Month: July 2024

Authored by Debra Heine via American Greatness,

A top FBI official made a point of testifying that President Trump’s would-be assassin Thomas Matthew Crooks may have espoused far-right extremist viewpoints on an unnamed social media account five years ago, but forgot to mention that Crooks may have shared pro-Biden viewpoints on Gab more recently.

Both accounts have not yet been fully verified as belonging to Crooks.

FBI Deputy Director Paul Abbate told senators on Capitol Hill Tuesday that a social media account believed to be Crooks’ appears to have shared antisemitic, anti-immigrant, and  “extreme in nature” posts in 2019 and 2020. Crooks would have been 14 to 15-years-old in that time frame.

“There were over 700 comments posted from this account,” Abbate testified before a joint Senate Judiciary Committee and Homeland Security Committee hearing entitled “Examination of the Security Failures Leading to the Assassination Attempt on Former President Trump.”

“Some of these comments, if ultimately attributable to the shooter, appear to reflect antisemitic and anti-immigration themes to espouse political violence and are described as extreme in nature,” Abbate added.

The deputy director said while the FBI was still verifying that the account belonged to Crooks, the Bureau felt it was important to detail the social account’s nature because of the “general absence of other information” establishing Crooks’ “motive and mindset.”

GAB CEO Andrew Torba, however, shared plenty of information on X last week about a GAB account the FBI appeared to believe was Crook’s, saying the content of the posts “UNEQUIVOCALLY” reflected  a “pro-Biden and in particular pro-Biden immigration policy.”

The Gab founder said on July 24, he received an Emergency Disclosure Request (EDR) from the FBI for the Gab account “EpicMicrowave,” and said based on the request, the FBI appeared to believe the account was associated with Crooks.

Torba said “as a courtesy to enforcement,” he would not post the contents of the entire request on social media, but did post the first page on X.

Torba said he was unable to confirm that the account in question, which posted a total of nine times on the site, actually belonged to Crooks. The account appeared to only be active for a short period of time in January and February of 2021.

“As far as we are aware, the account did not use the site to send any direct messages,” Torba wrote on X.

The majority of EpicMicrowave’s posts supported Joe Biden’s policies, particularly, his COVID lockdowns, border policies and executive orders. “To the best of Gab’s knowledge, as of 2021, Crooks was a pro-lockdown, pro-immigration, left-wing Joe Biden supporter,” Torba said.

“We are disclosing this information at significant personal and business risk,” Torba wrote on X when he posted the epicMicrowave comments last week. “If the past is any guide, defying the D.C. consensus by publishing the first definitive evidence that the shooter was a Biden supporter – something Democrats and their media allies have tried to cover up and deny at every turn – has a high probability of resulting in significant political and media backlash.”

In the past, we have been the target of politically motivated inquiries from both the House Oversight Committee and the Joint Committee on the January 6th Attacks, both of which sought to interfere with our mission of protecting free speech online. The enemies of freedom have the ability to impose significant present and future legal costs and any donations we receive will help to defray those costs.

Later during the hearing Tuesday, Senator Marsha Blackburn asked Abbate about the Gab account.

“We understand that the Gab account is pro-immigration, pro-lockdown, leftist views. Is that correct?” Blackburn asked.

“I haven’t seen it directly but I believe, from what I’ve been told, that is accurate,” Abbate conceded, while noting that the FBI is still working to verify whether the Gab account was Crooks’ as well.

“But it does have differing points of view it would appear,” Abbate said, without explaining why he had made a point of highlighting Crooks’ earlier alleged leanings.

Following the hearing, Blackburn told reporters that the deputy director had mentioned one account that painted Crooks as an anti-immigrant and anti-Semitic individual.

“That was an earlier social media account. We still don’t know the platform or the user name,” Blackburn noted.

Abbate has a reputation of being a Democrat partisan who crushes dissent within the Bureau.

In June of 2023, an FBI whistleblower came forward to accuse Abbate of improper intimidation.

According to an Empower Oversight affidavit, Abbate threatened agency employees concerned about the bureau’s overblown response to the Jan. 6 shortly after his appointment in February 2021.

During a secure video conference, Abbate allegedly called on agency staff with concerns about the bureau’s draconian approach  to meet with him personally so he could, in the whistleblower’s words, “set them straight.”

“I have witnessed hundreds of Director [Secure Video Teleconference]s and have never seen a direct threat like that any other time,” the whistleblower said in the affidavit. “It was chilling and personal, communicating clearly that there would be consequences for anyone that questioned his direction.”

Oil prices have surged overnight following the assassination of Hamas’ political leader in Tehran. This geopolitical risk premium surge came on top of an across the board inventory draw reported by API last night.

Traders are watching for confirmation of the drawdown trend in US crude stocks from the official data this morning.

API

• Crude -4.495mm (-3.9mm exp)

• Cushing -929k

• Gasoline -1.917mm (-1.6mm exp)

• Distillates -322k

DOE

• Crude -3.44mm (-3.9mm exp)

• Cushing -1.1mm

• Gasoline -3.67mm (-1.6mm exp)

• Distillates +1.53mm

US crude inventories fell for the 5th straight week, dropping 3.44mm barrels and stockpiles at the Cushing Hub also declined (for the 4th straight week)

Source: Bloomberg

That drawdown has dragged total US crude stocks to their lowest since February…

Source: Bloomberg

The Biden administration added 685k barrels to the SPR last week (which offset the big commercial draw modestly)…

Source: Bloomberg

US crude production remains at a record high, despite the accelerating trend lower in rig counts…

Source: Bloomberg

WTI is extending gains on the day after the oficial data…

The market has been assessing the risk that fresh escalation could affect production and exports, including from Iran. Crude prices haven’t reacted particularly sharply to recent developments in the war, which started in early October 2023.

“Right now, putting $2 of geopolitical risk premium back in the market is telling me the market is covering shorts, but not worried about a real supply event,” said Rebecca Babin, senior energy trader at CIBC Private Wealth.

In a sign that oil traders are hedging against further conflict, Brent call volumes were the highest since early June on Tuesday. A gauge of market volatility is also the highest since the start of the summer.

Boeing is finally going back to its core engineering roots.

The aerospace giant has named former Rockwell Collins boss Kelly Ortberg as its new CEO, handing the former head of one of its suppliers the task of steering the embattled plane maker through what is its biggest crisis in the company’s history.

The appointment of Ortberg, 64, who will start on August 8 and join Boeing’s board, ends months of speculation after Dave Calhoun said in March that he would step down by the end of the year (but not before cashing in on a huge golden parachute).

Boeing has been reeling, its stock tumbling to multi-year lows, since January when a door panel blew off a 737 Max during a commercial flight. Though no one was killed, some passengers were injured, and the accident recalled twin fatal crashes in 2018 and 2019 that the company has struggled to put behind it.

Ortberg is an experienced leader “with a well-earned reputation for building strong teams and running complex engineering and manufacturing companies”, said Boeing’s chair Steven Mollenkopf, who led the search for Calhoun’s replacement. “Kelly has the right skills and experience to lead Boeing in its next chapter.”

The 64-year-old led Rockwell Collins, which makes avionics and cabin equipment, for five years and helped oversee its $30bn tie-up in 2017 with United Technologies. Now known as Collins Aerospace, it is part of defense contractor RTX.

“I’m extremely honored and humbled to join this iconic company,” said Ortberg. “There is much work to be done, and I’m looking forward to getting started.”

His appointment comes as Boeing reported a $1.4BN second-quarter loss, far larger than Wall Street expected. The quarter was marked by $1BN in losses tied to fixed-price defense contracts and fewer plane deliveries. The company also reported a $2.90/share loss, far bigger than the $1.97 loss expected, on revenue which tumbled from $19.8 billion to just $16.9 billion, also missing estimates of $17.2 billion.

And the cherry on top of another gruesome quarter is that Boeing burned through a near-record $4.3 billion in cash, matching the worst quarters in the immediate aftermath of its 737 MAX crisis…

…. and sending the company’s total debt soaring higher by $10 billion (and net debt rising by $5 billion).

Still, despite the dismal earnings, Boeing shares rose 2% as Ortberg’s recruitment ended months of speculation over who would take on the multiple challenges facing the company, and has given investors some hope that the epic shitshow that is Boeing’s DEI-infused operations in the past five years will finally normalize.

Ortberg began his career in 1983 as an engineer at Texas Instruments, before joining Rockwell Collins as a programme manager. As reported previously, many in the aerospace industry had strongly favored an engineer taking the top job at Boeing, with critics suggesting it had prioritized shareholder returns (and DEI virtue signaling) over investment in engineering and innovation.

The new CEO will be under immediate pressure to restore confidence in the quality and safety of Boeing’s manufacturing operations, as well as finding ways to ease the supply chain strains that have hobbled the industry since the pandemic.

Boeing’s airline customers have been angered by delays in plane deliveries during a period in which rival Airbus has won market share.

Rob Stallard, analyst at Vertical Research Partners, said Ortberg was a “very good hire”.

“While he may not be as well known as say Larry Culp (GE) or Dave Gitlin (Carrier), in our experience Kelly was an excellent CEO of Rockwell Collins,” Stallard said. “What he brings to the party is not only a wealth of A&D experience, but also a record of running a company with an excellent corporate culture. Clearly there are a massive number of problems at Boeing, but with Kelly as CEO we think there is at least a chance of fixing them.”

Not that the new CEO is blemish-free: Ortberg will join after Boeing pleaded guilty on July 24 to a felony fraud charge for misleading the US Federal Aviation Administration. Boeing recorded a charge of $244mn in the second quarter tied to the penalty the company expects to pay.

The Bank of Japan has lifted its benchmark interest rate to 0.25% and outlined plans to halve its monthly bond purchases in a decisive, if doomed, move to normalize its monetary policy.

With the Fed and all other central banks either set to move, or already moving rapidly in the opposite direction, the always confused BoJ’s shift to tighter policy will narrow an interest rate gap that has driven record weakness in the yen, marking a big shift for global currency markets. It also comes at a time when Japan’s economy is once again slowing, inflation is failing to take hold, wage growth is sputtering…. which is also why this will be the shortest tightening cycle since its last failed attempt to raise rates off the zero lower bound.

The Japanese currency strengthened more than 1% following the decision on Wednesday, sending the USDJPY below 150 against the dollar.

By a majority of 7-2, the BoJ raised its overnight interest rate to “around 0.25 per cent”, the highest level since the global financial crisis in late 2008, from a previous range of 0 to 0.1%. The bank in March ended its negative interest rate policy following decades of on-and-off deflation.

The BoJ also said it would scale back its ¥6tn ($39bn) monthly bond-buying program to about ¥3tn by the spring of 2026, however, it would do so at a much slower pace than many had expected. Specifically, the BOJ said it would cut monthly bond purchases by ¥400 billion every quarter to decrease them to ¥2.9 trillion in 1Q 2026; the market was foreseeing 1 trillion yen per month starting August.

“It’s a hawkish development with the BOJ rate hike, but reduced to some extent by the less-than-expected amount of quantitative tightening,” said Alvin Tan of RBC Capital Markets. “In short, the BOJ decision today does not significantly exceed the hawkish market expectations baked into the meeting.”

Others agreed, Nick Twidale, chief market analyst at ATFX markets said the BOJ’s QE taper was “much less than expected and that has hit the yen hard… We’re seeing gapping in a fast moving market, and given the positioning overnight we could see more in the hours ahead.”

Today’s rate hike came after senior government officials made unusually blunt comments in recent weeks, putting pressure on the BoJ to unwind its ultra-loose monetary policy and arrest the yen’s decline.

At a news conference on Wednesday, central bank governor Kazuo Ueda said the rate decision was made because economic conditions and price movements remained “on track”. But he acknowledged that upside risks to inflation posed by the weaker yen were also a factor.

“We plan to continue raising our policy rate and adjust the degree of monetary accommodation” if economic conditions and inflation move in line with its forecast, Ueda added.

Ahead of the policy decision, traders were evenly split on the prospect of the BoJ lifting short-term interest rates, with some economists cautioning against a move following a string of weak economic data. Core inflation, which excludes volatile food prices, rose 2.6 per cent from a year earlier in June, exceeding the BoJ’s 2 per cent target for 27 consecutive months. However, Japan’s economy contracted in the first three months of the year as the yen’s decline and rising living costs hurt household spending.

“It’s extremely disappointing that the BoJ has chosen to act by ignoring weak economic data. It now looks like it moved to counter the weak yen,” said UBS economist Masamichi Adachi. “The normalisation of Japan’s economy was very precarious to begin with, but the BoJ has made it even more difficult.”

Adachi is spot on, because by caving to government pressure to ease the pressure on the crashing yen – a function of the BOJ’s own previous actions – the central bank has only made the next crisis that much worse, which in addition to a brutal stagflationary recession, will also see a bond market crisis, forcing the BOJ to unwind all of its recent actions and then some.

In its forecast, the BOJ said it expected consumer price inflation of 2.1%  for the year ended March 2026, instead of the 1.9% it forecast in April. Of course by then the world will be drowning in delfation and Japan will be back to using good old NIRP.

Stefan Angrick, a senior economist at Moody’s Analytics, pointed to the BoJ’s new emphasis on the yen’s inflationary impact but added that the central bank was still “hiking into a weak economy” in the absence of demand-driven inflation.

“I think the BoJ needs to be clear about the fact that they’re changing the rules. They’re not winning the game,” Angrick said. He forecast the next rate increase would be in December, noting that yen pressure on the BoJ was likely to wane once the Fed started cutting rates.

Growing expectations of the BoJ’s rate rise had already boosted the yen against the dollar in the run-up to Wednesday’s meeting. The reversal was aided by government purchases of ¥5.5tn of its own currency earlier this month. The market intervention had the effect of squeezing a substantial volume of short yen positions out of the market, traders said, tamping down the so-called carry trade.

But hedge funds are likely to still have significant short positions in the Japanese currency, so the combination of the BoJ move and a dovish tone by the Fed later on Wednesday could provoke another sharp move higher for the yen, even if it is the last one for a long time.

Yujiro Goto, Nomura’s chief foreign exchange strategist, said the yen’s upward momentum could also be accelerated if Japanese retail investors decide to unwind their large bets on US equities and convert dollar profits back into yen. And judging by the collapse in the USDJPY in recent weeks, that’s precisely what is taking place.

And yes, for those who note that it is amusing that it is somehow viewed as hawkish that a 0.15% increase in rates even as the BOJ continues its QE almost full bore (down ¥400 billion from ¥6 trillion), we agree: it is amusing.

After two months of ugly declines, US pending home sales bounced in June (up 4.8% MoM). However, that jump was not enough to juice YoY changes which saw sales decline 7.8% YoY…

Source: Bloomberg

June’s rebound pulls sales off record low levels going back to 2001…

Source: Bloomberg

“The rise in housing inventory is beginning to lead to more contract signings,” and more supply should hit the market in the coming months, NAR Chief Economist Lawrence Yun said in a statement.

“Multiple offers are less intense, and buyers are in a more favorable position.”

The pending-sales figures tend to be a leading indicator of sales of previously owned homes, because houses typically go under contract a month or two before they’re sold.

Authored by Caden Pearsen via The Epoch Times,

The U.S. Court of Appeals for the Fifth Circuit on Tuesday overturned a lower court’s decision requiring Texas to relocate a 1,000-foot floating barrier in the Rio Grande, installed to prevent illegal border crossings.

The Fifth Circuit found that the U.S. District Court for the Western District of Texas had abused its discretion when it ordered Texas to relocate the buoys from the river last summer.

Tuesday’s ruling permits the barrier system to temporarily remain in the river until a trial is held.

The Justice Department sued Texas after the buoys were placed in the river in July 2023, alleging that the barrier was unlawful. The district court had previously granted a preliminary injunction directing Texas to move the barrier to the riverbank.

Gov. Greg Abbott (R-Texas) appealed the ruling unsuccessfully, with a three-judge panel upholding the district court’s decision in a 2-1 opinion. But the full court later heard the case en banc, vacating the panel’s opinion and blocking the injunction pending appeal.

On Tuesday, Circuit Judge Don R. Willett, joined by eight other judges, found that the district court had abused its discretion in issuing the preliminary injunction.

“We hold that the district court clearly erred in finding that the United States will likely prove that the barrier is in a navigable stretch of the Rio Grande,” Willett wrote.

“We cannot square the district court’s findings and conclusions with over a century’s worth of precedent, which on a fair and faithful reading renders inapplicable or unpersuasive the evidence on which the district court relies.”

The appeals court said that a preliminary injunction should not be granted unless the requesting party meets all four necessary criteria: the likelihood of success on the merits, the likelihood of irreparable harm, the balance of equities in its favor, and alignment with the public interest.

The appeals court said the federal  bears the “heavy burden” of proving a likelihood of success, and the district court “cannot cure the United States’ evidentiary deficiencies by creatively reinterpreting binding caselaw.”

“Because we conclude that the United States fares no better on the three other preliminary-injunction factors, we hold that the district court abused its discretion by granting the United States a preliminary injunction,” the opinion stated.

Abbott, who has said the buoys are a measure to secure the U.S. southern border and prevent illegal immigrants from reaching it, hailed the ruling in a post on X.

“Biden tried to remove them. I fought to keep them in the water,” he wrote.

“That is exactly where they will stay. JUSTICE!!!!”

Texas Attorney General Ken Paxton also welcomed the ruling and pledged to “continue to defend Texas’s right to protect its border from illegal immigration!”

People walk between razor wire and a string of buoys placed on the water along the Rio Grande border with Mexico in Eagle Pass, Texas, on July 16, 2023. (Suzanne Cordeiro/AFP/Getty Images)

In July 2023, Texas installed a 1,000-foot floating barrier made of interconnected rotating buoys, ranging from 4 to 6 feet in height, at a crossing hotspot near Eagle Pass, approximately 145 miles southwest of San Antonio.

Both the Mexican government and the Biden administration criticized the installation. The Biden administration sued Texas, claiming the barrier illegally disrupts navigation and was placed without authorization from the U.S. Army Corps of Engineers.

The DOJ’s lawsuit accuses Abbott of installing the barrier without the necessary federal authorization, as required by the Rivers and Harbors Act.

Associate Attorney General Vanita Gupta has previously said that the barrier poses threats to navigation and public safety and has implications for U.S. foreign policy due to diplomatic protests from Mexico.

The Epoch Times has contacted the DOJ for comment.

The world just woke up to a new Middle East on Wednesday which stands on the precipice of major war between Iran and its proxies and Israel, following the overnight Israeli assassination of Ismail Haniyeh, the top political leader of Hamas, during an inauguration event for Iran’s new president. Haniyeh, who is based in Qatar, and an Iranian security guard were killed reportedly while in the Iranian capital. Hamas has since condemned the “treacherous Zionist raid on his residence in Tehran.”

Iran is vowing “severe” punishment, with the Islamic Republic’s Supreme Leader, Ayatollah Khamenei, announcing in English and Farsi on X, “The criminal, terrorist Zionist regime martyred our dear guest in our territory and has caused our grief, but it has also prepared the ground for a severe punishment.”

And Iran’s newly sworn-in president Masoud Pezeshkian in a statement cited in state media said the country will “defend its territorial integrity, dignity, honor, and pride, and will make the terrorist occupiers regret their cowardly act.”

Taking out Haniyeh was the second high-profile assassination attributed by Israel in a matter of hours, following the Tuesday airstrike in Beirut that killed Hezbollah’s top military leader and right-hand man to Secretary-General Hassan Nasrallah, Fuad Shukr. 

That attack was massive and on a neighborhood and buildings in the south of the capital, with Lebanon’s Health Ministry saying three people, including two children, have been killed, with at least 74 wounded. Emergency workers are still searching under the rubble, and thus the civilian death toll is likely to rise further.

And now there are emerging reports of another Israeli air raid – this time on Syria’s capital of Damascus (unconfirmed) – with likely casualties. A large cloud of smoke was seen rising over the Damascus suburb of Sayyidah Zaynab at around 3pm local time. It is an area which sees a constant influx of Iranian religious pilgrims, and Israel has bombed it frequently, saying each time it is targeting Iranian military assets and proxies.

Adding to this volatile mix, the US military also overnight launched its first military action in Iraq in months, reportedly striking militia combatants who attempted to launch a drone attack. The Pentagon is calling the new military action a defensive airstrike.

The US State Department and US administration have reportedly expressed confusion at the rapid series of Israeli actions in the last hours…

“How can Israeli-Palestinian mediation succeed when one party assassinates the negotiator on other side?” Stated Qatar’s Prime Minister

Bill Burns is in midst of negotiations

Blinken said he didn’t know what was going on. Israel doesn’t tell him. https://t.co/6FaTLUEcOP

— Joshua Landis (@joshua_landis) July 31, 2024

Iraq’s pro-Iran Popular Mobilization Authority confirmed casualties, saying, “Forces affiliated with the 47th Brigade… were exposed to an explosion of unknown nature, which resulted in the martyrdom of a number of people and the injury of others.”

So in the last 24 hours there has been military action by Israel or the US in Gaza, Lebanon, Syria, Iran, and Iraq. US Defense Secretary Lloyd Austin on Wednesday spoke with Israeli Defense Minister Yoav Gallant regarding “the threats to Israel posed by a range of Iranian-backed terrorist groups, including Lebanese Hezbollah,” according to a readout.

View from the destruction in the aftermath of the Israeli attack on the Beirut suburb of Haret Hreik:

⚡️View from the destruction in Haret Hreik, Lebanon

Zionist terrorists bombed this civilian building which led to the martyrdom of 2 children and one woman. pic.twitter.com/QT29bGH6ws

— War Monitor (@WarMonitors) July 31, 2024

Still there is no official comment from Israel over the Haniyeh killing, but Prime Minister Benjamin Netanyahu has convene his security cabinet as regional threats of revenge mount over the high profile assassinations. An Israeli government spokesman has said, “We are on extremely high alert for Iranian retaliation.”

Without doubt, this throws the prospect of any hostage negotiations in total disarray and the temperature of conversations within the White House and State Department are likely high. Secretary Blinken has said “We were not aware of or involved in the attack on Haniyeh.” Times of Israel correspondents have said ordinary Palestinians are exhausted from war and exasperated: 

War-weary Palestinians in Gaza mourn the killing of Hamas leader Ismail Haniyeh. Some say it will complicate efforts to reach a ceasefire deal with Israel.

“This man could have signed the prisoner exchange deal with the Israelis,” says Saleh al-Shannar, who was displaced from his home in northern Gaza. “Why did they kill him? They killed peace, not Ismail Haniyeh.”

Meanwhile, Russia has condemned the Israeli killing of the Hamas leader, saying “dangerous” consequences are likely:

⚡Russian Foreign Ministry: Those behind the assassination of Hamas leader were aware of the dangerous consequences this would have for the region — Reuters

— War Monitor (@WarMonitors) July 31, 2024

Many observers already concluded long ago that Netanyahu doesn’t actually want a quick resolution to the Gaza war, but is indeed intent on fighting until Hamas is eradicated, even if that puts the remaining hostages in jeopardy. This has been the constant criticism of his domestic political rivals and the hostage victims’ families. All that Washington officials have said so far is statements saying they are ‘very concerned’ at these developments. Middle East analyst Rami Khouri has expressed the feeling of many Arab leaders in the region, saying that the latest assassination shows that Israel is “a runaway killing machine.”

Earlier this week, in our Quarterly Refunding preview we said that “the August refunding package will be identical to the one in May, with $125bn in gross issuance across 3y, 10y and 30y auctions. In addition, expect unchanged 5y TIPS new issue and 30y TIPS reopening (at $23bn and $8bn, respectively), and a $1bn increase to the 10y TIPS reopening (to $17bn) to commensurate with the increase in the 10y TIPS new issue auctioned this month.”

Well, that’s precisely what the Treasury revealed at 8:30am this morning, when it published its latest Quarterly Refunding Announcement (the funding needs were already reported on Monday when the Treasury revealed a debt issuance schedule in line with expectations) in which  it reported that, as expected, the quarterly refunding would be $125 billion, with issuance raising $14 billion in new cash from private investors, as follows:

• $58 billion in 3-year notes
• $42 billion in 10-year notes
• $25 billion in 30-year bonds

Some rates strategist had cautioned of risk that the Treasury would revise its guidance to incorporate the potential for increasing issuance of longer-dated securities, given the outsize federal budget deficit. But the department reiterated its May language, preventing another bond market rout similar to the one seen exactly one year ago when Janet Yellen shocked the market with a big surge in bond issuance.

The refunding total is just shy of the record $126BN first reached in Feb. 2021; auction sizes across the curve began rising in 2018 to finance tax cuts and surged in 2020 to finance federal pandemic response

The Treasury confirmed expectations that the balance of Treasury financing requirements over the quarter will be met with regular weekly bill auctions, cash management bills (CMBs), and monthly note, bond, Treasury Inflation-Protected Securities (TIPS), and 2-year Floating Rate Note (FRN) auctions.

It also said that “its current auction sizes leave it well positioned to address potential changes to the fiscal outlook and to the pace and duration of future SOMA redemptions.” More improtantly, the Treasury forecast that “based on current projected borrowing needs, Treasury does not anticipate needing to increase nominal coupon or FRN auction sizes for at least the next several quarters.“

The table below presents, in billions of dollars, the actual auction sizes for the May to July 2024 quarter and the anticipated auction sizes for the August to October 2024 quarter:

Many dealers have said in recent weeks that the Treasury will have to bump note and bond sales higher again given the fiscal outlook as the US continues to run its largest federal deficit outside of crisis times, a deficit which will only get much larger regardless of who the next US president is. Marketable Treasury debt outstanding has already grown to $27 trillion from about $12 trillion a decade ago; and total US debt just hit $35 trillion on Monday.

Aside from Notes and Bonds, the treasury said it plans to address “any seasonal or unexpected variations in borrowing needs over the next quarter through changes in regular bill auction sizes and/or CMBs.”

The Treasury said that “given current fiscal forecasts” it plans to “modestly increase the offering size of short-dated bills being sold next week,” maintaining those sizes through August. It then expects to reduce offering sizes in early to mid-September in anticipation of the Sept. 15 non-withheld corporate tax date, and to subsequently increase all auction sizes over the course of October, based on expected fiscal outflows

The department will also continue with weekly issuance of the six-week CMB while it makes “necessary operational and systems changes in order to smoothly transition” issue to benchmark status. Timing of first benchmark auction will be provided at an upcoming refunding.

Sales of floating-rate debt were also kept unchanged for the coming three months, the Treasury said. With regard to Treasury Inflation Protected Securities, or TIPS, the department lifted the size of the October 5-year TIPS auction — the only new issue during the quarter —  by $1 billion. It also boosted the September 10-year TIPS reopening by $1 billion.

The supply of bills has increased by around $2.2 trillion since the start of last year, enabling the rapid drain of the Fed’s reverse repo facility. That left their share of total debt above the 15%-to-20% range that TBAC previously recommended, before Wednesday’s new guidance, which suggests the uptrend will resume.

Treasury officials have repeatedly said this isn’t a problem and highlighted that TBAC in the past indicated there was flexibility around that recommendation. In Wednesday’s statement, TBAC doubled down on that argument: “the committee unanimously noted the importance for Treasury to retain flexibility to adapt this over time with evolving market dynamics.”

To that end, Treasury officials asked the TBAC, or Treasury Borrowing Advisory Committee (which we have dubbed previously as the shadowy group that runs the world) to take another look at the recommended share of bills, which the TBAC had previously recommended a 15% to 20% range.

“Most” TBAC members this time indicated that averaging around 20% over time was a good tradeoff between interest-rate costs, volatility in financing and the risk of rolling over a major amount of debt at one time, the panel said in a separate report.

Just as notable, especially to those who keep track of the Treasury’s own recently launched “Not QE“, i.e., treasury buybacks, today the Treasury released a buyback schedule for the upcoming refunding quarter and updating its buyback FAQs.  As the schedule indicates, Treasury plans to conduct weekly liquidity support buybacks of up to $4 billion per operation in nominal coupon securities. In longer-maturity buckets, Treasury will conduct two operations, each up to $2 billion, over the refunding quarter.  Treasury also plans to conduct two operations, each up to $500 million, in each of the TIPS buckets.

Starting in August 2024, Treasury is removing the 20 CUSIP cap on eligible securities for each operation and will move towards operation sizes consistent with its previous guidance – i.e., a maximum of $30 billion per quarter across buckets for liquidity support, up from $15 billion previously. Indeed, while once upon a time the Fed’s POMO schedule served to goose the market on QE action days, so the Treasury’s bond buyback schedule will soon fill that void, at least until the Fed restarts full-blown QE.

With the Fed recently reducing the amount of Treasuries it’s letting mature each month without replacement, that has in turn eased the burden on the Treasury to sell more debt to the public to fund the fiscal deficit.

Later Wednesday, the Fed is widely expected to signal it will start lowering interest rates, offering further relief for the Treasury by reducing the government’s debt-servicing bill. The pace of so-called quantitative tightening — the amount the central bank is shrinking its balance sheet, is seen staying at the current amount of up to $25 billion a month for Treasuries.

Authored by Jonathan Turley,

Barbara Butch, the LGBTQ activist who was the center figure in the controversial “Last Supper” Paris Olympic scene is threatening to sue those criticizing her. Butch played the role viewed by many as a spoof on Christ in the Last Supper. The creators insist that they were going for a type of “pagan party” of Olympic gods and sent a message of tolerance. Art experts have supported the creators and pointed to paintings that inspired the pagan motif. That is not exactly what was seen by millions of Christians who were deeply insulted by the parody. The question is not the intent of the creators, but the intent of critics in denouncing the display and its participants.

The threat of legal action would not be especially serious in the United States where opinion is given robust protection in both criminal and civil cases. In France, however, free speech is in a free fall with the left pushing for the censorship and criminalization of ever-expanding range of political and religious speech.

The ceremony itself had some truly powerful and stunning elements. I enjoyed the mix of music and imagery as well as the effort to show the diversity of France.

However, other elements were more divisive or excessive. For example, the producers decided to use the ceremony to feature such elements as three young people hooking up for a “ménage à trois.” With many families watching with kids, many of us thought the scene was inappropriate for such an event. However, it was the supper scene that led to protests from clerics and critics. While claiming a message of “tolerance,” the scene was taken as yet another slap at religious elements in society.

That is a debate that has continued to rage, particularly on the Internet.

Audrey Msellati, Butch’s attorney, posted a statement on Butch’s Instagram account that the DJ and activist who will seek legal action after being “the target of an extremely violent campaign of cyber-harassment and defamation.” She is promising to file “several complaints against these acts.”

Clearly, any direct and intentional threats of violence against Butch should be prosecuted, as they can be prosecuted in the United States. However, the French laws sweep far more broadly in criminalizing opinion and what I have called “rage rhetoric.”

In France, such complaints are often criminal matters. In my new book, “The Indispensable Right: Free Speech in an Age of Rage,” I discuss the collapse of free speech rights in France as well as other European countries. This anti-free speech wave has now reached our shores. It has many allies in our own anti-free speech movement. American leaders such as Hillary Clinton have actually enlisted the help of European censors to seek to silence American citizens.

Once the cradle of individual liberty, France long ago became a global leader in the crackdown on free speech.

These laws criminalize speech under vague standards referring to “inciting” or “intimidating” others based on race or religion. For example, fashion designer John Galliano has been found guilty in a French court on charges of making anti-Semitic comments against at least three people in a Paris bar. At his sentencing, Judge Anne Marie Sauteraud read out a list of the bad words used by Galliano to Geraldine Bloch and Philippe Virgitti, including using ‘dirty whore” in criticism.

In another case, the father of French conservative presidential candidate Marine Le Pen was fined because he had called people from the Roma minority “smelly.” A French teenager was charged for criticizing Islam as a “religion of hate.”

I also wrote earlier about the prosecution of famous actress Brigitte Bardot for saying in 2006 that Muslims were ruining France in a letter to then-Interior Minister (and later President) Nicolas Sarkozy. Bardot, an animal rights activist, was repeatedly hit with such criminal complaints for criticizing different groups.

While wildly popular with many in Congress, French President Emmanuel Macron has consistently worked against free speech rights.

That is why the homage in the Olympics to Liberté ringed hallow for many of us in the free speech community. The French leaders have long been hypocritical in claiming to support free speech, such as marching in support of the Charles Hebdo magazine after the massacre after cracking down on its editors and writers.

Thomas Jolly, the artistic director for the opening ceremony of the Olympics, clearly wanted to be provocative in these scenes. He succeeded. Clearly, such provocative elements will spur debate and discussion, including heated opinions. Use of criminal sanctions for those expressing opinion would make a mockery of the display of fealty to French liberties that Jolly features in his ceremony.

The Bloomberg Commodity Spot Index (BCOMSP) has wiped out all gains so far this year. After peaking in late May (+12%), the index quickly slipped into negative territory by late July. This downward pressure on BCOMSP stems from faltering economic growth in China, which has sparked concerns about falling demand for agricultural goods, crude oil, crude products, copper, iron ore, and other essential commodities. Some traders are on high alert, fearing a potential repeat of a 2015 China slowdown.

“The ‘domestic consumption’ engine of the Chinese economy seems to be faltering,” said Sandeep Rao, senior researcher at exchange-traded product provider Leverage Shares, who MarketWatch quoted. 

Rao said, “Real estate interest has been plummeting, and online sales continue needing discounting strategies to prop up values.”

Recall that Apple has been discounting its iPhones in the world’s largest smartphone market. Yet new data shows that this strategy by Apple has miserably failed.

The People’s Bank of China recently surprised the market with interest-rate cuts, a move to prop up faltering growth after the Communist Party’s stimulus failed to result in any robust economic recovery. 

China’s downturn in manufacturing and productivity “does find parallels in the leadup” 2015-16 turmoil, said Rao, adding that the “Chinese economy’s vulnerability is simultaneously local, global and strategic.” 

He pointed out that the US and European economies have been “paring down consumption volumes and the Chinese economy’s ‘export’ engine [faces] competition in the long run from the likes of India and Vietnam.” 

Interestingly, Rao said the CCP “does not have the incentive to stimulate the economy” until after the US presidential elections in November, when a clear winner is chosen.

According to Bloomberg, “China has been stuck in the longest streak of deflation since 1999, with economy-wide prices dropping for five straight quarters.” 

The impact of China’s downturn has obviously trickled down into commodities. However, there’s good news for at least the metals market, as Goldamn’s Gabe Tkach noted Tuesday:

Liquidation was the core theme in metals over the past week as we saw weak Western hands enter and exit the Gold market in July and a continued reduction in positioning in copper. We estimate that 60% of the length in copper has been unwound but Gold was positioned lighter as China has been the marginal buyer this year. The focus on this meeting will be on the implicit confirmation of the path forward that Powell could offer given the recent sharp moves in front-end rates. We still think that the beginning of the upcoming cutting cycle will be positive for metals but a fair amount of length has already been deployed this year. (Thank You Ben Binet-Laisne – Metals Trading)

And there are broadening war risks with IDF Forces hitting targets in Beirut. A risk positive for Brent crude prices. 

All eyes will be on US monetary policy in September and China’s economy after the election for stimulus. These two factors will influence BCOMSP price action.