The details surrounding Cybertruck bomber Matthew Livelsberger continue to drip – with two ‘manifesto’ letters found in the Cybertruck itself, and another ‘manifesto’ he emailed to former Navy SEAL Sam Shoemate.

In the letters found in the Cybertruck, Livelsberger described the USA as “terminally ill,” and said his actions were meant as a “wake-up call,” and not a terrorist attack.

🚨BREAKING: Las Vegas police found two letters in the Cybertruck.

One warns of weak leadership, the other calls the country “terminally ill” and describes the incident as a “wake-up call,” not a terrorist attack. pic.twitter.com/jKhCSWLUCm

— Benny Johnson (@bennyjohnson) January 3, 2025

The most intriguing, however, is the email he sent to Shoemate – in which he warns that the “drones” seen around the United States over the last month are using “gravatic propulsion systems,” which only China and the United States possess.

Shoemate shared the email on Shawn Ryan’s show, writing on X, “I knew taking this public would insert me into the “glowy boi” conspiracy cycle, especially since I’m an intelligence officer,” adding “I had no choice. Dude dumped it in my inbox. When I saw his name in the news, I had little choice but to hand it over to the feds. I knew the FBI wouldn’t release it, or at least without an agenda attached, so I took it to Shawn Ryan because he has the platform to handle the magnitude of this information and will do so as objectively as possible.”

According to Livelsberger’s email:

“China has been launching them from the Atlantic from submarines for years, but this activity recently has picked up. As of now, it is just a show of force and they are using it similar to how they used the blloon for a sigint and isr, which are also part of the integrated comms system,” he writes.

“…they are the most dangerous threat to national security that has ever existed. They basically have an unlimited payload  capacity and can park over the WH if they wanted. It’s checkmate.”

🚨 BREAKING: Sam Shoemate reveals on the Shawn Ryan Show that the Las Vegas Cybertruck Bomber, MATTHEW LIVELSBERGER, emailed him before the attack claiming that the USG and China had “gravitic propulsion systems” and that he was being tracked by the FBI.@samosaur @ShawnRyan762 pic.twitter.com/KrffRvq66m

— Autism Capital 🧩 (@AutismCapital) January 3, 2025

🚨EXCLUSIVE🚨

I can confirm the Cyber Truck Bomber’s claim in his manifesto about having a Ford Mustang, which he shipped from Germany last yr.

I’ve obtained a copy of the port shipment from a source. Matthew had the car shipped from Germany to Galveston, TX@ShawnRyan762 👇🏻 https://t.co/quAqRyMz4a pic.twitter.com/tq8yykC3Iv

— Laura Loomer (@LauraLoomer) January 3, 2025

Meanwhile, Livelsberger was recorded at a Tesla charging station on the way to Las Vegas.

🚨#BREAKING: New footage has been released of suspect Matthew Livelsberger spotted at a Tesla charging station during his route to Las Vegas.
⁰📌#LasVegas | #Nevada

During a press conference, Las Vegas law enforcement released video of 37-year-old Matthew Livelsberger at a… pic.twitter.com/s6IapSNB39

— R A W S A L E R T S (@rawsalerts) January 3, 2025

You can read the entire email below:

“In case I do not make it to my decision point or on to the Mexico border I am sending this now. Please do not release this until 1JAN and keep my identity private until then.

First off I am not under duress or hostile influence or control. My first car was a 2006 Black Ford Mustang V6 for verification.

What we have been seeing with “drones” is the operational use of gravitic propulsion systems powered aircraft by most recently China in the east coast, but throughout history, the US. Only we and China have this capability. Our OPEN location for this activity in the box is below.

China has been launching them from the Atlantic from submarines for years, but this activity recently has picked up. As of now, it is just a show of force and they are using it similar to how they used the balloon for sigint and isr, which are also part of the integrated comms system. There are dozens of those balloons in the air at any given time.

The so what is because of the speed and stealth of these unmanned AC, they are the most dangerous threat to national security that has ever existed. They basically have an unlimited payload capacity and can park it over the WH if they wanted. It’s checkmate.

US needs to give the history of this, how we are employing it and weaponizing it, how China is employing them and what the way forward is. China is poised to attack anywhere in the east coast

I’ve been followed for over a week now from likely homeland or FBI, and they are looking to move on me and are unlikely going to let me cross into Mexico, but won’t because they know i am armed and I have a massive VBIED.

I’ve been trying to maintain a very visible profile and have kept my phone and they are definitely digitally tracking me. I have knowledge of this program and also war crimes that were covered up during airstrikes in Nimruz province Afghanistan in 2019 by the admin, DoD, DEA and CIA.

I conducted targeting for these strikes of over 125 buildings (65 were struck because of CIVCAS) that killed hundreds of civilians in a single day. USFORA continued strikes after spotting civilians on initial ISR, it was supposed to take 6 minutes and scramble all aircraft in CENTCOM. The UN basically called these war crimes, but the administration made them disappear.

I was part of that cover-up with USFORA and Agent [redacted] of the DEA. So I don’t know if my abduction attempt is related to either. I worked with GEN Millers 10 staff on this as well as the response to Bala Murghab. AOB-S Commander at the time [redacted] can validate this.

You need to elevate this to the media so we avoid a world war because this is a mutually assured destruction situation. For vetting my Linkedin is Matt Berg or Matthew Livelsberger, an active duty 18Z out of 1-10 my profile is public. I have an active TSSCI with UAP USAP access.”

How glowing is all of this on a scale of 1-Chernobyl?

*  *  *

Clark County Sheriff Kevin McMahill told reporters on Thursday that the Cybertruck bomber, Matthew Livelsberger, a 37-year-old Green Beret, died by a self-inflicted gunshot wound to the head just moments before the detonation outside Trump’s hotel in Las Vegas. This sequence of events is based on the official statements from law enforcement. However, speculation on X, particularly among internet sleuths, has brought up alternative theories regarding the timing of Livelsberger’s death. 

Rogan O’Handley, aka “DC Draino” on X, floated two scenarios about Livelsberger’s final moments:

Now that we know the Vegas suspect was found with a bullet in his head, I see 2 possible scenarios:

1. He shot himself – he was planning to commit suicide & didn’t want to risk being burned alive

2. He was shot by someone else & the Tesla was auto-pilot navigated to the Trump hotel

Now that we know the Vegas suspect was found with a bullet in his head, I see 2 possible scenarios:

1. He shot himself – he was planning to commit suicide & didn’t want to risk being burned alive

2. He was shot by someone else & the Tesla was auto-pilot navigated to the Trump… https://t.co/OqU5ecdy6e

— DC_Draino (@DC_Draino) January 2, 2025

“A long fuse could’ve been lit, a timer could have been set, or the bomb could have been remotely detonated I wonder if anyone in the vicinity heard a gunshot That would help confirm where the car was when he was shot,” O’Handley wrote in another post. 

A long fuse could’ve been lit, a timer could have been set, or the bomb could have been remotely detonated

I wonder if anyone in the vicinity heard a gunshot

That would help confirm where the car was when he was shot

— DC_Draino (@DC_Draino) January 2, 2025

Tesla’s Elon Musk quickly dismissed the second scenario, stating, “Autopilot will not function unless it detects an attentive person in the driver’s seat.”

Autopilot will not function unless it detects an attentive person in the driver’s seat

— Elon Musk (@elonmusk) January 3, 2025

Tesla vehicles have a cabin camera that monitors driver attentiveness and provides audible alerts when FSD is engaged. The camera is mounted above the rearview mirror. 

“Like other Autopilot features, Full Self-Driving requires that the driver pay attention to the road, their surroundings, and other road users,” Tesla wrote on its website under the “Driver Attentiveness” section of FSD. 

Tesla said, “The cabin camera does not require full visibility of the driver’s eyes in order to monitor attentiveness. The system is still active, for example, if the driver is wearing sunglasses.” 

“If the cabin camera does not have clear visibility of the driver’s hand and arm locations, Full Self-Driving periodically displays a message reminding the driver to apply slight force to the steering wheel,” Tesla continued. 

It noted, “If the driver repeatedly ignore prompts to apply slight force to the steering wheel or to pay attention, Full Self-Driving displays a series of escalating warnings and, if those warnings are ignored, disables for the rest of the drive and displays the following message.” 

What’s apparent from Tesla’s description of how FSD works suggests any scenario with Livelsberger shot in the head well before the bombing would be extraordinarily hard to trick the camera. 

X users should call on Musk to release the cockpit camera footage and any other recordings from the high-tech EV truck to disprove O’Handley’s second scenario. Additionally, footage from charging stations could provide valuable insights into what happened leading up to the bombing. We’re sure the FBI is already doing this… 

It’s Bitcoin’s birthday: The very first Bitcoin block was mined 16 years ago today.

Bitcoin’s first block was mined on January 3, 2009.

Known as the “Genesis Block,” Decrypt reports that Bitcoin’s pseudonymous creator Satoshi Nakamoto minted 50 BTC into existence with the move. 

Since then, 877,665 blocks have been mined and added to the network’s long ledger. On a blockchain, blocks contain data on transactions.

Only miners can add data to the network, and the difficulty level helps prevent unauthorized additions or edits to the chain, as it would take an incredible amount of computational power to take over the network.

And the network is stronger than ever, with mining difficulty reaching a new all-time high mark as the biggest cryptocurrency rides into the new year.

As CoinTelegraph’s Alex O’Donnell reports, Bitcoin’s hashrate – the total computing power securing the Bitcoin network – reached a new all-time high on Jan. 3 of over 1,000 exahashes per second (EH/s), according to data from CoinWarz. 

Source: CoinWarz

That is nearly double the network’s hashrate 12 months ago. According to CoinWarz, Bitcoin’s hashrate hovered around 510 EH/s in January 2024. At the time of this article’s publication, Bitcoin’s hashrate had retraced to approximately 780 EH/s. 

The network’s rising hashrate indicates Bitcoin miners are devoting more computational resources to the blockchain, thus improving the network’s security. 

Miners are continuing to expand production even after Bitcoin’s April halving reduced mining rewards from 6.25 BTC to 3.125 BTC per block.

Source: CoinWarz

Overcoming headwinds

In 2024, Bitcoin’s strong performance partially offset headwinds from the halving, especially for cash-heavy mining companies like Riot Platforms and CleanSpark.

Mining firms “acquired other miners with turn-key facilities to increase near-term hashrate and increase their power pipeline,” JPMorgan said in a Dec. 10 research note shared with Cointelegraph. 

Miners have also prioritized accumulating BTC on balance sheets. In December, JPMorgan raised price targets for four Bitcoin mining stocks to reflect value from the miners’ electrical power assets and BTC holdings, JPMorgan said.

JPMorgan cited the stock performance of MicroStrategy, a software company turned de facto Bitcoin fund, which traded at a roughly 2.4x multiple to the value of its BTC treasury as of Dec. 10.

Bitcoin miners, including Marathon, Riot and CleanSpark, hold BTC treasuries worth approximately $4.4 billion, $1.7 billion and $910 million, respectively, according to the BitcoinTreasuries.net data service.

Source: Bitcointreasuries.net

Institutional inflows

Bitcoin’s rising hashrate — and the resultant improvement in network security — is especially important as institutional investors pour capital into BTC exchange-traded funds and other regulated cryptocurrency investment vehicles.

In November, Bitcoin ETFs broke $100 billion in net assets for the first time, according to data from Bloomberg Intelligence.

Asset manager Sygnum expects this dynamic to accelerate in 2025 as large institutional investors, including sovereign wealth funds, endowments, and pension funds, add Bitcoin allocations.

“With improving US regulatory clarity and the potential for Bitcoin to be recognized as a central bank reserve asset, 2025 could mark steep acceleration for institutional participation in crypto assets,” Martin Burgherr, Sygnum’s chief clients officer, said in a statement.

However, BlackRock’s iShares Bitcoin Trust (IBIT) spot Bitcoin exchange-traded fund (ETF) just saw record-high outflows on Jan. 2.

Isaac Joshua – the CEO of token launch platform Gems – also told Decrypt yesterday that the recent downturn “can largely be attributed to end-of-year tax-loss harvesting by investors,” he explained.

Founder of Obchakevich Research Alex Obchakevich told Decrypt that “the main reason for the outflow is profit-taking by investors in early 2025.”

“At the end of the year, investors and funds often review their investment portfolios, which can lead to the sale of some shares,” he explained.

Though, bear in mind, IBIT surpassed $50 billion in assets under management just 228 days after its launch – more than five times faster than any other ETF in history.

Via InternationalMan.com,

International Man: Looking at the intersection of finance, economics, politics, and culture, what is your most significant prediction for 2025?

What major event or trend should people prepare for that most are currently overlooking?

Doug Casey: The trends that appeared, seemingly against all odds, in 2024 are going to accelerate.

The climate changed with the election of Trump. That was emblematic, but similar things are happening in other countries. The conservative/libertarian AfD will likely oust the current German government, which resembles that of the old East Germany. Castro’s son will be dethroned in Canada. And almost everywhere, even the media, has come to recognize that the Milei revolution in Argentina is succeeding.

It’s becoming apparent that progressivism and wokeism are morbid. White males are less afraid of committing thought crimes, being canceled, or being labeled racist or sexist. DEI, ESG, and Woke values are retreating. These trends will grow, even while leftists, statists, and socialists pull out all the stops to resist them.

It’s funny that the WEF and their ilk still talk about 2030 as being a magic year because the change in the trend that started in 2024 runs counter to everything that the WEF and the progressives were aiming for in 2030.

I’m surprised—and very pleased—to see what looks like a cultural sea change. But we’re still on the cusp of a giant financial crisis. If the markets melt down, the kaleidoscope could reset mass psychology radically. The fundamentals remain very shaky. The climate and CO2 hysterias are ingrained in the public psyche. And there’s an excellent chance the usual suspects will try to ramp up another vaccine hysteria. A bird flu seems to be on the dance card for 2025.

International Man: You’ve spoken about societal decline in the past. Do you see any path toward reversing this trend in 2025, or is societal breakdown inevitable?

What do you think happens next?

Doug Casey: Trends in motion tend to stay in motion until they reach a crisis and a new trend emerges.

Fortunately, technology continues to advance at an accelerating rate, and that’s crucial. Throughout history, innovation has changed the nature of life much more than politics, personalities, or even war.

Roughly five thousand years of recorded history show the trend is up, exponentially. That’s why I’m essentially an optimist. But one who recognizes that humanity suffers from occasional bouts of evil and stupidity. Time is on humanity’s side, although that can be an academic observation from the point of view of your own short lifetime.

On the pessimistic side, about 50% of the population in Western societies have been transformed into parasites, collecting much more from the government than they contribute to society. That’s a big deal because almost all progress has come from the West.

Europeans, especially, have become ingrained with bad habits and values. We’re undergoing another stage of the Industrial Revolution that started about the year 1800. It’s destroying lots of old jobs—mostly a good riddance—which will upset the people whose rice bowls are broken. But things will be fine, as long as enough of the middle class survives. The plebs and the “elite” will survive (because they’re basically parasites), but the middle class is the source of production and vitality in any modern society.

Unfortunately, society has retrogressed over the last few generations. But perhaps a counterrevolution has started. The remaining middle class wants to eliminate the parasites. I’d like to believe that the current technological expansion will aid in that and lead to another boom—not just a financial boom, but an economic boom featuring vastly more production at vastly lower costs.

In the short term, however, the Greater Depression will cause the average guy’s standard of living to drop. That’s the best case, even if society stops supporting parasites. Why? Because capital will be reallocated away from consumption and back to rebuilding wealth.

The worst case is that the world continues to party on, with borrowed money. Then, we could have a hyperinflationary depression.

Even though I think the Greater Depression will persist at least over the next decade, the long-term uptrend—which has been going on since the end of the last Ice Age—will continue and hopefully accelerate radically.

So what happens next?

The elite and the parasites still control the State, and that’s critical. The State still has legitimacy, but it’s not part of the cosmic firmament. Though it’s losing its legitimacy, people still view the institution the way children view their parents. Even though those who control the apparatus of the State act more like predators than parents. They will use it to their personal advantage.

I expect promiscuous spending will continue under Trump, notwithstanding the best efforts of Elon, Vivek, and DOGE. That’s because if they don’t keep spending and creating money, the whole pyramid of debt that’s been built up over many decades will come crashing down.

The US dollar, therefore, will continue being inflated. But at the same time, if the Trump administration deregulates radically, efficiency in manufacturing and production will improve radically. Despite lots more money being created, costs and retail prices could drop enough to disguise the effects of inflation.

Despite the positive effects of deregulation, there will be lots of unemployed people as distortions in the economy are liquidated. The good news is that the economy, which is to say the amount of real wealth being created, will start improving, even while the financial situation—stock and bond prices—gets ugly. Rapid change presents lots of paradox.

International Man: What does Trump’s return to the White House mean for the geopolitical situation?

How will the US’s role in the world evolve in 2025?

Doug Casey: There are two contradictory trends at play. Look at the following chart, courtesy of my friend Alex Krainer. It’s quite shocking.

It shows the size of companies born in the last 50 years in America and Europe. America, as heavily regulated and taxed as it is, is vastly more conducive to business than Europe. That trend will widen over the next few years.

It’s important to recognize that the US government is bankrupt, living on borrowed money, and that trend has gone exponential. I know it looks like Morning in America with the defeat of “Kamala and the Jacobins”… that’s a good name for a rock band. But, seriously, the US has become an overextended and corrupt multicultural domestic empire. It’s unsustainable in its present form. Anyway, morning only lasts for six hours.

The US is more militarily aggressive than ever. It’s said—I don’t think anybody knows exactly—that there are over 800 bases abroad in 80 or 100 countries. This is, to use a currently fashionable word, completely “unsustainable”. Trump says that he doesn’t want war, and that makes sense. But he’s all for more military spending. He apparently doesn’t understand that more spending is a provocation to the Chinese, and just a grift for weapons manufacturers, so-called defense companies.

Trump seems committed to using the US dollar as a weapon, by trying to force other countries to use our fiat currency. He sees that exporting paper money in exchange for real goods yields a higher standard of living, and wants to keep that Ponzi scheme going. But he doesn’t seem to understand the huge reaction it’s causing.

The thought of using tariffs to punish foreigners who are shipping goods to the US in exchange for depreciating fiat dollars is quite idiotic.

International Man: Following Trump’s victory, many Americans feel more optimistic about their portfolios and the nation’s economic prospects for 2025.

Is this optimism warranted? What’s your perspective on potential economic developments this year?

Doug Casey: No doubt that the Trumpers will try their best to get rid of egregious stupidities, as did the Reaganites when they took over in 1980. But the stupidities are much more ingrained and embedded than they were in Reagan’s day. It’s going to be tough.

Abolishing regulations is fantastic and will liberate the economy. Moore’s law, which is about computers becoming roughly 50% more powerful and 50% cheaper every year, now seems to apply to many areas of high tech—AI, space exploration, and biotech among them. It will accelerate until we reach Ray Kurzweil’s Singularity.

In the next five years, we’ll see humanoid robots become common, cheap, and extremely powerful, moving in the direction of those in the movie Terminator. Hopefully, they’ll be programmed to make love, not war.

The Singularity is almost guaranteed by exponential advances in artificial intelligence, quantum computing, and nanotechnology. As we advance toward the Singularity over the next decade, the whole nature of life will change. For the better—barring WW3.

International Man: Given your outlook for 2025, how are you preparing your portfolio?

What asset classes do you believe will perform best in the year ahead?

Doug Casey: No changes here. As regulations are rolled back, companies that own mineral deposits should boom. There will be lots of 10-1 shots over just a few years; it’s a sector everyone hates, assuming they even know it exists—which they don’t.

The general stock market is in a historic bubble, and the public loves it. I think the party is over. The bond market remains a triple threat to your capital—interest rate risk, default risk, and currency depreciation.

But let’s put money aside. Your main asset isn’t things. It’s your knowledge, your skills, and your character.

In an era of extremely rapid change, if you don’t constantly improve, you may inadvertently become a useless mouth. It’s more critical than ever that you build both physical and intellectual capital. And, most importantly, moral capital. Weakness and poverty are forgivable; there’s no excuse for villainy. Do the right thing. Many people will forget that as times get tough.

*  *  *

Doug Casey’s forecasts helped investors prepare and profit from: 1) the S&L blowup in the ’80s and ’90s, 2) the 2001 tech stock collapse, 3) the 2008 financial crisis, 4) and now… Doug’s sounding the alarms about a catastrophic event. One he believes could soon strike. To help you prepare and profit, Doug and his team have prepared a special video. Click here to watch now.

Despite the ugly PR start to the year for Tesla’s Cybertruck, there is some good news: the vehicle “qualifies for up to $7,500 in US tax credits for the first time this year”, according to Bloomberg.

At least for now, the number of EVs and plug-in hybrids eligible for credits has dropped to 18 from 22, due to stricter domestic sourcing rules for batteries under President Biden’s Inflation Reduction Act.

The Bloomberg article stated that demand for battery-electric vehicles has waned as President-elect Donald Trump prepares to potentially end federal EV subsidies. Currently, 10 brands, including Tesla’s Cybertruck, Hyundai’s Ioniq models, and Kia’s EV6 and EV9, still qualify.

Eligibility for the subsidy depends on income and vehicle price, limiting access for some buyers. Volkswagen’s ID.4 crossover lost its full $7,500 tax credit, while select models from Ford, Nissan, Rivian, Stellantis, and VW no longer qualify for partial credits, Bloomberg noted.

Cybertruck has recently been in the news due to a tragic incident in Las Vegas, where on New Year’s Day, a Cybertruck exploded outside the Trump International Hotel, resulting in the death of the driver and injuries to seven bystanders.

The driver, identified as 37-year-old Matthew Livelsberger, a U.S. Army Special Forces sergeant, reportedly shot himself before the explosion. The vehicle was loaded with gas canisters and fireworks, leading authorities to investigate the incident as a potential act of terrorism.

Elon Musk, Tesla’s CEO, highlighted the Cybertruck’s durability, suggesting that its robust design helped contain the blast and minimize further damage. Las Vegas police have acknowledged Tesla’s cooperation in providing information and footage to assist in the investigation.

Authored by Jeff Carlson and Hans Mahncke via Truth Over News,

McCabe tried to re-engage Christopher Steele after Comey firing in preparation for newly fabricated investigation…

Journalist Aaron Mate released a copy of the May 16, 2017 Electronic Communication that was used to open the FBI’s formal investigation of then-President Donald Trump as a foreign agent of Russia. The document, received by Mate under a Freedom of Information request he filed, totals six pages in length and is heavily redacted.

The FBI’s opening of a new investigation of President Trump in May 2017 followed the FBI’s “Crossfire Hurricane” investigation in July 2016, which targeted the Trump campaign as a whole. This newer investigation also sought to determine whether Trump “obstructed” the FBI’s July 2016 Crossfire Hurricane investigation and/or any other “associated” investigations.

The May 16, 2017 date of the Electronic Communication remains highly relevant—particularly when we bear in mind two other specific events that surround the filing of this document: the firing of former FBI Director James Comey on May 9, 2017 by President Trump and the sudden appointment of Robert Mueller as Special Counsel on May 17, 2017.

At the opening of this new (and completely unprecedented) investigation into a sitting US President, the FBI was being led by Acting FBI Director Andrew McCabe—who can currently be found running cover for the FBI on CNN.

McCabe had been a key player in the FBI’s counterintelligence Crossfire Hurricane investigation of the Trump presidential campaign, which relied heavily on fraudulent information provided by Steele—whom McCabe likely knew from his time leading the FBI’s Eurasian Crime Squad.

McCabe was also long-time friends with Senior DOJ official Bruce Ohr—who conveniently had a personal and professional relationship with Steele that went back almost ten years.

Ohr personally brought the Steele dossier to McCabe in early August 2016. A few months later, McCabe made Ohr the FBI’s unofficial conduit to Steele after the British spy was formally fired by the FBI for ongoing contacts with the media in the fall of 2016.

As we’ll see, in the days immediately following the May 9, 2017 firing of former FBI Director James Comey by President Trump, McCabe sought to directly re-engage with Steele—once again using Bruce Ohr as the FBI’s intermediary.

On July 30, 2016, Bruce and Nellie Ohr met with Steele and an unknown associate of Steele’s. Almost immediately after the meeting, Ohr initiated an early August 2016 meeting with FBI Deputy Director McCabe to detail his conversation with Steele. Also present at the meeting was McCabe’s counsel, FBI lawyer Lisa Page, who would go on to play a key role in the counterintelligence investigation into the Trump campaign.

Shortly thereafter, on August 15, 2016, FBI agent Peter Strzok sent the now-infamous “insurance policy” text. A short while later, the FBI suddenly reached out to Steele asking for all of the information in his possession.

Steele’s formal status as a source for the FBI was short-lived. He was officially terminated as a source by the FBI on November 1, 2016 for communicating with the media—specifically, Mother Jones reporter David Corn. Steele’s meeting with Corn led to the October 31, 2016, article “A Veteran Spy Has Given the FBI Information Alleging a Russian Operation to Cultivate Donald Trump,” which provided the first public reporting on the existence of the fraudulent Steele dossier.

But despite his formal firing, the FBI still wanted to receive information from Steele that could be used against Trump. Ohr, who was serving as the highest-ranking career official in the DOJ, played a pivotal role in passing on the unfounded allegations against Trump from Steele and Fusion GPS co-founder Glenn Simpson to the FBI.

Ohr would later testify that he had known Steele since 2007, when they met during an “official meeting” while Steele was still employed by the British government. After that, they maintained contact approximately “once a year.”

Ohr had also met with Fusion’s “Simpson on various occasions over the years” and his wife, Nellie Ohr, was actively working for Simpson’s firm as an open-source researcher on Trump. A 2010 report by the National Institute of Justice listed all three as participants in a paper.

Interactions between Ohr—who at the time was associate deputy attorney general—and Steele were so frequent that Ohr was assigned an FBI handler, agent Joe Pientka, who summarized Ohr’s conversations with Steele in FBI FD-302 forms.

The 302s of Ohr’s conversations with Steele ran from November 22, 2016 (just after the presidential election), to May 15, 2017—just one day before the FBI’s above-mentioned May 16, 2017 investigation into President Trump was officially opened. Although the FBI’s 302s ended on May 15th, Ohr later testified that he maintained contact with Steele and relayed those conversations to the FBI into November 2017.

Q: “On page 2 of the letter it lists 12 separate dates and 302s where the FBI interviewed you indicating the first interview took place on November 22, 2016, and the last one on May 15, 2017. Is this list of interviews and dates generally consistent with your recollection?”

Ohr: “Yes. The caveat I would say is, I continued to have some conversations with Christopher Steele after May 15, 2017. I’ve reported all of those to the FBI, but I do not see any 302s relating to those conversations.”

The information flow between Ohr and Steele typically went in one direction. Steele would provide information to Ohr, who would then provide it to the FBI. But in May 2017, the direction suddenly changed when the FBI decided to reach out to Steele in the wake of Comey’s firing:

Ohr: “The FBI had asked me a few days before, when I reported to them my latest conversation with Chris Steele—next time you talk with him, could you ask him if he would be willing to meet again.”

Q: “So this is the re-engagement?”

Ohr: “Yes.”

The texts being referenced in Ohr’s testimony were sent on May 12 through May 15, 2017 and refer to the request that Ohr received from the FBI to seek Steele’s re-engagement. It’s worth re-emphasizing that the FBI’s request occurred in the days immediately following Comey’s May 9, 2017 firing.

What is even more notable is that Steele’s professed source, Igor Danchenko, disavowed the dossier during a January 2017 FBI interview, confessing that the so-called “’intelligence” it contained was nothing more than barroom gossip from his childhood friends in Russia. What was the purpose of re-engaging Steele at this stage, given that the FBI already knew his entire dossier was a pack of lies? The only plausible explanation is that the FBI needed to ensure that Steele was aligned with their objective–which was to remove Trump.

On May 12, 2017, Ohr and Steele exchanged a series of text messages that show Ohr reaching out to Steele following the FBI’s request for re-engagement:

Ohr: “Thanks again for your time on Wednesday. Do you have time for a short follow up call sometime this weekend?”

Steele: “Yes, of course. Perhaps sometime tomorrow. When might suit?”

Ohr: “Would 3 pm your time work? I’m pretty open so just let me know. Thanks!”

Steele: “Fine, or possibly even at 2 pm our time if that works for you? Best”

Ohr: “2 pm your time is good. It will be quick. Thanks!”

The next text message is a response from Steele on May 15, 2017:

Steele: “B, having now consulted my wife and business partner about the question we discussed on Saturday I’m pleased to say yes, we should go ahead with it. Best C”

Ohr: “Thanks! I will let them know and we will follow up.”

Ohr is obviously referring to the FBI in his last message. The sudden firing of Comey appears to have been the precipitating event that led Acting Director McCabe and the FBI to suddenly re-establish contact with Steele. As this contact was being initiated by Ohr, the new FBI investigation into President Trump was formally opened by the FBI on May 16, 2017.

This seemingly irrational behavior by McCabe—the direct targeting of a sitting president of the United States—may have led directly to the appointment of Robert Mueller as Special Counsel the very next day, on May 17, 2017.

Indeed, text messages to Ohr from Steele provide some hints and highlight an abrupt pullback by the FBI. In June 2017, Steele sent Ohr the following text:

“We are frustrated with how long this re-engagement with the Bureau and Mueller is taking. There are some new perishable operational opportunities we do not want to miss out on.”

Steele sent another text to Ohr on Nov. 18, 2017:

“I am presuming you’ve heard nothing back from your SC colleagues on the issue you kindly put to them for me. We have heard nothing from them either. To say this is disappointing would be an understatement.”

Although McCabe likes to maintain the pretense of being a political victim, the truth is much harsher. McCabe was fired from his position for lying to the FBI’s Office of Professional Responsibility, to agents from the FBI’s Inspection Division and to the DOJ’s Inspector General, Michael Horowitz.

Indeed, Inspector General Horowitz determined in a February 2018 report that McCabe lied at least three times under oath regarding his leaks to the media—leading Horowitz to issue a formal referral to the FBI regarding McCabe’s conduct. McCabe was ultimately fired by the FBI on March 16, 2018.

Interestingly, former FBI Director James Comey was fired by President Trump on the very same day (May 9, 2017) that McCabe was initially interviewed by agents from the FBI’s Inspection Division (INSD) regarding his leaks to the media. McCabe lied to the INSD agents regarding his participation in the leaks and in the process of uncovering McCabe’s deception the IG also discovered the massive series of text messages sent between Strzok and Lisa Page.

McCabe was also instrumental in running cover for Hillary Clinton during the FBI’s investigation of her use of a personal email server.

His wife, Dr. Jill McCabe, ran for a State Senate seat in Virginia in 2015. She had no prior political experience. The McCabe’s took $468k in campaign contributions from long-time friend and political ally of the Clinton family, Virginia Governor Terry McAuliffe, who met with the McCabe’s on March 7, 2015. The ostensible purpose of the meeting was to convince Jill McCabe to run for office – her first run at any public office.

Conspicuously, Clinton’s private server had just been uncovered by the New York Times on March 2, 2015 – five days before McAuliffe’s first meeting with the McCabe’s. McAuliffe’s contributions represented more than a third of the total contributions raised by Jill McCabe’s campaign. She lost the race despite heavy funding and an endorsement by the Washington Post.

Interestingly, McAuliffe himself was under investigation by the FBI – at exactly the same time – for donations made to his campaign:

The investigation is examining $120,000 of donations to the Democratic governor’s campaign and inauguration made by U.S.-based companies controlled by Chinese businessman Wang Wenliang.

Another of Mr. Wang’s companies, Rilin Enterprises, has donated between $1 million and $5 million to the Clinton Foundation. The investigation dates to at least last year.

The FBI investigation into Clinton’s use of a private email server was formally launched on July 10, 2015. At the end of July 2015, Andrew McCabe was suddenly promoted to the number three position within the FBI. In the middle of October 2015, McCabe emailed investigators that Clinton would get an “HQ Special” – special or lenient treatment.

McCabe’s office initially provided personnel and resources to the Clinton email investigation, but when matters heated up, McCabe took personal control of the Clinton email investigation on Feb 1, 2016. Despite pressure from Congress and the American public, McCabe refused to recuse himself from the Clinton investigation until just one week before the 2016 election.

McCabe is long gone from the FBI, along with the entirety of the FBI’s leadership from the 2016-2017 period but nothing has changed at a fundamental level. The FBI remains a corrupted institution that exists only to protect the members of the Establishment and the status quo.

In his release of the heavily redacted Electronic Communication, Mate noted that he was “most interested to learn the factual basis for the FBI taking the extraordinary step…of investigating the sitting president as an agent of Russia. But that part is entirely redacted.”

The intentional and unwarranted obfuscation by the FBI continues unabated. Incoming FBI Director Kash Patel and the rest of the new Trump Administration can’t begin soon enough.

(Update 1330ET): Looks like it won’t be one-and-done for Johnson, who just lost two Republican votes (he could only afford to lose one) on the first round of voting.

The Republican Main Street Caucus will now be ‘holding a gaggle’ before they move on to the next vote…

Republican Main Street Caucus will be holding a gaggle after this first speakership vote concludes on the House steps, per source with knowledge

— Olivia Beavers (@Olivia_Beavers) January 3, 2025

Here’s a breakdown of the 1st round votes:

• Johnson 216
• Jeffries 215
• Others 3
• Massie (R) for Emmer
• Norman (R) for Jordan
• Self (R) for Donalds

*  *  *

With the House set to vote today on whether or not Speaker Mike Johnson gets to keep his gavel, President-elect Donald Trump wished him luck.

“Good luck today for Speaker Mike Johnson, a fine man of great ability, who is very close to having 100% support,” Trump posted on Truth Social. “A win for Mike today will be a big win for the Republican Party.”

The vote comes after a week of intense campaigning by Johnson to win over conservative holdouts.

And with a slim 219-215 margin, Johnson can only afford one GOP defection if all members vote for a candidate. Rep. Thomas Massie (R-KY) has already said he wouldn’t vote for Johnson, while other lawmakers – mostly Freedom Caucus members – say they are undecided.

Rep MTG Is Voting FOR Mike Johnson As Speaker Of The House

“All of you at home and myself included are ready for the drama to end…let’s put aside our pride… and in-fighting. It’s time to come together as Republicans… I’ll be voting for Mike Johnson.” pic.twitter.com/NCeIpxlG43

— Mr Producer (@RichSementa) January 3, 2025

“Republicans as a whole are going to have to put down their egos a little bit and just focus on getting the job done,” she said.

Meanwhile, Rep. Chip Roy (R-TX) wants to Chair the House Rules Committee in exchange for supporting Johnson – something whih Rep. Lauren Bobert (R-CO) said would ‘secure the vote on the first round.’

Tonight @laurenboebert tells @mattgaetz that:
“Mike Johnson coming out and committing to Chip Roy being the Chairman of the Rules Committee would secure the vote on the first round.”

Click the link to watch tonight’s episode at
9PM ET | 6PM PThttps://t.co/Bgm0eOgOZi pic.twitter.com/r3IlNTwMLi

— One America News (@OANN) January 3, 2025

With 215 Democrats expected to back their leader, Rep. Hakeem Jeffries (D-NY), Johnson must maintain near-unanimous Republican support.

The House will meet at Noon on Friday for a quorum call, which will be followed by the Speaker election. The vote will be presided over by the House clerk, who will call out the names of hundreds of members-elect one-by-one in alphabetical order.

Johnson is hoping for a 1st round ballot win in order to avoid what happened in Jan. 2023, when it took more than a dozen ballots to select Kevin McCarthy (R-CA). If Johnson isn’t elected by a majority, the process will be repeated as many times as necessary until a speaker is chosen.

“We cannot afford any palace drama here,” Johnson told Fox News on Thursday, and telling CNN on Friday, “I expect we can get it done on the first round.”

Speaker Johnson: “We don’t have time for drama.” pic.twitter.com/hz1S3xB7XH

— Sam Lisker (@slisker) January 3, 2025

Johnson has been working the phones all week to lock up votes, while attempting to avoid or minimize concessions that could cause Democrats to shut down future votes on various issues, WaPo reports.

Trump’s endorsement earlier this week provided Johnson with a significant boost, signaling the former president’s belief that there is no viable alternative candidate. Johnson underscored his alignment with Trump’s agenda, highlighting plans for increased border security spending and tax cuts as part of a coordinated strategy session at Mar-a-Lago on New Year’s Day.

Hard-Liners Seek Assurances

Rep. Ralph Norman (R-SC), a prominent Freedom Caucus member, acknowledged Trump’s endorsement as “huge” but remained cautious. Norman met with Johnson alongside fellow hard-liners, seeking commitments on substantial tax cuts, spending reductions, and enhanced border security. After the meeting, which lasted about an hour, Norman expressed optimism, stating he was “very happy with the discussion.”

Rep. Andy Harris (R-MD), chair of the Freedom Caucus, emphasized the need for procedural changes, including more time for lawmakers to review legislation before floor votes and greater flexibility to propose amendments. Johnson indicated he was in discussions with Republican colleagues about adjusting the legislative process but refrained from providing specifics.

In the wake of McCarthy’s removal, the Republican conference endured weeks of infighting, rejecting several senior leadership candidates before coalescing around Johnson as a surprise compromise choice.

Meanwhile, Republicans will also cast a Friday vote on a new rules package aimed at stabilizing leadership by raising the threshold to initiate a vote to remove the speaker. The proposal increases the number of members required to trigger such a motion from one to nine and mandates that both the sponsor and co-sponsors of the motion must belong to the majority party.

Democrats have criticized the rule change, with Rep. Jim McGovern (D-MA), the ranking Democrat on the House Rules Committee, warning it could undermine accountability. The proposal “would, for the first time in history, shield the speaker from accountability to the entire chamber by making it so that only Republicans can move to vacate the chair,” McGovern said.

Back in October, when the repo market started cracking under the weight of the Fed’s gradual reduction in Reserves and Reverses, and funding spreads briefly exploded, we quoted BofA STIR expert – and former NY Fed repo guru – Mark Cabana, who said that according to his estimates, the Lowest Comfortable Level of Reserves (or LCLOR) is around $3-3.25 trillion given “(1) bank willingness to compete for large time deposits and (2) reserve / GDP metrics (back in 2019, the repo market locked up once reserves dropped to about 7% of GDP not too far from where they are now).”

We bring this up because in the latest weekly Fed balance sheet update, we find that the amount of Fed reserve balances as of Wednesday, Jan 1, tumbled by a whopping $326 billion – the second biggest drop on record – pushing the total from the comfortable level of $3.218 trillion to $2.892 trillion, the lowest since November 2020.

Normally, this liquidity-draining plunge would have been sufficient for funding spreads blowing out and stocks being flushed into a liquidation frenzy, however in this particular case there was a footnote: the fact that it took place at year, means that there was a mitigating factor, namely the flood of reserves went largely into reverse repos, which as we noted previously, soared by a near-record $213BN to $474BN, the highest since June, after previously dropping below $100BN.

Reverse repo soars by a near-record $213BN to $474BN, the highest since June, on year-end window dressing and funding shortage. Expect this to drop to $80BN by the weekend. pic.twitter.com/NhLLvIaIdq

— zerohedge (@zerohedge) December 31, 2024

This, as frequent readers know by now, is largely for window dressing purposes with banks scrambling to pad their books for regulatory purposes at quarter and year-ends, in the process draining substantial liquidity out of the system… then just days later reverting to normal, and sure enough on Wednesday we already saw a huge drain in the reverse repo balances, which dropped by 50%, or $233BN in one day, to $240BN, an amount which  we are confident will slide aggressively, and back below $100BN, in the coming days.

That also explains the market’s sanguine take on the recent plunge in reserves: it is quite confident the numbers will increase in the coming days.

There is another reason why what would otherwise be a concerning drop in systemic liquidity has yet to manifest itself in any funding spreads blowing out, and for that we have to thank Democrats for refusing to kick the can on the debt ceiling, which as discussed previously, will hit within days and restart the familiar 4-6 months liquidity flood that traditionally precedes the next debt ceiling crisis.

As Goldman’s William Marshall writes in a Thursday note (available to pro subs), the start of 2025 brings the end of the debt limit suspension period. And while the treasury likely won’t have to dip into its extraordinary measures until the middle of January, as Janet Yellen noted recently, from that point it will generally have to operate under the constraints of cash on hand plus available extraordinary measures until there is a resolution. At that point the countdown to the next debt ceiling crisis begins, and the deadline for the next D-Day, or debt limit action, is likely not until July or August 2025.

Some more details from the Goldman report:

We estimate Treasury will start out with slightly more than $1tn in headroom, reflecting the sum of the Treasury’s cash balance plus extraordinary measures available up front. As Treasury Secretary Yellen noted in a letter to Congress, it likely won’t be until the middle of January that Treasury actually has to start dipping into its extraordinary measures thanks to redemptions of nonmarketable securities on January 2. In addition to the capacity available to begin with, we assume some incremental headroom will come available each month alongside a more sizeable boost at mid-year.

There is uncertainty as to how exactly Treasury will manage its available levers—i.e. the pace at which it draws down the TGA versus depleting extraordinary measures via higher net marketable borrowing. Still, the overall effect will be less bill supply and higher levels of broad liquidity (thanks to a lower TGA) in the system than the counterfactual of no constraint. Exhibit 1 illustrates the average change in T-bills outstanding and cash balances normalized to past debt-limit resolutions (using a sample since 2011).

On average bill supply falls by about $130bn and the TGA drops roughly $225bn in the 6 months into an agreement. The subsequent rebuild tends to be somewhat faster—on average bills outstanding and the TGA both reverse that decline within the month or two following a resolution.

As noted above, the TGA will be starting off at a considerably higher level compared to when Treasury has reached the debt ceiling in the past (highs of approximately $450BN in 2021 and 2023). Goldman expects this year’s TGA drawdown to be comparable to the 2021 and 2023 experiences when cash balances fell roughly $425bn in the window between reaching the debt ceiling and resolution.

That said, a process that drags into Q3 could see TGA fall significantly further still as July and August tend to be seasonally large deficit months, and thus GS estimates meaningful bill paydowns in the $400 to $600bn range over the first two quarters in this scenario, on par with the paydown observed in 2021

Paradoxically, and as we explained in early 2021, the period preceding a debt ceiling D-Day (which will takes place some time in Q3) tends to be very beneficial for risk assets, not because markets fail to discount a potential looming political crisis, but because overall liquidity levels soar. 

Indeed, as Goldman confirms, “debt ceiling limitations mean that until there is a deal there will be less bill supply and higher levels of broad liquidity than would have been the case otherwise.” Less Bill supply means the Treasury is forced to draw down on its Treasury General Account (i.e. cash balances) as it can’t roll Bills, and meanwhile the liquidity from maturing Bills is allocated to other risk assets lifting them in the process despite what is clearly another looming crisis.

To wit, the bank writes that “balance sheet runoff means, however, that a given TGA drawdown is likely to translate to a smaller build in overall liquidity in the system (measured as reserves plus RRP) — we expect this would rise roughly $150-250bn through mid-year under our QT baseline assuming no resolution ahead of then.“

Ironically, as with the scope for a larger TGA drawdown, a more protracted process that spills into the second half of the year could see a sharper rise in overall liquidity that exceeds what was seen in 2023 when injections from the Bank Term Funding Program also helped offset the impact of QT. Conversely, a later tapering and/or end to QT than baseline expectations of an H1 end, would dampen any potential rise in liquidity although should Trump pursue an activist Fed to boost overall liquidity, we don’t expect this happening. Ultimately, absent any debt limit constraint, bill supply would be roughly flat alongside a roughly $350bn draining of overall liquidity from the system in the first half of the year.

In other words, the good news is that with just days to go until the countdown to the next debt ceiling fiasco begins, the Treasury cash balance is historically high compared to past instances when the debt ceiling has been reached as discussed above, and If there is no resolution in the first half of the year, the TGA drawdown would more than fully offset the draining of liquidity via QT alongside meaningfully negative bill supply.

Not surprisingly in light of this imminent liquidity flood, Goldman thinks that “the higher starting level for the TGA and magnitude of any potential bill paydown should at least support a more benign first half of the year in dollar funding conditions than would have been the case otherwise, dampening the tightening bias in swap spreads that have prevailed in prior debt ceiling episodes.”

Goldman’s rule of thumb is that a $100bn rise in liquidity from current levels is worth 0.5bp to SOFR-FF, while a $100bn drop in bills outstanding is worth about 0.1bp. That said, the market prices that in to a large degree, with most SOFR-FF tightening backloaded into the second half of the year…

… which leaves vulnerability to a faster resolution of the debt limit (or a later/slower ending of QT). It’s also worth noting that balance sheet capacity constraints (rather than the overall level of liquidity) have played a greater role in driving volatility in funding markets over the last year—these may ease now that year-end is behind us, but not because of the debt limit.

Putting it all together, Trump could not have asked for a better “debt ceiling crisis”, because while Democrats have been hoping to pull the rug from under Trump as soon as he is in the White House (expect the reality of the US jobs market to be unloaded by the deep state apparatchiks at the BLS like a ton of bricks), the accelerated drain of some $750BN in Treasury cash will provide a generous buffer for risk assets to maintain their levitation well into the second half of 2025 much to the delight of the 47th US president.

Ironically, it would be the end of the debt ceiling fiasco that is bearish for markets! That’s because, the Treasury tends to rebuild the TGA fairly quickly upon resolution, suggesting risks of a swift undoing of any tailwinds in funding and spread markets.

That said, the intersection of this episode with the more mature phase of Fed QT may see Treasury proceed somewhat more cautiously in eventually returning the TGA to target, however, particularly with Treasury’s “steady-state” TGA target somewhat higher than it was pre-pandemic.

According to Goldman, the August-September 2019 repo crisis is perhaps the closest analog: QT had ended, and the mid-September jump in the TGA coincided with the surge in funding market volatility that prompted Fed liquidity injections. While the end point would ultimately be the same, a more gradual replenishing of Treasury’s cash balance would reduce the risk of excessive volatility that could arise from quickly withdrawing liquidity from the system.

In other words, stocks – and liquidity sppoppnges like Bitcoin surge – for the duration of the TGA drain, then risk tumbles once the debt ceiling resolution drains $750BN from the market some time in Q3, and then – if the stress from said drain is too much – we get another “Not QE” from the Fed, which triggers the next inflationary shock into late 2025 and onward.

More in the full Goldman note available to pro subs.

Authored by David Stockman via InternationalMan.com,

The MAGA folks are going to be in for a rude awakening. That’s because Donald Trump has been taking to the public stage in recent weeks promising a new “golden age” of American prosperity upon his return to the Oval Office, but nearly the opposite is just around the corner. What’s actually coming down the pike is the UniParty’s revenge— a financial and economic shitshow that is likely to dwarf all that has gone before.

There is no mystery as to why. To wit, there is a demolition derby brewing in the bond pits that threatens to extinguish any even faint remaining hope that Washington’s Fiscal Doomsday Machine might be unplugged.

We are referring to the utter fiscal paralysis that stems from the combination of the GOP’s addiction to tax cuts and Big Defense budgets and the Dem’s demagoguery about Social Security, Medicare and the rest of the Welfare State. This means that down on the banks of the Potomac there is virtually no one left in the camp of fiscal rectitude. And, equally importantly, there is no political hay to be harvested by campaigning against the “borrow and spend” proclivities of an overweening central government, which has now become heavily insulated from the daily life of the people as they struggle to pay their bills and ward off the economic imprecations of inflation and taxes.

This embedded fiscal paralysis is actually something new under the sun, however. It was actually far different as recently as the late 1970s. Back then we found plenty of company among the GOP backbenchers in the US House as we launched full-throated political campaigns against the rising public debt and the “modest” rivers of red ink being incurred by “big spender” Jimmy Carter.

We employ the quote marks here because as it has turned out Carter’s biggest annual deficit in constant 2024 dollars of purchasing power was just $240 billion during the recession year of 1980. Given that the Federal deficit clocked in at $367 billion in the month of November 2024 alone, it can be well and truly said that the Washington UniParty is now capable of generating more red ink in 20 days than Jimmy Carter did during his worst year.

Of course, that outcome earned him in short order a one-way ticket back to Plains Georgia. Yet that electoral rebuke was no fluke nor was it even due to the superior campaigning style of the Hollywood B actor who displaced him. Back then the deficit had immediate ramifications on main street because the Fed was not yet monetizing the flow of Treasury paper. Accordingly, the Treasury Department’s sharp elbows in the bond pits caused interest rates to materially rise and private sector borrowers to be “crowded out”.

Needless to say, representing a typical “town and country” district in Michigan, as we did, our political support base was especially attuned to the effects of Uncle Sam sucking up the available supply of private savings. Among these supporters, for instance, were car dealers, whose floor plan financing costs got jacked-up by rising interest rates, and Savings and Loan executives, whose book of fixed rate mortgages got nailed by sharply higher funding costs. There were also farmers, who suffered ballooning financing costs for fuel, fertilizer, tractors etc. and small manufacturers, who needed to finance inventories and equipment—among countless other productive citizens immediately and adversely impacted by Federal deficits.

Not surprisingly, therefore, the Federal deficit’s adverse economic impact on main street was rapidly and thoroughly transmitted to Washington via the incoming Congressional mail and hometown political pressure – a potent force that was not lost on the Congressional Democrats led by Speaker Tip O’Neill. In fact, we backbenchers used to send the Speaker into paroxysms of ill-temper with our deficit-howling on the floor of the US House because he knew full well that keeping his gavel in hand could be jeopardized in swing districts all around the country by GOP candidates on the warpath about spending and deficits—most especially during periods of rising inflation or other economic distress.

What existed until the era of Alan Greenspan and his subsequent heirs and assigns, therefore, was a form of politico-economic checks and balances. The Federal debt never really got out of hand because there was a feedback loop in the nation’s governance process that motivated the GOP to function as the anti-government party and Watchdog of the Treasury against the Dem’s self-designated role as the Government Party and champion of the people and the havenots.

The resulting tolerable political equilibrium is more than evident in the post WWII path of the Federal debt claim on the GDP. After bouts of bipartisan wartime finance, the debt ratio came down with regularity, falling from the 120% WWII peak to a bottom of just 31% in the early 1980s. Indeed, it was only after Paul Volcker was given his walking papers in 1987 by the easy money man at the US Treasury, James Baker, that this debt-containing governance equilibrium finally failed.

The cause of the failure, of course, was the switch to massive monetization of the public debt by the Fed after Volcker’s untimely departure. There was a bitter irony in that, indeed, because Volcker was a fiscal conservative, sound money man and steely opponent of monetizing the public debt for the convenience of the politicians in power.

That is, his stance was the very embodiment of what the Gipper had come to town to accomplish. Yet he got bamboozled by Baker into appointing as Fed Chairman a lapsed goldbug and shameless political opportunist who wanted nothing less than to be the toast of the town in Washington. This aspiration most definitely did not encompass allowing interest rates to clear the market at whatever level Washington’s massive borrowing requirements dictated.

That is to say, once Greenspan put the Federal Reserve in the public debt monetization business on a big time basis, the checks and balances system broke down because the feedback loop of rising interest rates and crowding-out was short-circuited. The subsequent history speaks for itself—the public debt claim on GDP has been on a relentless uphill climb ever since and regardless of which party controlled the Congress and/or White House.

Federal Debt As % of GDP, 1941 to 2023

Yet this 37-year free lunch interregnum is about ready to expire. The Fed has printed itself into a corner, and is no longer in a position to resume monetizing the debt. Stubbornly embedded goods and services inflation, will likely keep the Fed’s printing presses on idle for years to come.

Moreover, despite the good intentions of the DOGE boys and the alarms about runaway Federal spending and borrowing they are managing to get into the public discourse through X and other alternative media, we still are a democracy of laws. That means without sweeping statutory changes in entitlements and drastically reduced annual appropriations for defense and nondefense discretionary spending alike, the nation’s Fiscal Doomsday Machine will crank forward, pushing the public debt skyward.

In fact, the Madisonian Contraption of deep governmental checks and balances which has served the nation so well over the last 236 years means that on fiscal matters aligning 218 votes in the House, 51 votes in the Senate and a presidential signature is virtually impossible, as will be evident during the first 100 days of the second Trump Administration.

Specifically, the current debt ceiling suspension ended on January 1st and there is no hope of it being extended or lifted in a U.S. House divided by just one vote on a red/blue basis. Rightfully, the 30-40 remaining GOP fiscal hawks are not going to sign-up for an open-ended renewal of the suspension or an outright increase in what will be the nation’s $36.3 trillion debt ceiling. It will surely ignite the greatest game of political “chicken” ever witnessed on the banks of the Potomac.

That is to say, the US Treasury is sitting on a $800 billion pile of cash, along with availability of a few hundred billion more owing to one-time intergovernmental borrowing and lending games. However, both of these sources of cash and borrowing to pay Uncle Sam’s bills will be drawn down toward zero at a rapid rate during the first half of 2024 as the UniParty politicians line up in a circle on the banks of the Potomac taking aim and each other and most especially the White House occupant.

And we do mean that what impends is a perilous game of political chicken in the face of a rapidly depleting hoard of cash. To wit, just in the first two months of FY 2025 through November, cumulative spending has come in at $1.253 trillion versus receipts of just $629 billion. The resulting $624 billion of red ink amounted to $10 billion of new borrowing each and every day—including weekends, holidays and adverse weather days.

That’s right. The US Treasury’s current cash burn rate is the real revenge of the UniParty. It insures that whatever the Trump Administration and its DOGE advisors might have had in mind on the fiscal front will be quickly overtaken by the Mother of All Debt Ceiling Crises within months and weeks of the inauguration.

Moreover, without the Fed coming the rescue, interest rates were already fixing to soar— even before the debt ceiling crisis was front and center after January 1st. And if the GOP seeks to move Trump’s $5 trillion tax cut bill on Capitol Hill, the revenge of the bond vigilantes will be even more virulent.

Already the handwriting is on the wall. The yield on the 10-year UST is up 100 basis points since September 18th despite the Fed cutting the overnight rate by 100 basis points during the same three-month period. That is to say, the Fed is not clearing the bond pits of new government debt paper which is now flowing at a $3 trillion annual rate.

Yield on 10-Year UST, September 2024 to December 2024

It is only a matter of time, therefore, before the rising purple line below causes cascading dislocations among the $100 trillion of total public and private debt now outstanding.

*  *  *

The truth is, we’re on the cusp of an economic crisis that could eclipse anything we’ve seen before. And most people won’t be prepared for what’s coming. That’s exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.

Outgoing U.S. Surgeon General Vivek Murthy issued an advisory on Friday that alcohol consumption could lead to a risk of developing cancer, calling for an updated warning label on alcoholic drinks.

“Alcohol is a well-established, preventable cause of cancer responsible for about 100,000 cases of cancer and 20,000 cancer deaths annually in the United States – greater than the 13,500 alcohol-associated traffic crash fatalities per year in the U.S. – yet the majority of Americans are unaware of this risk,” he said in a statement.

Murthy called for the guidelines on alcohol consumption limits to be reassessed so that people can weigh the cancer risk when deciding whether or how much to drink, alongside current warnings on birth defects and impairments when operating machinery.

As Jack Philips reports for The Epoch Times, according to his office, alcohol is the “third leading preventable cause of cancer” in the United States after tobacco and obesity, while many Americans are not aware of the risk.

“This Advisory lays out steps we can all take to increase awareness of alcohol’s cancer risk and minimize harm,” Murthy said.

Alcoholic beverages in the United States currently carry a health warning label that advises pregnant women to not drink them and that their consumption impairs a person’s ability to drive a car or operate machinery. This label has not changed since its inception in 1988.

“The direct link between alcohol consumption and cancer risk is well-established for at least seven types of cancer,” his statement said, adding that the risk can occur “regardless of the type of alcohol” consumed such as beer, wine, or spirits.

The beverages can cause cancers of the mouth, throat, esophagus, and voice box, it added.

Murthy’s statement says health care providers should encourage alcohol screening and treatment referrals as needed and that efforts to increase general awareness should be expanded.

In September, a report released by the American Association for Cancer Research (AACR) said that 5.4 percent of all cancer cases are linked to alcohol consumption.

“Unfortunately, awareness about the link between alcohol and cancer is still low, highlighting the need for public messaging campaigns, such as cancer-specific warning labels displayed on alcoholic beverages, along with effective clinical strategies to reduce the burden of alcohol-related cancers,” the organization said.

Meanwhile, the World Health Organization (WHO) said in late 2022 that “no level of alcohol is safe” for one’s health, noting it is a “toxic, psychoactive, and dependence-producing substance” listed as a carcinogen, meaning it may cause cancer.

However, an analysis from Harvard University found that some studies, including one published in August 2024 that warned that no level of alcohol is safe, “failed to give enough context or probe deeply enough to understand” the limitations of the study.

That study appeared to have “cherry-picked subgroups of a larger study previously used by researchers, including one of us, who concluded that limited drinking in a recommended pattern correlated with lower mortality risk,” the analysis said.

“We need more high-quality evidence to assess the health impacts of moderate alcohol consumption. And we need the media to treat the subject with the nuance it requires. Newer studies are not necessarily better than older research,” it added.

A surgeon general’s warning for alcohol regarding its potential cancer risk would require approval from Congress.

Shares in European-listed liquor companies Diageo and Pernod Ricard were both down by more than 3 percent, while beer makers Heineken and Anheuser-Busch InBev also slipped. Shares of U.S.-listed alcoholic beverage makers such as Constellation Brands Brown-Forman Corp. and Molson Coors fell by between 1 percent and 2 percent in early trading on Friday.

Authored by Lance Roberts via RealInvestmentAdvice.com,

In a recent discussion on TheRealInvestmentShow, Bob Farrell and his 10 investment rules were discussed, which elicited several email questions asking, “Who is Bob Farrell, and where are these rules?”. I often forget how old I have become, and the investing legends of my youth are no longer there and are lost to the sands of time. While I have written several articles discussing the investing legend’s famous rules, which have served us well. the last time I had a deep discussion of Bob’s rules was in 2016; much has happened since then. From tax cuts and tariffs to trade wars, or the Fed cutting rates and instituting a massive QE program following COVID-19, to rate hikes to combat inflation. The question worth exploring is whether Bob’s rules still hold today. That is the subject of this week’s discussion.

Why are Bob’s rules so important? The answer is simple: The downfall of all investors is ultimately “greed” and “fear.” Investors repeatedly fail to sell when markets are near peaks, nor do they buy market bottoms. However, this does not just apply to individuals but also to many advisors, which is why many promote “buy and hold” investment strategies because they either can’t, don’t want to, or don’t know how to manage portfolio risk.

While buy-and-hold strategies work well during trending bull markets, they can be devasting during larger corrections and bear markets. This is why Bob Farrell’s rules are so important for navigating markets over the long term. Such is particularly the case today, with expectations elevated, valuations high, and sentiment extremely bullish.

Who is Bob Farrell?

Bob was a Wall Street veteran with over 50 years of experience crafting his investing rules. Farrell obtained his master’s degree from Columbia Business School and started as a technical analyst at Merrill Lynch in 1957. Even though Farrell studied fundamental analysis under Graham and Dodd, he turned to technical analysis after realizing there was more to stock prices than balance sheets and income statements. Farrell became a pioneer in sentiment studies and market psychology. His ten rules on investing stem from personal experience with dull markets, bull markets, bear markets, crashes, and bubbles. In short, Farrell saw it all and lived to tell about it.

With that said, let’s dive into Bob Farrell’s famous rules.

1) Markets tend to return to the mean (average price) over time.

Like a rubber band stretched too far – it must be relaxed to be stretched again. The same is true for stock prices anchored to their moving averages. Trends that get overextended in one direction or another always return to their long-term average. Even during a strong uptrend or downtrend, prices often return (revert) to a long-term moving average or trend. The chart below shows the S&P 500 versus its bullish and bearish trends. Even during strongly trending bull markets, markets revert regularly to their underlying trend. The difference between a BULL market and a BEAR market is when the previous existing trend is reversed.

The next chart shows the percentage deviation of the market’s current price from the 52-week moving average. During bullish trending markets, there are regular reversions to the mean, which create buying opportunities. However, what is often not stated is that investors should have taken profits from portfolios as deviations from the mean reached historic extremes. Conversely, in bearish trending markets, such reversions from extreme deviations should be used to sell stocks, raise cash, and reduce portfolio risk rather than “panic sell” at market bottoms. The current deviation of the long-term mean is at levels that suggest investors may be best served in becoming more risk-averse in portfolio allocations.

2) Excesses in one direction will lead to an opposite excess in the other direction.

Markets that overshoot on the upside will also overshoot on the downside, like a pendulum. The further it swings to one side, the further it rebounds to the other side. Such is the extension of Rule #1 as it applies to longer-term market cycles (cyclical markets).

While the chart above shows how prices behave on a short-term basis, longer-term markets also respond to Newton’s 3rd law of motion: “For every action, there is an equal and opposite reaction.” The first chart below shows that cyclical markets reach extremes when they are more than two standard deviations above or below the 50-week moving average. Notice that these excesses ARE NEVER worked off by just going sideways.

The second chart shows the S&P 500’s price deviations from its long-term exponential growth trend adjusted for inflation. Notice that when prices have historically reached extremes, the price reversion is just as extreme. It should be somewhat logical that the current deviation from the long-term mean will eventually revert.

3) There are no new eras – excesses are never permanent.

There will always be some “new thing” that elicits speculative interest. These “new things” throughout history, like the “Siren’s Song,” has led many investors to their demise. In fact, over the last 500 years, we have seen speculative bubbles involving everything from Tulip Bulbs to Railways, Real Estate to Technology, Emerging Markets (5 times) to Automobiles and Commodities. It always starts the same and ends with the utterings of “This time it is different.”

[The chart below is from my March 2008 seminar discussing that the next recessionary bear market was about to occur. I have updated it for the current events.]

As legendary investor Jesse Livermore once stated:

“A lesson I learned early is that there is nothing new on Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”

4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways

Excesses, such as what we see in the market now, can go much further than logic dictates. However, as stated above, these excesses are never worked off simply by trading sideways. Corrections are always just as brutal as the advances were exhilarating. The chart below shows when the markets broke out of their directional trends—the corrections came soon after that.

5) The public buys the most at the top and the least at the bottom.

The average individual investor is bullish at market tops and bearish at market bottoms. Such is due to investors’ emotional biases of “greed” when markets are rising and “fear” when markets fall. Logic would dictate that the best time to invest is after a massive sell-off; unfortunately, this is the opposite of what investors do.

6) Fear and greed are stronger than long-term resolve.

As stated in Rule #5, emotions cloud your decisions and affect your long-term plan.

“Gains make us exuberant; they enhance well-being and promote optimism,” says Santa Clara University finance professor Meir Statman.  His studies of investor behavior show that “Losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks.”

The bullish sentiment index shows that “greed” is again beginning to reach levels where markets have generally reached intermediate-term peaks.

In the words of Warren Buffett:

“Buy when people are fearful and sell when they are greedy.”

Currently, those “people” are getting extremely greedy.

7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.

Breadth is important. A rally on narrow breadth indicates limited participation, and the chances of failure are above average. The market cannot continue to rally with just a few large-caps (generals) leading the way. Small and mid-caps (troops) must also be on board to give the rally credibility. A rally that “lifts all boats” indicates far-reaching strength and increases the chances of further gains.

The chart above shows the NYSE Advance-Decline Line and the number of S&P 500 companies trading above their 50—and 200-day moving averages. When the market is overbought, and the breadth deteriorates, this usually precedes a short-term correction or period of consolidation. While such does not necessarily mean a more significant market crash is imminent, there is no way to distinguish between consolidations and corrections until after.

8) Bear markets have three stages – sharp down, reflexive rebound, and a drawn-out fundamental downtrend

Bear markets often start with a sharp and swift decline. After this decline, an oversold bounce retraces a portion of that decline. The longer-term decline continues at a slower and more grinding pace as the fundamentals deteriorate. Dow Theory suggests that bear markets have three phases with two down legs and a reflexive rebound.

The chart above shows the stages of the last two primary cyclical bear markets. There were plenty of opportunities to sell into counter-trend rallies during the decline and reduce risk exposure. Unfortunately, the media and Wall Street told investors to “hold on” until they finally sold out at the bottom.

9) When all the experts and forecasts agree, something else will happen.

This rule fits within Bob Farrell’s contrarian nature. As Sam Stovall, the investment strategist for Standard & Poor’s, once stated:

“If everybody’s optimistic, who is left to buy? If everybody’s pessimistic, who’s left to sell?”

As a contrarian investor, along with several of the points already made within Farrell’s rule set, excesses are built by everyone on the same side of the trade. Ultimately, when the shift in sentiment occurs – the reversion is exacerbated by the stampede going in the opposite direction.

Being a contrarian can be quite difficult at times as bullishness abounds. However, it is also the secret to limiting losses and achieving long-term investment success. As Howard Marks once stated:

“Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, since momentum invariably makes pro-cyclical actions look correct for a while. (That’s why it’s essential to remember that ‘being too far ahead of your time is indistinguishable from being wrong.’)

Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.”

10) Bull markets are more fun than bear markets

As stated above in Rule #5 – investors are primarily driven by emotions. As the overall markets rise, up to 90% of any individual stock’s price movement is dictated by the market’s general direction. Such is the derivation of the saying, “a rising tide lifts all boats.”

Psychologically, as the markets rise, investors begin to believe they are “smart” because their portfolios increase. In reality, their portfolios are primarily driven by “luck” rather than “intelligence.”

Investors behave much the same way as individuals who are addicted to gambling. When they win, they believe their success is based on their skill. However, when they begin to lose, they keep gambling, thinking the next “hand” will be the one that gets them back on track. Eventually – they leave the table broke.

Bull markets are indeed more fun than bear markets. They elicit euphoria and feelings of psychological superiority. However, bear markets bring fear, panic, and depression.

What is interesting is that no matter how many times we continually repeat these “cycles” – as emotional human beings, we constantly “hope” that somehow this “time will be different.” Unfortunately, it never is, and this time, it won’t be either. The only questions are: when will the next bear market begin, and will you be prepared for it?

Conclusions

Like all rules on Wall Street, Bob Farrell’s rules are not meant to have hard and fast rules. There are always exceptions to every rule, and while history never repeats precisely, it often “rhymes” very closely.

Nevertheless, these rules will benefit investors by helping them to look beyond the emotions and the headlines. Awareness of sentiment can prevent selling near the bottom and buying near the top, which often goes against our instincts.

Regardless of how often I discuss these issues, quote successful investors, or warn of the dangers – the response from individuals and investment professionals is always the same.

 “I am a long term, fundamental value, investor.  So these rules don’t really apply to me.”

No, you’re not. Yes, they do.

Individuals are long-term investors only as long as the markets are rising. Despite endless warnings, repeated suggestions, and outright recommendations, getting investors to sell, take profits, and manage your portfolio risks is nearly a lost cause as long as the markets are rising. Unfortunately, when the fear, desperation, or panic stages are reached, it is far too late to act, and I can only say I warned you.

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