Month: July 2024

Authored by Connor O’Keefe via The Mises Institute,

Anyone following the 2024 presidential election has undoubtedly heard about the political establishment’s latest villain, Project 2025. This policy agenda — technically named the 2025 Presidential Transition Project — was produced by a group of conservative policy analysts, most of whom are associated with the Heritage Foundation.

The project centers around a 900-page book meant to provide the next Republican administration to win the White House with a plan and guide for implementing conservative policies at the helm of a federal government staffed with people who almost universally oppose those policies.

In recent months, Project 2025 has exploded to the forefront of political discourse. Democrats like Kamala Harris are presenting the agenda as an evil scheme concocted by Donald Trump and his allies that is guaranteed to come to fruition, in full, if she loses this election.

Donald Trump has disavowed Project 2025 and made a point to dismiss it as an irrelevant plan that’s unrelated to him and his campaign.

The rift even reportedly caused project head Paul Dans to resign and Trump’s team to celebrate the “demise of Project 2025.” Yet the Democrats and much of the media are still conflating the Heritage-led project with Donald Trump in an effort to terrify Americans into voting blue.

For their part, those involved in Project 2025 are leaning into the hysteria, with Heritage president Kevin Roberts, for example, implying on a podcast that the effort represents a second American revolution that “will remain bloodless if the left allows it to be.”

Despite how prevalent Project 2025 has become in our political discourse, it’s remarkably hard to get trustworthy information about it. Almost all the rhetoric surrounding it either hysterically claims it will impose some kind of fascistic, theocratic quasi-slave state on the American people for a couple years before we’re all killed by climate change, or it’s a bold, tactful playbook that will solve just about all of America’s problems if implemented.

In truth, Project 2025 does not warrant much hype or dread.

The predominant 900-page book does contain several fantastic passages and sections.

But most policy prescriptions presented in the massive volume fall far short of what’s required to address the many problems facing the American people.

By far the best sections come mainly at the beginning where the authors lay out how the federal government actually works. The numerous White House offices are broken down in great detail, with an emphasis put on explaining which roles can and cannot be appointed by the president, along with how people in the various positions could derail the sitting administration’s policy ambitions. Similar analysis can be found in the later chapters on various executive agencies.

This effort is clearly a reaction to Trump’s first term when a series of ill-advised appointments and a general lack of institutional understanding doomed most of the Trump team’s objectives from the start. The people behind this project are not only serious about avoiding the same mistakes in a second term but in actively maneuvering around and eliminating the entrenched bureaucratic resistance.

With its nonspecific language, the opening chapters of Project 2025’s book provide an excellent guide for any presidential team that voters send to the White House on a platform to which the permanent, unelected bureaucracy stands in near-total opposition. This is required knowledge for anyone who is serious about rolling back federal power, and it alone makes Project 2025 a valuable resource in the struggle against the political establishment.

That said, things start to go downhill as soon as the authors turn to the specific policies they want the next Republican administration to implement. To be clear, there are some very good policies laid out. For example, the authors call for winding down Fannie Mae and Freddie Mac, abolishing the federal sugar program, and eliminating the Department of Education. There is also a fairly decent chapter on the Federal Reserve, which Jonathan Newman reviewed last week.

But most of what the authors call for is frustratingly moderate. In almost every single case, the highly publicized plans to cut federal agencies like the Department of Homeland Security are, in fact, calls to keep everything those agencies do in place but to move the offices in question to other federal agencies. In other words, the authors of Project 2025 are mostly planning to reorganize, not cut, the federal government.

There is lip service paid to actual rollbacks of federal power. But typically, the authors quickly dismiss such ambitions as impossible and instead spend most of their time theorizing about how conservatives could steer the federal Leviathan to push their preferred social and cultural values if they took full control of the executive agencies. The authors never explain why rollbacks — which they claim to prefer — would remain impossible if their assumption of a total conservative takeover came true.

Foreign policy-wise, Project 2025 is much closer to Bush-era neoconservativism than the populist, “America First” brand its advocates and opponents attach to it. Various authors accuse the federal government of being weak on China, Iran, Venezuela, North Korea and Russia. A Project 2025 foreign policy can be boiled down to spending more money to act even more aggressively in the Pacific, Middle East, South America and Eastern Europe under the ahistorical assumption that it will get each of these “hostile foreign regimes” to calm down.

So overall, the policy vision of Project 2025 is much more familiar and moderate than the rhetoric surrounding it would have you expect.

In theory, it might make sense to pair sweeping institutional changes that create opportunities to later roll back the administrative state with moderate policies that wouldn’t generate a complete freak-out from the progressive left and political establishment. But, as we see today, in reality, the freak-out happens nonetheless.

And so, if the left and the political establishment are going to call you crazy radicals anyway, why not push for the kinds of sweeping changes that are actually needed to address the many problems we face? For some of the authors behind Project 2025, it could very well be because they do not actually want to cut government spending or roll back Washington’s power.

But for those who understand that significantly slashing the bloated, corrupt, often malicious federal government is the only way out of many of our national predicaments, Project 2025 remains, in its current form, woefully inadequate.

One week after Ukrainian Foreign Minister Dmytro Kuleba met with his Chinese counterpart Wang Yi in China to improve dialogue between the two countries, Beijing announced broader export restrictions on drones and drone parts with potential military applications on Wednesday. In recent months, US and NATO officials have accused China of supporting Russia’s war machine by supplying Moscow with advanced drone technology for the modern battlefield in Ukraine. 

The South China Morning Post reported that civilian over-the-counter drones, which can be reconfigured for the modern battlefield or used by terrorists, will now face export restrictions. 

In a statement, the Ministry of Commerce explained that the decision was primarily based on preventing the use of drones in “the proliferation of weapons of mass destruction.” It noted that laser targeting sensors, infrared imaging equipment, high-precision inertial measurement sensors, and other critical sensors that can easily be mounted on the drone’s payload section will be placed on the export control list. 

“The Chinese government firmly supports Chinese companies conducting international trade and cooperation of drones in the civilian area [and] oppose civilian drones to be used for non-peaceful means,” the ministry continued. 

But in what appears to be a jab at mounting US tech sanctions by Washington, DC elites, the ministry also said, “We oppose the imposition of illegal sanctions on Chinese companies and individuals by certain countries using the excuse of [proliferation of weapon-capable] drones.”

SCMP said the new directive issued today will go into effect on September 1. 

In recent months, unnamed senior US officials have been quoted by MSM, explaining how Russia has purchased drones and drone parts from Chinese companies that are being used on first and second lines in Ukraine.

“Our view is that one of the most game-changing moves available to us at this time to support Ukraine is to persuade the PRC (China) to stop helping Russia reconstitute its military-industrial base. Russia would struggle to sustain its war effort without PRC input,” the official told Reuters in mid- April. 

Goldman Sachs’ John Flood told clients this AM that China’s new directive is a sign that it’s “looking to placate the US and NATO by clamping down on its support for Putin’s war.” 

Meanwhile, Putin will just go to Iran for drones…

Via Headline USA,

Los Angeles officials are pushing back on California Gov. Gavin Newsom’s order this month to start clearing homeless encampments, arguing the effort to clean up the city’s streets won’t work.

“I do not believe that it is ultimately a solution to homelessness,” said Democrat Mayor Karen Bass, according to the Denver Gazette.

“How are they supposed to pay for their ticket, and what happens when they don’t pay?” she continued. “Does it go into a warrant and give us an excuse to incarcerate somebody?” 

Los Angeles County Supervisors Chair Lindsey Horvath agreed with Bass, calling the order to clear out homeless camps “unconscionable.” The solution to homelessness is not “arrest,” she insisted. “It is not pushing people from community to community.”

Horvath also accused Newsom of setting a troubling precedent.

“The criminalization of homelessness and poverty is dangerous,” she said. “It does not work, and it will not stand in Los Angeles County.”

Newsom issued the executive order last month after the U.S. Supreme Court released a decision giving local officials more power to remove those illegally living on the streets and camping out in public parks.

Local governments are not legally obligated to follow Newsom’s order, but failure to do so could result in critical funds potentially being withheld.

“This executive order directs state agencies to move urgently to address dangerous encampments while supporting and assisting the individuals living in them—and provides guidance for cities and counties to do the same,” Newson said in a statement. “There are simply no more excuses. It’s time for everyone to do their part.”

Horvath warned Los Angeles officials would not tolerate a funding cut from Newsom’s government.

“I don’t think that threatening funding at a time where we’re trying to get more people served and more people housed is a place that anybody wants to be in,” she said.

California has the largest homeless population in the country, with more than 180,000 people in the state estimated to be living on the streets.

First it was supposed to be $25 billion, then $10 billion, then $2 billion… and now it’s gone.

Bill Ackman, the suddenly outspoken red-pilled asset manager who has been blasting Biden relentlessly for much of 2024, has withdrawn the proposed public listing for closed-end fund Pershing Square USA in a huge about-face for the billionaire investor who just months ago predicted it would be among the largest initial public offerings ever, the FT reported.

The new investment vehicle was initially expected to price on the New York Stock Exchange as early as this week, but was postponed after Ackman tried to drum up interest in a letter last Wednesday to investors in his hedge fund, Pershing Square Capital.

The letter was later disclosed in a regulatory filing, and in an unusual move, the company disclaimed the note.

The announcement comes after a challenging week for the hedge fund billionaire, as the float’s fundraising target dropped from $25bn to $2bn and a crucial investor – value investor Seth Klarman, who clearly does not share Ackman’s redpilled views – backed out.

While the company has received “enormous investor interest” in the listing, during meetings in recent weeks, Ackman, the founder and chief executive of Pershing Square Capital Management, was prompted to evaluate whether investors would be “better served waiting to invest in the aftermarket than in the IPO”.

“This question has inspired us to re-evaluate PSUS’s structure to make the IPO investment decision a straightforward one,” Ackman said in a statement on Wednesday.

“This is not normal,” one banker involved in the deal told the FT. “To Bill’s credit he was trying to do something very different and obviously it didn’t come together the way he wanted here. I’m sure he’ll consider other things and other ways to do it.”

In the letter to investors last week, Ackman said the listing had received a $150 million commitment from Boston-based hedge fund Baupost Group and $60mn from the Teachers Retirement System of Texas. But just a few days after the letter was publicly disclosed, Baupost said it would not be backing the listing, perhaps ashamed of its association with Ackman.

Banks often use anchor investors to signal strong levels of demand in an IPO, as well as indicate a receptive after-market trading environment. It is rare for an anchor investor to bow out on the cusp of a flotation, and Baupost’s decision to stay on the sidelines would have undercut their pitch to other possible backers.

Ackman has embraced social media in recent months, regularly posting political opinions on platform X. To investors, he touted his online “notoriety” as a potential boon for the public listing, especially among retail investors who would not otherwise have access to Pershing Square’s returns.

Authored by John R. Lott Jr. via RealClearPolitics,

“Crime went down under Biden, and crime went up under Trump,” Secretary of Transportation Pete Buttigieg claimed on Fox News Sunday. “Why would America want to go back to the higher crime we experienced under Donald Trump?”

“It’s no accident that violent crime is near a record 50-year low,” President Biden similarly claimed. And fact-checkers, at places like Politifact, rate Biden’s statement as “true.”

For months, the news media has relied on FBI data to relentlessly push this claim. But the problem is that the FBI data only counts crime reported to police, not total crime, and even then, it does a poor job of measuring reported crime.

Buttigieg dared viewers to “do yourself a favor and look up the data.” But Buttigieg either doesn’t understand the crime data or he is really hoping that Americans don’t take him up on his dare.

There are two different measures of crime. The FBI’s National Incident-Based Reporting System program annually counts the number of crimes reported to police. The National Crime Victimization Survey (NCVS), by contrast, asks 240,000 people a year whether they have been victims of a crime. The NCVS is used to estimate total crime, both reported and unreported. Survey results indicate that only 42% of violent crime and 32% of property crime were reported to law enforcement in 2022, the last year the NCVS data is available.

Buttigieg didn’t claim that the reported crime fell. He claimed that crime went down.

In saying Biden’s claim was correct, Politifact declared: “Other types of crime statistics, including the National Crime Victimization Survey, show current levels of violent crime far lower than their peaks in the early 1990s.” But Biden was saying that the violent crime rate was near a 50-year low, not that it was lower than it was in the 1990s. There have been many years over the last 50 where the violent crime data from the NCVS is lower than in 2022. In addition, to say the violent crime rate increased by 42.4% in 2022 after a smaller increase in 2021 seems far from the low it was in 2020.

Unreported crime has increased as law enforcement has collapsed, and that has reduced the rate at which people report crimes to police. In cities with more than one million people (where violent crime disproportionately occurs), arrest rates for violent crime plunged from 44% in the five years preceding COVID-19 (2015-2019) to 20% in 2022. Property crime arrest rates dropped by even more.

Since 2020, the FBI’s number of reported crimes and the NCVS’s number of total crimes have been negatively correlated. For instance, in 2022, the FBI reported a 2.1% drop in violent crime while the NCVS showed an alarming increase of 42.4% –  the largest one-year percentage increase in violent crime ever recorded by the NCVS.

It is puzzling enough that measures of reported and total crime don’t match. But the FBI’s and NCVS’s estimates of reported crime have also gone in opposite directions since 2020. From 2008 to 2019, the FBI and NCVS measures of reported violent crime generally tended to move up and down together. However, from 2020 to 2022, these two numbers were almost perfectly negatively related to each other. Each time one measure of reported violent crime rose, the other measure fell.

While the FBI’s number of reported violent crimes fell by 2% in 2021 and 2.1% in 2022, the NCVS’s measure showed increases of 13.6% and 29.3%, respectively. 

The fact that the FBI and NCVS measures of reported crime go in opposite directions raises real concerns about the FBI data.

So even if Buttigieg wanted to claim that reported crime went down, that is even debatable.

A frequently discussed concern with the FBI data is the decline that occurred in police department reporting after a new system was implemented. In 2022, 32% of police departments didn’t report CRIME data to the FBI. Another 24% only partially reported it, so less than half of departments fully reported crime data.

Police departments downgrading crimes further biases the FBI numbers. Classifying an aggravated assault as a simple assault means that it will be excluded from FBI violent crime data, which doesn’t include simple assaults. The difference often involves whether the criminal used a weapon in committing an assault, but many radically left-leaning district attorneys are refusing to include weapons charges against defendants. That could explain the difference between the two measures of reported crime. After all, the NCVS asks victims if the assault involved a weapon, even if the police reports ignore that characteristic of the crime.

Soros-backed district attorneys from New York to Chicago to Los Angeles have created other biases in the FBI data by downgrading felonies to misdemeanors. Recent numbers show that the progressive Manhattan DA downgraded felonies to lesser charges 60% of the time. Eighty-nine percent of the time that would-be felonies were downgraded, they were downgraded to misdemeanors.

This isn’t a new problem. In the past, Chicago has intentionally misclassified murders by mislabeling them as non-criminal “death investigations.” However, the problem may be growing, and police may also be responding to the decisions of prosecutors.

Over the last few years, as police ranks have thinned due to retirements and budget cuts, police departments have stopped responding to non-emergency 911 calls in places such as Charlottesville, Chicago, and Olympia, Washington. Instead of police coming out to crime scenes, however, people can still go down to their local police stations. People may think that they reported a crime by calling  911, but a crime isn’t officially counted until police make a report. 

Much is made of the drop in murder rates over the last few years. Murder rates dropped by 13% in 2023, though the preliminary 2023 murder rate is still 7% above 2019 levels. The NCVS doesn’t survey its respondents about murder, but the Centers for Disease Control (CDC) has a measure that doesn’t match up with the FBI data. While the FBI shows murder peaking in 2020 and dropping in 2021 and 2022, the CDC shows it peaking in 2021 and higher in 2022 than in 2020.

The FBI data doesn’t match the NCVS or CDC data. The gigantic gap between these measures, even when they are measuring the same thing, should raise major doubts about the accuracy of the FBI’s reported crime data. People say that they are reporting more crimes to the police, but that isn’t showing up in the FBI reports.

Americans in our country’s urban centers know that crime is increasing as law enforcement is collapsing.

Lott is the president of the Crime Prevention Research Center and the author most recently of “Gun Control Myths.”

After 3 rather soggy Mag 7 earnings in the past week – with TSLA, GOOGL and MSFT all sliding on earnings – investors were hoping that at least one out of four would surprise positively when the ill-renamed Facebook (aka META) reported earnings after the close. And at least according to the kneejerk reaction, the reaction appears to indeed be favorable, with the stock jumping after the company beat on sales and earnings despite the all-important for AI CapEx print coming soft.

Here is what the company that has been investing aggressively in AI reported for Q2:

• Revenue $39.07 billion, +22% y/y, beating estimates of $38.34 billion
  • Advertising rev. $38.33 billion, +22% y/y, beating estimates of $37.57 billion
  • Family of Apps revenue $38.72 billion, +22% y/y, beating estimates of $37.76 billion
  • Reality Labs revenue $353 million, +28% y/y, beating estimates of $376.9 million
  • Other revenue $389 million, +73% y/y, beating estimates of $344.6 million
• Operating income $14.85 billion, beating estimates of $14.59 billion
  • Family of Apps operating income $19.34 billion, +47% y/y, beating estimates of $18.69 billion
  • Reality Labs operating loss $4.49 billion, +20% y/y, estimate loss $4.53 billion
• Operating margin 38% vs. 29% y/y, beating estimates of 37.7%
• EPS $5.16 vs. $2.98 y/y, beating estimates of $4.72

The ad revenue breakdown by geography shows that as usual the bulk of revenue came from the US and Canada, with Europe and Asia following.

Curiously while the total number of ad impressions both slowed and missed estimates, the amount Meta charged per impression not only rose double digits and reversed last year’s decline, but came in almost double the expected. Good luck keeping those rates up in the recession.

• Ad impressions +10% vs. +34% y/y, estimate +13%
• Average price per ad +10% vs. -16% y/y, estimate +5.96%

Oddly enough, the drop in ad impressions is taking place even as the company hsa said it is using AI to improve the way advertisements find interested users, “adding efficiency” to its most lucrative business. Judging by the actual results, efficiency is the last thing AI is adding.

The company which no longer disclosed DAUs is also investing in large language models, the technology behind AI chatbots. The company recently unveiled its largest model to date, which Zuckerberg said cost hundreds of millions of dollars in computing power to train. And while investors have been looking for signs of a positive impact on the business from all the spending, especially after Meta poured billions into another Zuckerberg passion project — a series of virtual worlds known as the metaverse — without generating much return, so far ad impressions are sucking wind.

Turning to actual users, Facebook – which no longer reports Daily and Monthly Active Users since both have plateaued and are in the case of US and Europe decreasing – reported that its Family Daily Active People (or DAP, a made up category which the company can massage however it wants), rose to 3.27 billion, up 6.5%, and beating estimates of $3.22 billion. That’s right: we are supposed to believe that somehow half the entire world logs into Facebook every single day.

Yet while user metrics are easy to fudge, one place where META missed was Capex, which in Q2 rose to $8.173 billion, far below consensus of $9.4 billion, and a hint that spending on all those H100 or whatever Nvidia chips is starting to cool despite the company’s always cheerful guidance.

Besides spending on AI, an expense which clearly has yet to generate results, Meta has also been spending heavily on data centers and computing power, as Zuckerberg works to build a leading position in the industry-wide AI race. Despite the Q2 CapEx miss, Meta further hiked adjusted its full-year CapEx projections, setting a new range from $37 billion to $40 billion, raising the low end of the range by $2 billion. Needless to say, NVDA stock loved it.

Looking ahead, the CFO made the following forecasts:

• Expect third quarter 2024 total revenue to be in the range of $38.5-41 billion. Guidance assumes foreign currency is a 2% headwind to year-over-year total revenue growth
• Expect full-year 2024 total expenses to be in the range of $96-99 billion, unchanged from the prior outlook. For Reality Labs, continue to expect 2024 operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and investments to further scale our ecosystem.
• While Meta does not intend to provide any quantitative guidance for 2025 until the fourth quarter call, it expects infrastructure costs will be a significant driver of expense growth next year as it recognizes depreciation and operating costs associated with the expanded infrastructure footprint.
• Anticipate our full-year 2024 capital expenditures will be in the range of $37-40 billion, updated from our prior range of $35-40 billion, which is funny since Q2 CapEx was actually below estimates; yet the ridiculous forecast was enough to send NVDA surging after hours, and on pace to gain half a trillion dollars in market cap from yesterday’s post MSFT lows. The company said that while it continues to refine our plans for next year, “we currently expect significant capital expenditures growth in 2025 as we invest to support our artificial intelligence research and product development efforts.”
• Absent any changes to our tax landscape, Meta expect our full-year 2024 tax rate to be in the mid-teens. 

Ah yes, speaking of taxes, the company – which has been very close to the Biden admin – just reported that its effective tax rate dropped to just 11%, the lowest since the covid crash quarter of Q2 2020. See, it literally pays to censor.

At the end of the day, the latest chatbot craze will blow up spectacularly when people get bored with the trope that has been tried many times before. But first, META stock will hit new all time highs allowing insiders to cash out.

“I think that there’s a meaningful chance that a lot of the companies are over-building now, and that you’ll look back and you’re like, ‘oh, we maybe all spent some number of billions of dollars more than we had to,’” Zuckerberg told Bloomberg earlier this month. “On the flip side, I actually think all the companies that are investing are making a rational decision, because the downside of being behind is that you’re out of position for like the most important technology for the next 10 to 15 years.”

Actually no, Mark, the real downside is that you are once again chasing a bubble. After all, just look at your ticker. Remember when that was all the rage?

Alas, for now it’s easy to fool all the people, and META stock jumped about 5% after hours.

Authored by Edward Ring via American Greatness,

If you have ever confronted the astonishing hatred that San Francisco Bay Area Democrats have for anything Republican, much less MAGA Republican, then you understand why Kamala Harris may become the next president of the United States.

This isn’t a hate that is grounded in reality. It is nurtured by decades of propaganda, backed by trillions of dollars in big tech wealth, and, lately, the most powerful tools of mass hypnosis and Pavlovian conditioning the world has ever seen. If you question any of their pieties—climate, race, gender, Trump—you are instantly and permanently dehumanized. It is impossible to change their minds. There is no room for nuance. There is no tolerance for alternative perspectives. You are hated. You are garbage. Give up. Die.

This is Kamala Harris’s core constituency.

If you haven’t experienced the withering rebukes of San Francisco progressives or been the target of their white-hot rage, you might think Harris’s Portlandian drivel actually indicates a benevolent, if somewhat intellectually middling, soul. Her bird-brained new-age prognostications are certainly more humorous than fearsome:

“It is time for us to do what we have been doing, and that time is every day.”

“The significance of the passage of time, right? The significance of the passage of time. So when you think about it, there is great significance to the passage of time.”

“You exist in the context of all in which you live and what came before you.”

It’s hard to ascribe malevolence to phrases like this. They’re the words of a vapid airhead, not a tyrant. On the other hand, Harris’s penchant for nodding her head in the affirmative as a way to punctuate literally everything she says is more than slightly ominous. It is a condescending, passive-aggressive way to telegraph what is actually a terrifying arrogance. I am right. You will agree. Nod your head with me. This is how it is.

Yikes.

Here’s what Kamala Harris is really about, and here’s what we are up against:

California is ruled by a coalition of extreme environmentalists, opportunistic business interests, the “renewables” lobby, the Homeless Industrial Complex, the DEI Industrial Complex, public sector unions, including the rabidly partisan and woke teachers union, and Hollywood, all backed by tech billionaires who wield stupefying wealth and influence.

At its roots, this is a coalition of lunatics, crooks, and amoral pragmatists. A prominent Democrat who was working on some genuine reforms once told me, “We had the Republicans at hello.” A businessman who supports Democrats once shared with me a similar sentiment. “Why should we back Republicans?” he said, “we’ve already got them.” And yet the Republicans, especially the “MAGA Republicans,” are the threat. Go figure.

This is a machine, and Harris is just a cog. Meanwhile, California is broken. People can’t afford homes or any other essentials, including gasoline, electricity, water, food, tuition, or health care. And the reason California is broken is because the economy is dominated by leeches who profit from inefficiency and failure and hide behind pessimistic narratives—climate doom, race and gender resentment.

Not every Democrat in California has bought the progressive narrative. Not every one of them has become usefully terrified of climate catastrophes, pervasive white bigotry, and MAGA fascists. Not every one of them has succumbed to apocalyptic fear and hence yielded to blinding hatred of the alleged deniers, bigots, Nazis and MAGA storm troopers on the brink of destroying the world.

No. Some of them are just practical. Do you want to do business in California? Play ball with the Democratic machine. Do you want to make incremental change? Maybe find some nonpartisan island of common sense and work towards at least one useful reform? Be a Democrat. To have credibility in California, that’s the price of admission. Which is to say, there are some Democrats in California trying to do some good.

The problem with this otherwise sound reasoning is that even Democrats with mostly good ideas are bound to have at least one issue where they are insanely, fatally flawed. Robert F. Kennedy Jr. is a perfect example. On many critical issues, he is a breath of fresh air, a voice of honesty and courage. But on the issue of climate change, his positions are just as fascist, delusional and obedient to the doom narrative as the worst machine politician the Democrats can offer.

Which brings us back to Kamala Harris. She is going to represent the Democrats in the race for U.S. president for the same reason Joe Biden did. Just like Joe, she is a puppet. A cog in the machine. But make no mistake about the motivations of her donors. They want to rule the world. And make no mistake about her grassroots supporters. They have been manipulated into thinking of themselves as embattled warriors, fueled by a hatred they believe is righteous and justified.

The irony is deep and tragic. They are the Nazis they hate. They are the haters they hate. They are the puppets of the authoritarian machine they think they’re fighting.

As Kamala Harris spouts her goofy aphorisms, in between stoking her acolytes with fear and loathing, this machine is one election away from consolidating its power across America. If it wins, it will do to the entire country what it’s done to California.

Authored by Peter Tchir via Academy Securities,

It is difficult to tell how much of today’s rally was:

• AMD related which was up more than 10% and presumably helped rally almost 15% adding more than $300 billion of market cap

• MSFT, gaining traction from the immediate post earnings reaction as their conference call did a lot to soothe investors – a nice turnaround in a market that has been punishing “misses”

• The Fed.   Yields moved down across the curve, even though the Fed didn’t cut rates, and only signaled that September was a possibility, not a done deal.

• Relief rally from what has been a few tough weeks for stocks, buy the dippers being enticed back in, and some chatter about money on the sidelines moving in from money funds now that rate cuts are in sight.

• Not only are we getting buyback announcements, but as companies make it through their earnings, they are able to enter back into discretionary buybacks and may view recent dips as great buying opportunities.

In terms of the Fed:

• Powell didn’t commit to September, but with the market likely to be pricing in close to 100% certainty it would take some unusually strong numbers on either inflation or employment to have them not cut.

• I don’t see 50 on the table.

• The Fed seems more comfortable with the employment situation than many in the market. This remains my biggest area of fear – that employment deteriorates more rapidly than the Fed is expecting (or is priced into the market), but the Fed feels handcuffed and cannot commit to easing quickly in response to employment data (they are still afraid of inflation retuning).

Both stocks and bonds seem a little too complacent about the Fed, earnings and other factors.

• The Japanese Yen, has broken below 150 for the first time since the middle of March. Improving 7% versus the dollar in 3 weeks could have some repercussions for anyone funding positions with Yen. That was listed as a reason for stocks declining a few weeks ago, and is worth paying some attention to.

• While events in the Middle East didn’t affect markets overnight, there is once again increased risk of an escalation directly between Iran and Israel (Today’s SITREP).

• We have some more earnings to get through, and it really does seem like “get through” is the watchword, as opposed to being an excuse to rally like they have been in some prior earnings cycles.

• Jobs. That is my biggest concern for markets, but falls into an overall view that we will be going from no/soft landing to some form of bumpy landing in the coming weeks as data comes in.

Back to Mag 7 Earnings and the AI Story

I still expect that stocks will be lower in August than they were yesterday, but it won’t be a one way street and today likely helped to reset some “for a trade” longs, and squeeze out shorts, smoothing the path to more downside on any disappointment.

I am somewhat surprised the rate rally is continuing, but there has been less corporate new issuance and the “month end index extension” trade is well known and likely helping support rates here (which in turn are helping stocks).  I don’t see that continuing.

Energy related stocks remain my favorite position, as they will act as a hedge in the event of geopolitical escalation.

Bonds and bullion outperformed in July with the dollar down and oil getting hammered…

Source: Bloomberg

And while the broad S&P 500 managed very modest gains in July – there was a massive divergence between Small Caps (+12% in July) and Nasdaq (-1.5% in July)…

Source: Bloomberg

Crowded consensus trades suffered in July. e,g, A.I…

Source: Bloomberg

Thanks to a massive $440BN surge today (the biggest day since Feb), the market cap of Magnificent 7 stocks ended the month down only 2.5% (though admittedly down 10% from the highs)…

Source: Bloomberg

MSFT bounced back hard from its post-earnings plunge…

…and NVDA exploded (after touching $100)…

…as did ‘most shorted’ stocks…

Source: Bloomberg

For context, NVDA added a stunning $330BN in market cap today – its largest single-day gain ever…

Source: Bloomberg

The market’s initial reaction to the FOMC statement was muted to say the least as Powell reiterated that “We have made no decisions about future meetings and that includes the September meeting.”

But then Powell dropped the dovish hammer:

“I can imagine a scenario in which there would be everywhere from zero cuts to several cuts.”

…and stocks elevated, only to give it back after he stopped speaking…

Powell’s comments on the job market and inflation during the presser also sent yields and the dollar lower…

• Job Mkt – Fed ready to move if easing in Labour mkt goes beyond ‘gradual’ and would not want to see ‘further material cooling’. This will likely heighten the focus on Friday’s print.

• Inflation – very benign take from Powell re recent progress defined as ‘broader disinflation’ /high quality progress (including housing and non-housing services).

The kneejerk reaction (higher) in yields was reversed to the lows of the day…

Source: Bloomberg

…as rate-cut expectations initially dropped, then surged…

Source: Bloomberg

Treasury yields plunged in July with the short-end down 45bps, dramatically outperforming the long-end…

Source: Bloomberg

The yield curve steepened dramatically in July, dis-inverting at 2s30s…

Source: Bloomberg

Gold soared to its highest monthly closing level ever, rebounding the last few days…

Source: Bloomberg

While crude had an ugly month overall, today saw a sizable bounce as MidEast tensions re-escalated…

Source: Bloomberg

It was a mixed month for crypto with Bitcoin managing gains (+4.5%) but Ethereum dumped (-4.5%), despite the launch of the ETH ETFs…

Source: Bloomberg

Bitcoin touched $70,000 intraday at its highs this month, but has fallen back since (testing $65k today)…

Source: Bloomberg

Finally, July saw the biggest Nasdaq underperformance of Russell 2000 since the peak of the DotCom bubble’s bursting…

Source: Bloomberg

Probably nothing, right?

And, according to the prediction markets, Trump and Kamala are all tied up…

Source: Bloomberg

The market doesn’t feel like its 50-50.

Authored by Jacob Burg via The Epoch Times,

President Joe Biden announced new rules on July 31 that make millions more borrowers eligible for student loan debt relief.

“Today, my Administration took another major step to cancel student debt for approximately 30 million Americans,” Biden said.

“We won’t stop fighting to provide relief to student loan borrowers, fix the broken student loan system, and help borrowers get out from under the burden of student debt.”

Starting on Aug. 1, the Education Department will send emails to all borrowers with at least one outstanding federal student loan with updates on potential debt relief and a notice of the Aug. 30 deadline to call and opt out if they are not interested in the program. The email does not guarantee eligibility.

The department will finalize the rules this fall, based on the administration’s existing work to provide $168 billion in student loan relief to nearly 4.8 million borrowers. If the rules are finalized as proposed, the number of borrowers eligible for student loan relief will climb to more than 30 million, including those already approved.

“These latest steps will mark the next milestone in our efforts to help millions of borrowers who’ve been buried under a mountain of student loan interest, or who took on debt to pay for college programs that left them worse off financially, those who have been paying their loans for twenty or more years, and many others,” Education Department Secretary Miguel Cardona said in a statement.

The administration released its first set of draft rules in April, directing Cardona to grant further student loan debt relief to tens of millions of borrowers nationwide, including those with balances growing from years of interest.

If finalized, the rules would allow Cardona to provide partial or full debt relief to borrowers who owe more than they did at the start of repayment, those who have been in repayment for more than 20 years, those eligible for loan forgiveness but have not yet applied, and those enrolled in low-financial value programs.

The Education Department said if the rules are approved, the proposed relief would automatically apply to eligible borrowers.

Borrowers who instead want to opt out of debt relief can do so by contacting their servicer by Aug. 30, but will not be able to opt back into the program.

Currently, the Biden–Harris administration has approved $69.2 billion for 946,000 borrowers through fixes to Public Service Loan Forgiveness, $51 billion for more than a million borrowers through adjustments to income-driven repayment counts, and $28.7 billion for more than 1.6 million who were “cheated by their schools, saw their institutions precipitously close, or are covered by related court settlements.”

The administration also granted $14.1 billion to more than 548,000 borrowers with total and permanent disabilities and $5.5 billion to 414,000 borrowers through the SAVE Plan.

“From day one of my administration, I promised to fight to ensure higher education is a ticket to the middle class, not a barrier to opportunity,” Biden said.

“I will never stop working to make higher education affordable and to make sure our administration delivers for the American people.”