Authored by Matt McGregor via The Epoch Times (emphasis ours),

A woman has filed a lawsuit against a Virginia school district alleging its clandestine support of her daughter’s decision to change her gender identity resulted in her being threatened, bullied, and ultimately trafficked by sexual predators.

Michele Blair, biological grandmother and adoptive mother of 16-year-old Sage Blair, alleges in the lawsuit (pdf) filed in August that staff at the Appomattox County High School directed Sage—who has a history of mental health issues and early childhood trauma—to change her name and pronouns and to use the boys’ bathroom, all the while keeping it a secret from Mrs. Blair.

While attending school identifying as a boy named “Draco,” Sage faced abuse from the other students because of the actions of the staff to transition her, Mrs. Blair told The Epoch Times.

“She was being verbally, physically, and sexually harassed, with constant threats of rape from the male students, and despite this, the school still encouraged her to use the boys’ bathroom,” Mrs. Blair said.

Among the defendants named in the lawsuit are two counselors—Dena Olsen and Avery Via—and Maryland public defender Aneesa Khan.

According to the lawsuit, Ms. Olsen and Mr. Via played a key role in deliberately concealing Sage’s transition while engaging in inappropriate psychotherapy methods to facilitate Sage’s belief that she was a boy, which later led to increased trauma and her decision to run away in August 2021.

Sage—identified as “S.B.” in the lawsuit—was kidnapped, drugged, and raped by an adult male who later drove her to Washington, where she was left with two brothers who drugged and raped her again before driving her to Maryland, where she was then left with a registered sex offender who kept her in a locked room only to be trafficked to other men, the lawsuit states.

After Sage had gone, law enforcement found a note she left for her parents which read, “You’ve done your job, Jesus loves you. … I’m afraid of what is to come if I stayed. Be on your guard. There are bad people around here. … All my love,” the complaint states.

‘An Ideological Agenda’

Though law enforcement rescued Sage on Sept. 2, 2021, Mrs. Blair was not allowed to take her home because Ms. Khan, who was assigned as Sage’s public offender, alleged neglect at home, an allegation that was supported by Ms. Olsen and Mr. Via based on the supposition that Mrs. Blair and her husband weren’t acknowledging Sage as a male.

“She went with her own ideological agenda because of her belief that I was not adequately supporting Sage,” Mrs. Blair said. “We got into a courtroom, and she came up on a big Zoom screen. I called her name, saying, ‘I love you, Sage,’ and she replied, ‘I love you, Nana,’ and that was it. The public defender shut it down and convinced the judge that I was abusive because I didn’t call her by her boy name.”

Baltimore Circuit Court Judge Robert Kershaw at one point had Mrs. Blair’s husband removed from the courtroom for forgetting to use Sage’s masculine pronouns, she said, and the judge refused to acknowledge Sage’s need for trauma care, Mrs. Blair said.

Ms. Khan, with the assistance of Ms. Olsen and Mr. Via, had successfully convinced Judge Kershaw to have Sage put in the custody of the Maryland Department of Juvenile Services (DJS) where, at Ms. Khan’s insistence, she was housed with high-risk adolescent males who, again, sexually assaulted her, the lawsuit states.

“I just don’t understand why he went along with it,” Mrs. Blair said.

A month later in November, Sage fled to Texas to meet someone she’d met online who she believed was 16, but the person turned out to be another sex trafficker.

This time, Texas authorities were able to intervene and get her back to Mrs. Blair, where she remains after having been away from home for over a year.

“This all could have been avoided if the school had informed me of what was going on instead of keeping me in the dark,” Mrs. Blair said. “Sage would not have a lifetime complex PTSD diagnosis she will struggle with the rest of her life.”

Sage had already spent several months in the foster care system before she was adopted by the Blairs when she was 2 years old after her father died and her mother was unable to care for her.

“She had a history of mental health issues from early childhood trauma,” Mrs. Blair said.

Sage has good days and bad days, Mrs. Blair said.

“It’s a long road, but where there’s life, there’s hope, and I’m so grateful she’s alive,” she said.

The Lawsuit

Mary McAlister, senior litigation counsel with Child & Parental Rights Campaign, the firm representing Mrs. Blair, told The Epoch Times that they are suing school staff and the public defender for several causes of action, the first being the violation of the fundamental parental right of a parent to direct the upbringing of the child and a second being a violation of civil rights.

“By depriving Plaintiff of critical information regarding S.B.’s gender identity and sexual harassment and assaults at school, Defendants Olsen and Via have infringed Plaintiff’s fundamental right to direct S.B.’s upbringing in that Plaintiff did not have the information necessary to make reasoned decisions regarding how to respond to S.B.’s announcement of a male gender identity and the sexual harassment she suffered in the way most appropriate for protecting S.B.’s mental health and keeping her safe,” the complaint states.

They are suing for violation of Title IX for “deliberate indifference to sexual harassment” because, according to the complaint, school staff failed to take corrective measures when Sage reported she was being sexually assaulted.

“As a direct and proximate result of Defendants’ deliberate indifference to the severe, pervasive and objectively offensive sexual harassment suffered by S.B.,” the lawsuit states, Sage will “continue to suffer significant physical and psychological trauma, educational disruption, and emotional distress.”

The lawsuit alleges that Ms. Olsen, Mr. Via, and Ms. Khan violated Mrs. Blair’s fundamental right to custody of Sage because of a “perceived viewpoint about affirming an incongruent gender identity in her daughter.”

“Mrs. Blair is informed and believes that while S.B. was in custody in Baltimore Ms. Khan asked S.B. whether S.B.’s parents called her a boy at home, to which S.B. answered no,” the complaint states. “Upon hearing that answer, Ms. Khan determined, without taking into account any of S.B.’s mental health history or life circumstances and without having any contact with Mrs. Blair, that Mrs. Blair had an unfavorable viewpoint of S.B.’s assertion of a male gender identity, and that her perceived viewpoint constituted abuse and neglect.”

Alleged Abuse

According to the complaint, Ms. Khan met with Ms. Olsen and Mr. Via and determined that Mrs. Blair was guilty of abuse, though they never discussed Sage’s gender identity with Mrs. Blair.

“Despite only speaking with Mrs. Blair briefly on two occasions in August 2021, and not about S.B.’s asserted male gender identity, Mr. Via presented false sworn testimony that Mrs. Blair and her husband had been verbally abusive, emotionally abusive, and unsupportive to S.B.,” the lawsuit states. “Mr. Via also acted to provide Ms. Khan with mental health records for S.B., including the August 5, 2021 psychiatric evaluation showing a diagnosis of gender dysphoria, a diagnosis of which Mrs. Blair was not aware.”

Mrs. Blair is additionally suing Ms. Khan for legal malpractice.

“Ms. Khan knowingly and intentionally presented that false testimony to the Maryland court to secure an order of temporary custody with Maryland DJS so as to prevent Mrs. Blair from regaining custody and returning S.B. to Virginia,” the lawsuit states.

The Epoch Times contacted the Maryland Office of the Public Defender for comment.

‘Sage’s Law’

To see that this doesn’t happen to any more parents, Mrs. Blair got involved in telling her story to push for legislation titled “Sage’s law,” which would prohibit school staff from hiding gender identity choices from the parents.

In January, Mrs. Blair gave her testimony before the Pre-K-12 Subcommittee of the Virginia House of Delegates, where she advocated for the passage of the bill.

Ms. McAlister said after the bill was introduced in the 2023 legislative session, it passed the Republican-controlled House of Delegates, but when it got to the Democrat-controlled Senate, it died.

“Every Democrat serving in the General Assembly voted against it, which is a sad commentary,” Ms. McAlister said. “But Virginia is having elections this November and the entire General Assembly is up for reelection, so if the makeup of the Legislature changes to be more Republican, then there’s great hope this law could be passed, and we’re certain Gov. [Glenn] Youngkin will sign it.”

Since telling her story, Mrs. Blair said she’s discovered she’s not alone.

Government agendas to separate children from their parents based on gender ideologies have ramped up since 2020, but it’s the job of the parents to be the voice of reason for their children, Mrs. Blair said.

“We are the ones to make important personal and mental health decisions for our children,” Mrs. Blair said. “That’s not the role of the school.”

Now, Mrs. Blair is telling other parents that they’re not alone.

“Keep fighting for your children because we love them more than any school or court system ever could,” she said.

Despite the worst housing affordability crisis in decades and a frozen housing market, the latest migration data reveals a clear pattern: Americans continue to ditch California’s urban centers, Chicago, and Northeastern cities, flocking to Sun Belt and Southwest US cities. 

A new report from John Burns Real Estate Consulting shows Houston, Jacksonville, Charlotte, San Antonia, Fort Worth, and Nashville still had strong inbound migration, while the eastern region of the San Francisco Bay Area, Orange County, San Diego, San Jose, Miami, Washington, DC, Boston, Chicago, and San Francisco had very negative outbound migration flows. 

To determine migration trends, the team analyzed current postal address change forms within a few months, explaining that this data “has given us far more conviction in expressing” migration trends nationwide. 

Here’s a snapshot of the report:

The winners: Strong housing demand

Strong migration continues in:

1. Houston
2. Jacksonville
3. Charlotte
4. San Antonio
5. Fort Worth
6. Nashville

Previously strong migration is now trending less strong than one year ago in:

1. Dallas
2. Atlanta
3. Tampa
4. Boise
5. Orlando
6. Raleigh-Durham

Previously strong migration is now trending to barely positive migration in:

1. Phoenix
2. Austin
3. Las Vegas

The losers: Weak housing demand

Previously strong in-migration is now trending negatively in:

1. Sacramento
2. Riverside-San Bernardino

Previously small out-migration is now trending as a big out-migration in:

1. Denver
2. Salt Lake
3. Philadelphia
4. Seattle

Very negative domestic out-migration continues, which is likely somewhat offset by strong international migration, in:

1. East Bay Area
2. Orange County
3. San Diego
4. San Jose
5. Miami
6. Washington, DC
7. Boston
8. Chicago
9. San Francisco

The team noted the data excludes international migration. There was no mention of specific drivers pushing people out of metros, such as San Francisco, Chicago, and other Northeast cities. However, one can only assume that out-of-control violent crime and soaring shelter costs have something to do with it. 

Migration patterns that took root in the Covid era remain persistent. We expect once the 30-year fixed mortgage rate, now hovering over 7%, hits its peak and reverses due to a worsening economic outlook or a potential U-turn in the Fed’s hiking strategy, the frozen housing market might come alive once more, resulting in even more Americans exiting progressive-run cities that have become nothing more than crime-infested hellholes. 

Some Americans are ditching metro areas all together: Americans Panic Search “Live Off Grid” As Housing Crisis Worsens And Democrat Cities Implode. 

Via Middle East Eye

A US lawmaker from the state of Arizona has introduced legislation in Congress that would impose a 300 percent tax on the sale of water-intensive crops grown by foreign companies in the state, in a bid to curb the extensive use of water in the drought-stricken state.

The bill, titled the Domestic Water Protection Act of 2023, was introduced by Ruben Gallego, a Democrat who in a press release announcing the measure directly called out Saudi Arabia.

“Arizona’s water and crops belong in Arizona, not Saudi Arabia,” Gallego said in his statement. “No longer should foreign governments and companies be given sweetheart deals that leave Arizonans worse off.”

“I’m proud to lead the Domestic Water Protection Act to stop these entities from stealing our state’s water.”

Arizona has been leasing farmland to a Saudi company called Fondomonte, which uses the state’s groundwater to grow alfalfa, which is then exported to feed cows in the country.

There is no firm data on exactly how much water the company uses, but a State Land Department report states that Fondomonte is estimated to be using as much as 18,000 acre-feet (22 million cubic metres) each year, which is enough water to supply 54,000 single-family homes.

The estimated cost of that much water is between three to four million dollars a year.

In one area, the Butler Valley in Arizona, Fondomonte pays only $25 per acre for the water that it uses, which is one-sixth of the market price for the land, Middle East Eye reported in November, citing a realtor in the area.

In addition to Saudi Arabia’s Fondomonte, the United Arab Emirates company al-Dahra grows 30,000 acres (12,000 hectares) of alfalfa, garlic and onion in Arizona and California, according to the company’s website.

The exporting of “virtual water” – water embedded in products such as produce and crops – also has a huge environmental impact on the local communities.

And as Saudi and Emirati companies continue to pump out water from aquifers, scientists worry that they are pumping at such a rate that they will not be able to be replenished. Amid the massive drought the region is facing, with dwindling surface water supplies, these aquifers are the area’s last option for water.

Arizona’s water and crops belong in Arizona–not Saudi Arabia.

That’s why I introduced the Domestic Water Protection Act so foreign companies stop stealing our state’s resources.https://t.co/YvXZQMdWjz

— Ruben Gallego (@RubenGallego) August 30, 2023

A 2020 Arizona Department of Water Resources report found that groundwater levels in the Willcox basin in southeastern Arizona dropped roughly 2.5 metres a year in some areas from 2008 to 2018. A 2018 report estimated that at least roughly 221.8 billion litres were drawn out of the aquifer each year from 1995 to 2015.

“As our communities in Arizona feel the intense effects of the climate crisis and prolonged drought, we are simultaneously being stripped by Saudi-owned companies of our most precious resource – our water,” Raul Grijalva, a cosponsor of the legislation, said in a press release.

Recently, leaders in the state of Arizona have signalled their intentions to end the lease with Fondomonte, which would effectively stop the company from pumping more groundwater.

You know how Democrats are highly coordinated when it comes to things like spying on Trump, framing Trump with a hoax dossier, then impeaching Trump after a fat Ukraine simp named Vindman (who was offered the role of Ukraine’s Secretary of Defense) tattled on the former president for asking about Biden corruption that obviously happened? Uncanny isn’t it.

And how was that first impeachment inquiry launched against Trump (not the other one for ‘inciting’ January 6th)?

Nancy Pelosi simply drew out her pen and pulled the trigger, willing it into existence.

So what about an impeachment inquiry into Biden for said obvious corruption Trump was impeached for asking about?

Not so fast.

On Friday, Kevin ‘Uniparty’ McCarthy decreed that he hasn’t the spine to launch an impeachment inquiry unless the entire House signs off on it. And given the GOP’s slim margins in the chamber, he can only lose four votes.

“To open an impeachment inquiry is a serious matter, and House Republicans would not take it lightly or use it for political purposes. The American people deserve to be heard on this matter through their elected representatives,” McCarthy said in a statement to Breitbart. “That’s why, if we move forward with an impeachment inquiry, it would occur through a vote on the floor of the People’s House and not through a declaration by one person.”

McCarthy’s comment came days after CNN reported that Republicans weren’t sure if an impeachment inquiry would have the full support of the House.

“Leadership recognizes that the entire House Republican conference is not yet sold on the politically risky idea of impeachment,” reads the report, which was countered by Rep. Matt Gaetz (R-FL).

“I don’t believe that a vote of the House is required to open an impeachment inquiry,” said Gaetz, who supports a Biden impeachment and sits on the House Judiciary Committee.

So the top Republican in the House – who’s in charge of the House, won’t use his power to try and impeach an obviously corrupt President, while the top Republican in the Senate is now glitching on a monthly basis.

This is what ‘Rich Men North of Richmond‘ skyrocketed to #1 on iTunes.

Authored by Jarrett Stepman via The Epoch Times,

Republican border-state strategy to send illegal immigrants to Democrat-run cities and states is paying off.

On Thursday, New York Gov. Kathy Hochul sent a letter to President Joe Biden begging for federal aid. Importantly, she finally acknowledged where the problem is coming from.

“This is a financial burden the city and state are shouldering on behalf of the federal government,” Hochul, a fellow Democrat, said of the illegal immigrants pouring into New York.

“I cannot ask New Yorkers to pay for what is fundamentally a federal responsibility,” the governor wrote. “And I urge the federal government to take prompt and significant action today to meet its obligation to New York State.”

In a press conference following release of the letter, Hochul further complained about illegal immigrants released into the country by the Biden administration.

NY Gov. Hochul complains the state has “shouldered the burden” of processed and released migrants coming from the southern border for “far too long,” pointing to the billions of dollars they have spent to take care of the daily arrivals. pic.twitter.com/KUBSHwtKtM

— Julio Rosas (@Julio_Rosas11) August 24, 2023

What happened to all are welcome, no exceptions?

This is an interesting pivot from the New York governor. Until now, Democrat politicians mostly have been unwilling to criticize the White House in any way on the border security issue, or even suggest that the Biden administration is where the problem originates.

If you want to know the reason for the sudden pivot, a new poll sheds light. The Siena College poll released Tuesday shows that New Yorkers are deeply discontented about the surge of illegal immigrants in their state and mostly blame Democrat leaders.

“New Yorkers—including huge majorities of Democrats, Republicans, independents, upstaters and downstaters—overwhelmingly say that the recent influx of migrants to New York is a serious problem for the state,” Siena College pollster Steven Greenberg said.

Now, this may seem meaningless in the sense that New York is unlikely to become a red state any time soon. But keep in mind that the crime issue didn’t just swing seats from Democrat to Republican in the 2022 midterm elections, it likely also gave the GOP overall control of the U.S. House of Representatives.

Discontent over lawless Democrat policies is much worse now, and New York voters are heaping the blame on Hochul, New York City Mayor Eric Adams, and, most of all, Biden.

Open borders and the idea that all immigration—whether legal or illegal—is a positive good is a matter of faith for Democrat Party activists. That’s less likely to be true with rank-and-file voters and independents.

“There is no question in my mind that the politics of this is a disaster to Democrats,” said Howard Wolfson, a former deputy and political adviser to former New York Mayor Michael Bloomberg, in an interview with The New York Times.

“This issue alone has the potential to cost Democrats the House, because it is such a huge issue in New York City and the coverage of it is clearly heard and seen by voters in all of these swing districts in the suburbs,” Wolfson said.

He described the issue as a “ticking time bomb” for Democrats.

I’d say the bomb already has gone off.

Since Biden entered the White House in January 2021, a historic stream of illegal immigrants has poured across the U.S. southern border. This has had catastrophic consequences for many swamped communities in Texas and Arizona especially. They’ve shouldered the burden of the border crisis for years, so it’s a little rich for New York to be throwing a pity party.

It obviously would be better if the federal government was doing its job and enforcing our laws, but until that time there’s little border states can do to “fix” the situation. All they can do is mitigate the damage.

The Biden administration has done all it can to make sure that the border remains nice and open, er, “secure.”

The administration’s actions have made it clear that Biden and his top officials want to flood the country with illegal immigrants.

This is completely insane.

Biden’s DOJ is suing @elonmusk‘s SpaceX because they only hired American citizens instead of refugees and asylum seekers and wants to force them to give full back pay to non-citizens that they choose to not hire. pic.twitter.com/IzB3GVj252

— Greg Price (@greg_price11) August 24, 2023

And that’s where border-state busing comes in.

Instead of carrying the entire burden of the Biden-led border disaster, Republican governors such as Greg Abbott in Texas, Ron DeSantis in Florida, and Doug Ducey in Arizona decided to ship illegal immigrants to places such as Chicago, New York, the District of Columbia, and, most amusingly, Martha’s Vineyard.

This is hardly ideal. But if the federal government is going to foist open borders on the country, why not at least force the people who voted for this nonsense to pay more of the price for it?

Of course, Democrats in those destinations pointed fingers at the Republican governors for their newfound troubles, and some left-wing political commentators tried to say that shipping illegal immigrants to Martha’s Vineyard—a posh, liberal vacation destination—was akin to Nazism.

Biden’s trusty allies in the legacy media have done all they can to “contextualize” the immigration issue to protect the president from criticism.

However, much like with the crime surge, it’s hard to pull the wool over the eyes of the American people forever when they literally see the consequences of bad policies in their neighborhoods.

Thanks to Biden, the bill for once low-cost, sanctuary-city virtue signaling has come due.

I suggest that if Democrat politicians want federal aid to care for illegal immigrants, they should demand that the White House work to restore the policies of the previous administration and actually attempt to get control of the border. The excuses have run out, the border crisis has become a national crisis, and blame for this mess falls on the “big guy” in the Oval Office.

Democrats’ demands for more money should be met with a resounding “no” until the actual problem is fixed at its source.

Quite a week… sticky (or rising) inflation, mostly bad picture of the labor market, and sentiment softens – not exactly the goldilocks/soft-landing that The Fed and most of the talking heads keep dreaming of and in fact more stagflationary signals evident.

‘Hard’ data disappointed this week and fell to 4 month lows while ‘soft’ survey data surged back near cycle highs on the heels of hope…

Source: Bloomberg

Overall on the week, STIRs pushed dovishly lower…

Source: Bloomberg

That dovish tilt supported stocks all week – even with today’s post-payrolls weakness – for big gains in Nasdaq and Small Caps (best week since March)…

The kneejerk reaction to payrolls was higher in stocks but as soon as the cash market opened, The Dow, S&P, and Nasdaq were hit by selling (higher rates, lower stocks) but the last hour saw a 0-DTE covering-driven bounce back into the green for all but Nasdaq…

And all on the back of the biggest weekly short-squeeze since January (‘most shorted’ stock up almost 7%)…

Source: Bloomberg

For the 3rd day in a row, NVDA was unable to break above its $500 Call-Wall level…

Staples and Utes ended lower on the week while Tech, Materials, and Energy led the gains…

Source: Bloomberg

Treasury yields exploded higher today after the payrolls data to wreck the week’s trend and push the long-end higher on the week (30Y +1bps, 2Y -21bps)…

Source: Bloomberg

Which steepened the yield curve (2s30s) dramatically – up near recent highs. The 2s30s curve has risen for 5 straight sessions…

Source: Bloomberg

But, it is worth pointing out today’s huge jump in yields (despite the broad weakness in jobs data) after a kneejerk lower (that’s a 15bps spike in 10Y yields)…

Source: Bloomberg

Here are 10 possible reasons for the surge in yields (via Bloomberg)…

1. Hollywood strikes and Yellow Corp. bankruptcy cut 54,000 from August jobs. Without that, non-farm payrolls would have been closer to ~240,000

2. Debunking the decline in August average hourly earnings, noting it might be temporary. Companies still plan to hike wages. A special question in Monday’s Dallas Fed Manufacturing report showed companies expect to raise wages by 5% this year. That’s above the level of inflation and something that can keep the consumer spending — putting a floor under inflation

3. The slight rise in hours worked in August gives credence to Thursday’s Chicago PMI report whereby there were glimmers that business activity is getting back on track after a soft patch

4. US August ISM Manufacturing index saw rises in the overall index, production, backlogs, lead times, prices paid and employment

5. Money managers sold the long end and fast money did steepeners in swaps. Traders are short and letting those winning positions ride

6. Mortgage origination has picked up. It’s $800 million so far today, that’s up from its typical $500 million pace

7. Preparations for an onslaught of corporate supply

8. Breakout in crude oil as OPEC+ supply cuts tighten market. Option bets on $100 oil are also rising as supplies tighten

9. Saudi Arabia Aramco is considering selling $50 billion in shares. It would be advantageous for the Kingdom to keep oil supplies tighter thus prices higher through the offering

10. Federal Reserve Bank of Cleveland President Loretta Mester said inflation remains too high despite recent improvements, and the labor market is still strong

The dollar ended the week marginally higher after exploding back to Tuesday’s PCE highs and Friday’s Jackson Hole highs…

Source: Bloomberg

Crypto had an ugly week, legging lower again today as the dollar spiked, with Bitcoin back below $26,000. After three weeks hugging 26k, we spiked on the SEC losing but then three selling legs wiped all that lipstick off the pig…

Source: Bloomberg

Energy dominated in commodity-land this week (led by NatGas) while silver was flat and Spot Gold improved…

Source: Bloomberg

WTI soared to its biggest week since March, reaching akmosty $86, the highest since Nov 2022…

Source: Bloomberg

Gold (spot) rallied for the second week in a row, topping $1950 back at one-month highs…

Source: Bloomberg

Finally, while many continue to grasp the ‘soft-landing’ straw narrative, we note that despite the headline payrolls number surprising slightly to the upside, temporary help and weekly hours worked continue to point to a weakening jobs market, consistent with a drop in yields…

Source: Bloomberg

Employers typically cut hours worked and temporary staff before they lay off full-time employees. The data suggests that underlying pressures are building, and job losses should start to rise more rapidly in the coming months.

This is consistent with the message from other leading indicators, such as higher claims and tighter consumer credit conditions.

And at the same time, ‘core services’ inflation jumped to its second highest since 1985…

Source: Bloomberg

…and Manufacturing ISMs confirmed the stagflationary theme.

Philip Marey, Senior US Strategist at Rabobank

Yesterday’s data from both sides of the Atlantic showed that the battle against inflation is far from over, which means that the ECB and the Fed are not going to cut rates anytime soon. While it has come down considerably, inflation is not falling in a straight line. In fact, in some months, inflation is not falling at all, or it is actually increasing.

Eurozone inflation remained at 5.3% in August. Our ECB watcher Bas van Geffen noted that ECB expectations reversed course after the inflation report for August hit the wires. Markets are now priced for about a one in four chance that the central bank will raise rates in September, down from the 55% odds at Wednesday’s close. The headline inflation rate failed to continue its descent from 5.3%, but on the bright side it didn’t accelerate either – as had been expected following the release of several national estimates. Moreover, core inflation did decline somewhat, as did other measures of underlying price pressures. Our own estimate of super-core inflation dropped 0.3 percentage points, and, notably, services inflation decelerated marginally. Although the latter is admittedly difficult to gauge given the broad range of categories it spans, it is also a closely watched measure by the ECB considering that services prices generally have a closer relationship with wage developments.

Later in the day, the accounts of the July ECB meeting confirmed that inflation developing more or less in line with expectations may just be good enough for the Council to sit on their hands at the next meeting: “Members underlined that there had been no material surprise in the latest inflation outcomes compared with the June projections. This was seen as good news given the earlier streak of upward surprises.” On its own, that’s not the most convincing argument. Crucially, at the same time, the ECB is clearly becoming more concerned about the growth outlook: “signs of a possible downward surprise in economic activity compared with the June projections constituted important news.” 

Bas views these developments as supporting our view that the ECB will take a long pause from here on out, albeit with a hawkish message. The ECB is by no means considering its job done, and the Council is not blind to the upside risks from a resilient labour market, and the potential for wage growth to outstrip the ECB’s expectations. The possibility of rate hikes will be kept firmly on the table, even if the ECB holds rates this month. However, risks are no longer one-sided. The weakness in activity is partially caused by monetary developments and tightening credit conditions; and the effects of past policy tightening have yet to fully materialise. This concern was also raised in the Council’s previous deliberations: “with the current slowdown in activity, the ongoing transmission of past monetary policy actions could lead to a more pronounced deceleration in activity than was necessary to achieve price stability.” In other words, “overtightening would not help bring inflation sustainably to the 2% target if it later led to inflation undershooting.”

Turning to the US, the PCE deflator and its core for July came out exactly as expected by the Bloomberg consensus: 3.3% headline and 4.2% core. This rebound from 3.0% and 4.1% was caused by base effects, as July last year we actually saw a decline in the headline PCE price level month-on-month. For the remainder of the year, we are not likely to see a substantial decline in (core) PCE inflation year-on-year, unless core inflation starts to come down significantly in month-on-month terms. This is largely a services story, with services inflation at 5.2%, in contrast goods inflation is negative: -0.5%. In the same report, there was also an acceleration in real personal spending to 0.6% (month-on-month) in July from 0.4%. However, there was a slowdown in personal income to 0.2% from 0.3% and a decline in the personal saving rate to 3.5% from 4.3%. This is the lowest saving rate this year.

The initial jobless claims unexpectedly fell to 228K in the week ending on August 26, but on average they remained slightly higher in August than in July. Further signs of a loosening labor market were provided by the Challenger job cuts which rose by almost 277% (year-on-year) in August. This follows on weaker JOLTS data for July and the Conference Board consumer survey for August indicating deteriorating labor market opportunities, earlier this week.

After yesterday’s data, the Atlanta Fed revised its nowcast for Q3 GDP growth downward to 5.63% from 5.91% (August 24). This is still an impressive figure. The biggest contributor is personal consumption spending (2.94 ppt), followed by changes in inventories (1.25 ppt).

Yesterday, Atlanta Fed president Bostic gave a speech at a South African Reserve Bank research conference. Although he is currently not a voter in the FOMC, his views give us some insight into the thinking of the doves in the Committee. He said that policy is appropriately restrictive and that “we should be cautious and patient and let the restrictive policy continue to influence the economy, lest we risk tightening too much and inflicting unnecessary economic pain.” However, he did not rule out an additional rate hike: “Should conditions not play out the way I anticipate, and inflation or inflation expectations abruptly reverse course and start climbing, then I would certainly support doing what would be necessary to put the US economy back on a path toward price stability.” What’s more, Bostic said that patience “does not mean I am for easing policy any time soon. Inflation in the United States is still too high. The battle against inflation has seen significant progress. Inflation is well off the very elevated levels we saw in the last year, but it’s essential that it be brought all the way back to our target.”  So even a very dovish FOMC participant does not want an early pivot

By John Kingston of FreightWaves

Truck transportation jobs plummeted in August, according to the Bureau of Labor Statistics, with the likelihood that the demise of Yellow Corp. was largely responsible for sending the employment total down by 36,700 employees.

To put that drop in perspective, in the past 10 years the only month with a larger decline was April 2020, when the economy took the full blow from the start of the pandemic. Truck transportation jobs on a seasonal basis that month dropped 84,500 jobs from March. 

Since then, there have only been six months in which truck transportation jobs declined, four of them this year. And those job losses totaled just 16,900 jobs, less than half of those lost in August alone.

The only other month with higher job loss than August was due to a Teamsters strike in April 1994.

“Following Yellow’s bankruptcy on July 31, much of this loss is attributed to LTL trucking,” Breakthrough Fuel Chief Economist Matt Muenster said in an email to FreightWaves.

The 1,567,700 truck transportation seasonally adjusted jobs total is the lowest total since April 2022, when the BLS reported 1,571,700 jobs. Since the peak number in January, 1,611,400 jobs, the total number of truck transportation jobs reported by the BLS is down by 43,800 jobs.

The BLS breaks out data by truckload and LTL with a time lag of a month, so there is no way of knowing for certain that the decline in employment was heavily weighted toward LTL, as would be expected if the decline was driven by the shuttering of Yellow.

Ironically, even as truck transportation jobs were plummeting, warehouse jobs stabilized for the first time in months.

Warehouse jobs had declined for seven consecutive months and 10 of the past 11; in the one month in that stretch when jobs didn’t decline, job totals were flat.

The August increase of 600 jobs was the first rise in that number since June of last year. But with a downward revision of the total for June of this year, even the small gain in August could not push the warehouse jobs total above 1.9 million. Jobs in the warehouse sector had not been less than 1.9 million since January 2022, just before the annual revision of the BLS model produced a giant increase in the warehouse jobs estimate.

Another area that took a big hit was couriers. August jobs totaled 1,100,300, down 9,000 jobs from 1,109,300. And that was on top of a revision in the July number which sent that figure down by 8,100 jobs. Throw in a revision in the June numbers and courier jobs stood at 13,900 fewer in August than they were two months earlier.

As Muenster noted, even with the latest decline, total truck transportation employment is down just 2.1% year on year “and remains elevated from 2021 and pre-pandemic levels.”

In August 2019, jobs in truck transportation were 1,529,400.

Muenster, in reviewing the one-month lag figures that break out employment by sector, said the data on long distance truckload, both in number of jobs and hours worked, “stand out because they continue to show the sector is more resilient to the weak freight market than other trucking sectors.”

David Spencer, the vice president of market intelligence at Arrive Logistics, saw a bright spot. “As tough as it is to see, capacity leaving the market can be a good thing for those who can survive the current environment,” he said in an email to FreightWaves. “Ultimately, this trend is what will set up market vulnerability, enabling the next inflationary cycle. I’m still predicting this to occur in the later part of the first half of 2024,, by Q2.”

In other highlights from the report:

• Not seasonally adjusted jobs in truck transportation, which can often diverge from the seasonal numbers, did not stray far this time around. The job decline in that category was 35,700, just 1,000 jobs fewer than the seasonal report.

• Rail employment had held steady between 144,000 and 147,000 jobs for several years. Its increase to more than 150,000 jobs in the past year was seen as significant because as an industry, railroads had been been taking incoming pressure and criticism that they had let too many workers go. It now appears to  be at a new normal: Rail jobs in August totaled 150,200, identical to June, and July jobs in between came in at 150,400.

Blackstone has limited investor redemption requests from its $68 billion real estate trust for high-net wealth investors for ten consecutive months while storm clouds gather over commercial real estate markets. The silver lining is that redemption requests are on the decline. 

According to a shareholder letter, Blackstone Real Estate Income Trust (BREIT) recorded investor outflows of nearly $3 billion in August — the lowest redemption requests since October. But the fund still gates redemptions, only returning $1.3 billion, or approximately 43% of what was requested. The trust limits redemptions to 2% of net asset value monthly and 5% quarterly to curb sudden runs.

“We were pleased to see August repurchase requests decline significantly from the January peak to the lowest level since October 2022,” a Blackstone spokesperson told Bloomberg in a statement. They added, “A shareholder that has been submitting repurchase requests since November 30, when proration began, has received approximately 96% of their money back.”

BREIT has been working through redemption requests since last November. Recall: 

• Blackstone Urges Investment Advisors To ‘Keep Clients Calm’ As It Limits Redemptions Of Commercial REIT

Recently, BREIT has been on a property-selling spree, notably finalizing a deal to sell Simply Self Storage to rival Public Storage for $2.2 billion in July. Then, it sold a 22% stake in Bellagio on the Las Vegas Strip.

Last month, a report from the Financial Times said BREIT was gearing up to “invest billions in data centers to feed the artificial intelligence boom.” 

Before diving into the AI bubble, the trust should prioritize meeting redemption requests (in full) and quell the ongoing panic withdrawals. 

Investors are nervous about commercial real estate since the Federal Reserve has hiked interest rates to two-decade highs. 

We’ve pointed out (“New “Big Short” Hits Record Low As Focus Turns To $400 Billion CRE Debt Maturity Wall“) that the regional banking crisis kick-started CRE turmoil. JPM, Morgan Stanley, and Goldman Sachs have all joined the CRE gloom parade. 

Authored by James Rickards via DailyReckoning.com,

Has World War III already begun?

That’s not a facetious question meant to grab attention. It’s a legitimate question.

It’s often the case that momentous events begin in small ways and expand out of control. In retrospect, it seems obvious that war was inevitable. But at the time, it’s not obvious at all. Events might seem disconnected and it’s far from obvious that war is inevitable.

Historical hindsight is 20/20.

World War I was not called that at the time. It was called the Great War. It was only when World War II arrived that the name World War I was applied.

And how should we think about the beginning of World War II? Most historians date it from the German invasion of Poland on Sept. 1, 1939. Still, many Americans date the war from Dec. 7, 1941, when Japan bombed Pearl Harbor and the U.S. declared war on Japan.

But the Chinese can be forgiven for saying both dates are wrong. The Chinese look to the invasion of Manchuria by Japan on Sept. 18, 1931 as the real start of World War II.

A Matter of Perspective

The point is that both the start and finish of world wars and other major conflicts are not quite as cut and dried as historians would have it. It’s often a question of culture and perspective.

This brings us to the current state of the world. Has anyone raised a banner or made a declaration that World War III has begun? No. Is it often the case that there are brushfire and proxy wars going on in several parts of the world that don’t pose any clear danger of coalescing into a global conflagration?

The answer is yes.

The wars going on today are not all small and some are quite large. More importantly, they directly or indirectly involve great powers such as the U.S., China and Russia and important secondary powers, including nuclear powers such as France and Pakistan.

Moreover, the stakes are high including the future of NATO, control of Eastern Europe, control of Middle East oil and the global supply of uranium. More urgent than the current status of these conflicts is the likelihood of escalation leading to nuclear war with no reverse gear.

Let’s review these critical conflicts briefly. In doing so, keep in mind that we may be in a period such as the Balkan Wars (1912-1913) that presaged World War I, or the Japan-China wars (1931-1937) that presaged World War II.

The genii may already be out of the bottle.

Ukraine

Ukraine is the obvious place to begin. Russia is winning the war decisively. The Ukrainian counteroffensive was annihilated on June 6 and re-annihilated after a reboot of the offensive again in late July. Ukraine is now using light infantry tactics since their armor has been blown up by Russian mines and artillery and left burning on the battlefield.

The “wonder weapons” including Patriot missile batteries, HIMARS artillery, Bradley Fighting Vehicles, Leopard tanks, Challenger tanks and Storm Shadow cruise missiles have all been destroyed by some combination of Russian hypersonic missiles, anti-aircraft defenses and artillery or mines, or have been disabled by GPS signal jamming and other forms of electronic warfare.

Ukrainian combat dead are estimated at over 200,000 and all for nothing.

Ukraine has no chance of winning the war, but the war may escalate anyway. Biden’s team does not want to admit a humiliating defeat. They do want to keep the war going until after the 2024 election to help Biden’s reelection chances. After that, Biden (if he wins) will ditch the Ukrainians just as he ditched the Afghanistan people in August 2021.

Keeping the war going means more aggressive acts in the Black Sea (possibly involving Romanian vessels; Romania is a NATO member), providing 155 mm cluster munitions (that mainly kill children when they don’t detonate as intended) and massing Polish troops (another NATO member) on the border of Belarus, which is in a treaty alliance with Russia. Poland has its own designs on western Ukraine as a revival of the Polish-Lithuanian federation that lasted from 1569-1795.

If Russia is pressed to sink a Romanian warship or if Poland moves into western Ukraine, you have a pretext for triggering Article 5 of the NATO treaty, which would lead more or less directly to World War III, including the use of tactical nuclear weapons. Biden doesn’t care about any of this and U.S. warmongers like Deputy Secretary of State Victoria Nuland are cheering it on.

Side-by-side with the kinetic war in Ukraine are the financial sanctions imposed by the U.S. on Russia. Biden has threatened to keep these sanctions in place “as long as it takes,” which could mean years the way the conflict is proceeding.

These sanctions have had no impact on Russian behavior or the Russian economy, but they have badly damaged the EU and the status of the U.S. dollar as a trusted store of value. These economic costs for the West will grow with the passage of time.

The Fight for Uranium

Another conflict with escalatory potential involves the state of Niger, located in the Sahara desert. A recent military coup d’état overthrew the elected government several weeks ago (although the coup leaders contend the election was fraudulent). Some surveys show that the military junta enjoys broad popular support.

Niger is France’s largest supplier of uranium, while France is one of the largest builders of nuclear power plants in the world. France desperately needs to restore order in Niger, including forcing the junta to step aside and reinstate the elected government.

France has special forces including the French Foreign Legion ready to intervene. However, France does not want to proceed unilaterally, and is trying to recruit African allies to join the invasion.

The most significant regional grouping is the Economic Community of West African States (ECOWAS), which includes both Francophone states like Senegal and Côte D’Ivoire and important Anglophone states such as Nigeria. France is recruiting ECOWAS to participate in its invasion of Niger.

ECOWAS members are divided on the idea. In any case, ECOWAS action would require approval of the African Union and possibly the United Nations as well as weeks of mobilization. So no military action is likely for several months at the earliest.

There’s no evidence that Russia was involved in the Niger coup, but Russia certainly stands as a major beneficiary. Russia is the other large manufacturer of nuclear power plants in addition to France.

Russia gets its uranium from inside Russia, Kazakhstan and other Central Asian republics. (Russia also owns large amounts of U.S. uranium deposits obtained in a deal authorized by Hillary Clinton in exchange for huge donations to the Clinton Foundation).

If Russia can cut off France’s access to Nigérien uranium, it will tighten its hold on global uranium supplies and enhance its position as a provider of nuclear power plants.

There is some talk now (not confirmed) that Russia may offer support to the Nigérien coup, including possible deployment of the Wagner Group mercenary army. That would greatly complicate any plans for French or ECOWAS involvement.

Again, we would have the specter of Russia (via Wagner) and France (a NATO member) squaring off in a war for uranium in the Sahara desert. The escalatory potential is obvious.

By the way, the bloodthirsty Victoria Nuland visited Niger recently and was not warmly received. She departed the country empty-handed. No doubt she left some threats of U.S. support for the French behind.

A Presage To The Third World War?

There are many other hot zones around the world including Taiwan, the South China Sea, Syria, and North Korea. Pakistan is perhaps the most dangerous because there is a rising conflict between the elected Prime Minister Imran Khan (now in prison and removed from office) and his supporters on the one hand, and the military on the other.

Chaos in Pakistan is inherently threatening at a global level because it is a nuclear armed power in a continual standoff with the nuclear armed India.

Perhaps these conflicts will resolve themselves in the fullness of time. Perhaps not. For now, they are individually threatening (because of escalation) and bear an eerie resemblance to the confluence of conflicts that presaged the two greatest wars in history.

History may not repeat itself, but it sounds like it’s beginning to rhyme.