Today’s News 29th January 2024

• The CDC Covered Up The Vaccine's Risks
  The CDC Covered Up The Vaccine’s Risks

  Authored by Jeffrey Tucker via The Epoch Times,

  By the Spring of 2021, Americans were inundated by a cacophony of demands that everyone immediately line up for the shot that would supposedly end the pandemic.

  The screams of certainty were deafening.

  It was everywhere you turned: TV, radio, newspaper, social media, and medical authorities at all levels.

  Several features of this campaign were suspicious.

  

   

  People had begun to notice that the virus itself was nowhere near as deadly as had been claimed. Yes people got sick but, as with the flu, most everyone shook it off in time. Why get vaccinated for a pathogen against which your immunity can be earned the old-fashioned way? It never made sense that this was somehow essential for the whole population.

   

  Then there was the question of whether it was going to be effective. Coronaviruses are fast-mutating, and the whole history of vaccines suggests they are not capable of keeping up. It’s even worse: some specialists at the time said that mass vaccination against one variant drives the virus to mutate even more, while disabling the capacity of the immune system to resist. That suspicion was confirmed true by the time the year was up.

  Then there is the pressing question of safety. It was a new technology and hence an experiment. Absolutely no regular member of the public knew precisely what was in it yet. And yet everyone was forced to line up, roll up their sleeves, and accept it. No drug in the history of the FDA had been rolled out this way.

  As for the claim that the shots are “safe,” that was never believable. To say “we don’t know” would have been the only honest statement, simply because there was no record of experience with these vaccines. You cannot declare something to be safe when there is no actual evidence or possibility of evidence within the time frame. It might be or it might not be. That should have been unbearably obvious.

  Even at this point in the trajectory, the massive vaccine push had already overreached. Many people of intelligence knew this. There was clearly something odd about how all major pundits, as well as movie stars and social-media influencers, hectored the public. Many of these same people only six months earlier were telling the public to be skeptical of the vaccine because it was being pushed by the Trump administration.

  Now at this late date, we are starting to get details about what was going on behind the scenes.

  It turns out that the CDC started to see evidence of problems in the spring of 2021, namely the risk of myocarditis.

  What did they do with that evidence? They buried it.

  The Epoch Times has unearthed a startling email sent by the CDC to either Moderna or Pfizer letting them know that an CDC alert was likely coming.

  “The pros and cons of an official HAN are what the main discussion are right now,” Dr. Sara Oliver, the official, wrote.

  “I think it’s likely to be a HAN since that is CDC’s primary method of communications to clinicians and public health departments, but people don’t want to appear alarmist either.”

  Despite the warning and the heads-up that this was going to be communicated with the public, the action alert was never sent. This was from May 25, 2021. During the same week, the CDC had previously told vaccine makers: “Wanted to make sure you were aware before anything was made public.”

  This close collaboration between government regulators and agencies and the private manufacturers is suspicious enough. But to fail to alert the public of known risks is gravely irresponsible. We are talking here about people’s lives and health. They are supposed to be guardians of both but here we see the very opposite happening. They put marketing the shot above the health of the population.

  At the time, something felt very wrong about the whole vaccination campaign. In the United States, we don’t do things simply because someone in authority says we should. We are skeptical of such invasions of our bodily integrity in the absence of transparency. When intimidation replaces rationality, there is something strange going on.

  Many people got the shot anyway because the propaganda was so overwhelming. Some people went along despite their best instincts simply because they became exhausted from resisting. Even by the spring of 2021, mandates in business and government were starting to appear. Over time these grew more intense as the Biden administration tried every possible means to force the shots on the military, health care, transportation, and every business in America. The latter mandates were shot down by the Supreme Court but many stayed.

  It became so insane that city governments like New York, Boston, and New Orleans locked down their whole towns to the vaccinated only. The unvaccinated could not go to theaters, libraries, restaurants, bars, or other indoor venues. They were blamed for prolonging the pandemic and declared generally unclean. All of this happened by the end of the year.

  The health risks of the shot were known by the government and the vaccine makers but never revealed to the public. And why? It’s pretty simple. They knew that a truth-telling announcement would collapse demand for the shot. It was already sketchy and faltering so they decided to create the appearance of a united front. This was not only in the United States but in the UK and Europe too.

  Clearly, a handful of pharmaceutical companies had by then captured control of myriad government agencies around the world, even the World Health Organization itself. It was so bad that health agencies shelved their entire mission in order to operate as marketing agencies for a particular technology. It was so intense that agencies buried even scary and known risks. We know this for sure now, thanks to sleuthing reporting.

  How precisely this happened cries out for explanation. More strangely, most of us didn’t know that this had happened or was happening.

  As it turns out, you can explain nearly everything that happened during the darkest months and years of our lives based on the one factor of panicking the population in order to maximize vaccine acceptance throughout the whole population. That was the reason for the prolongation panic, the disease-avoidance theater, the screaming media, the nutty mandates and restrictions, and all the rest. It was all designed to prepare the people for the shot.

  It took me and others a very long time to see this. In retrospect, it all makes perfect sense what was going on. But how precisely this came to be—how democracies based on the idea of popular control of government became marketing agencies for Big Pharma—deserves years of investigation and deep reflections on the structural problems with government.

  Meanwhile, we now have a health crisis to deal with as a consequence, not only of ill-health from lockdowns and missed diagnostics but also from the shots themselves. We don’t know the scale of the problem because the CDC has not been transparent about that either.

  Ladies and gentlemen, this is your government. Is it any wonder that trust today is at rock bottom?

  Tyler Durden
  Sun, 01/28/2024 – 23:20

• December Border Surge Sets Alarming Record: 371,000 Illegal Crossings
  December Border Surge Sets Alarming Record: 371,000 Illegal Crossings

  Authored by Tom Ozimek via The Epoch Times (emphasis ours),

  A record-breaking number of illegal immigrants crossed the U.S.-Mexico border last month, according to data released Friday by U.S. Customs and Border Protection (CBP), as the border crisis continues to rage with no end in sight.

  

  A stunning 371,036 encounters were caught entering the United States illegally in December, the data show, breaking the previous record of 341,392 set in August 2023.

  Encounters along the southwest land border also set a new record, hitting 302,034, per other data released by CBP on Jan. 26

  The record-shattering numbers come ahead of House Republican efforts to impeach Department of Homeland Security (DHS) Secretary Alejandro Mayorkas for his handling of the illegal immigration crisis.

  Rep. Mark Green (R-Tenn.) is expected to introduce articles of impeachment against Mr. Mayorkas next week.

  “Secretary Mayorkas has outdone himself yet again—never have we seen such catastrophic numbers, even with historically high encounter numbers on his watch,” Mr. Green said in a statement. “December’s numbers serve as more undeniable proof that Secretary Mayorkas must be impeached.”

  Intentional ‘Disaster’?

  Mr. Green said that not only are the record high numbers a “disaster,” but he alleged that they are intentional.

  “This staggering number of encounters at our borders only happens by design and a willful refusal to comply with the laws passed by Congress,” Mr. Green said, accusing the DHS chief of having “intentionally opened our borders.”

  Mr. Green, like many of his fellow Republicans, has accused the Biden administration of relaxing border policies and flinging open the door to a sharp influx of illegal aliens.

  Biden administration officials have rejected such allegations, claiming they’re doing all they can to stem the influx and variously blaming factors like seasonal fluctuations, a broken immigration system—even climate change.

  Voters, meanwhile, have grown increasingly concerned about the border crisis, with a recent poll showing that immigration has become the top concern, shunting inflation into second spot.

  “They are very concerned about immigration, inflation, and crime, and that’s why many of them are saying they want a new president,” Mark Penn, co-director of the Harvard CAPS / Harris poll and Stagwell chairman and CEO, said in a Jan. 22 statement.

  

  ‘Give Me the Money’

  President Joe Biden, whose approval on immigration sank to 35 percent in the poll, recently admitted that the border is not secure—although he denied his policies have had anything to do with it.

  Mr. Mayorkas recently pinned the blame for the influx on Congress, or rather its failure to make legislative changes and provide more money for border security.

  President Biden, too, has seen funding as key, most recently when he responded to a reporter asking him if he believed the border was secure.

  “No, it’s not,” President Biden replied. “I haven’t believed it for the last 10 years. And I’ve said it for the last 10 years … give me the money.”

  

  Former President Donald Trump, under whose tenure (and tough border policies) the number of illegal crossings fell significantly, has been a sharp critic of his successor.

  “When I was President, we had the most secure Border in History,” he wrote in a Jan. 25 statement. “Joe Biden has surrendered our Border and is aiding and abetting a massive Invasion of millions of Illegal Migrants into the United States.”

  The former president accused President Biden of “fighting to tie the hands” of Texas Gov. Greg Abbott in his efforts to bolster border security on his own, without federal help.

  Texas is embroiled in a high-profile conflict with federal border protection agencies over the use of concertina wire along the southern border.

  The Biden administration sued Texas over the razor wire, and the U.S. Supreme Court ruled against Mr. Abbott on Jan. 22 and allowed federal agents to cut Texas’ concertina wire barriers.

  Unphased by the court order and the Biden administration’s criticism, Mr. Abbott said on Thursday that he would add more razor wire “to make sure we are doing even more to secure the border.”

  

  ‘Invasion Clause’

  Declaring that the influx of illegal immigrants into his states amounts to an “invasion” that the Biden administration has failed to repel, Mr. Abbott on Jan. 24 invoked what’s been dubbed the invasion clause of the U.S. Constitution.

  “The failure of the Biden Administration to fulfill the duties imposed by Article IV, § 4 has triggered Article I, § 10, Clause 3, which reserves to this State the right of self-defense,” Mr. Abbott said in a statement.

  “For these reasons, I have already declared an invasion under Article I, § 10, Clause 3 to invoke Texas’s constitutional authority to defend and protect itself,” he said.

  “That authority is the supreme law of the land and supersedes any federal statutes to the contrary,” the Texas governor added.

  

  President Trump expressed support for Mr. Abbott’s move and called on states to deploy National Guard troops to support Texas in its efforts to bolster border security.

  “We encourage all willing states to deploy their guards to Texas to prevent the entry of illegals and to remove them back across the border,” President Trump said in a Jan. 25 statement.

  President Trump further charged that President Biden was trying to hinder Mr. Abbott in his efforts to protect his state from the “onslaught” and, in fact, is working to keep the influx going “unchecked.”

  The White House did not respond to a request for comment.

  Tyler Durden
  Sun, 01/28/2024 – 22:45

• NPR’s New CEO Under Fire Over Social Media Postings
  NPR’s New CEO Under Fire Over Social Media Postings

  Authored by Jonathan Turley,

  The new CEO for National Public Radio (NPR) has become instant news over social media postings that she deleted before the recent announcement of her selection. Katherine Maher is the former CEO of Wikipedia and sought to remove controversial postings on subjects ranging from looters to Trump.

  

  Shannon Thaler at the New York Post reassembled Maher’s deleted postings including a 2018 declaration that “Donald Trump is a racist” and a variety of race-based commentary. That included a statement that appeared to excuse looting:

  

  She is also quoted for saying that “white silence is complicity.” She has described her own “hysteric white woman voice.” She further stated: “I was taught to do it. I’ve done it. It’s a disturbing recognition. While I don’t recall ever using it to deliberately expose another person to immediate physical harm on my own cognizance, it’s not impossible. That is whiteness.”

  She further stated “I grew up feeling superior (hah, how white of me) because I was from New England and my part of the country didn’t have slaves, or so I’d been taught.”

  The concern is that Maher will further the advocacy journalism at NPR in framing the news to advance social and political agendas. NPR employees have already objected to efforts to maintain a neutral tone in reporting and declared “civility is a weapon wielded by the powerful.” The most interesting question is how NPR will implement its controversial policy on allowing journalists to join in protests.

  NPR declared that it would allow employees to participate in political protests when the editors believe the causes advance the “freedom and dignity of human beings.”

  The rule itself shows how impressionistic and unprofessional media has become in the woke era. NPR does not try to define what causes constitute advocacy for the “freedom and dignity of human beings.” How about climate change and environmental protection? Would it be prohibited to protest for a forest but okay if it is framed as “environmental justice”?

  NPR seems to intentionally keep such questions vague while only citing such good causes as Black Lives Matter and gay rights:

  “Is it OK to march in a demonstration and say, ‘Black lives matter’? What about a Pride parade? In theory, the answer today is, “Yes.” But in practice, NPR journalists will have to discuss specific decisions with their bosses, who in turn will have to ask a lot of questions.”

  So the editors will have the power to choose between acceptable and unacceptable causes.

  Maher will now play a role in determining what causes advance “human dignity” that justifies reporters crossing the line to join the protests. Given her own past advocacy, NPR may have found the perfect adjudicator for advocacy journalists.

  Tyler Durden
  Sun, 01/28/2024 – 22:10

• "High Crimes And Misdemeanors": House Unveils Impeachment Articles Against Mayorkas Over Border Quagmire
  “High Crimes And Misdemeanors”: House Unveils Impeachment Articles Against Mayorkas Over Border Quagmire

  House Republicans on Sunday released articles of impeachment against Homeland Security Secretary Alejandro Mayorkas, alleging he has committed “high crimes and misdemeanors” in his mishandling of the southern US border.

  

  According to the first article, Mayorkas is accused of:

  • Willful and Systemic Refusal to Comply with Federal Immigration Laws: This includes allegations of repeated violations of immigration and border security laws, contributing to illegal entries and compromising national security.
  • Failure to Comply with Detention Mandates: Accusations of implementing catch and release schemes, contrary to specific detention requirements in the Immigration and Nationality Act.
  • Exceeding Parole Authority: Claims that Mayorkas paroled aliens en masse, violating the case-by-case basis required by law.
  • Misrepresentation and False Statements to Congress: Allegations of making false claims about the security and control of the border.
  • Obstruction of Lawful Oversight: Accusations of failing to comply with congressional subpoenas and hindering investigations by the DHS Office of Inspector General.
  • Abandonment of Effective Border Security Initiatives: Claims that he neglected established border security measures without adequate alternatives, leading to increased illegal entries.
  • Failure to Enforce Immigration Laws and Control the Border: Accusations of failing to control illegal entries and the influx of unaccompanied alien children.
  • Diversion of Border Patrol Resources: Allegations that his policies led to the diversion of Border Patrol agents from their primary duties.
  • Increase in Encounters with Aliens on the Terrorist Watchlist: Claims of a significant increase in encounters with potentially dangerous individuals during his tenure.
  • General Neglect of Duty and Public Trust: Broad accusations of neglecting statutory duties related to immigration and border control.

  Tuesday on our Homeland Security Committee we are voting to impeach Secretary Mayorkas.

  Here are the facts about the Articles of Impeachment. pic.twitter.com/eR38GeTwLn

  — Rep. Marjorie Taylor Greene🇺🇸 (@RepMTG) January 28, 2024

  As Just the News reports, a markup of the articles is scheduled for Tuesday, following a multi-phase, year-long investigation into Mayorkas.

  

  “Congress has a duty to see that the executive branch implements and enforces the laws we have passed,” said House Homeland Security Committee Chairman Mark Green (R-TN), the Washington Post reports. “Yet Secretary Mayorkas has repeatedly refused to do so.”

  Read the first article below:

  Tyler Durden
  Sun, 01/28/2024 – 21:35

• Speaker Johnson Is Right: Stop The Fake Border Bill
  Speaker Johnson Is Right: Stop The Fake Border Bill

  Authored by Newt Gingrich via RealClear Wire,

  Speaker Mike Johnson just sent out an email which captures exactly what is going on in the U.S. Senate today.

  

  He wrote:

  “They want you to believe that the deal they’re offering to the American people is a ‘compromise.’ 

  “[Sen. Chuck] Schumer wants you to sign off on:

  “150,000 illegal immigrants entering the country uninhibited per month. (That’s nearly the population of my hometown in Louisiana)

  “Work permits for EVERY illegal alien who’s been released into the country.

  And they want YOU to pay for their legal fees.

  “My answer is NO. Absolutely not.”

  As I mentioned on my podcast this week, I am proud of Speaker Johnson’s firm position, but he is going to need a lot of grassroots support to convince Senate Republicans not to go along with this border sell out.

  Americans want a clean, simple bill that controls the border and stops illegal immigrants from entering the United States.

  Americans strongly favor legal immigration, but they are worried about the enormous flood of illegal immigrants from more than 160 countries – including people on the terrorist watch list and criminals from dangerous cartels.

  Closing Brooklyn’s James Madison High School so American students had to learn from home while illegal immigrants stayed in the school became a symbol of misplaced values and destructive Biden administration policies.

  In fact, the American people strongly support another bill, the Secure the Border Act of 2023 – which House Republicans passed last year. At America’s New Majority Project, we found enormous support for key provisions in that bill which address the amnesty and parole systems that are currently being abused.

  The American people are increasingly concerned about Joe Biden’s illegal immigration crisis. The issue was the No. 1 concern for Republican caucus goers in Iowa – surpassing even the economy.

  Further, in a brand-new poll by America’s New Majority Project, we found 77 percent of Americans reject non-citizens voting. In fact, 60 percent strongly oppose non-citizens voting.

  The voting issue is a real election game changer. A Republican who is against non-citizens voting defeats a Democrat who favors non-citizens voting 56 percent to 29 percent (15 percent were undecided).

  Finally, Americans do not want to open up the welfare system to illegal immigrants. In yet another America’s New Majority Project poll, we found only 29 percent support letting illegal immigrants receive “Medicaid, food stamps, and other help meant for people with low incomes.” Sixty-four percent oppose this (and 47 percent oppose it strongly).

  These most recent findings by America’s New Majority Project reaffirm the results of other polls on immigration and border security.

  Consider that according to Scott Rasmussen 73 percent of Americans believe illegal immigration is bad for America (similarly, 71 percent believe legal immigration is good for our country).

  In a poll by the Trafalger Group, only 14 percent favor amnesty and citizenship for people who entered the country illegally or are seeking asylum (among Hispanics that drops to 3 percent).

  The confusion among Senate Republicans is painful.

  Many Senate Republicans start out seeking an agreement with Schumer and the Democrats. Such an agreement will be opposed by the vast majority of Americans.

  Both President Biden and the congressional Democrats are committed to accepting illegal immigrants, finding a way to give them work permits, and ultimately letting them vote – even if they are not citizens. Some Democratic controlled cities are already doing this.

  The Democrats’ goal is to make the admission of illegal immigrants a routine event. That will require paying their big city allies billions of dollars for taking care of the millions of Biden’s illegal immigrants coming to their neighborhoods. Then they will need extra money to provide health care for illegal immigrants (as California Gov. Gavin Newsom has already promised to do). Then they will have to provide work permits because otherwise we will have millions of people entering an underground economy with no legal means of earning a living. Finally, we will have to pay to educate millions of young people who have no knowledge of American culture.

  The Democrat plan is designed to make illegality routine in an effort to get political power. But it will ultimately extend the reach of dangerous cartels, expand drug distribution, and increase local crime.

  The American people want illegal immigration stopped – not made routine. They want the border controlled – not opened.

  The left ultimately wants no borders, with no requirements for citizenship or expectations of work (note the disastrous proposal Congress is working on to reduce work requirements for the child tax credit).

  It is impossible for House Republicans to compromise in good faith with values and goals that are directly opposed to the wishes of the American people.

  Let Speaker Johnson and House Republicans know that you stand with them in opposing a phony border bill.

  Let Republican Senators know that the details matter, and a bill that regularizes illegal immigration is unacceptable.

  This could be a decisive turning point in the crisis at the border – and the crises in our cities.

  The question is who will win – the American people or the politicians.

  You can help win this fight.

  For more commentary from Newt Gingrich, visit Gingrich360.com.

  Tyler Durden
  Sun, 01/28/2024 – 21:00

• "Dangerous Game": Chevron Warns California That Anti-Petrol Policies Could Result In Gas Price Spikes, Shortages
  “Dangerous Game”: Chevron Warns California That Anti-Petrol Policies Could Result In Gas Price Spikes, Shortages

  Chevron is warning the state of California that its climate policies have consequences: namely, that the price of gas is going to continue to rise. 

  Calling the state’s policies a “dangerous game”, it was reported by Bloomberg this week that Chevron is warning the state of potential gasoline price spikes and shortages as a result of policies that discourage petrol production. 

  In the last quarter of 2023, drivers in California faced an average gasoline price of $4.94 per gallon, surpassing the national average by approximately $1.72, marking the highest recorded quarterly difference, as per Bloomberg’s compiled data.

  Head of Chevron’s U.S. refining, Andy Walz, said this week that the spike is partly attributed to California’s stringent low-carbon fuel regulations, which prompt refineries to shift from petroleum to renewable diesel production. This transition is curbing gasoline availability and causing prices to rise, he told Bloomberg. 

  “They knew it was going to happen when they wrote the legislation. The problem is the consumer is starting to realize it. It’s becoming painful. The way politicians dealt with it was ‘let’s blame the oil companies,” Walz said. 

  

  But – as expected – Governor Gavin Newsom’s office responded with a vague statement blaming oil producers that was barely one brain cell above throwing paint on the Mona Lisa: “Big Oil has been ripping off consumers for decades and lying to protect their profits.”

  And so, the adversarial tone naturally drives producers from the state: “If they cap the upside when conditions are good it’s going to make it really challenging to want to put our money there. I cannot compete internally for big capital investments. It doesn’t stack up. I’d rather spend money at our refinery in Mississippi,” Walz said. 

  As the report notes, Chevron’s relationship with California has become increasingly strained, with stringent regulations leading to a $4 billion asset write-down, mostly in the state.

  While Governor Newsom accuses the oil industry of price gouging and climate change misinformation, leading to investigations and legal actions, Chevron simply says it is responding to demand and shouldn’t be penalized.

  A new proposal to cap refining margins in California further complicates things for the refiner Chevron’s, with its two refineries representing 30% of the state’s capacity. 

  The policies are forcing refiners to spots where they “are making decisions that are kind of putting us on a pathway where there could be a reliability problem,” Walz said. “You may not have the supply of gasoline if things don’t turn out the way the government wants them to. It’s a dangerous game.”

  Tyler Durden
  Sun, 01/28/2024 – 20:25

• 83 Million!?
  83 Million!?

  Authored by Victor Davis Hanson,

  Donald Trump in furor stormed out of a New York courtroom for a while, in the defamation suit brought by author and dating/boyfriend/sex-advice columnist E. Jean Carroll.

  It was just settled against Trump for $83.3 million!

  

  The Carroll suit was largely subsidized by Reid Hoffman the billionaire capitalist, and mega-donor to the Democratic Party and leftwing causes.

  The subtext of Trump’s rage, aside from the outrageous monetary size of the defamation ruling, is that he was facing—and angered – a leftwing claimant, a quite hostile leftwing judge, and a leftwing New York jury.

  The civil suit serves as a mere preview of four additional leftwing criminal prosecutions, leftwing judges, and leftwing juries to come – all on charges that would never had been filed if Trump either had not run for president or been a liberal progressive.

  Yet here we are.

  The E. Jean Carroll case is the most baffling of all five.

  She, the alleged victim, did not remember even the year in which the purported sexual assault took place, nearly three decades ago. Observers have pointed out dozens of inconsistencies in her story.

  It was never clear what were the preliminaries that supposedly (Trump denies meeting her) led both, allegedly, willingly to retreat together to a department store dressing room, where during normal business hours the alleged violence took place.

  Moreover, the sexual assault complaint came forward decades post facto—and only after Trump was running for and then president.

  Carroll eventually sued him for battery, but well after the statute of limitations had expired and thus the case seemed defunct.

  Her claims of defamation injuries arise from being fired from her advice column job at ELLE magazine.

  She claimed that Trump’s sharp denials and ad hominem retorts led to her career ruin. But the loss for anyone of a column at 76 does not seem such a rare occurrence, and the absence of a salaried job in one’s late seventies for four years does not seem to equate to a $83 million hit.

  And note the allegation that her dispute with Trump led to her firing was strongly denied by the very magazine that cut her loose.

  But then another strange thing happened. In 2022, a new law (“The Adult Survivors Act”) was passed in the New York legislature. It also post facto established a twelve-month window (beginning six months from the signing of bill) that permitted survivors of long ago alleged sexual assaults suddenly to sue the accused long-ago perpetrator—regardless of the previous statute of limitations.

  That unexpected opening suddenly gave Carroll’s prior unsuccessful efforts a rebirth. And she quickly refiled with the help of arch-Trump hating billionaire Hoffman.

  Yet the bill may have been introduced with Trump particularly in mind—given the legislator who introduced it, Brad Hoylman-Siga, was known as another Trump antagonist.

  More interestingly, he had earlier introduced and had passed another Trump-targeted bill. That “TRUST” act had empowered particular federal Congressional committees to have access to the New York State once sealed tax returns of high-ranking government officials—such as Trump.

  That bill’s generally agreed subtext was a green light for anti-Trump members of Congress to obtain legal access to Donald J. Trump’s tax returns.

  So there is an eerie feeling that the New York legislature may have abruptly passed legislation that was aimed at the past conduct of Donald Trump but only after he entered the political arena.

  While these are not quite bills of attainder, there is something unsettling if they are post facto laws aimed at targeting the most famous and controversial man in America and the leading candidate for the presidency.

  In essence they were targeted statutes designed to make Trump’s prior legally unactionable behavior suddenly quite legally actionable.

  Trump will be subject to such special treatment all summer and fall.

  Prosecutors Bragg, James, Smith, and Willis will synchronize their court business for maximum effect.

  Trump again will face leftwing prosecutors, judges, and juries on charges that are politically driven, involving alleged behavior that is either usually not criminalized or not to the same degree as Trump’s case. (Do we remember the nearly $375,000 federal fine belatedly leveled at an exempt Obama but only five years after his 2008 illegal garnering of, and not reporting, foreign campaign contributions?)

  The stakes are higher each day as Trump closes in on the nomination and thus becomes the hope of half the country to end the Biden madness.

  Somehow Trump will have to stay calm, give no opening to his legion of hostile prosecutors, while conducting a nonstop campaign against Biden (and for a while Hayley), and while fighting to keep his name on various state ballots.

  So what we are witnessing is not even the extralegal efforts of Steele/Fusion GPS, Perkins Coie/DNC/Hillary Clinton in 2016, or the 2020 “Russian disinformation” ruse/change the voting laws/infuse half a billion dollars to absorb the work of the registrar machinations against Trump.

  We are way beyond all that.

  The legal system itself, hand-in-glove with leftwing politicos (compare campaign boasts of James and Willis, or prosecutorial visits to the January 6 committee and the White House) is turning the process of balloting and elections into an embarrassing farce.

  Still, Trump will have to soldier on. He must stay controlled amid the tsunamis, not play into the hands of his accusers, and remember that he may soon be the only eleventh-hour hope to stop this mockery of American law, customs and traditions.

  Tyler Durden
  Sun, 01/28/2024 – 19:50

• Why Americans Do Not See A Strong Economy
  Why Americans Do Not See A Strong Economy

  Authored by Daniel Lacalle via dlacalle.com,

  The euphoria with the fourth quarter Gross Domestic Product (GDP) figure makes no sense. The headline champions say that real GDP increased at an annual rate of 3.3% in the fourth quarter of 2023, according to the Bureau of Economic Statistics (BES). An increase in real GDP of $1.5 trillion with an increase in public debt of more than $2 trillion is not a strong economy. It is a bloated economy. Furthermore, there is nothing positive in consumption when personal saving as a percentage of disposable personal income was only 3.7% in December and disposable personal income in 2017 has basically stagnated. American consumers are buying fewer things with their salary.

  We cannot forget that one of the biggest drivers of the fourth quarter increase in real GDP was an abrupt reduction in the GDP deflator, which came at 1.5%, less than half the previous reading of 3.3%. This is a massive boost to real GDP from a reduction in the inflation estimate that most Americans have not seen at all.

  Credit card debt is at an all-time high, and Americans are taking longer to pay their balances. The percentage of Americans who are in financial distress due to credit card debt has reached the same level as during the Great Recession, according to the Federal Reserve Bank of St. Louis report “Share of Americans in Financial Distress Reaches High Levels” (December 26, 2023, J. M. Sanchez, M. Mori).

  The evidence of real economy stagnation is also clear in the Gross Domestic Income figure, which shows why U.S. citizens see the economy in recession when official real GDP tells us a different picture. The annual growth of real gross domestic income, with the latest figure, stands at -0.1%. The BES will not publish the fourth quarter until the next GDP revision, but if previous trends continue, the real GDI may continue to signal recession.

  The same happens with inflation.

  Market participants and the government may consider that the data on PCE inflation is hugely positive, but if we look at non-replaceable services, shelter in particular, these are rising above 5%.

  The above-mentioned figures may seem like a dream to any eurozone citizen, where real GDP is in recession even with the massive Next Generation EU fund and all fiscal rules eliminated. However, U.S. citizens must understand that the path of its economy only leads to stagnation. If you follow European policies, you get European stagnation and elevated unemployment.

  The lesson is that so-called “public stimulus” always means more debt, which in turn means more taxes, lower growth, weaker real wages for families, as well as a tougher environment for small businesses.

  It is no surprise to read that six out of ten people polled by CBS News said they rated the economy as “fairly bad” or “very bad.” U.S. economic policy is increasingly detached from small businesses and families, those who feel the negative effects of inflation and subsequent rate cuts. While the size of government in the economy rises, aggregate figures seem further away from the reality that Americans live in. In Europe, it is the same: governments cheer aggregate GDP and annual inflation changes, while the average citizen sees the purchasing power of salaries decline rapidly and the ability to make ends meet more complicated. Small businesses feel the destruction of margins when inflation soars and suffer twice as much when rates rise because the entire burden of monetary policy expansion and contraction is imposed on the shoulders of the average worker and small entrepreneur.

  It is important to remember that this dire situation for the majority comes after an unprecedented chain of monetary and fiscal stimulus plans imposed under the message of redistribution and helping the middle class, when reality shows that financial repression, massive government size, and bloated debt are destroying the middle class while aggregate figures tell them they should be grateful. Policies that have never worked are being implemented at an astonishing pace and with enormous levels of money printing and debt, and the government blames anyone except themselves for poor consumer and business confidence. This is not a strong economy. Deficits and massive debt will mean more taxes, fewer opportunities, weaker real wages, and weaker growth in the future. I come from the euro area, and I know it. I come from the future of America if it continues down this path: stagnation and elevated unemployment.

  Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Author of bestsellers “Life In The Financial Markets” and “The Energy World Is Flat” as well as “Escape From the Central Bank Trap”. Daniel Lacalle (Madrid, 1967). PhD Economist and Fund Manager. Frequent collaborator with CNBC, Bloomberg, CNN, Hedgeye, Epoch Times, Mises Institute, BBN Times, Wall Street Journal, El Español, A3 Media and 13TV. Holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

  Tyler Durden
  Sun, 01/28/2024 – 18:40

• CA Bill Would Electronically Restrict Cars With 'Speed Governors'
  CA Bill Would Electronically Restrict Cars With ‘Speed Governors’

  California state Senator Scott Wiener (D), this guy…

  

  …who wants to punish parents for misgendering their children up to the point of losing custody, and in 2022 suggested “offering Drag Queen 101 as part of the K-12 curriculum, and introduced a bill that grants judicial leniency to certain pedophiles, and who was accused of a hate-crime hoax…

  …now wants to require any new car or truck sold in the state after 2027 to have “speed governors” which would make it physically impossible to go more than 10 miles per hour over the posted speed limits.

  “I don’t think it’s at all an overreach, and I don’t think most people would view it as an overreach, we have speed limits, I think most people support speed limits because people know that speed kills,” said Wiener, who is introducing a set of new bills.

  Another part of the measure would require large trucks to install side guards which would prevent pedestrians, cyclists, or other vehicles from being sucked underneath during a crash.

  “I think if you ask anyone, do people need to be driving more than 10 miles an hour over the speed limit, assuming you’re not an emergency vehicle which are exempt from the bill, I think most people would say no, I don’t want people driving more than 10 miles an hour in my neighborhood,” he said.

  Wiener’s second bill would require Caltrans to make upgrades to crosswalks, bike lanes and curb extensions on state-owned roads to protect pedestrians, cyclists and those who rely on public transit.

  A similar bill was vetoed by Gov. Gavin Newsom in 2019 in order to give Caltrans a chance to do this work on its own. -ABC7

  The bills will likely go to a committee sometime in the spring.

  Tyler Durden
  Sun, 01/28/2024 – 18:05

• Major Donor Calls For Cornell University President To Resign For Allegedly Promoting DEI
  Major Donor Calls For Cornell University President To Resign For Allegedly Promoting DEI

  Authored by Aaron Pan via The Epoch Times (emphasis ours),

  A major alumnus donor is pushing Cornell University to oust its president for allegedly promoting diversity, equity, and inclusion (DEI) initiatives that undermine education quality and academic freedom at the Ivy League school.

  

  In a letter dated Jan. 23 to Cornell’s chairman Kraig Kayser and board of trustees, Jon A. Lindseth, a long-time donor and trustee emeritus, raised concerns over DEI policies and its “harmful effects” on the school and demanded Cornell fire president Martha Pollack and provost Michael Kotlikoff.

  “Cornell must abandon its misguided commitment to DEI because it has yielded not excellence but disgrace,” he said. “Replace the President and the Provost.”

  “DEI should never have been allowed to corrupt an institution that earned its prestige for exemplary academics based on merit,” Mr. Lindseth said.

  In the letter, Mr. Lindseth said he was concerned about the DEI initiatives that have infiltrated all aspects of the university, creating a “toxic academic environment.”

  “Today, the instruction Cornell offers is in DEI groupthink applied to every field of study. The result is a moral decay, some call it ‘rot,’ that falls in line with prevailing ideology and dishonors basic principles of justice and free speech,” he noted.

  Mr. Lindseth listed multiple instances at Cornell that call DEI policies into question, such as allegedly race-based hiring rather than academic merit, rejecting qualified faculty candidates for not meeting DEI requirements, and punishing faculty members “for expressing minority opinions on national events and policy matters,” among others. He also accused the school of fostering “a cancel culture on campus where bullying, intolerance, and petulant behavior rule rather than academic rigor and honest debate.”

  “A new campus ‘bias reporting system’ fosters a hostile Orwellian environment among neighbors, classmates, and colleagues reporting on one another. The elimination of grades and SATs has created a system in which equal outcomes rather than proven merit has become the objective,” Mr. Lindseth said. ”This is disastrous for a research university that is built upon academic achievement and aims to educate and train some of our country’s leading scientists, architects, and engineers.”

  Poor Leadership

  He also pointed out that Cornell’s DEI policies are being promoted by its new “Center For Racial Justice and Equitable Outcomes.”

  Mr. Lindseth blamed Cornell’s poor leadership for allowing DEI to continue to hurt his alma mater, adding that many alumni share the same opinion with him.

  In addition to his calling for the resignation of Cornell’s president and provost, he urged the school to terminate DEI staff and policies and made many recommendations to “put Cornell back on the path towards academic excellence.”

  Mr. Lindseth said he would withhold his general donation “until the university reformulates its approach to education by replacing DEI groupthink with the original noble intent of Cornell.”

  Mr. Lindseth’s letter comes after presidents of two Ivy League schools, Harvard and the University of Pennsylvania, stepped down following their controversial congressional hearings over anti-Semitism on campus.

  According to the Wall Street Journal, Mr. Lindseth’s move was supported by the Cornell Free Speech Alliance, a free speech advocacy group that was created two years ago. Some wealthy alumni members also want Ms. Pollack ousted.

  Russell Rickford, a history professor at Cornell, sparked controversy when he called the Oct. 7 terrorist attack on Israel by Hamas, killing 1,200 people, “exhilarating” during a pro-Palestinian rally in Ithaca on Oct. 15. The university had to cancel classes on Nov. 3 due to “extraordinary stress” from a series of divisive events on campus. The incidents followed the arrest of a third-year Cornell student for allegedly threatening to kill Jewish people.

  Cornell was one of the four Ivy League schools facing investigation by the U.S. Department of Education in mid-November following allegations of anti-Semitism or Islamophobia since the start of the Israel-Hamas war.

  The school, also under probe by the House Ways and Means Committee, risks losing its tax-exempt status for its “disappointing and lackluster responses” to protect Jewish students on campus after the Oct. 7 terrorist attacks.

  According to the Foundation for Individual Rights and Expression, a free-speech ranking group, Cornell ranked 212 out of 242 with a below-average score.

  A week ago, Elon Musk indicated that DEI inherently involves discrimination and is “fundamentally anti-Semitic” amid the growing anti-Semitism in major Western cities and on college campuses. Earlier, hedge-fund billionaire Bill Ackman, who recently pushed to oust the Harvard president, also criticized the DEI movement, calling it a “root cause” for problems at Harvard.

  The Epoch Times has reached out to Cornell University for comment.

  Tyler Durden
  Sun, 01/28/2024 – 17:30

• US Officials Believe North Korea Will Soon Launch 'Limited' Attack On South
  US Officials Believe North Korea Will Soon Launch ‘Limited’ Attack On South

  Starting last July, a US Navy nuclear-armed submarine made port call in South Korea – something which hadn’t happened since 1981. As expected, North Korea began immediately ramping up its ballistic missile tests and military drills near the border, and there have been escalating threats and counter-threats since.

  The New York Times is reporting that the Kim Jong-un government has plans for escalation, saying that it will soon launch some kind of lethal military action against the south, but will still seek to avoid a full-scale war. 

  “North Korea’s leader, Kim Jong-un, could take some form of lethal military action against South Korea in the coming months after having shifted to a policy of open hostility, U.S. officials say,” the report began.

  

  US officials indicated the recent spate of more aggressive statements from Kim should be taken seriously. “While the officials added that they did not see an imminent risk of a full-scale war on the Korean Peninsula, Mr. Kim could carry out strikes in a way that he thinks would avoid rapid escalation,” the report continued.

  “They pointed to North Korea’s shelling of a South Korean island in 2010 as an example,” NYT noted. “The two sides exchanged artillery fire, resulting in the reported deaths of troops on both sides as well as civilians in the South, but both militaries soon stopped.”

  Something which came dangerously close to the 2010 deadly exchange of fire actually happened earlier this month. On Jan.5 North Korea fired over 200 artillery rounds off its West coast which landed near the South’s Yeonpyeong and Baengnyeong Islands, as we detailed earlier.

  Seoul condemned the “provocative act” while the North asserted the islands weren’t in danger due to these drills. There were no casualties, and the shells appear to have fallen harmlessly into the sea, but it quickly raised fears of a repeat of the 2010 incident wherein four people died on Yeonpyeong island. Civilians on the area islands were ordered to seek immediate shelter in the Jan.5 incident.

  Interestingly, all of this also comes at a time of deepening relations between the North Korean leader and Russia’s President Putin, who is believed to be planning a trip to Pyongyang at some point in the near term. The DPRK is also widely believed to be supplying the Russian military with weapons.

  VIDEO: South Korea soldiers patrol border island after North’s artillery drills.

  On the remote border island of Yeonpyeong, heavily armed soldiers locked up the beaches at dusk — a reminder of the picturesque spot’s proximity to nuclear-armed North Korea pic.twitter.com/R8PGuyiiET

  — AFP News Agency (@AFP) January 9, 2024

  https://platform.twitter.com/widgets.js

  * * *

  The non-interventionist think tank Responsible Statecraft agrees that North Korea’s threats are more than just rhetoric at this point. It asked: Are North Korea’s latest threats rhetorical or real? According to some of the commentary [emphasis ZH]…

  Washington’s failure to remain engaged with North Korea is the primary reason that longtime North Korea watchers Robert Carlin and Siegfried Hecker believe that Kim Jong Un has abandoned the default approach of more-or-less peaceful coexistence in favor of launching an attack against South Korea. In some ways, Kim is following the logic of Hamas, an illiberal force also in charge of a largely failed entity. Kim, too, perceives his adversaries as complacent, uninterested in any real negotiations, and vulnerable to a surprise attack. Presiding over an “open air prison” in Gaza, Hamas decided it had nothing left to lose. The North Korean leadership, in charge of an impoverished country with a horrific human rights record, may well have decided that it also has run out of options.

  “The literature on surprise attacks should make us wary of the comfortable assumptions that resonate in Washington’s echo chamber but might not have purchase in Pyongyang,” Carlin and Hecker write in 38North. “This might seem like madness, but history suggests those who have convinced themselves that they have no good options left will take the view that even the most dangerous game is worth the candle.”

  Tyler Durden
  Sun, 01/28/2024 – 16:55

• FBI Official’s Anti-Trump Post Violated Federal Law: Watchdog
  FBI Official’s Anti-Trump Post Violated Federal Law: Watchdog

  Authored by Zachary Stieber via The Epoch Times (emphasis ours),

  The former FBI official who whistleblowers say shut down an investigation into President Joe Biden’s son violated federal law with a social media post denigrating former President Donald Trump, a watchdog has found.

  

  Timothy Thibault “engaged in modern-day leafletting on social media,” the U.S. Office of Special Counsel found after reviewing Mr. Thibault’s posts.

  Mr. Thibault’s social media activity included sharing in 2020 a post from the anti-Trump political action committee Lincoln Project that itself included an article with the title, “Donald Trump is a Broken Man.”

  That violated the Hatch Act, which bars federal employees from engaging in political activity while on duty. The law also imposes further restrictions on employees of some agencies, such as the FBI, such as prohibiting activity “in concert” with partisan political groups like the Lincoln Project.

  “Although Mr. Thibault was on leave when he retweeted this message, the Hatch Act’s prohibition against acting in concert with a partisan political group applies to further restricted employees at all times, even when they are off duty and away from work,” the Office of Special Counsel (OSC) said in a Jan. 19 letter to Sen. Chuck Grassley (R-Iowa) that was reviewed by The Epoch Times. “Accordingly, because Mr. Thibault shared a message from a partisan political group on Twitter, OSC has concluded that he acted in concert with a partisan political group, in violation of the Hatch Act.”

  The review of Mr. Thibault’s activity came at the request of Mr. Grassley.

  Among Mr. Thibault’s other posts, while with the FBI, was a LinkedIn post of a Washington Post opinion piece that stated in part that the Trump administration had abused the justice system. He also told then-Rep Liz Cheney (R-Wyo.) that her father, former Vice President Dick Cheney, “was a disgrace.”

  “The American people deserve to have confidence that the officials entrusted to lead the top echelon of our federal law enforcement agencies are not letting political bias infect their work. These federal employees should not blur their official business with their political viewpoints,” Mr. Grassley told The Epoch Times in an emailed statement.

  “The Office of Special Counsel confirmed that former FBI Assistant Special Agent in Charge Timothy Thibault failed to meet that standard. I’ve warned that this sort of political bias will erode public confidence in the FBI. It’s up to the bureau to restore that trust through transparency and cooperation with congressional oversight,” he added.

  The FBI and Mr. Thibault did not respond to requests for comment.

  Mr. Thibault’s lawyers said previously that he did not think he violated the Hatch Act with his social media posts.

  Mr. Thibault left the FBI in 2022. His lawyers said at the time that he retired.

  Violations of the Hatch Act can result in removal from federal employment, a suspension, and/or a fine of up to $1,000.

  The OSC said it warned Mr. Thibault that if in the future he violates the Hatch Act while in a position covered by the act, “OSC would consider such activity to be a willful and knowing violation of the law that could result in disciplinary action.”

  Mr. Thibault was an assistant special agent in charge at the FBI’s Washington Field Office when the FBI received derogatory information about Hunter Biden, the son of President Biden. The information included details of alleged criminal financial activity. Mr. Thibault ordered the matter closed without providing a valid reason, whistleblowers have informed Congress.

  Mr. Thibault “was not involved in any decisions related to any laptop that may be at issue in that investigation, and he did not seek to close the investigation,” his lawyers have said.

  Mr. Grassley noted in a speech on the Senate floor that the lawyers did not directly address the whistleblower accusations.

  Mr. Biden has since been charged with tax fraud in California and gun crimes in Delaware. He has pleaded not guilty to all charges.

  Tyler Durden
  Sun, 01/28/2024 – 16:20

• Goldman Trading Desk: Theme Of The Week Was Increased Appetite For Stocks Ex Mag 7
  Goldman Trading Desk: Theme Of The Week Was Increased Appetite For Stocks Ex Mag 7

  According to the most comprehensive recap of relevant recent market flows, last week hedge funds were subdued with buying driven almost entirely by short covers in Macro Products while flow in Single Stocks ended flat, as trading activities pointed to increased dispersion and sector rotation. Perhaps more importantly, Goldman’s Sales Trading desk notes that the theme of the week was an increased appetite for equities ex mega cap tech, as markets digested better economic growth, benign inflation data, and mixed tech earnings. SPX finished the week with 328 names up on the week vs 175 down. Compare that to the first 2 weeks of the year where SPX showed 197 up, and 305 names down – aka investors are rotating away from defensive tech, and into other names. Finally, the Goldman trading desk saw $4bn of net supply from the LO community, largely driven by Info Tech and Comm Services selling throughout the week. Energy and Industrials were the only net bought sectors on the pad. HFs finished the week balanced.

  All this and much more is discussed in what we have dubbed Goldman’s weekly “must-read” report that aims to consolidate the latest positioning and flows intelligence, market themes, and actionable ideas from thought leaders and traders across the GS franchise, and is an indispensable piece for every serious trader.

  Below we excerpt from the latest full report for the benefit of our premium and professional readers  (full analysis available to our pro subscribers in the usual place).

  * * *

  The S&P 500 fell marginally on Friday after closing at ATHs for 5 straight sessions, as market participants digested better economic growth, benign inflation data, and mixed tech earnings. China ADRs, Value, and Commodity Sensitive names were among the biggest gainers this week, while Housing Exposure, High Retail Sentiment, and Onshoring stocks underperformed.

  

  Next, here are the key observations from across the key divisions inside Goldman’s trading desk.

  • Prime: US equities were modestly net bought this week, driven almost entirely by short covers in Macro Products. While Single Stocks net flow ended ~flat, trading activities point to increased dispersion and sector rotation – Industrials, Real Estate, Utilities, and Materials were the most net bought sectors, while Consumer Disc, Financials, and Health Care were the most net sold.
  • Shares Sales Trading: The theme of the week was an increased appetite for equities ex mega cap tech. SPX finished the week with 328 names up vs 175 down (compared with the first 2 weeks of Jan where 197 names were up vs. 305 down). Our trading desk saw $4bn of net supply from the LO community, largely driven by Info Tech and Comm Services selling throughout the week, while Energy and Industrials were the only net bought sectors on the pad. HFs net activity finished the week balanced.
  • Futures Sales Trading and Strats: Various actions implemented by Chinese policymakers appear to have supported price action in equities (MSCI EM) and commodities (High Grade Copper), as bearish China sentiment afflicted various futures contracts entering this week. In Energy, ongoing geopolitical strains prompted meaningful risk infusions in the Low Sulphur Gasoil contract.
  • Derivatives Sales Trading: The US equity market will pay attention to what happens between now and Feb 2nd: QRA, FOMC, and earnings (32% of SPX market cap reports next week) are among the notable catalysts. We still like IWM upside despite the recent pullback, and with China potentially turning a corner on the policy front, some investors are warming up to Energy stocks again.
  • ETF Trading: This week’s focus was an RIA-tracked model portfolio rebalance that came through multiple platforms. Domestic equities saw supply in US growth (IVW) and quality (QUAL) vs. demand for US Value (IVE) and a factor rotation strategy (DYNF). International equities saw demand for DM growth (EFG) vs. supply in DM value (EFV). Fixed income saw supply in USD IG Corps (LQD), treasury floaters (TFLO) and 20+ year treasuries (TLT) vs. demand for Core Bond+ (IUSB) and actively managed FI (BINC).
  • Baskets & Macro Themes: Take a look at High Beta 12M Laggards (GSCBLMOM). The momentum factor has been sensitive to the odds of a March rate cut, and for investors who think a March cut will happen and are long momentum, it may make sense to hedge. With Gross exposure in our PB book at record highs, this can leave crowded positions and momentum at risk of a de-grossing. Outside of short momentum, a March rate cut would be best for residual vol, beta, value, and leverage related factors.
  • Sector Specialists: A mixed week for Health Care, as the early innings of the 4Q EPS season brought significant volatility/debates around Managed Care, Med Devices and Tools subsectors, while IPO/capital markets picked up after a long drought. In Consumers, we think most of the earnings results in the next 2 weeks will likely continue to support the building notion that the consumer is in a pretty healthy place and that comments from the card companies about a volume slowdown are explainable.

  * * *

  Some more details on each of these segments below:

  1. Prime Services

  Asset Weighted Risk Exposures: US Fundamental L/S Gross leverage decreased -0.2 pts to 196.4% (93rd percentile three-year), while US Fundamental L/S Net leverage rose for a 3rd straight week by +0.4 pts to 54.1% (48th percentile three-year). Aggregate US Fundamental long/short ratio increased +0.5% on the week to 1.76 (30th percentile three-year).

  

  Trading Flows: US equities were modestly net bought on the week (+0.4 SDs vs. the past year), driven almost entirely by short covers in Macro Products (Index + ETF), as net flows in Single Stocks finished ~flat.

  Macro Products – Index and ETF combined – were net sold in 4 of the past 5 sessions, driven mainly by short sales. On the other hand, Single Stocks were modestly net bought on the week, driven by long buys outpacing short sales 1.2 to 1.

  While Single Stocks collectively saw muted net activity, trading flows point to increased dispersion and sector rotation – Industrials, Real Estate, Utilities, and Materials were the most notionally net bought sectors, while Consumer Discretionary, Financials, and Health Care were the most net sold.

  Consumer Discretionary stocks were net sold for a 2nd straight week (5 of the last 6), driven by long-and-short sales (~4.5 to 1). Broadline Retail and to a lesser extent Specialty Retail were the most net sold subsectors this week, driven by long sales and short sales, respectively.

  After being net sold in 4 of the previous 5 weeks, Real Estate was the most net bought sector on the week in standard deviation terms (+2.4 SDs), driven by short covers and long buys (1.6 to 1). Nearly all subsectors were net bought this week, led by Retail REITs, Specialized REITs, and Real Estate Management & Development

  

  * * *

  2. US Shares Sales Trading

  RTY finished the week +1.7%, vs SPX +1.1% and NDX +62bps. The theme of the week was an increased appetite for equities ex mega cap tech, as markets digested better economic growth, benign inflation data, and mixed tech earnings. SPX finished the week with 328 names up on the week vs 175 down. Compare that to the first 2 weeks of the year where SPX showed 197 up, and 305 names down – aka investors are rotating away from defensive tech, and into other names.

  Our trading desk saw $4bn of net supply from the LO community, largely driven by Info Tech and Comm Services selling throughout the week. Energy and Industrials were the only net bought sectors on the pad. HFs finished the week balanced.

  

  * * *

  3. Futures Sales Trading and Strategies

  Entering this week, bearish China sentiment afflicted various futures contracts. For equities, Commitment of Traders exhibited $3.2bn of Non-Dealer net selling in MSCI Emerging Market from January 9th – 16th, due to liquidation (-$2bn) and new shorts (+$1.2bn). By category, Asset Manager dominated. This, combined with bearish flows in other leveraged products, pressured funding spreads. Similarly in commodities, High Grade Copper net length across Managed Money, Other, and Non-Reportable nosedived $3.2bn – the 3rd largest 2 week fall over the past 2 years. New shorts ($2.3bn) were the main driver.

  

  Therefore, it was no surprise that various actions implemented by Chinese policymakers, including equity market support and a cut in the reserve requirement ratio, were well received. As of the January 25th close, High Grade Copper and MSCI EM were +0.6% and +2.2% on a 4 day look back. From a momentum perspective, the swing in Copper may prove more impactful near-term. Per GS Futures Strategists’ CTA model, sizeable buying is projected over the coming week if prices sustain current levels. However, discretionary portfolios seem reluctant to implement longs ahead of the Q1 seasonal surplus and with carry still firmly negative.

  

  In Energies, ongoing geopolitical strains – Red Sea bickering plus Ukrainian strikes on Russian refineries – prompted meaningful risk infusions in the Low Sulphur Gasoil contract. Extrapolating from recent Commitment of Traders data and viewing the extreme curve strength, Managed Money spread buying was potentially responsible for some bullish posturing. But GS Futures Strategist’s model also forecasted reasonable CTA purchases due to a change in trend. Interestingly, inventory data has yet to reflect draws, causing some to question the curve shift.

  

  * * *

  4. ETF Trading

  Model Portfolio Rebalance Spotlight

  This week’s focus in ETF flows was an RIA-tracked model portfolio rebalance that came through multiple platforms across both equity and fixed income ETFs. Total primary flows were ~$14.4bn across both creates and redeems, coming through the system both via outright risk blocks and benchmark working orders. The desk was active and engaging with clients around these flows, leveraging house expertise in the underlying constituent portfolios across equities and bonds.

  In domestic equities, saw $3.5bn of supply out of US growth (IVW) and quality (QUAL) and $4.8bn of demand into US Value (IVE) and a factor rotation strategy (DYNF). The graph below showcases the shares outstanding change on the back of the $2bn tactical switch out of quality and into value.

  

  In international equities, saw demand for DM growth (EFG) / supply in DM value (EFV). Since July last year, there was a systemic shift out of growth and into value – with this allocation shift, it could be a signal for a reversal:

  

  In fixed income, saw supply in USD IG Corps (LQD), treasury floaters (TFLO) and 20+ year treasuries (TLT) / demand for Core Bond+ (IUSB) and actively managed FI (BINC). This allocation into BINC doubled the size of the fund, hitting just over $1bn in total AUM (as of Thursday night).

  

  * * *

  5. Derivatives Sales Trading

  In the near-term, the US equity market will pay attention to what happens between now and Feb 2nd… among other catalysts, we get:

  • QRA
  • FOMC
  • Earnings – nearly 40% of the S&P’s market cap reports, the biggest week of earnings.

  The equity vol market is now pricing the biggest premium on this date – the S&P implied move from now thru next Friday’s close = > 1.50%

  

  If that sounds low, it’s because it is … The options market is currently implying near record-low correlation amongst S&P constituents, as high gross leverage and index vol selling products have led to much more dispersion.

  

  Underscoring the micro volatility: both long and short exposures have risen sharply to their respective multi-year highs.

  

  The other prevalent trend of more options selling remains thematic at the S&P index level, which continues to provide dealers with more gamma (this has a braking effect on the SPX market moves, as dealer hedging flows lead to more buying on dips, and more selling on rallies).

  

  So where does the desk think we can move? We still like IWM upside despite the recent pullback. With short exposure at multi-year highs and looming catalysts, the case for owning calls here is attractive.

  Similar to other short proxies (namely China equities), we are seeing positive spot/vol correlation in IWM as investors rush to hedge shorts on rallies. This phenomenon has never before occurred in small-caps.

  

  Where else could shorts be vulnerable? Managers have continued to sell and press shorts in Energy stocks – our PB data has shown consistent selling here to start the year as part of the re-grossing theme, and with China potentially turning a corner on the policy front (more on those recent flows here), we’re seeing some investors warming up to this space again.

  

  It’s also worth noting that commodities in general are starting to see some positive flow signals. Unlike our equity CTA model that shows a downside asymmetry, in the commodities space:

  

  Last point: the dichotomy between the first half of February and the second half from a seasonal perspective. For those worried about any froth in the US markets, the last two weeks in February are historically the worst 2 weeks of the year. Given how well markets followed the historical analog last year, it’s something to have on the radar.

  

  Simulated results are for illustrative purposes only. GS provides no assurance or guarantee that the strategy will operate or would have operated in the past in a manner consistent with the above analysis. Past performance figures are not a reliable indicator of future results.

  Past performance is not indicative of future results / charts sourced from Goldman Sachs FICC and Equities, GS Research, and Bloomberg as of Jan 25th 2024.

  * * *

  6. Thematic Baskets and Macro Observations

  After this morning’s data, the 6-month annualized rate of core PCE inflation is below 2%. At the same time, the odds of a March rate cut have declined YTD. Will that change?

  We wanted to flag just how sensitive the momentum factor has been to the odds of a March rate cut (visual below). If you think a March cut is happening and you are long momentum, it may make sense to hedge. Outside of short momentum, a march rate cut would be best for res vol, beta, value and leverage related factors (tables below). We recommend looking at High Beta 12M Laggards {GSCBLMOM Index}

  Overall Gross exposure in our PB Book has risen to new record high and this can leave crowded positions and momentum at risk of a de-grossing, especially as Momentum factor exposure of Systematic is in the 88th percentile vs 5y history.

  • Other items that could be favorable for low momentum, high beta, small cap stocks:
  • The negative revisions of 4Q Earnings for 493 imply a low bar for earnings the next two weeks
  • Indices at all time highs should be supportive of breadth improvement at some point
  • Dealer gamma positioning keeps S&P contained, allowing for more factor rotation under the surface.
  • Many short quality trades are 12-15% below December levels, and quality factor appears to be topping out.
  • The yield curve is close to un-inverting, and unless this steepening is viewed as the start of the recession (’01, ’07), it is typically good for beta, weak b/s, small size, value, tech and financials and basically the opposite of what is working YTD.

  Momentum has been sensitive to odds of a March cut

  

  Momentum could be at risk of a de-grossing

  

  Momentum Factor exposure of Systematic is in the 88th percentile vs 5y historical

  

  Beta to March Cut:

  

  Short Momentum (GSCBLMOM Index) is decoupling from 10yr yields

  

  Momentum is off to its best start in 15 years and strongly rebounded post December selloff

  

  Momentum has become overbought in January and RSI remains elevated vs history

  

  Correlation of momentum to popular Themes are very elevated

  

  

  7. Sector Specialists Highlights

  Health Care

  A mixed week for the healthcare sector, as the early innings of the 4Q EPS season brought significant volatility/debates around Managed Care, Med Devices and Tools subsectors, while IPO/Capital markets picking up after a long drought.

  Most in-focus was the Managed Care group, where the Medicare Advantage market remains the epicenter of debate around a historic rise in costs. After negatively preannouncing the prior week, HUM provided formal 2024 and initial 2025 commentary well below even subdued expectations. Commentary from the company suggested a heightened cost trend environment into 2024 and an elongated period with which the company could re-price/adjust their risk book. This comes partly in contrast to peer UNH who saw similar spike in cost trend in 4Q, though suggested more seasonal impacts rather than something more durable, while peer ELV largely confirmed cost issues are MA-centric issue.

  Medtech updates on the week had some puts/takes, with topline trends remaining strong + corroborating elevated cost environment – though sell-the-news dynamics (ISRG, ABT) and/or weaker margin execution (JNJ) drove volatility within the complex.

  Debates around the Life Sciences/Tools subsector remains high, with the solid 4Q + initial 2024/mid-range guidance from EU peer Sartorius driving a late in the week bounce in the broader Tools sector, particularly bioprocessing levered names within the group – though focus quickly shifting towards the mega cap bellwethers within the complex (TMO, DHR) reporting next week to confirm or deny signs of stabilization across key life sciences end markets.

  Consumers

  Consumers spending choppier, but fine. While there was some inbounds and concern around comments from Visa about their January trends, the group was able to successfully brush off any view that it was a narrative chance. As a desk, we have heard inbounds for the last 2 weeks now about weak traffic trends in retail in January in restaurants and retailers. Much of it can be simply attributed to weather and tougher compares. As a result, we think any slightly sluggish January updates will not come as too much of shock to the consumer specialist and community. We do not think there is any true change to the soft landing narrative for the market or consumer spending.

  Corporates this week generally sounded a constructive tone. The most surprising came from airlines, who largely guided to in-line or above consensus 1Q results. Another area of unexpected strength was from Proctor & Gamble (PG), who highlighted +4% volume growth in the US and said they had expectations for further improvements. That is a change from their tone in 2H23. While we do not think the next 2 weeks of earnings results will be perfect, most will likely continue to support the building notion that the consumer is in a pretty healthy place and that comments from the card companies about a volume slowdown are in fact explainable.

  More in the full note available to pro subscribers.

  Tyler Durden
  Sun, 01/28/2024 – 15:45

• The Great Growth Hoax
  The Great Growth Hoax

  Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),For a few days, ever since the supposedly amazing GDP report from quarter four 2023, we’ve been blasted by the media about how great the economy is doing. It’s exasperating because these claims do not fit with human experience. Last we heard from the Census Bureau, real income is down, and no one doubts it. Everyone has felt strong downgrades in living standards over these last four years.

  

  And yet, no recession has been declared. This is for technical reasons. A recession is supposed to show up in the technical reading of the GDP plus unemployment. We’ve known for years that the unemployment data is broken. It does not account for labor dropouts or adjust for multiple job holders or otherwise reveal anything about labor participation or remuneration. Unemployment is technically low but so what?

  As for GDP, it is not a measure of the standard of living or even economic growth. It is a measure of output—stuff going on as measured in dollar terms, whether necessary, productive, society serving, efficient, or not at all. The aggregate was concocted at a time when economists believed that spending was itself productive, whether it flowed from a sustainable capital base or government itself. Anything moving and churning was regarded as good.

  When the latest report came out and everyone cheered, I dug around the data a bit but figured I would wait for my favorite analysts to weigh in. Sure enough, Peter St Onge writes it up and it is a doozy. “Fresh GDP numbers came in and it was a blowout. The kind of blowout that only a $2.7 trillion government deficit can buy while the private economy crumbles around it. Another couple blowout GDP reports like this and Americans will be living under an overpass.”

  The essential ruse comes down to unfathomable amounts of government spending that is being recorded as productivity and output, and interpreted by media as growth. “In the past 12 months the federal deficit increased by $1.3 trillion. Yet we only got half that in GDP—about $600 billion. In other words, everything else shrank. It’s even worse for that brave and stunning Q4—there we got just $300 billion in extra GDP for—wait for it—$834 billion of new federal debt.”

  To put a fine point on it: “Essentially, [GDP is measuring] the pace at which we’re going Soviet, replacing private wealth with government waste.” In his interpretation of the data, we are destroying wealth at the fastest rate since 2008.

  An analysis by ZeroHedge echoes the same thought.

  “While Q4 GDP rose by $329 billion to $27.939 trillion, a respectable if made up number, what is much more disturbing is that over the same time period, the US budget deficit rose by more than 50 percent, or $510 billion. And the cherry on top: the increase in public US debt in the same three month period was a stunning $834 billion, or 154 percent more than the increase in GDP. In other words, it now takes $1.55 in budget deficit to generate $1 of growth… and it takes over $2.50 in new debt to generate $1 of GDP growth!”

  To further the analysis, and doing the math: “[E]very dollar in GDP growth cost $1.69 in new debt, and also means that every new job cost future generations of Americans $957,100.48.”

  To say this is unsustainable is more than obvious. It is a disaster and this is dragging American prosperity into the pits, if by prosperity you mean quality of life. No matter how many gizmos to which you have access, the resources for living a good life are depleting very fast. The idea of a one-income family is nearly extinct, whereas it was the norm three-quarters of a century ago. Even the gizmos are falling apart and not serving us well.

  Household appliances don’t work unless you somehow get your hands on the most high-priced models. They are trying to shove everyone into urban commuter cars so that you cannot drive on those big vacations that used to be the American norm. College is out of reach and the degree is increasingly worthless anyway. People are ever more despairing for the future and thinking that this is just the new normal.

  Even looking at output data over the long term, you can see the trend, even given all the manipulation and fakery. It’s still very obvious where things are headed.

  

  This chart reveals the history that did not need to happen. The United States has been the world center of technological innovation during these years, and the historical home for free enterprise and entrepreneurship. We should have had the greatest boom times in our history! Instead, government stole all that energy for itself. It’s a tragedy.

  Everyone underestimates the wild effect of 2020 and the following chaos caused by lockdowns. Those sent the workplace into upheaval, wrecked data collection, made property rights and liberties far less secure, and entrenched a professional managerial class in government and industry that conspires against the public.

  On the good side, we are seeing the evaporation of trust in media, medicine, academia, and government. Large media organizations are laying off workers in droves just to survive, and the woke agenda generally seems on the ropes.

  Dramatic reforms are possible but are they likely? We will see. There needs to be wholesale reform in government and much more besides in order to save what’s left of the great American prosperity machine. As it is, the more likely outcome is to go the way of empires past, a long slog through the miasma of corruption and stagnation until generations hence will speak of the United States in the past tense the way we talk about the Portuguese empire.

  That’s a big departure from the way this article opened so let’s go back to the point. The GDP data is not reflective of anything real except government profligacy and stagnation in every sector that counts. You can read the headlines or look at the underlying realities. One perpetuates existing myth-making and the other reveals that the myth is not long for this world.

  Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.

  Tyler Durden
  Sun, 01/28/2024 – 15:10

• Congressional Hawks Urge 'Hit Iran Hard' After 3 US Troops Killed By Tehran-Aligned Militants
  Congressional Hawks Urge ‘Hit Iran Hard’ After 3 US Troops Killed By Tehran-Aligned Militants

  Update(1452ET): It took a mere minutes after the headlines spread across the globe for the hawks and neocons to call on the White House to “hit them hard”—in reference to Iran and Iranian-linked groups believed responsible for the attack on a US outpost along the Jordanian border which killed three American troops and injured 25 more.

  The government of Jordan has since said that none among their own troops were injured, which suggests all of the injured were Americans too. Below is a partial survey of the Congressional hawks who are now essentially calling for full-blown war against Iran and its proxies [emphasis ZH]…

  “The only answer to these attacks must be a devastating military retaliation against Iran’s terrorist forces, both in Iran and across the Middle East. Anything less will confirm Joe Biden as a coward unworthy of being commander-in-chief.'” —Republican Senator, Tom Cotton of Arkansas

  “The Biden Administration can take out all the Iranian proxies they like, but it will not deter Iranian aggression. I am calling on the Biden Administration to strike targets of significance inside Iran, not only as reprisal for the killing of our forces, but as deterrence against future aggression… Hit Iran hard, hit them now.” —South Carolina Senator Lindsey Graham

  “Target Tehran” —Republican Senator from Texas John Cornyn

  And as also fully expected, the think tank “armchair warrior” crowd is all in favor of sending more young Americans to fight and to die in the Middle East, based purely on another ‘war of choice’ with unclear end goals…

  Mr. President, this crosses a line. You have to hit #IRGCterrorists and hit them hard. Aim for targets that hold strategic significance for #Iran‘s regime, not merely its proxies. Aim for the head of the Octopus, not merely its tentacles. pic.twitter.com/9TGEq5l3Tf

  — Jason Brodsky (@JasonMBrodsky) January 28, 2024

  https://platform.twitter.com/widgets.js

  Of course, the neocons have had their sites set on Tehran and hoped-for regime change there going all the way back to the 1990’s, as is evident from the writings of PNAC crowd (Project for the New American Century, which went on to largely staff GW Bush’s cabinet).

  Thankfully, Trump’s initial statement did not echo the hawkish neocon line of some among the more outspoken GOP Congressmen…

  🚨Statement from President Trump 1/3 pic.twitter.com/tWGEHU3aYi

  — Karoline Leavitt (@kleavittnh) January 28, 2024

  https://platform.twitter.com/widgets.js

  But the reality is that the years-long US occupation of Syria, which happens to largely located in the oil and gas producing parts of the country, have left US forces as ‘sitting ducks’ yet without any clear identifiable mission or goal. The Biden administration knows this very well, having been quoted as saying the same merely a week ago in The New York Times:

  The latest attack on American troops in the region over the weekend resulted in no deaths, but President Biden and his advisers worry that it is only a matter of time. Whenever a report of a strike arrives at the White House Situation Room, officials wonder whether this will be the one that forces a more decisive retaliation and results in a broader regional war.

  But this is the pattern of US interventionism of the past more that two decades: intervention begets more intervention… then begets US occupation at some far-flung outpost… militant attack on said outpost begets greater escalation and yet more intervention. It seems that the cycle never ends (perhaps by design) as the continuing legacy of the neocons’ GWOT which kicked off with the era of the Iraq and Afghan invasions.

  It seems this is what President Ronald Reagan foresaw and understood in the wake of the Beirut barracks bombing.

  Biden is in a corner. He has no moves…https://t.co/r5U5gBmTqI

  — Daniel McAdams (@DanielLMcAdams) January 27, 2024

  https://platform.twitter.com/widgets.js

  * * *

  An overnight drone attack on a US military outpost in northeast Jordan has killed three American troops and left 25 more injured, according to breaking reports Sunday morning. 

  The outpost, called Tower 22, is located very close to the Syrian border, and the casualty rate is so high as soldiers were reportedly sleeping in tents when the drone struck. By all accounts thus far, the drone appears to have come from Syrian territory.

  

  President Joe Biden issued a statement announced the attack on Americans, saying that “radical Iran-backed militant groups” in Syria and Iraq were behind it.

  “While we are still gathering the facts of this attack, we know it was carried out by radical Iran-backed militant groups operating in Syria and Iraq,” Biden said. “Have no doubt – we will hold all those responsible to account at a time and in a manner our choosing.”

  “Jill and I join the families and friends of our fallen – and Americans across the country – in grieving the loss of these warriors in this despicable and wholly unjust attack,” the statement added.

  According to CNN:

  US Central Command confirmed in a statement on Sunday that three service members were killed and 25 injured in a one-way drone attack that “impacted at a base in northeast Jordan.”

  US officials have said that identities of the slain will not be revealed for 24 hours until their families have been notified.

  Tower 22 is also close to the Iraq border, and the US occupation base at Tanf…

  BREAKING:

  US announces that 3 American soldiers were killed by a suicide drone striking the Tower 22 military outpost in Jordan last night.

  Another 25 Americans wounded.

  Tower 22 (Area 55) is located right next to the border with Syria and Iraq.

  Major crisis happening pic.twitter.com/z0lladWID5

  — Visegrád 24 (@visegrad24) January 28, 2024

  https://platform.twitter.com/widgets.js

  Crucially, these are the first known American troop deaths in the Middle East region since Hamas Oct.7 terror attack.

  developing…

  Tyler Durden
  Sun, 01/28/2024 – 14:52

• University Of California Ditches Plan To Hire Student Illegals, Enraging Protesters
  University Of California Ditches Plan To Hire Student Illegals, Enraging Protesters

  The University of California has backed off a plan to hire undocumented students on campuses, ignoring the demands of hunger-striking protesters.

  

  On Thursday, the University of California Governing Board of Regents announced the move, which will affect roughly 4,000 current students who aren’t legal residents.

  “We have concluded that the proposed legal pathway is not viable at this time,” said UC President Michael Drake, adding that it “in fact, carries significant risks for the institution and for those who we serve.”

  One UCLA student who’s an illegal told ABC30, “I have fought for my education. I have fought and worked hard to be where I am today. Nothing, absolutely nothing, has been handed to me.”

  Except the opportunity for an education that a legal resident isn’t enjoying, but aside from that… 

  The student is one of a group of people who have been on a hunger strike since Tuesday over the issue while waiting for a decision from the board of regents, which is made up of 26 members.

  

  Maybe become a legal resident and try again?

  Tyler Durden
  Sun, 01/28/2024 – 14:35

• This Week Will Be Determined By What Powell Says Between 2:30pm And 3:00pm ET on Wednesday
  This Week Will Be Determined By What Powell Says Between 2:30pm And 3:00pm ET on Wednesday

  By Peter Tchir of Academy Securities

  Powell’s Walk-Up Song

  Unless something dramatic and unexpected happens this week on the geopolitical or earnings front, trading and returns will be largely determined by what Fed Chair Powell says between 2:30pm ET and 3:00pm ET on Wednesday. Every other market driver will take a back seat to what Powell says during the post-FOMC rate decision conference.

  This presentation is more important than usual because no one has listened to a word that any other Fed Speaker has said. Okay, maybe we’ve listened, but no one has done much on the basis of those speeches.

  • Prior to the December 13th meeting, Powell had remained steadfastly “neutral” and “data dependent.” That was the message that he gave when speaking prior to the last meeting. It was more or less consistent with other Fedspeak.

  • We didn’t believe him. Although we expressed some concern that the market had eased financial conditions significantly ahead of the meeting, we weren’t too worried. Yes, the market-imposed financial tightening had influenced the Fed heavily for the November 1st decision, but we thought that he would be mildly dovish given the inflation data (and even hints of concern about the job market).

  • Wow were we wrong! Not as wrong as those calling for a hawkish Fed, but the “pivot” was more aggressive than we expected. Fortunately, we liked risk coming into the meeting and that paid off, but there was definitely an element of “better lucky than smart” playing out as the market boost was more than we had expected, because we (I) didn’t anticipate the “pivot.”

  • Since that press conference, no one in the market is listening to anyone other than Powell (at least I’m not). Even with Powell (I’m not sure if he spoke this month), all that will really matter is what he says at the press conference and he has given whole new meaning to “past performance may not be indicative of future results.” He taught the market that what he says coming into the meeting may not be what he says after the meeting (a very weird lesson to teach the market for an entity that relies so heavily on “jawboning”).

  All of this got me thinking about what should Powell’s “Walk-Up” song be? Or maybe what song he should listen to in order to get pumped up for the press conference. While it might not be the song that he would choose for himself (I suspect not), I think that “Here I Go Again” is the perfect “Powell Walk-Up Song.”

  I don’t know where I’m going
  But I sure know where I’ve been
  Hanging on the promises in songs of yesterday
  And I’ve made up my mind I ain’t wasting no more time
  Here I go again, here I go again

  Though I keep searching for an answer
  I never seem to find what I’m looking for
  Oh, Lord, I pray you give me strength to carry on

  ‘Cause I know what it means
  To walk along the lonely street of dreams

  Here I go again on my own
  Going down the only road I’ve ever known
  Like a drifter, I was born to walk alone
  And I’ve made up my mind
  I ain’t wasting no more time……

  I’m pretty sure that this song played on the radio while I was driving around Michigan last week, but the lyrics seemed to fit perfectly for how I’m thinking about this meeting! I have to admit, in “researching” this report, I had no idea that Whitesnake is a British Band.

  Don’t Know What Powell is Thinking But Here’s My Take

  I’m on board that inflation has been on the decline, but I’m far from convinced that the next step is lower (especially if something happens forcing the U.S. to enforce full sanctions on Iran’s oil production and sales).

  Consumer strength has surprised to the upside, but it was a heavily discounted holiday season. Consumers also seemed to have tapped into credit to the point that it is so difficult to ignore all the credit spending as a “mere normalization” from Covid-era lows.

  Jobs have tilted to slightly weaker, but the data is all over the place (claims, household, ADP, establishment, JOLTs, etc.). Not only have the different reports been, well “different,” but also many of the reports have had internal inconsistencies that are difficult to explain away (other than “garbage in, garbage out”).

  One slightly “weird” thing about this meeting is that NFP comes out on Friday, so presumably the FOMC will have some insight into that data (the market will certainly believe that is the case).

  My playbook for Wednesday (and the future is):

  • No changes to monetary policy.

  • Repeat that it is too early to think about ending quantitative tightening. It is a discussion topic, but not urgent.

  • A teensy-weensy victory lap. Inflation has come down and evidence that it can remain contained is high, but we have to be vigilant.

  • An acknowledgement that rates are higher than their long-term requirements and that they are watching the data as they think about a path to “normalization.” He will not pivot back!

  Which leaves us with our current expectation (which we’ve had for several weeks and the market is coming in our direction).

  • 100 bps of cuts. The FOMC will do 25 bps, then 50 bps, then 25 bps, then go into stall/wait and see mode.

  • I am 100% convinced that the Fed will want to avoid cutting in September and November (too close to the election, and much easier to avoid if possible).

  • I was leaning towards the first cut being at the April/May meeting, but several clients pointed out the following during recent discussions: given my view on inflation (even the “services bump” is declining) and the Fed not wanting to enact monetary policy close to the election, I was probably just being stubborn, and should predict a March start. So, let’s call it 50/50 on whether the 25/50/25 starts in March or May.

  • I think that the Fed should continue to decrease the balance sheet so that they have “dry powder” if needed. Having said that, there are technical issues around reserves that seem to warrant higher longer-term balances than I would like to see. So, I hope that they downplay the possibility of ending QT, but my job is to think about what the Fed will do, not what I would like them to do, so we will probably see just enough on this front during the Q&A to keep markets happy.

  I suspect, given what has been priced in (on rates, pivots, and QT), that Powell will disappoint markets (call it a 2% to 4% downward move in stocks, with 10s pushing above 4.3%), but nothing disastrous, and will let the other factors (earnings, jobs, etc.) take center stage.

  Bottom Line

  Since we’ve already given away the “bottom line” on the Fed and markets, let’s just focus on two quick things:

  • Pricing in Geopolitical Risk. We discussed this extensively in Weebles Wobble and it remains a topic of conversation.

    • Some (but not all) geopolitical risk is being priced in, so a “surprise” in either direction on that front will have some market impact, but it shouldn’t be extreme.

    • My view that there will be no “flight to safety” at the long end of the yield curve (7-years and out) is getting some traction and causing some to rethink hedging geopolitical risk with longer-dated Treasuries and bet more simply on dollar strength or a surge in commodities (and commodity stocks).

  On Friday, Academy had a relatively long interview on Bloomberg TV. Given the amount of feedback that we’ve received on this particular segment, it seems to make sense to provide a more detailed “viewing guide” than usual.

  • 1:54:50 mark. “The Rush into Bonds.” Contrasting views on Treasuries (higher yields) and corporate credit (highly recommend overweighting high-quality credit versus Treasuries, especially 5-years and in – even managed to mention commercial paper!). Bloomberg posted a chyron to that effect at 1:58:35.

  • 1:58:40 mark. “Geopolitics.” It starts with a quick intro from the hosts, and we go on to discuss Russia/Ukraine, the Middle East, and other geopolitical possibilities. We get to discuss what is hedged or not hedged, and how effective various types of hedges will be.

  • 2:00:50. CONsumer CONfidence. Not quite sure how we got on the subject, but I did get to give a shout-out to my strategist when I was trading CDX indices through the financial crisis – Bob Janjuah. Also got to gripe about the overall quality of economic data (not just this particular survey), and how useful it is or isn’t! It was a long segment in the new studio!

  For what it is worth, if we had “walk-up” songs when I was playing sports, my choice would have been “Anarchy in the U.K.” – and on that note, have a great Fed week and don’t judge people on their walk-up songs.

  Tyler Durden
  Sun, 01/28/2024 – 14:00

• Chicago Democrat Demands Officials Nix 'Sanctuary City' Status As Migrant Crisis Overwhelms
  Chicago Democrat Demands Officials Nix ‘Sanctuary City’ Status As Migrant Crisis Overwhelms

  A Chicago government employee and Democrat activist has called on city officials to drop its sanctuary city status, months after suing the city last October after Mayor Brandon Johnson began setting up migrant shelters in now-packed warehouses, and a “field house” at Amundsen Park, a popular location for youth sports that’s been rendered unusable.

  

  Cata Truss told Fox News on Wednesday that Democrat voters like her are growing increasingly frustrated.

  “There is no moneys to take care of the migrants, nor is there moneys to take care of the people that are there. And so we have a mess on our hands,” she said, arguing that Windy City residents are upset over the city’s prioritization of migrants over low-income residents, and that “no one was willing” to speak with her after contacting Democratic elected officials.

  “If you are all not willing to sit down with us, if you’re not willing to talk to us, why should we continue to support you?” she said. “A lot of us [Democrats] are jumping ship.”

  Watch:

  Last May, residents demanded action after the arrival of thousands of migrants.

  Photos captured from the event pic.twitter.com/mp3946xI3L

  — End Wokeness (@EndWokeness) May 11, 2023

  Mayor Brandon Johnson defended himself on Wednesday, saying “I know folks may question my style, but don’t question my leadership.”

  Truss said she couldn’t understand Johnson’s sentiment.

  “He has to have regrets, because people have regrets. We are not happy with what is happening here,” she said, ading that she’s disappointed with President Biden for not using his executive authority to fix the situation at the southern border.

  For a more in-depth look at Truss’s efforts, watch below:

  Tyler Durden
  Sun, 01/28/2024 – 13:25

• Netanyahu And Sinwar's Forever War: Perpetual Conflict In Gaza
  Netanyahu And Sinwar’s Forever War: Perpetual Conflict In Gaza

  Authored by Joe Buccino via RealClear Wire,

  As the Gaza War extends beyond 100 days with no end in sight, a potential months-long respite from fighting comes into focus. The ceasefire will allow the release of another set of Israeli hostages and another set of Palestinian prisoners. Beyond this ongoing series of exchanges, however, there appears no end to the war: The bombing, the raids, and the exchanges will go on for months and months. This perpetual state of conflict is exactly what the two men leading both sides seek.

  

  On one side, Israeli Prime Minister Benjamin remains steadfast in emphasizing an unachievable strategic objective for the war: the total eradication of Hamas in Gaza as the war’s strategic objective. The governing body of Gaza since 2007, Hamas has its vile arms in all aspects of Gazan governance and society. Hamas is not only the enclave’s military force, but also the school system, the trash collection, and the police. The group blends so deeply into Gazan society that the complete elimination of Hamas – Netanyahu’s consistently stated goal – would likely require killing virtually every adult male. Further, beyond smashing Gaza to bits, Israel has no transition plan. Netanyahu refuses to turn Gaza over to a reformed Palestinian Authority. He’s ruled out the White House’s proposal for a post-war Palestinian State. Bibi’s left no viable remaining option — even a security handover to Sunni Arab militaries is unpalatable in those countries without a Palestinian State.

  On the other side of this gruesome conflict, Yayhya Sinwar, Hamas’ leader, remains elusive, likely underground and mixed with Israeli hostages. Like his counterpart, Sinwar wants the war to continue in perpetuity. Hamas’s goal in such a savage attack on Israel on October 7th was to force an Israeli overreach. The terror group wanted images of a dystopian hellscape, destroyed hospitals, dead children, and wailing babies – precisely what the Israel Defense Forces (IDF) are inflicting on Gazans. Hamas, widely unpopular in Gaza before the war, sees its stature, prestige, and acclaim grow dramatically as the fighting continues. Palestinians – and many Muslims in the Middle East – view Hamas’s war as a legitimate form of defiance against Israeli oppression. This is the war Sinwar always wanted – a war of resistance embraced by the Mulsim world. Sinwar now hopes to bleed Israel dry, to keep the IDF tied down in Gaza, and to employ Hamas’s well-honed information operations program to turn the world against Israel.

  Sinwar’s strategic approach pivots on the more than 100 hostages remaining in Hamas control. He must ensure his forces keep them alive. He will use them as leverage in a series of staggered pauses during which Hamas’s forces consolidate ammunition, repair defensive positions, and replace troops on the front lines. Keeping such a large group of hostages alive in combat in a devastated landscape is a colossal task of planning and resourcing, but it is vital to preserving conflict.

  The return of Palestinian prisoners from Israel at a rate of two to one in exchange for Israeli hostages makes Sinwar a hero in the Muslim world. His stature will continue to grow with each exchange. Sinwar knows his popularity – and the acclaim of his organization – will continue to rise in the months to come.

  The Israeli Prime Minister, on the other hand, was a largely reviled figure before the war and grew more despised as the battle continued. Netanyahu’s image was always that of the man who would keep Israelis safe from the rest of the world. In secretly propping up Hamas for almost a decade while pushing settlements into the West Bank, he’s only done the opposite. The war is his mechanism to remain in power; once the fighting stops, Israelis will call for an election and overwhelmingly vote him out.

  Once out of office, the 73-year-old Netanyahu will suffer a worse fate than political failure. Bibi is charged with fraud, breach of trust, and accepting bribes in three separate scandals. The longer he remains in power, the longer he can delay facing the consequences of these charges. The trials, repeatedly delayed, have recently resumed but are expected to drag on slowly while he adjudicates the war. Should the war end, however, Bibi will surely face justice.

  So, with no viable off-ramp and two leaders keen to keep the blood flowing, the war will persist. The awful suffering it brings will continue- for months and months, through 2024 into 2025. Pursuing peace and resolution takes a backseat to Sinwar’s political agenda and Netanyahu’s self-preservation.

  Joe Buccino is a retired U.S. Army colonel with five combat tours in the Middle East. He served as U.S. Central Command communications director from 2021 until September 2023. His views do not necessarily reflect those of the U.S. Department of Defense or any other organization.

  Tyler Durden
  Sun, 01/28/2024 – 11:40

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