securities

Milton Friedman made the term “long and variable lag” famous. Everyone involved in markets and the economy has been struggling with the question of “what is the amount of lag” that we currently face on monetary policy. “Conventional” wisdom, as I understand it, is that it takes 3 to 6 months for economic policy to be truly felt. I think that is far too short of a “lag” effect.

I’m going to ignore the fact that there was ongoing stimulus when the Fed started to hike. For example, things like the so-called “Inflation Reduction Act” came out during the hiking cycle. In addition, the Fed was still expanding its balance sheet almost until the time of the first hike. Finally, student loans were in moratorium and there were promises (and attempts, with limited success) of debt forgiveness.

Basically, I will ignore all the reasons why the lag effect was impacted early on. I will instead focus on the reason why it is still taking so long to kick in.

Borrowers Were Smart

What we will try to demonstrate is that borrowers were very smart and that “smartness” is translating into a much longer lag time for monetary policy to kick in than “normal”.

We will focus on the U.S. investment grade bond market as it is what I live and breath and feel most comfortable discussing (and I have good access to information).

I do think that it applies well to all corporate borrowers, especially since we saw private credit markets explode in size.
I expect that if we did a similar analysis on the auto loan market and mortgage market, we would see that consumers also made some very smart decisions in recent years (minimizing the immediate impact of monetary policy).

We will show that in the corporate credit market, issuers took advantage of incredibly low yields to lock in borrowing costs for longer (and in bigger sizes) than we’ve ever seen.

The more you borrowed at low rates (for extended maturities), the longer the monetary policy lag time is going to be as it will take years for the real impact to be felt (i.e., not in 3 to 6 months). This applies to corporations and households and it should not surprise us that 18 months after the first hike (and barely 6 months after the “slowing” of hikes) we aren’t seeing the impact that many expected.

We tried to describe this using the “birthday paradox” in 99 Problems but the Fed Ain’t One. It is also part of the reason why (only recently) we have been warning that The Real Story is Real Yields.

Without further ado, let’s start analyzing the “smartness” and why we have yet to see much of an impact from what seems like an unprecedented cycle of hikes.

IG Borrowers Were Very Smart

The Fed created ZIRP and some of the easiest monetary conditions ever seen. Not only were they growing their balance sheet with Treasuries, but they also figured out (in conjunction with the Treasury Department) how to buy corporate bonds and even fixed income ETFs!

In any case, we will show that corporations responded to this opportunity and that response is why the lag effect is “laggier” than ever.

Average Coupon

While I tend to live in a “mark to market” world, most companies live in an “accrual accounting” world. It might be fun to watch (and trade) the gyrations in bond markets, but the reality is that current yields are largely irrelevant to most borrowers. What matters is the average coupon. For all the following charts we use data based on the Bloomberg Corporation Bond Index.

The current average coupon is 2.99%. It is creeping higher (towards 3%), but it is still much lower than current yields are anywhere on the curve.

Historically, that is an incredibly low average coupon. Prior to July 2020 this index wasn’t below a 3% coupon in well over 20 years (2000 is as far back as I went for today’s purposes).

Almost 60% of the time (prior to July 2020) the average coupon was above 4%!

So, even after a series of aggressive hikes, average coupons are still low by historical standards.

Despite the Fed hiking rates by 5.25% in less than 2 years, the average coupon has only trickled up to 2.99%. The low was 2.42% in January 2020. So, we’ve seen the average coupon increase by less than 60 bps in the almost 2 years since the hiking cycle began. It will continue to go higher as there is no place on the yield curve to hide. The 10-year at 4.57% is at the lowest point on the Treasury curve and that is before adding any credit spread.

The average coupon is impressive, but it only tells part of the story of just how well borrowers (at least corporate borrowers) navigated ZIRP. However, I strongly believe that individuals, small businesses, and leveraged companies did this well too.

Average Maturity

While traders tend to live in a world driven by duration and DV01 (dollar value of a basis point), most people focus on how long they borrowed money for. How long you’ve locked in your debt for is how you manage your roll risk (for better or for worse, though we will demonstrate that corporations did it for the better).

While not quite as high as it was back in 2000, the average maturity is at 8.5, which is longer than average for this index. It climbed steadily, dipped a bit in 2019, and then rose rapidly while curves were inverted and yields were low. It has come down now, presumably because companies are less interested in issuing longer-dated bonds and some (as we will see next) are apparently paying down debt (unlike our government, but that is a story/rant for another day – US Govt Credit Rating).

Since April 2020, the average maturity went from 7.6 to almost 9 – an incredibly fast rise.

All else being equal, the average maturity declines over time as bonds come closer to their maturity date (it takes an impressive amount of long-dated issuance to drive that maturity extension). It is still coming down, but from elevated levels.

The fact that investment grade borrowers (and I’m sure consumers and other borrowers) extended their maturities to take advantage of historically low yields and inverted curves means that it will take even longer for today’s current high yields to work their way into the system (i.e., it will make monetary policy effects even laggier).

Debt Issuance

Maybe “net” issuance is the right number to look at, but for now, let’s just see what happened to debt issuance (based on the Bloomberg league table data).

2023 isn’t finished, but IG debt issuance has been reasonably stable. 2020 saw a 57% increase from 2019! While 2021 slowed down a bit, it was the 2nd highest in the past decade (behind 2020) and we still saw 25% more debt issued that year compared to 2019.

While net issuance is probably the correct metric, outright issuance alone is enough to send a strong message that companies took advantage of ZIRP to issue lots of debt! That helps explain why the average maturity increased relatively rapidly (and the average coupon dropped reasonably quickly). Typically, a surge in issuance helps overcome the inertia inherent in broad market indices.

Better Preparation Leads to Longer Lag Times

The more people prepared for a change in the rate environment, the longer it will take for that change to impact borrowers.

It seems clear that companies (and borrowers of all types) locked in lower for longer, which by definition (or maybe it is axiomatic) means longer lag times.

I think that the Fed should be very cautious (more cautious than they already have been) about raising rates as the impact is only beginning to be felt and piling on will cause more trouble down the road (especially if the Fed doesn’t want to cut any time soon, which they don’t).

Smart borrowers need to be accounted for in thinking about lag times and many of you on this distribution list deserve a pat on the back for being so well prepared to mitigate an aggressive Fed!