“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”― Frank Zappa
I know they try to keep us distracted with Taylor Swift’s latest escapades, today’s fake indictments of Trump, Biden’s dog biting another White House visitor, Dementia Joe falling down or shitting his pants while lying about his past, our imminent death from climate change and gas stoves, black lesbians from Maryland being appointed senator from California, allowing millions of third world savages to invade our homeland and then proposing Trumps wall, the annual government shutdown kabuki dance, and sending another $25 billion into Zelensky’s off-shore bank accounts for his noble freedom fighting efforts against Russia.
But I know and you know it is all bullshit, meant to divert our attention from the imminent destruction of our financial system at the behest of the Deep State cabal using Dementia Joe as their Trojan horse. They plan to implement their Great Reset agenda come hell or high water. They want to reduce the “surplus population” of the planet through whatever means necessary, whether it be their toxic vaccines, global warfare, climate lockdowns, destroying farmers, starving the peasants, making sure you own nothing, and creating a catastrophic financial collapse designed to impoverish the masses.
While the masses are mesmerized by modern day bread and circuses (NFL, MLB, Dancing With the Stars, The Bachelor, Taylor Swift’s boyfriend, latest explosive Apple iPhone version), the economic trajectory of the country and the globe is set to crash mode. To paraphrase James Carville, “It’s the debt, stupid”. Those pulling the strings are supremely confident they have done a spectacular job in dumbing down multiple generations through the government education indoctrination centers, they know the masses are incapable of understanding simple math or thinking critically. They’ve only been taught how to feel, obey and not question the approved narrative.
This week was filled with conspiratorial theories about the FEMA Emergency Alert test on Wednesday, that happened to coincide with Russia conducting a nuclear attack warning test on the same day. I didn’t believe the more far-fetched dire warnings about 5G activating the covid vaxx, but I do believe THEY like to foreshadow what they plan to do in the near future. They held Event 201, simulating a global pandemic in October 2019, three months before they launched the Covid Scamdemic exercise. The WEF has recently warned of a global Cyber-attack threat. They used this Emergency Management “test” as a psychological technique to prepare the masses for the next “emergency” they roll out in order to take away more of our rights, liberties, freedom and wealth. There are no coincidences. Everything they do has a purpose.
So that brings us to the reality portion of this rant. It’s all about the debt. Earlier this week the national debt increased by $275 billion in one day. The annual deficit in 2007, before the Wall Street/Fed created financial disaster, was $160 billion. The entire national debt after 200 years as a nation was $2.9 trillion. In the last four months they have added $2 trillion to the national debt. Does that seem sustainable? With interest rates at sixteen year highs, the interest on the national debt will exceed $1 trillion per year, on a path to $1.5 trillion. It was $400 billion prior to the 2008 financial crisis.
Credit card debt now exceeds $1 trillion, with over 50% of borrowers carrying a balance from month to month, and average interest rates charged by the Wall Street shysters at 21%. Credit card debt is up 60% since 2015 and up 120% since the start of this century. Is this a sign of exuberance or desperation? With inflation raging at double digits since Biden was inserted as president, I’m leaning towards desperation.
The pollyannas claim credit card default rates are still near all-time lows. But the trend is not their friend. Delinquency rates are now the highest in eleven years. They were artificially suppressed by the billions of covid handouts, rent moratoriums, and student debt payment suspensions, which are now fully spent. Delinquencies have risen seven consecutive quarters and are now poised to accelerate as the economy contracts and the average student loan payment of $500 starts this month.
It appears someone pulled the punch bowl away in the last month, as the change in credit card spending has crashed. This has been confirmed by multiple retailers reporting horrible sales results, in addition to the billions walking out their doors as reparations for the diverse downtrodden. Once delinquencies begin to accelerate, the Wall Street cabal will all react in an identical manner, cutting credit lines and denying new credit to those who have no intention of paying them back. That will further reduce credit card spending and worsen the economy, as 70% of GDP depends upon the masses spending money they don’t have on things they don’t need.
The student loan debacle, created by Obama and his minions, is about to blow up in the faces of millennials and Gen Z, now that Biden’s UN-Constitutional method of buying votes through bribing lesbian and african studies graduates, by not making them pay their legal obligations, has come to an end. The 43 million borrowers now have to start repaying the $1.76 trillion they borrowed for worthless degrees. This will mean $70 billion will not be spent on autos, gadgets, bling, vacations, sporting events, rent, and lattes. The recession that has been predicted forever is coming fast, and the markets know it.
With mortgage rates at 7.9% and home prices at all-time highs the housing market is Wiley Coyote suspended in motion, just before he plummets to the bottom of the canyon. There will not be a soft landing. The flippers will falter first. Once unemployment starts to accelerate, the newer buyers, who bid 25% above asking price last year, will be taught a lesson they’ll never forget. Once the housing crash starts, it will go on for several years, just as it did from 2006 through 2012. An unsustainable trend will not be sustained.
With average interest rates of 7% for new cars and 11% for used cars, average loans over 72 months, and an average new auto price of $48,000, the auto industry is about to implode, just as their union workers are looking for a 40% pay increase. I see bankruptcies and massive layoffs in their future.
Essentially the country is a room full of unstable powder kegs and we have a plethora of mediocre, low IQ, diversity hires running around the room celebrating whatever LGBTQ+++++ day it is by lighting matches. The actions of those purportedly in charge of the country are designed to create chaos, havoc, violence, despair and financial collapse. They have set events in motion and there is absolutely nothing that can be done or will be done to stop it. You should be angry, because no matter what preparations you’ve made, you will still bear the brunt of the coming storm.
We know the culprits and we know what their fate should be, but will enough irate citizens do it? We shall see. For now we await the Larry Silverstein of our time to yell “PULL IT!!!”
Oil prices tumbled back to earth today, erasing Sunday night's gains on apparent optimism that the Irasel0-Hamas war wouldn't last long and wouldn't disrupt oil market in the MidEast. Sounds pretty optimistic to us but hey.
There may have been some downward pressure also as traders weighed EIA's monthly Short-Term Energy Outlook which reported that US crude production surged to a record during the third quarter and is expected to climb further above 13 million barrels a day
Meanwhile, US gasoline consumption for 2023 was revised slightly lower to 8.84 million barrels a day, though still above last year. Total domestic oil demand also saw a modest downward revision to 20.07 million barrels a day, while world consumption remains little changed at 100.92 million barrels a day.
Still tonight's first glimpse at inventory data will likely trigger the next leg in WTI, especially after last week's huge surge in gasoline stocks (drop in demand).
API
Crude +12.94mm (+900k exp)
Cushing -547k
Gasoline +3.56mm (+400k exp)
Distillates -3.53mm (-300k exp)
APi reported a massive crude inventory build of almost 13mm barrels - the biggest since Feb 2023. Cushing stocks fell again and did Distillates (the biggest draw since May)...
Source: Bloomberg
AlphaBBL reports that Cushing stocks fell 682k barrels last week, back towards 'tank bottoms'.
WTI was hovering just below $84 ahead of the API print and extended losses after the big draw...
The US and Venezuela, meanwhile, are close to reaching an understanding that would bring limited sanctions relief in exchange for steps to ensure fair elections, according to people familiar with the matter. As part of the informal deal, the US would be willing to lift some oil and banking sanctions.
Additionally, the New York Times reported that US intelligence shows Iran was surprised by Hamas’s attack on Israel. That may reduce the chances of additional sanctions on Iranian oil and help prevent the nation and its proxies across the Middle East from being drawn into the conflict.
Worth noting that this CNN story laundering Biden admin spin was co-written by Natasha "Fusion GPS" Bertrand, who in addition to being used to run the Russia collusion scam also was the sole author of the 2020 Democrat info op of "Hunter Biden's laptop is disinformation!" pic.twitter.com/lFP4p8BSp0
President Biden will attend a roundtable with Jewish community leaders on Wednesday afternoon. He will discuss his administration's support for Israel in the wake of an unprecedented attack by the Hamas militant group last weekend, which resulted in 1,200 fatalities and over 2,700 injuries.
The White House said the event is due to start at 1615 ET (he was 90 minutes late yesterday).
President Biden will deliver remarks on his unwavering support for Israel and his administration's work to 'combat Antisemitism.'
Earlier in the day, Biden said, "There is no justification for terrorism. No excuse," adding he spoke with Prime Minister Benjamin Netanyahu - his fourth call in recent days - reiterating the US "will make sure Israel has what it needs to take care of its citizens, defend itself, and respond to this attack."
On Tuesday, Biden denounced the Hamas attack and vowed to stand by Israel's side without equivocation. The president called the attack on Israel "pure, unadulterated evil," "sheer evil" and "indiscriminate evil."
Reuters cited a person familiar with the matter earlier who said the White House is considering military aid to Israel and Ukraine. NBC also reported the White House is preparing to seek supplemental funding from lawmakers on Capitol Hill for both countries, Taiwan and US border security.
At a press briefing on Wednesday, US National Security Council Coordinator John Kirby said the administration's additional funding request to Congress has yet to be finalized.
According to the Israel Defense Forces, at least 1,200 Israelis - including more than 150 soldiers - have been killed and more than 2,700 injured. The number of Americans killed jumped to 22 today, up from 14 on Tuesday.
In Gaza, nearly 1,100 have been killed with 5,000 injured, according to the health ministries in Gaza and the West Bank. Israeli fighter jets have bombed 450 targets in northern Gaza in 24 hours.
An IDF spokesman said that "fighting will intensify" in the coming days. Washington Post said IDF forces are "signaling that it's preparing a ground invasion."
Finally, as we have noted several times in the last few days, Biden will have to tread a fine line of supporting US' close ally Israel (despite its so-called ultra-far-right government) while not upsetting 'The Squad' and their vociferous support of Palestine and whatever it takes for them to achieve freedom from their apartheid oppressors.
Hotter than expected PPI, a hawkish-er than expected FOMC Minutes, and tensions in the MidEast heating up even more... so buy gold (makes some sense) and buy big tech stocks (hmm, ok?)
Oh, and remember all that excitement about "the market doing their job for them" blah blh blah... well financial conditions have eased significantly in the last few days (as Israel sparked flight to safety/quality bids)... time to unleash the hawks again?
Source: Bloomberg
Spot Gold topped $1875 - two week highs - after bouncing off the February lows
Source: Bloomberg
Bonds were mixed with the short-end underperforming (2Y +2bps, 30Y -11bps). From Friday's (post-payrolls) close, the 20Y yield is down 35bps and 2Y yield up 9bps!
Source: Bloomberg
...which has flattened (inverted-deeper) the yield curve (2s30s)...
Source: Bloomberg
The 2Y Yield found itself pinned around 5.00% once again...
Source: Bloomberg
Also the SOFR Z3-Z4 (basically how much rates will be cut next year), has risen notably (more rate cuts expected for next year in the last few days)...
Source: Bloomberg
Small Cap stocks lagged on the day but the entire equity complex sold off into the FOMC minutes and was bid after with Nasdaq the best performer...
No big short-squeeze today...
Source: Bloomberg
Bitcoin was punched in the mouth again, back down near $26,500....
Source: Bloomberg
The dollar was flat on the day
Source: Bloomberg
And bear in mind that the dollar tends to fall after CPI (out tomorrow morning)...
But we do note that the Ruble continues to slide (back above 100/USD) and Russia imposed capital controls today...
Source: Bloomberg
Crude oil erased all (almost all) of its post-Israel-attack gains...
And finally, there's today's "blockbuster" IPO... Birkenstock - which IPO'd at $46, opened at $41, and went south from there...
After a more than 3-year pause, government student loan repayments started again this month and it’s already putting the squeeze on borrower’s wallets. This is bad news for an economy already strained by massive levels of debt and rising interest rates.
Interest accrual on student loans resumed on September 1 with the first payments coming due in October.
According to a recent survey reported by Yahoo Finance, about 40% of people with student loans expect to cut spending in order to make payments. Consumers planning to tighten their belts to cover student loan payments said they would likely cut back spending on restaurants, apparel, and electronics.
A separate Morgan Stanley survey found that only 24% of student borrowers can make monthly student loan payments in full without reducing spending. That was down from 29% just three months ago, indicating growing financial stress on consumers.
The Trump administration paused student loan repayment for the first time in March 2020 as governments began locking people down due to COVID-19. The Biden administration extended the pause eight times. Nearly three and a half years later, borrowers must start paying again and that’s a big shock to many budgets.
Even with loan payments paused, many student loan borrowers said they are struggling to keep up with expenses. In a survey earlier this year, 53% of borrowers said they were struggling to pay other bills (e.g. auto loan, mortgage, credit card), even though they have not been making their student loan payments.
Around 43 million Americans have outstanding student loans totaling $1.8 trillion, according to the most recent data from the Federal Reserve. Student loan debt has tripled since 2008.
When the US government stopped defaults and allowed borrowers to pause payments due to the COVID-19 pandemic, 11.1% of student loans were 90 days or more delinquent or were in default. This didn’t include the people who were in various deferment programs and were not counted as delinquent.
Wedbush analyst Tom Nikic crunched Fed numbers and concluded that the typical student loan payment ranges between $200 and $299 per month. That means some 43 million Americans just had their discretionary spending budget cut by at least that amount. This comes to about $120 billion annually.
Nikic estimates that if consumers incrementally spend $120 billion annually on student loan payments, it could wipe out 2.5% of the total $5 trillion in annual discretionary spending.
He called that “brutal news” for retailers.
With consumers now needing to divert some of their monthly income towards student loan payments, there is risk that this could ‘crowd out’ other spending items. Furthermore, this comes at a time when US consumers are increasingly feeling pressures from a variety of sources, including waning pandemic savings, rising gas prices, record-high credit card debt, and a continued normalization of spending on services vs. goods. Thus, these factors could combine to weigh on a variety of companies, including retailers of discretionary goods.”
There is some indication retailers are already feeling the effects. Macy’s reported a 36% reduction in credit card sales year-on-year in the second quarter. Nordstrom reported a similar trend.
Meanwhile, it appears that some student loan borrowers started making payments early to avoid accruing interest. While credit card debt spiked by over 13% in August, non-revolving credit, which includes student loans, fell by 9.8%. This is a sign of a strained consumer trying to make ends meet by charging everyday purchases on credit cards.
“The unexpected contraction in consumer credit in August appears to have been driven by the one-off jump in voluntary repayments of student loans early ahead of the October resumption deadline,” Oxford Economics lead US economist Michael Pearce told MarketWatch.
The resumption of student loan payments will reverberate through the economy. Consumer spending primarily drives economic growth in the US. As spending shifts from buying goods and services to paying student loans, it will add to recessionary pressures.
This is yet another reason to question the “soft landing” narrative. Despite all the rosy economic narratives out there, Americans are under a tremendous amount of financial stress.
The plan might take the weight off some student loan borrowers, but in effect, it just shifts that burden to the taxpayer.
Nothing the government does is free. Ultimately, student loan debt relief will add to the already massive budget deficits. That means Uncle Sam will have to borrow more money that taxpayers will have to repay, either in higher taxes or the inflation tax.
This is yet another example of government trying to fix a problem it created in the first place.
The widespread availability of student loans drove up college tuition in the first place. Studies have shown the influx of government-backed student loan money into the university system is directly linked to the surging cost of a college education.
Senator Rand Paul offered a voice of reason Monday cautioning that the U.S. should “see where the facts lie” before rushing into any military response to the Hamas attack in Gaza.
While other Republicans, including Lindsey Graham, urged that Iran’s nuclear and energy facilities should be bombed, Paul noted that there has been a history of the U.S. using such events as pretexts to start conflicts that were not ultimately in the best interest of the nation.
“Let’s let Israel do what they need to do which is to have a punishing response to the people in Gaza to say no more, we are not going to let this happen,” Paul stated, adding “I have nothing but sympathy for the Israeli people at this point and time. I think that the primary objective this time has to be to get the people that attacked them. They were in Gaza.”
The Senator continued, “Before we think about spreading this to the rest of the world maybe we have to think about what is going on on the ground there. I do think there is a immediate reaction sometimes to get everybody, let’s get everybody who is responsible.”
“Without question, Iran had their hands in this. But if you remember after 9/11 there are people who wanted to attack Iraq. They said Iraq did 9/11. Iraq had nothing to do with 9/11. Let’s see where the facts lie and let’s investigate this,” Paul urged.
He continued, “everybody has the anger. I have anger. I have no sympathy for these thugs pulling men, women, and children, shooting people point-blank. Nobody should have sympathy for them. I think that they use sympathy for their cause by doing such horrendous, outlandish things. But at the same time, people say ‘We need to stop Iran from having nuclear weapons. We’re going to bomb them.’ You have got to realize that there have been assassinations of nuclear scientists in Iran and the last six and eight years. Every time we assassinate one of them enrichment goes higher.”
“We had maximum pressure of sanctions and the enrichment goes higher. People say that within a week or two of enrichment people say ‘We are going to bomb them to smithereens.’ Well, when you get uranium to like 100% or 95% enrichment you can have as much in that little box there. You can have it in a little box. You can hide it anywhere. You can have 20 different places,” Paul further explained.
He added, “Something has to be done. But we have to be careful of the bomb them now, bomb them everywhere all the time. And our founders were conscience of that. We need to vote on these things. No president, no one person can decide when war happens. War is a means of retribution. It is not always pretty and it doesn’t always get exactly what we intended as well.”
“If you act out of anger irrationally, sometimes you will do the wrong thing and make things worse,” Paul further warned, adding “You want war, you want to drop a bomb on Tehran, then you do not do that like you’re chewing bubblegum. This is a really, really serious thing that we need to make sure that we get right before we launch into a worldwide war.
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Authored by Simon White, Bloomberg macro strategist,
The VIX, a measure of implied equity volatility, is biased much higher in the coming months as the lagged impact of tighter financial conditions increasingly ripple through the economy and markets. Also, the VIX curve has flattened over the last month, meaning there is less negative carry on long VIX positions.
From the vantage point of an equity investor, inter-day implied volatility has been remarkably subdued. While the MOVE (fixed-income vol) and the CVIX (FX vol) are both notably above where they were in late 2019, the VIX is barely higher than its level just prior to the beginning of the pandemic.
There are several reasons for this.
The narrowness of this year’s rally in the S&P has led to implied correlations dropping. Inter-day stock moves largely cancelling each other out will subdue volatility.
Further, investors’ preference for buying puts and selling calls in recent years has helped, with call selling outpacing put buying. When an investor sells an option it adds liquidity to the market through the hedging behavior of the option dealer on the other side, which tends to keep a lid on volatility.
Also, when investors are buying puts (i.e. buying downside protection), this is less destabilizing for the market than when they are selling them as the dealer eventually has to buy the underlying asset when it falls, meaning that corrections are less likely to morph into full crashes.
So investors’ option preferences have ultimately help to keep the VIX in check.
(The VIX index is composed of options with an average of 1-month expiry, but other volatility maturities, all the way down to zero-day (0DTE), also have their vol near lows.)
But that’s unlikely to continue indefinitely.
The yield curve may have been steepening of late, but the flattening and heavy inversion are emblematic of tighter financial conditions that have yet to be fully felt across markets and the economy.
An inverted yield curve stores up trouble for later.
As the chart below shows, yield-curve flattenings typically precede rises in the VIX, as the tightening of financial conditions cumulatively bleeds into the economy, while also stressing balance sheets as credit and debt become more difficult to roll.
Possible exogenous proximate causes for vol catalysts are building (today’s producer prices which surprised to the upside; Thursday’s consumer prices; the conflict in the Middle East), but the remote cause is much more restrictive rates that have yet to fully make their mark.
Update(1425ET): US National Security Council Coordinator John Kirby confirmed that the United States will be sending the USS Dwight D. Eisenhower aircraft carrier to the Eastern Mediterranean, after it was already announced that the USS Gerald R. Ford would be deployed as part of "support" operations related to the Israel-Gaza conflict.
However, Kirby said that the Eisenhower will not be directly joining or escorting. Instead, the carrier will be in the region for availability if called upon. While in a press briefing Kirby tried to downplay the dual carrier deployment as somewhat routine or expected, they will certainly be on standby to potentially intervene if all hell continues breaking loose in the Middle East.
UPDATE: NSC Spokesperson John Kirby confirms the USS Dwight D Eisenhower carrier strike group will be headed to the Mediterranean but says it will not join the USS Gerald R. Ford strike group as a second strike group, but will be available in the area if needed. pic.twitter.com/kpaAxbgXfc
Kirby also confirmed that the US administration is in talks with Qatar as part of mediation efforts to free the hostages being held by Hamas. It's believed there are Americans among the captives in Gaza, which at this moment is being pounded by Israeli airstrikes. Kirby said the following:
"Obviously, we're in discussions not only with the Israelis, about what hostage recovery could look like, but with other allies and partners in the region. And there are some countries like Qatar that have open lines of communication with Hamas, so of course, we're casting the net wide as you would expect, we want to get these all the hostages back with their families, particularly the American hostages, no question about that."
Meanwhile...
MCCAUL: US SPECIAL FORCES, FBI SHOULD BE USED TO FREE HOSTAGES
* * *
Update(1304ET): The IDF has revised its earlier alert as follows, downplaying the severity of the northern infiltration alert:
IDF spokesperson: Further to the reports of intrusion from the Lebanese border into Israel's airspace, as of now fear of intrusion has been ruled out.
An updated headline from Times of Israel: IDF says no drone infiltration in north after scares send millions into shelters
An emergency war-time government has been formally announced in Israel:
Israel's Netanyahu forms unity government with ex-Defense Minister Gantzhttps://t.co/SyuTAWnDTM
Update(1250ET): Israeli emergency authorities, specifically the Israeli Homefront Command, has ordered residents in the far northern town of Ma'alot-Tarshiha to stay in their homes and lock their doors, warning of possible infiltration of militants from Lebanon. The alert stayed active for a brief period Wednesday. There are current official reports of an airspace breach from Lebanon, possibly drones sent by Hezbollah:
🚨A report was recieved regarding a suspected infiltration from Lebanon into Israeli airspace.
The current top headline at The Times of Israelreads:
Residents across north told to shelter as several aircraft appear to infiltrate Israel
On the other side of the border, Lebanese residents are scrambling for exit as fighting grows, and as evidence of damaged and burning homes and buildings begins to circulate:
Cross-border violence between Lebanon and Israel has escalated into a fourth day, pushing many Lebanese in southern towns to leave as Hezbollah and the Israeli military continue to trade fire.
Hezbollah said it fired precision missiles on an Israeli position across from the Lebanese town of Dharya on Wednesday, drawing retaliatory Israeli shelling that has left a number of houses damaged.
Tensions have been boiling along the Israeli-Lebanese border since Palestinian fighters launched a surprise multi-front assault on Saturday morning. The Israeli military has been heavily bombarding the Gaza Strip since, while Palestinian groups have continued to fire thousands of rockets towards Israel. At least 1,055 Palestinians and 1,200 Israelis have been killed.
Sirens are reportedly going off across northern Israel, amid unverified reports of major drone action:
Amid the escalating and highly dangerous (for the prospect of major, broader war) tit-for-tat Israel-Hezbollah escalation, both sides are vowing "decisive" response to deadly attacks.
News wires are now reporting that 22 Americans have been confirmed killed after the weekend Hamas terror rampage in southern Israel.
The US Embassy in Beirut is meanwhile refuting reports that it is evacuating, but is it a sign of things to come as the south Lebanon situation slides?
The U.S. Embassy in Beirut has not evacuated and is open and operating normally. Reports saying otherwise are false. For more information and travel advisories, visit our embassy website: https://t.co/QDEaP8dkZR
A below review of the last hours via journalist Joyce Karam. UPDATE:
Lebanon front, Israel- Hamas war
Drones, infiltration from Lebanon
Israel fired flares
Residents in N Israel to enter shelter
Gaza hospitals full capacity
Israel gets war cabinet
Evacuations from Israel
200,000 Gazans displaced
* * *
A worst-case scenario for Israel is emerging: the dreaded multi-front war involving Hezbollah, which is a much more formidable and better equipped paramilitary force than Hamas.
Israel Defense Forces (IDF) spokesman Lt. Col. Jonathan Conricus has confirmed Wednesday Israel fired rockets into southern Lebanon for at least a second straight day, striking Hezbollah positions after the Iran-backed group struck Israeli soldiers with anti-tank missiles fired from across the border.
Bloomberg has also confirmed in a note, "Israel said an anti-tank missile fired from Lebanon hit one of its military posts near the border, news that saw investors seek haven assets like US Treasuries." This as an Israeli ground invasion into the Gaza Strip, which is sure to be a bloody campaign, appears imminent after PM Netanyahu told Biden in a Tuesday phone call, "We have to go in. We can’t negotiate now."
Netanyahu also previously vowed in public statements that "what we will do to our enemies in the coming days will reverberate with them for generations."
Citing IDF spokesman Conricus further, Fox News underscores that Israeli is now "actively fighting a secondary front" in the north and is surging troops toward that end:
...the Israeli army shelled the Lebanese border town of Duhaira and the surrounding area where the missile attack came from. He also said Israel was actively fighting a secondary front along Israel’s northern border with Hezbollah in Lebanon, in addition to the counteroffensive the IDF is launching in the Gaza Strip.
"We have deployed tens of thousands of additional units along the northern border," Conricus said, including infantry, special forces, armored forces, artillery, air forces, and "additional assets including intelligence and logistics."
Cross-border shelling has occurred since Sunday, leading to multiple casualties among Hezbollah members and possibly other Islamic factions. Palestinian Islamic Jihad (PIJ) has also had a presence there and has taken casualties. The IDF said, "The message to Hezbollah is very clear: ‘If they try to attack, we are ready and we are vigilant on our border.’"
At least one "Israeli senior officer" has been killed at the northern border since the exchange of fire has increased. Another two Israeli troops have also been confirmed killed. Hezbollah has claimed to have wounded and killed a "large number" of Israeli troops.
Al Jazeera wrote Tuesday that "At least three Hezbollah members, an Israeli senior officer and two Palestinian fighters have been killed so far in the cross-border fighting."
And the IDF has confirmed: "In Southern Lebanon, Hezbollah have already fired anti-tank missiles and rockets at our positions and soldiers, fortunately without any significant casualties," Conricus said. "There has already been an attempt of Islamic jihad terrorists infiltrating into Israel. That attempt was successfully thwarted by the IDF, sadly at the cost of a senior [IDF] officer and two other soldiers."
Hezbollah has meanwhile issued a fresh statement saying it sees the United States as a direct accomplice in Israel's killing of Gazans, as the Israeli air war continues, with Palestinian deaths on Wednesday approaching 1,000 after four straight nights of unprecedented bombardment.
Hezbollah issues a statement saying the United States is a 'full partner' of Israeli 'aggression' on the Gaza Strip. Hezbollah also says that it holds the United States fully responsible for the airstrikes that are killing civilians in Gaza.
"At least 950 people, including at least 140 children, have been killed in the Gaza Strip by Israel's retaliatory airstrikes, according to the Gaza Health Ministry," CBS reports. 'The ministry said in a social media post that at least 5,000 more people in the blockaded Palestinian territory were wounded, most of them women and children."
Dangerously, and amid fears of a broader regional conflagration, Syria launched missiles on the Israeli-occupied Golan Heights, which didn't appear to do significant damage. However, Israel has reportedly released an emergency statement for settlements in the area: "Instructions have been given to residents of the Golan to stay near shelters." Israel says it is forming an emergency war-time government.
ISRAEL PLANS TO ANNOUNCE EMERGENCY GOVT TONIGHT: ISRAEL RADIO
Iran's Supreme Leaders has issued fresh threats, even while asserting it didn't have a direct hand in the Saturday Hamas terror rampage into Southern Israel:
The Zionist regime wants to justify the mass murder of the people in #Gaza by attempting to show itself as the victim.
Heads of the usurper regime should know that the response to these atrocities will be a heavier slap to their hideous faces.
Complicating matters and sending regional tensions soaring further at a moment of fresh Iran threats, a US carrier group will soon cross the Atlantic to park in waters off Israel as part of "support" operations. A second carrier could also be on its way:
The US might deploy a second aircraft carrier to the Eastern Mediterranean Sea to support Israel’s attack on Gaza, two Pentagon officials told POLITICO on Tuesday.
In the wake of the Hamas attack on southern Israel, the US announced that it was deploying the aircraft carrier USS Gerald R. Ford and its strike group, which arrived in the Eastern Mediterranean on Tuesday.
The Pentagon officials said that the aircraft carrier USS Dwight D. Eisenhower and its strike group, which includes several other warships, were already scheduled to leave Norfolk, Virginia, this week and that it might be ordered to also deploy near Israel. The Pentagon said that the Eisenhower could leave on Friday and arrive in the Eastern Mediterranean at the end of October.
A double aircraft carrier deployment would be a massive show of force in the region and could risk escalating the situation. Some Shia factions in Iraq have threatened attacks on US bases in the country if the US "intervenes" to support Israel against Hamas.
Hezbollah has issued a statement directly responding to this possibility, saying, "Sending aircraft carriers to the region with the aim of raising enemy morale reveals the weakness of the Zionist military machine."
More images have begun to emerge of the ratcheting conflict along the Israel-Lebanese border...
⚡️Consequences of the Israeli bombing on homes in the Lebanese town of Al-Dhahira this morning pic.twitter.com/Q6LbSIoIWS
In Israel, the death toll from the weekend attack has risen to 1,200 - according to new official statements. The Biden administration has also confirmed that at least 14 of these were US citizens.
Tl;dr: The Minutes echoed the hawkish tone of the statement and press conference: “a majority” of Fed officials saw one more rate increase “would likely be appropriate”.
The Bloomberg Intelligence US interest-rate strategy team’s NLP model of the minutes showed the Fed was somewhat more dovish than at the July meeting, with the exponential moving average declining back to levels experienced for the June FOMC gathering.
“Overall, we didn’t see many surprises in the minutes,” BI Chief Interest Rate Strategist Ira Jersey says.
“With the model suggesting the Fed is neutral, another pause at the November meeting seems most likely unless tomorrow’s CPI data is shockingly high.”
* * *
Since The FOMC meeting on September 20th, when the various Fed members dropped their now infamously hawkish SEP (dot plot), things have gone just a little bit turbo across asset-classes.
The dollar is marginally stronger... and everything else is lower in price (with bonds and gold leading the charge lower)...
Source: Bloomberg
The 'higher for longer' narrative gained ground since the hawkish statement with the STIRs curve up around 10bps...
Source: Bloomberg
Interestingly the long-end of the yield have risen dramatically in the weeks since the last FOMC meeting (and we suspect spooked Fed members). Over the same period, 2Y Yields are down 8bps (30Y +33bps)...
Source: Bloomberg
That's a dramatic steepening of the curve...
Source: Bloomberg
And finally, financial conditions have steepened notably in the weeks since the FOMC (though the last 2 days of flight to safety post-Israel has eased it back a little)...
Source: Bloomberg
Since the hawkish SEP, various Fed speakers have attempted - albeit very modestly - to tamp down the tone (because we suspect the rampant surge in long-end yields spooked some of them). Will the Minutes attempt to do the same with cherry-picked comments?
In fact, Powell was actually fairly balanced in his open remarks at the press conference, so we wouldn’t be surprised if the minutes had more statements of risk, fitting with the post-FOMC FedSpeak.
Arguably, the Minutes suggest there is more of a two-sided argument for policy action (pause vs more hikes - not hikes vs cuts) than the tone at the statement and press conference, while most participants continued to see upside risks to inflation.
Policy
A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted.
Many participants noted data volatility, potential data revisions as supporting case for proceeding carefully in determining extent of additional tightening.
Several participants commented that with policy rate at or near peak, decisions and communications should shift to how long rates stay restrictive versus how high they will rise.
Several participants noted balance sheet run off could continue for 'some time,' even after rate cuts begin.
Economy
Many participants saw continued downside risks to economic activity and upside risks to the unemployment rate.
Vast majority' of participants continue to judge the future path of the economy as 'highly uncertain'.
Many participants saw continued downside risks to economic activity and upside risks to the unemployment rate, those risks included longer lag effects from financial tightening, effect of union strikes, slowing global growth and continued weakness in commercial real estate.
Participants still saw below-trend growth, softer labour market as necessary to restoring economic balance.
Fed Staff
Fed staff economic forecast was stronger than July projection on resilient consumer and business spending.
Fed staff assumed GDP growth for rest of 2023 would be damped a bit by UAW strike, with effects unwound in 2024.
Yields on medium- and longer-term nominal Treasury securities rose more substantially, mainly reflecting higher term premiums and higher real yields.
China
In China, signs of strain in the property sector increased, and optimism about growth diminished further, on net, although broader markets, including global commodity markets, did not appear to show elevated concern about China-related risks.”
Forecasting is hard
Many noted data volatility and potential data revisions, or the difficulty of estimating the neutral policy rate, as supporting the case for proceeding carefully in determining the extent of additional policy firming that may be appropriate.
...And you think they don't watch stocks?
U.S. financial conditions tightened, with higher longer-term rates, lower equity prices, and a stronger dollar contributing roughly equally to the increase in various financial conditions indexes.
Doctors in Gaza have sent out an "SOS message" to the world, saying that after four straight nights of the biggest Israeli air campaign in years (or perhaps history), all civil services including electricity, fuel and water are suffering collapse.
Officials at Shifa Hospital in Gaza City have further claimed the Israelis are targeting first responders, as the death toll among Palestinians has soared passed 940, with at least 140 children among the dead. An estimated 263,000 Palestinians have been displaced thus far.
Israel has also revised its numbers, announcing the gruesome Hamas attack on Saturday into Sunday killed over 1,200 Israelis. Among these were at least 14 Americans and many other foreign citizens.
A Gaza health official announced Wednesday, "We are suffering … and the world is not moving a finger. This is an SOS to the whole world… you must help us," and further confirmed Gaza’s sole power plant has run out of fuel. Israel had already cut all external electricity and water supply sources.
Al Jazeera has cited its correspondent to say Gaza residents are "trapped in a cage" with nowhere to exit amid the unrelenting Israeli airstrikes:
Gaza has been completely locked up by Israel, and it was already in a deteriorating humanitarian condition for many years because of a long-lasting blockade.
But these five days have been extraordinary. A complete blockade, no power, no water, no food supply, no medical supply and on top of all of that, continuous bombardment.
All supplies are running out since there are no open emergency or humanitarian corridors for any kind of aid to enter the Gaza Strip. The people aretrapped in a cage with no access to help from the outside.
Reports of Palestinian medics killed...
Controversially, the Biden administration says it is in talks with the Egyptian government and regional officials to establish a humanitarian corridor through which Palestinian civilians, particularly American citizens and passport holders still stuck in the strip, could evacuate.
"President Joe Biden's administration began coordinating with other countries to set up a humanitarian passage through Egypt to evacuate Palestinians and citizens holding American nationality, Kan reported," regional sources say. "The Israeli channel did not provide further details regarding which Palestinians would be allowed to leave the heavily bombarded enclave, or where they would be settled upon reaching Egyptian territory."
Israel using white phosphorus shells in the Port of Gaza, densely populated with civilians pic.twitter.com/2HmGkILxLL
But skeptics of the humanitarian corridor plan have presented the following key questions:
How would Gazans actually make it to the 'humanitarian corridor' exit amid the constant bombs?
How can Egypt, itself suffering economically and with lack of infrastructure, hope to resettle all these refugees?
Would this be facilitating a massive demographic 'emptying out' of Gaza by encouraging the population to leave, instead of world powers pursuing a ceasefire deal?
On Tuesday, Israel bombed the lone border crossing between Gaza and Egypt. There are over 2 million Palestinians in the Gaza Strip packed into an area just a few square miles in size. The Rafah crossing is essentially the only possibility of escape for Gaza civilians. The Washington Post has noted, "the Gaza Strip is just over twice the size of Washington, D.C., but has triple the population" - at around 2.3 million people.
And now the population is dealing with a total blackout and lack of communications, also as an Israeli ground incursion is looming:
"The situation is exceptional and horrible on the ground", Ziad Shehadah, general manager from Humanitarian Care Malaysia, has told Al Jazeera as humanitarian workers attempt to deliver aid in Gaza.
"We are trying to provide them [people who fled from their houses to UNRWA schools] with food packs, pillows, blankets and so on, but we are facing two problems. First, most of the supplies are stored near the border, so it’s unreachable. The second point is that most of the products are about to finish," Shehadah said.
🇵🇸🇮🇱🚨‼️ BREAKING: Video analysis shows that they specifically target the foundation of houses with two JDAMs at once … to ensure their collaps.
While the US and West has focused on the horrific images and reporting to come out of the terror massacre of Israelis that happened over the weekend, Palestinian officials have accused the West of dehumanizing Gazan civilians.
This was on full display during the following heated exchange at the State Department on Tuesday:
After Biden cheered on Israel’s decimation of Gaza, The Grayzone’s @MaxBlumenthal challenged the State Dept on the calls for genocide and collective punishment by Israeli leaders, and pressed @StateDeptSpox to acknowledge that Israel has killed masses of children this week pic.twitter.com/hskUQOrcUj
The US has repeatedly asserted the right of Israel to defend itself against the heinous terror attacks of Hamas and Palestinian Islamic Jihad (PIJ), also at a moment hundreds of rockets continue to be fired from Gaza, but at the same time the majority of Palestinian victims from the Israeli bombing campaign are civilians, including women and children.
Israel has countered that Hamas hides among civilian residences and facilities, making 'collateral damage' all but impossible to avoid.
Footage captured in the streets of Gaza showcases the destruction caused by Israeli air strikes over the past days.
At least 950 Palestinians have been killed since Israel began launching air strikes on Gaza, after an attack on Israel by Palestinian fighters on Saturday. pic.twitter.com/YxihotPogj
Critics have said that Israel's military disregards civilians, and that recent statements of Israeli officials point to a genocide in progress. Israel has said it is Hamas terrorists committing genocide against Jews.
Sen. Tommy Tuberville (R-Ala.) responded to a social media post from a former CIA director that suggested he be removed "from the human race" by referring the comment to the U.S. Capitol Police.
This week, former CIA Director Michael Hayden responded to an X post that read: "Should Tommy Tuberville be removed from his committee? Yes or No?" Mr. Hayden responded by asking: "How about the human race?"
Some commentators on X, formerly Twitter, interpreted it as a call for the Alabama senator's assassination. Mr. Tuberville also said that he believed it was a call for violence, releasing a statement saying he referred the former CIA boss to the U.S. Capitol Police.
"This morning my office was made aware of a statement made by General Michael Hayden calling for a politically motivated assassination," the senator said.
"This statement is disgusting and it is repugnant to everything we believe in as Americans. Given General Hayden's long career in Washington, he must have known that, by making such a statement, he was committing a serious crime."
Former CIA Director Michael Hayden (Ret.) testifies during a hearing before the Senate Armed Services Committee on Capitol Hill in Washington on Aug. 4, 2015. (Alex Wong/Getty Images)
Elaborating, he wrote that Mr. Hayden's "efforts today to reinterpret what he said are only a tacit admission of guilt," according to the statement. "If we still have a nonpolitical justice system in this country, then General Hayden will be prosecuted to the fullest extent of the law. My office has reported this incident to the Capitol Police and I expect that they will once again do an excellent job protecting members of Congress and bringing criminals to justice."
Earlier in the day, Mr. Hayden responded to allegations that he wanted the assassination of Mr. Tuberville, who notably has maintained a blockade on U.S. military nominations.
"I was surprised to wake up this morning and discover that many MAGAnuts had lost their minds over my suggestion that 'Coach' Tuberville not be considered a member of the human race. I stand by that view," the former CIA chief wrote, referring to the senator's previous job as the head coach of multiple college football teams over the years. "I’m wishing you all a nice day even the intransigent Tommy Tuberville."
The senator's office has said that he will continue his blockade on Pentagon confirmations amid the conflict that erupted over the past weekend in Israel. U.S. State Department-designated terrorist group Hamas launched multiple surprise attacks on Israel, leaving hundreds of civilians dead and prompting a significant response from Jerusalem.
“The Pentagon clearly thinks forcing taxpayers to facilitate abortion is more important than confirming their top nominees without a vote,” a Tuberville spokesperson told NBC News. “They could end this situation today by dropping their illegal and immoral policy and get everyone confirmed rapidly, but they refuse.”
As of August, some 301 leadership positions in the Department of Defense were vacant, according to data obtained by the Washington Post. The senator has said that he will keep up the blockade because the Pentagon's abortion policy violates federal laws.
Meanwhile, Mr. Tuberville also criticized Senate Democrats for not coming to his defense or condemning the former CIA chief's remarks.
"I am a conservative and a Republican, but above all, I am an American who cares about this country and is deeply concerned for its future," his statement said. "I am not a politician, and when I came to Washington, I did not expect to be popular among the clown show; but I certainty did not expect to be lied about on the Senate floor and threatened by former government officials like Michael Hayden. Anyone who actually cares about our country must go on the record and condemn his reckless statements."
Mr. Hayden served as the CIA director from 2006 to 2009 under former Presidents George W. Bush and Barack Obama. In 2017, he became an analyst for CNN, often criticizing former President Donald Trump and has backed President Joe Biden's presidency and 2020 candidacy.
Several months ago, Mr. Hayden and several other retired military officials criticized Mr. Tuberville's hold on confirmations.
"Risking our military's planning and preparedness and our national security to make a political point is far out of bounds," the letter said. "The world is too dangerous to cede our leadership, which is why we urge Senator Tuberville to swiftly end his blockade and to respect our nation's service members and their families."
Update(1324ET): Wall Street Journal has pieced together a visual timeline of the Nova music festival massacre, which took place in a rural farmland area located just 3 miles from Gaza. There are eyewitness accounts saying it took the Israeli Army some five hours to reach the location, but by then, over 260 people had been killed, including many Americans and foreigners.
Festival attendees had been cut off from three sides by the invaders before anyone was even aware. They describe being "hunted by Hamas". Watch:
* * *
As Middle East Eye reported earlier, Civilian survivors of Hamas-led attacks on a music festival and kibbutzim close to Israel’s border fence with Gaza have been speaking to Hebrew media about their experiences.
At the Supernova festival, which took place in the woods next to Reim, a secular kibbutz in southern Israel, witnesses spoke of Hamas fighters on motorcycles opening fire on hundreds of people, who had already begun fleeing the party because of rocket fire launched from the besieged Gaza Strip.
Two-hundred and sixty people have been reported dead following the attack, which began at 6.30am on Saturday morning.
“Suddenly a van with terrorists arrived in front of us and they started shooting us,” one survivor told Haaretz. “They came from all directions, people went like sheep to the slaughter.”
The Israeli army took five hours to arrive on the scene, eyewitnesses said, as those present hid in the undergrowth and police officers present acted as security forces. Others said that dozens of people had hid in ditches and orchards, begging for help as Hamas fighters swept through the area.
Michal, an Israeli survivor, told Kan News that she ran into a small cabin, which had about 50 people in it. The Hamas fighters shot at those in the cabin, she said, and in a brief moment of quiet an Israeli policewoman present told the group that if they wanted to survive they should run.
But, Michal said, the route out was blocked and she was confronted by five Hamas pick-up trucks. She lay under a tank for six hours and then, “at some point, they threw a grenade at us”. Michal said she was hit by a bullet in the leg.
Eyewitness accounts of the Israeli music festival massacre near Gaza border.
“It was hell on earth,” another survivor told the Israeli broadcaster. Survivors have spoken of their shock at the response from the Israeli army. “They told us that the army was guarding us,” one festival-goer told Israel’s Channel 13 News, “we didn’t want to go home.”
The outlet reported that the young men and women “simply had no chance against dozens of armed terrorists, who were spread out along all the access roads to the party”.
One attendee, Omer, told Haaretz he had seen gunfire coming from all directions. People ran, looking to get into vehicles to escape the attack. Omer escaped with some others but found the road leading out littered with burnt-out cars. He said gunmen opened fire on his group: “It was a battlefield.”
Mor Bayder broke down in tears during a live TV interview, recalling the moment when she saw her slain Israeli grandmother in a video posted to the woman's Facebook page by the Hamas militant who killed her. https://t.co/zlz5Lv2utxpic.twitter.com/sALLQ0QmoZ
“It was mayhem,” another witness said. “They came from everywhere.” Michael Zrihan, the uncle of festival-goer Shahar Mantsur, told Haaretz that after he reached his nephew’s girlfriend over the phone, she told him Mantsur had “gotten a bullet in the neck, and she was hiding in the car”.
Two hours later, they spoke again. “She was screaming, ‘I’m being shot at, I don’t know what to do’, and we’ve lost contact since then.”
Following the attack, the area the festival took place in was strewn with bodies, burnt-out cars, bullets and ammunition casings. The Zaka rescue organization told Hebrew media that at least 250 bodies had been removed from the scene.
#Israel🇮🇱: A new video has emerged showing a #Hamas paraglider making a landing at the Nova festival on Saturday morning, just moments before the carnage began.
Elsewhere, Israel Hayom reported that the granddaughter of former Israeli national football team coach Shlomo Sharaf was killed in one of the attacks on communities close to Gaza. According to the family’s testimony, 22-year-old Mai Naim fled to a shelter in the area of the settlement of Be'eri, when Hamas fighters found and killed her.
The Hamas attack on the kibbutz began at 6am on Saturday, according to Israel’s Yedioth Ahronot newspaper. On the community’s WhatsApp group, messages relaying the murder of loved ones began to appear.
One kibbutz resident, born in Costa Rica, “wielded a machete” he had got in the Central American country, but said he knew it wouldn’t help him against the Hamas fighters, and that he had “never been scared like that” before.
Anna, a resident of the kibbutz, spoke to Israel Hayom as the attack was taking place: “My children were injured by gunfire from terrorists on a passing vehicle near the kibbutz. They sent us for medical treatment, and on the way, we saw wounded and dead. The kibbutz is under siege, the army has not yet arrived... In all my years in the Gaza periphery, I have never seen anything like this.”
Ella, a resident of another kibbutz, told Channel 12 News she had identified her father in pictures posted on the Telegram messaging app. “I think they kidnaped him to the Gaza Strip,” she said. “He wrote to me that they entered their home and kidnapped them.”
A girl from the music festival called her dad to ask for help when the Hamas terrorists attacked.
Hundreds of residents of the Be'eri kibbutz have now been evacuated to the Dead Sea area, where they are being housed in hotels. “I couldn’t believe we survived,” 15-year-old Gal Hagi told Ynet.
It wasn't quite as ugly as yesterday's 3Y auction, but it certainly wasn't pretty: moments ago the Treasury sold $35BN in a 10Y reopening (9Y-10M technically), which priced at another cycle high of 4.61%, above last month's 4.289%, and the highest since August 2007. The auction also tailed then 4.592% When Issued by 1.8bps, which was not only the biggest 10Y auction tail since April, but was the 8th consecutive auction without a stop through (last month's was on the screws).
The bid to cover printed at 2.50, down from 2.52 last month and the lowest since June.
The internals were concerning because while Indirects took down 60.3%, the lowest since Dec '22 (and clearly below the six-auction average of 66.5), with Directs awarded 18.7% (also the highest since last December), it was the 20.9% allotted to Dealers - the highest since October 2022 - that was a red alert, because with Dealers still unwilling to hold US paper, the Fed may have no choice but to activate the mechanism that allows Dealers to activate the mechanism that permits them to flip their TSY holdings right back to the Fed. A mechanism better known as QE.
Overall, a subpar, disappointing auction which sucked on both on the top line and also in the internals. No surprise that 10Y yields have jumped to session highs in the moments after the poor auction.
Update (1418ET): Following Steve Scalise's nomination for House Speaker (formal vote coming up later), Rep. Jim Jordan threw his support behind his colleague.
NEWS -- JIM JORDAN just offered to nominate Scalise on the House floor.
A House floor vote will follow sometime this afternoon.
* * *
Update (1205ET): House Republicans have successfully tabled a motion to change the rules on the speaker vote, after Rep. Steve Scalise (R-LA) allies rallied to defeat the measure.
According to Punchbowl News' Jake Sherman, "This puts SCALISE on the brink of the nomination to be House speaker."
BREAKING -- HOUSE REPUBLICANS have tabled a motion to change the rules on the speaker vote.
SCALISE's whip operation, which was in overdrive over the last few days trying to defeat the measure.
This puts SCALISE on the brink of the nomination to be House speaker.
After ousting Kevin McCarthy as Speaker, House Republicans on Wednesday kicked off the process of electing his replacement - which could take a while.
The front runners for the position are Reps. Jim Jordan (R-OH), Chair of the House Judiciary Committee, and Steve Scalise (R-LA), House Majority Leader.
Starting things off was a proposed amendment to the voting rules by Rep. Chip Roy (R-TX), which would require a nominee to secure 217 votes in the conference before the vote heads to the floor. The purpose of this is to avoid a repeat of the drama that occurred in January of this year, when McCarthy's election took more than a dozen ballots to win the speakership.
As for the Speakership vote, btw Reps Scalisse and Jordan “it could go either way,” Republicans tell press.
RIGHT NOW: They are voting to table a proposed rule change intro’d by Rep Chip Roy.
Catered lunch deliveries just rolled into the committee, indicating long day ahead 🥪 pic.twitter.com/WnabOD8w6W
As The Hill notes, getting 217 votes won't be an easy feat. Per Roy's proposal:
The process starts with a majority vote for a candidate.
If a candidate fails to get 217 votes, a Q&A session takes place, before a secret ballot vote.
If a candidate gets less than 217 votes again, the process repeats with a Q&A session and another secret ballot vote.
If that vote ends with a candidate getting less than 185 votes, the process restarts. A candidate with 217 votes is declared a winner. If a candidate gets 185 to 216 votes, there is a Q&A followed by a roll call vote.
If that ends with a candidate getting between 185 to 216 votes, there is another Q&A session and roll call vote.
If no candidate gets 217 votes in that vote the process restarts.
Otherwise, the candidate with 217 votes is declared a winner.
Republicans are now voting on whether to table Roy's proposal, with Rep. Steve Womack (R-AR) saying: "The amendment is flawed in many respects, personally I think it empowers a handful of people to be able to stop the movement of a Speaker’s election in its tracks."
If the motion to table is successful, the conference will move on to the secret ballot election for speaker. But if the motion to table fails, "then there would be a secondary amendment offered," according to Womack.
New York City was placed on "high alert" Tuesday by New York Mayor Eric Adams, who told law-abiding residents not to "underestimate" the threat from lone-wolf terrorists who have been radicalized by Hamas.
"We cannot let our guards down," said Adams.
The announcement comes as Israel prepares to turn parts of the Gaza Strip into "rubble" following the terrorist attack.
New Yorkers should not "underestimate" the threat from lone-wolf style terrorists who have been radicalized by Hamas online, warned New York Mayor Eric Adams, as the horror of the Israel-Palestine conflict continues to send shockwaves around the world.
Speaking at a press conference, the Democrat may have warned the city to be on guard, saying: "Don't underestimate lone wolves...people being radicalized online."
He added that messaging social media sites - where Hamas has shared horrific footage of Saturday's attack on Israel - can motivate people to carry out similar attacks.
Authorities in New York are paying "special attention" to communities of Hasidic Jews in the Big Apple while monitoring social media sites, he said. -Daily Express
Adams' comments come days after Hamas launched a surprise attack on Israel over the weekend, in which more than 1,800 people have been killed on both sides.
Making matters worse for NYC's Jewish population, which, outside of Israel is the largest in the world, has been disastrous border policies pushed by Democrats which have allowed a steady stream of illegal migrants to enter the country - most of whom are unvetted.
Meanwhile, Rep. Alexandria Ocasio-Cortez, D-N.Y.'s Democratic Socialists of America party led pro-Palestinian rallies in Times Square after the Hamas attack.
Perhaps the FBI will be forced to do its job instead of targeting enemies of the Democrat party?
The Tokenized Collateral Network enables the conversion of traditional assets into digital assets and makes way for faster and more secure on-chain settlements...
United States banking giant JPMorgan debuted its in-house blockchain-based tokenization application, the Tokenized Collateral Network (TCN), on Oct. 11, according to Bloomberg. TCN settled its first trade for asset management giant BlackRock.
The Tokenized Collateral Network is an application that allows investors to utilize assets as collateral. Using blockchain technology, investors can transfer collateral ownership without moving assets in underlying ledgers.
In its first public collateralized trade between JPMorgan and BlackRock, the TCN turned shares of one money market fund into digital tokens, which were then transferred to Barclays bank as security for an over-the-counter derivatives exchange between the two companies.
The first internal test of the TCN was conducted by JPMorgan in May 2022, with a pipeline of other clients and transactions now that TCN is live. The TCN was launched to streamline and scale the process of traditional settlements on a blockchain. The use of decentralized technology made the process faster, more secure and more efficient.
According to Tyrone Lobban, head of Onyx Digital Assets at JPMorgan, the new TCN platform unlocks capital and allows it to be used as collateral in ongoing transactions, boosting efficiency at scale. The platform enables the creation, transfer and settling of tokenized traditional assets. It also allows for the movement of collateral nearly instantly, unlike earlier methods.
The blockchain platform allows clients to access intraday liquidity through a secured repo transaction using tokenized collateral rather than depending on expensive unsecured credit lines. External clients who agree to the blockchain trade have their own node on which they can settle the trade and access other reports.
The U.S. banking giant has come a long way from its early days of criticizing the decentralized world and is currently actively involved in testing and launching various blockchain and crypto-centered services amid growing demand. The bank used a blockchain-based solution to settle trades with Indian banks in June.
Exxon Mobil shares have dropped as much as 5% after agreeing to buy Pioneer Natural Resources for $59.5 billion in an all-stock deal that Wall Street said offers not only cost-savings for Exxon ($2 billion per year over the next decade according to the company), but makes the company the new undisputed US shale king. While sellside research was supportive of the transaction, some such as Piper Sandler went so far as describing the deal as a long-term "home run."
BMO Capital Markets, Phillip Jungwirth (market perform; PT $118)
“Deal more than doubles Exxon’s Permian footprint” as Pioneer had 850,000 net acres of land in the basin, while Exxon previously held 570,000 net acres
The expanded Permian footprint, combined with Guyana assets is, “expected to drive most of future upstream growth”
Calls deal “slightly accretive, highly strategic”
Piper Sandler, Ryan Todd (overweight; PT $132)
“Strategically, we view the deal as a home run for XOM” as it answers the “only identifiable ‘question’ in its portfolio”
Says the acquisition firmly establishes Exxon among the most “dominant players across nearly every business segment”
Deal will “further increase pressure on its closest peers” including Chevron, to add to their portfolios
Says Exxon “already held the most attractive global upstream portfolio in the space longer-term”; and Pioneer deal “further cements that characterization given our highly favorable view of the PXD assets”
Sees Exxon accelerating development of Pioneer’s assets
Goldman Sachs, Neil Mehta (Neutral, PT $116, full note here available to pro subs):
"Deal rationale. Permian M&A has been a key point of investor focus as it relates to XOM more recently, with the topic in-focus on recent earnings calls and at our recent Houston Headquarter visit. Management expects the transaction to be immediately accretive to XOM's earnings per share, operating cash flow and free cash flow. XOM expects the transaction to immediately add $5 bn in annual free cash flow and with synergies, incremental FCF of $6 bn in the second full year post-closing, growing to >$10 bn by the end of the decade."
"The focus will be on XOM's plans around improving resource recovery. To the extent this can be replicated by other producers"
"We see potential for another leg of improvement for shale capital efficiency where investors are concerned on both the quality and duration of the resource. On consolidation, while recent public transactions have been at no/little premiums, we note that this transaction is ~18% above the undisturbed closing price of PXD on October 5."
JPMorgan, John Royall (overweight, PT$137, full note here available to pro subs)
"We think the deal makes strategic sense, as it grows XOM’s Permian footprint, which had been smaller than that of peers CVX and COP, and allows the company to high-grade and apply its own production techniques to PXD’s acreage, which has a strong overlap with XOM’s legacy acreage"
"XOM expects <$35/boe cost of supply for PXD’s assets and is targeting double-digit returns on the transaction."
"XOM expects to generate $5B of FCF from the deal in year 1, growing to $6B in year 2, and $10B by 2030. XOM described the deal as immediately accretive to EPS and FCF and discussed upside opportunity to returns of capital to shareholders"
Following last Thursday’s WSJ article suggesting late stage deal talks between XOM and PXD (see our initial takeaways here), XOM announced a $59.5B all stock merger that values PXD at $253 per share using the exchange ratio of 2.3234 shares of XOM (~18% premium to PXD’s unaffected price). Strategically, this looks to be a pivot towards a higher mix of short cycle barrels (~40%+ from 28% today) and the U.S. (~45% from 31% today), which looks to have positive implications for NAM levered service stocks. We are not surprised to see XOM use all stock for the transaction given the timing of the transaction at well above mid-cycle conditions (~$87/bbl Brent), as all-stock deals have often been a preferred method of de-risking the potential for oil price volatility for the buyer. In PXD’s case, the all-stock deal provides its investors with portfolio diversification and potentially higher resource recovery from XOM’s technology toolkit. Figure 1 shows our refreshed accretion/dilution math on the final deal values. We expect the transaction to be relatively neutral on FCF metrics, assuming $1B of total synergies and modestly accretive (-0.2x) on both P/E and EV/DACF in 2025. XOM has identified $1.0B of synergy capture in year 2 and $2B per annum over the next decade. Interestingly, XOM expects two-thirds of the synergy capture from higher recovery factors and one-third from capex/opex synergies (we assume a 50/50 split of the one-third between capex/opex in our analysis). Surprisingly, lower G&A was not a key driver of expected cost synergies.
XOM now expects ~1.3mmboepd of PF volumes in the Permian in 2023 (stand-alone: ~600kboepd), with its 2027 target now ~2mmboepd (standalone: ~800kboepd). This implies a >11% growth CAGR vs. PXD’s standalone long-term oil growth forecast of up to 5% per annum. XOM’s total Permian acreage would go from 570k net to 1.42mm net, and combined resource is 16B boe. XOM expects <$35/boe cost of supply for PXD’s assets and is targeting double-digit returns on the transaction. XOM expects to generate $5B of FCF from the deal in year 1, growing to $6B in year 2, and $10B by 2030. XOM described the deal as immediately accretive to EPS and FCF and discussed upside opportunity to returns of capital to shareholders. Overall, we think the deal makes strategic sense, as it grows XOM’s Permian footprint, which had been smaller than that of peers CVX and COP, and allows the company to high-grade and apply its own production techniques to PXD’s acreage, which has a strong overlap with XOM’s legacy acreage (Figure 2).
By Teeuwe Mevissen, Senior Macro Strategist at Rabobank
In the beginning of this millennium, when the US made the ill-fated decision to invade Iraq - based on flawed assumptions that Iraq would be in the possession of weapons of mass destruction - then secretary of defense, the late Donald Rumsfeld, called Western Europe “the old Europe”. The remark clearly touched a nerve in the Berlin and Paris capitals. But for the wrong reasons, Donald Rumsfeld was - and unfortunately still would be, right. Western Europe still is old Europe and maybe has become increasingly so, i.e., an even older Europe.
With progressive liberalism deeply engraved in the hearts and minds of the current political elites and those of the past decades in Western Europe, Europe finds itself in a place of dependency in many areas. Security, technology, raw materials and energy are just a few of these areas where any geopolitical actor that would be slightly serious in its strive for strategic autonomy, would want to be (largely) independent. But the previous German/French axis failed miserably in addressing these dependencies and actually raised them. Additionally, both countries (as did Brussels) failed in forming a coherent and future-proof European strategy to position itself in the modern era. A modern era, which, as we predicted already years ago, would be characterized as fragmented and disorderly. Realists would immediately point to the core realist concept of “anarchy”, which is surely the better way to describe the current world order than “rules-based” does. In the anarchic picture that realists hold regarding the international system, there is only one rule. And that is that you simply cannot have enough power.
While France was dreaming about a European leadership role in its pursuit of strategic autonomy, Germany was doubling down and continued fighting an already lost battle in trying to uphold the international rule based order. Both aspirations or maybe better described as dreams, were nothing but illusions. But still it very much seems that old Europe thinks that it still has the strategic autonomy to choose between war and (selling) cheese. It makes one wonder how long it will take old Europe to fully realize that the global picture has changed and that it is not the time to say cheese anymore but to show its teeth instead. But maybe we are seeing some kind of start with that since multipleprobes have been launched now by the EU regarding China.
At the same time the German car lobby unsurprisingly expressed its strong opposition to the recent probe into China’s EV sector; illustrating the complex political landscape that is still heavily influenced by short term business interests i.e. shareholder value. Indeed this might be one of the more important factors why financial markets are generally only mildly and very often just shortly influenced by geopolitical tensions. Business simply prefers business as usual and businesses often get their way. The many Western companies that (would) still love to continue to engage in business as usual practices in Russia are illustrative of this fact. It is however up to our elected governments – the governing class – to counter these forces of the ruling class in order to protect the legitimate interests of the middle/working class; which by the way is where both neo- and progressive liberalism failed. But it is unlikely that financial markets will continue to show a relatively high degree of indifference to the new world disorder that is increasingly unfolding right in front of our eyes. For instance the risk of higher energy prices for longer has become even more significant because of the current war in Israel.
And now Europe is faced with yet another conflict in its periphery. While this is guaranteed to negatively impact Europe from the outside, the war also increases tensions within old European states where pro- and anti Israelian protesters are reflecting just one of the many divisionary lines that currently plague the societies of old Europe. As if there aren’t already more than enough security issues that the EU has to deal with. Now those who think that old Europe has embarked on a ‘Zeitenwende’ - as current Bundeskanzler Scholtz so proudly proclaimed just after the war between Russia and Ukraine broke out - will turn out disappointed. The industrial defense base in old Europe has not received close the amount of orders it needs to be able to be able to safely invest in higher capacity in order to significantly increase much needed defence production. As such, old Europe continues to neglect the core task of any government being to ensure - and if necessary enforce - the protection of its citizens.
While we just made the point that it seems unlikely that markets will be able to neglect the current geopolitical realities, this is still exactly what we witnessed only yesterday. News that China finally seems to be ready to come up with sizable stimulus and dovish comments coming from the Fed was enough to fuel global markets with the necessary amount of optimism. Yesterday’s risk on sentiment even resulted in a temporary rise of Eurodollar above 1.06. Furthermore, US yields dropped sharply while stocks went up.
Today we see a similar picture showing that “the markets of course have no heart” as our well respected colleague Jane Foley put it today on Bloomberg’s Surveillance. Stocks rise further on the same news that resulted in similar moves yesterday: Chinese stimulus and Fed dovishness. It will clearly depend on the situation in the Middle-East whether this optimism will prove to be sustainable. As for now, Israel’s finger is not pointing straight to Iran yet but in case direct involvement from Iran would be proven, it is hard to see how Israel would not retaliate in some way. This would obviously mean a significant escalation of the conflict.
Despite inflation coming down notably from its 2022 highs in recent months thanks to gradual easing of supply chain disruptions and declining commodity prices, You will find more infographics at Statista">Statista's Felix Richter reports that the International Monetary Fund doesn’t expect consumer price increases to return to the desired levels of around 2 percent before 2025 in most advanced economies.
According to its latest World Economic Outlook, the IMF predicts global inflation to reach 6.9 percent this year, down from 8.7 percent in 2022. For 2024, the organization expects inflation to decline further to 5.8 percent, which is 0.6 percentage points higher than its July ’23 prediction, as core inflation remains stubbornly elevated.
“Near-term inflation expectations have risen and could contribute - along with tight labor markets - to core inflation pressures persisting and requiring higher policy rates than expected,” the IMF finds.
Expectations play a crucial role in managing inflation dynamics, as expectations of future inflation influence price- and wage-setting processes which then feed into current inflation rates. And while long-term inflation expectations have remained well-anchored near the goal of two percent, short-term expectations have risen significantly since 2022, contributing to sticker-than-expected core inflation.
As the following chart shows, the IMF expects the United States and the Euro area to follow similar trajectories in their fight against inflation.
While inflation is projected to remain severely elevated this and moderately elevated in 2024, it is then expected to converge towards the long-term target of two percent.
Update (0953ET): After celebrating the Hamas paraglider massacre at a rave in Israel which killed more than 260 people, BLM Chicago has deleted their tweet, and said that they had "sent out msgs that we aren’t proud of."
"We stand with Palestine & the people who will do what they must to live free," the statement continues.
Yesterday we sent out msgs that we aren’t proud of. We stand with Palestine & the people who will do what they must to live free. Our hearts are with, the grieving mothers, those rescuing babies from rubble, who are in danger of being wiped out completely🇵🇸♥️🖤💚
The Marxist organization then tweeted that they were praying for God to "please unharden Israels heart & help them to stop bombing children & taking over peoples homes & building fences."
Us too, God please unharden Israels heart & help them to stop bombing children & taking over peoples homes & building fences, god please help them see the beauty & peace that can come of ending genocidal behavior https://t.co/kVBkBjEGpw
And of course, the ADL says white supremacists are celebrating the attack on Israel.
White supremacist leaders are openly celebrating Hamas’s attack on Israel, cheering explicit depictions of violence against Israelis and promoting brutality against Jews worldwide. Read more from our Center on Extremism: https://t.co/ynZPhgKZs9
While this idiot suggests there are "Israeli flags" flying at 'white supremacy' rallies.
“When you go to a Black Lives Matter rally, you see Palestinian flags, when you go to a white supremacy rally, you see Israeli flags.” Speeches held at today’s pro-Palestine rally in Dearborn, Michigan pic.twitter.com/4GQk1h2RNq
This is going to get awkward for a lot of virtue-signalers...
Black Lives Matter formally siding with Hamas is going to complicate the scheduled race riots in 2024. Regime is going to have to cook something else up. Or maybe Jake Tapper etc will pretend none of this happened and do propaganda for BLM again. We’ll see!
At least two Black Lives Matters (BLM) groups have made statements on X, formerly known as Twitter, supporting Hamas - the terrorist group responsible for the deaths of over 1,200 Israelis (including women and babies).
The first BLM group (@blmgrassroots) issued a lengthy statement proclaiming, among other things, that "when a people has been subject to decades of apartheid and unimaginable violence, their resistance must not be condemned but understood as a desperate act of self-defense." The statementdid not include any criticism of Hamas or its tactics.
We used a screenshot of the tweet since we suspect this will be deleted very quickly.
This should not be a surprise since Melina Abdullah, the co-director of the group, has been accused of antisemitism, according to InfluenceWatch. But, if you thought that was a little distasteful, here is what BLM's Chicago affiliate tweeted.
Again, we used a screenshot of the tweet since we suspect this will be deleted very quickly.
It doesn't get much clearer than that - BLM 'standing with' paragliding terrorists who killed hundreds of innocent Israeli concertgoers (as the community note makes it clear) .
Ultimately, Elon Musk - who has repeatedly been accused of anti-semitism by the Anti-Defamation League, which in turn has frequently supported BLM in the past - made it very clear how he feels about their comment...
Presumably the following companies will be demanding their money back, all $99 billion of it, and will promptly cease any and all donations to BLM-affliliated groups and issue a statement of regret for their prior support...
Also, Jonathan Greenblatt and the Anti-Defamation League have been awkwardly quiet in their rebuke of BLM...
However, that may leave Mr.Greenblatt with a problem, given that Israel Hayom reported last year that a Fox News investigation found that the Anti-Defamation League (ADL)'s educational and "anti-bias" programs, which influence millions of American children, educators and officials, promote far-left and critical race theory (CRT) concepts including "white privilege" and "systemic racism," and promote groups such as the Women's March and BLM – despite those organizations or their leaders' virulent Jew-hating, Israel-hating and pro-Farrakhan positions.
This problem a longstanding.
Six years ago, ZOA documented that multiple ADL educational lesson plans: encouraged students to join BLM protests in Ferguson (the same protests that demanded ending Israel's existence, calling Israel an apartheid genocidal state); promoted BLM while ignoring the BLM/M4BL organizations' antisemitism and antisemitic platform; and repeated numerous BLM false claims.
ADL hired an outreach director who justified anti-Israel terrorism; said Jews need to "repent for Gaza's dead"; and, after Black extremists murdered innocent Jews in Jersey City, blamed Black antisemitism on "Jewish landlords, and pawnbrokers and small merchants" and on "systemic racism" against Blacks.
After Ilhan Omar tweeted, "Israel has hypnotized the world, may Allah awaken the people and help them see the evil doings of Israel.", and gave an insulting "non-apology," claiming she reacted to Israeli "oppression," Greenblatt praised Ilhan Omar, saying: "Hats off to Rep Omar for her honest apology & commitment to a more just world."
ADL opposed Israel's anti-BDS law banning BDS activists from entering Israel, which was upheld by Israel's courts. Furthermore, in 2018, ADL said that Israel should allow antisemitic boycott activist, SJP-BDS hate group president and terrorism supporter Lara Alqasem to enter Israel.
In September 2020, ADL co-signed a full-page New York Times advertisement promoting the antisemitic Israel-bashing BLM. ADL signed just four months after BLM burned, defaced and looted Los Angeles Jewish synagogues, schools and businesses; and despite BLM/M4BL falsely accusing Israel of genocide, ethnic cleansing, training US police to murder Blacks, etc.
We look forward to Greenblatt's appearance on CNBC to clear up any confusion.
Maybe Matt Walsh was on to something...
I said from the very beginning that BLM is a terrorist organization. Now they finally admit it. https://t.co/nJ1FYGCYmS
I take no great joy in pointing out that most of us knew that BLM was a corrupt, grifter, toxic organization long before they showed the world their true colors today...well..i take some joy…just not “great joy”…lets call it modest joy…
Presumably, Google and its ad-services will have already contacted all BLM-affiliated groups and banned them for 'policy violations' (which we assume includes, supporting baby-killing terrorists?)
And now we wait for this epic SNAFU by the deep state's favorite on-demand riot organization (whose activity tends to peak 3-6 months prior to presidential elections) to force the FBI to conclude that BLM is yet another white-supremacist terrorist organization...
A Reuters analysis has shown that China is likely to have saved around $10 billion on crude oil imports so far this year by importing sanctioned oil.
Venezuela, Iran, and Russia are all under sanctions and made up 25% of overall Chinese crude oil purchases in the first nine months of 2023.
Russia's discounted oil has been snapped up by China and India this year, overtaking imports of oil from Saudi Arabia.
China is likely to have saved $10 billion on crude oil imports so far this year as it has imported record volumes of cheaper oil from Russia, Iran, and Venezuela - all three under U.S. and Western sanctions, a Reuters analysis showed on Wednesday.
As international benchmark prices rose from July due to tightening supply, China has managed to save billions of U.S. dollars from its crude oil import bill, taking advantage of cheaper crude cargoes from the three oil exporters under sanctions.
China imported a record-high volume of 2.765 million barrels per day (bpd) of crude from Russia, Iran, and Venezuela between January and September, per the Reuters analysis of data by vessel flow trackers Kpler and Vortexa.
If China had bought those volumes from non-sanctioned oil exporters, it would have paid $10 billion more on its crude imports, according to Reuters’ calculations.
Those imports are estimated to have accounted for 25% of overall Chinese crude oil purchases in the first nine months of 2023.
Russia, Iran, and Venezuela made up around 21% of China’s crude oil imports in the same period of 2022, and just 12% in the same months of 2020, according to the Reuters analysis.
Despite higher oil prices in recent months and narrower discounts of Russian crudes to international benchmarks, Russia remains the single largest crude oil supplier to China.
During the first half of 2023, Chinese imports of Russian crude oil averaged 2.13 million bpd, which helped Russia oust its OPEC+ partner Saudi Arabia from the top spot as the single biggest supplier to the world’s top crude importer so far this year, per Financial Times estimates based on Chinese customs data.
China has also boosted imports of crude from Iran, amid increased competition with India for cheap Russian oil and a more lenient U.S. sanction enforcement on Iranian oil trade so far this year.
Finland and other Baltic countries are on high alert as a natural gas undersea pipeline leak was detected on Sunday from Finland to Estonia. EU officials already suspect the leak was caused by a 'deliberate act of destruction,' which fuels concerns about 'Nordstream 2.0' and Europe's energy security ahead of the Northern Hemisphere winter.
On Wednesday, NATO Secretary General Jens Stoltenberg met with EU officials about the damage sustained on the 77-kilometer (48-mile) Balticconnector pipeline, first detected by one of the two pipeline operators, Finland's Gasgrid, on Sunday morning.
Stoltenberg said he also plans to meet with defense ministers in Brussels and discuss more about the pipeline leak.
He said, "The important thing now is to establish what happened and how this could happen ... and if it is proven to be a deliberate attack on NATO critical infrastructure, then this will be serious but will also be met by a united and determined response from NATO."
"If it is proven to be a deliberate attack on NATO critical infrastructure... it will be met with a united and determined response"
On Tuesday, Finnish Prime Minister Petteri Orpo said the leak was triggered by an "external source" but failed to speculate on who caused it.
Earlier today, Dmitry Peskov, the spokesman for Russian President Putin, said the damaged pipeline is very "alarming news." According to the state media Tass News, Peskov said the Kremlin awaits further details. He added explosions that damaged the nearby Nord Stream pipeline one year ago have set "dangerous precedents" across the Baltic Sea.
Meanwhile, Estonian Navy Commander Juri Saska told public broadcaster ERR Tuesday night, "Something has dragged this pipe from one side to the other."
"If I try to paint a picture of what I've seen without showing it to you, then the pipe itself is covered with a concrete shell," Saska said. "And it looks just as if someone has torn it from the side and the concrete has broken off or peeled off from the damaged area."
Bloomberg quoted seismologist Jari Kortstrom at the University of Helsinki, who said Finland detected a small seismic event around the time the pipeline sustained damage.
To note, the pipeline sits above a heavily trafficked shipping lane in the Baltic Sea.
"While the rupture of the pipeline is not significant for the wider European gas market, it raises questions about the security of supply just as Europe goes into winter," Bloomberg said.
This comes several weeks after the first anniversary of the Nord Stream pipeline bombing. Journalist Seymour Hersh has said the US blew up the Russia-to-Germany natural gas pipeline as part of a covert operation under the guise of the BALTOPS 22 NATO exercise.
Below is my column in the New York Post on reports that Special Counsel Robert Hur has finally interviewed President Joe Biden on allegations that he removed and retained classified material going back to his time as a United States senator. The problem facing Hur could be what to do if he actually finds evidence of a crime.
Here is the column:
A neutron and Special Counsel Robert Hur walk into a bar and order two drinks.
When Hur asks how much they owe, the bartender responds, “come on, for you guys, you know there’s never a charge.”
Unfortunately, for the prosecutor tasked with investigating President Joe Biden, it may not prove a laughing matter.
There was no word of any grand jury or the issuance of subpoenas. His interview this week was the sign of life for a prosecutor who seemed headed for milk cartons.
I have long disagreed with the Justice Department policy as without foundation in the Constitution.
There is no question that the best course in dealing with a felonious president is to first remove the president from office through the impeachment process and then indict the former president in the wake of the Senate conviction.
However, even the Justice Department admitted in reaching this policy during the Clinton administration that “[n]either the text nor the history of the Constitution” is “dispositive” on this question.
It simply rendered an internal opinion against indictments of a sitting president as a matter of “considerations of constitutional structure.”
We still do not know whether fingerprints were taken off the documents found in various locations associated with the President.
Unlike Smith’s investigation, there have been no strategic leaks from Hur’s investigation.
On its face, the President claims that he had no knowledge of these documents appears dubious at best.
Some classified material reportedly goes back to Biden’s time as a senator material that he would have had to remove from a sensitive compartmented information facility or secure room on Capitol Hill.
More importantly, the documents from the Obama Administration were removed when Biden left as vice president.
Why were they divided and some documents were found in his garage and possibly his library?
If Hur found fingerprints that contradict Biden’s statements, he could face not just some of the same charges brought against Trump but also possible false statement or obstruction charges.
Notably, Biden used counsel to conduct searches and (as in the Trump case) additional classified materials were found after the Biden team said that they had finished their searches.
There are serious questions over whether, in allowing uncleared counsel to search through these documents, evidence may have been lost in how they were stored or appeared in locations like the garage.
Hur can bring charges against third parties, who would not be barred from indictment under the DOJ policy.
But what does Hur then do if he has evidence against the President himself?
He could wait to see if Biden does not run for reelection or loses in 2024.
He could ask for a reconsideration of the policy, which was poorly supported during the Clinton Administration as a rationale for blocking any indictment for perjury by the Office of Legal Counsel.
Absent such moves, the public may face the glaring contradiction of proton and neutron prosecutors where Smith pursues a former president with abandon while Hur is left with investigating with no possibility of an immediate charge.
It is the type of question that Attorney General Merrick Garland should be eager to answer. Indeed, it should have been clarified at the outset with the mandate given to Hur.
Garland, however, has maintained a position as a virtual spectator, disavowing any role in the ongoing investigations. He is neither neutron nor a proton. He is literally without mass.
So the question is whether Hur can get anything other than free drinks in Washington. The answer to that question may prove to be the best punchline of all.
Citigroup Inc. has been buying large volumes of physical aluminum and zinc on the London Metal Exchange, in a bold metal-financing trade that’s made it one of the biggest players in the market in recent months.
In the last few months, Citi requested delivery of about 100,000 tons of aluminum and 40,000 tons of zinc worth over $300 million, according to people familiar with the matter. The purchases are for Citi’s own trading book and are part of a metal financing play, said the people, who asked not to be identified discussing private information.
Citi has struck a rent agreement with at least one warehousing company to store metal in Taiwan’s coastal city of Kaohsiung, and intends to ship metal there from LME warehouses in Korea and Singapore, the people said, although they cautioned that its plans could still change. Citi may ultimately decide to deliver the metal back on to the LME, one of the people said.
Much if not most of these metals are of Russia origin. But that’s OK because the Biden administration placed no bans on Russian aluminum or zinc.
Financing plays were a dominant theme of the LME’s market in the years after the global financial crisis, when banks and traders bought up warehousing companies and engaged in battles to control and profit from a critical mass of inventory in a period known as the “warehouse wars.”
The trade has thrust Citi into the spotlight at a time of upheaval for some of its biggest rivals in metals trading. JPMorgan has pulled back from parts of its metals business after playing a central role in the nickel crisis on the LME last year,
Too Big to Fail
I would not give a rat’s ass what Citi did with its own money.
But as long as it is deemed too big to fail, it should not act like a hedge fund.
Banks Should Be Banks, Not Hedge Funds
Citi is now one of the biggest players is metals speculation.
In practice, I doubt this position is big enough to matter, but it’s another example of the willingness of banks to make speculative bets.
Silicon Valley Bank Speculation
Earlier this year, Silicon Valley Bank blew up by making speculative bets on interest rates.
The 2023 bank failures arose from what the banks did with uninsured deposits, not the fact that the deposits were uninsured.
Banks could easily have parked the money back at the Fed collecting generous amounts of free money because the Fed pays interest on reserves.
Instead, the banks made enormous bets that interest rates would not rise rapidly. When rates rose, paper losses soared, and the banks became capital impaired.
Tesla is officially thinking past electric vehicles and building a "bunkerlike" structure in Texas that it will use to house part of a new supercomputer that the company is calling "Dojo".
The supercomputer is being put together by the company "to help run the artificial intelligence software behind the self-driving capabilities in its vehicles," according to The Information.
The supercomputer could also eventually be used to sell cloud services to other companies, the report says. The project is is being called an "an audacious plan by Musk to take greater control over the technology it needs to run the AI software at the heart of its products".
Tesla CEO Elon Musk has already said he plans on investing "well over" $1 billion on the project, which is based on an in-house chip that was designed by Tesla. Currently, Tesla uses Nvidia AI chips to power its vehicles.
As the company moves more toward the "robotaxi" evolution that we were promised years ago at this point, it has obviously realized it is going to need significantly more computer power.
Glenn O’Donnell, a semiconductor researcher at technology research firm Forrester told The Information that it is tough for people in AI to get enough chips: ”Everybody who is trying to do this is complaining that they can’t get enough of these chips.”
A primary motivator for Tesla's development of its in-house AI chip, known as D1, is to decrease dependency on Nvidia, a sentiment echoed by other tech giants like AWS and Microsoft. Elon Musk admitted that Tesla would have stayed with Nvidia if the chipmaker could meet Tesla's growing demands. Going forward, the plan is to use both Nvidia and D1 chips for their Dojo supercomputer, the report says.
Taiwanese media revealed that Tesla recently doubled its D1 chip orders with Taiwan Semiconductor Manufacturing Co., which produces these chips for Tesla.
Obviously, as Dojo expands, Tesla will require more physical space. The firm's current strategy involves utilizing its Palo Alto data center to host seven ExaPods a term Tesla uses to describe a cluster of Dojo servers. Within a year, Tesla expects its Dojo computing capabilities to grow to an equivalent of 100 ExaPods, necessitating additional facilities.
Recall back in early September we wrote about how Morgan Stanley's Adam Jonas upgraded Tesla based almost solely on its forthcoming "Dojo" capabilities.
Jonas predicts that Tesla's Dojo supercomputer may add as much as $500 billion to the company’s market value as a result of faster adoption of Robotaxis and the company's network services. Jonas says the technology can open up "new addressable markets" in the same way AWS did for Amazon.
Dojo could put Tesla at “an asymmetric advantage” in a market potentially worth $10 trillion, he said.
"We believe that Dojo can add up to $500bn to Tesla's enterprise value, expressed through a faster adoption rate in Mobility (robotaxi) and Network Services (SaaS). The change drives our PT increase to $400 vs. $250 previously. We upgrade to Overweight and make Tesla our Top Pick," Jonas wrote in a 66 page note out in September.
Jonas added: "We believe Dojo can represent the next step-change in market perception of Tesla. Dojo emphasizes 3 of Tesla's core capabilities: 1) speed, 2) performance, and 3) cost. In the near term, we believe Dojo can accelerate the development and monetization of Tesla's software and services business. Longer term, we see scope for Dojo to provide avenues for Tesla's software and hardware capabilities to extend well beyond the auto industry. If Dojo can help make cars 'see' and 'react,' what other markets could open up? Think of any device at the edge with a camera that makes real-time decisions based on its visual field."
And so now, all eyes are on the company's "bunker" in Austin...
