Last week we experienced an Everything Rally. In some cases, it was touch and go until the final bell, but it was a cross asset rally nonetheless. The S&P 500 was up 4% and despite some wild moves in individual tech stocks, even the Nasdaq 100 climbed 2%. The 10-year yield dropped from 4.22% to 4.02% and the 2-year yield dropped from 4.48% to 4.42%. CDX tightened 7 bps on the week and series 38, which just rolled a month ago, closed at 79 (the tightest spread since August). The Bloomberg corporate bond OAS only tightened 6 bps on the week, but that makes sense as “hedges” should be outperforming at this stage of what is still just a bear market rally. Commodities and commodity stocks also had a good week. I’m looking for the everything rally to continue.
Clearly the next big event for markets is the FOMC meeting on Wednesday. I view this quite simply:
Do you believe that inflation is on a downward path now (due to a number of issues)? Clearly I do, as you can read in Inflation Dumpster Dive.
Would a central bank (which didn’t miss “transitory” inflation) be slowing or pausing hikes at this stage based on virtually every economic model? Given my inflation views, the answer would be yes.
Will the Fed really hurt the economy at this stage?
That is the question and is why I keep thinking of Wile E. Coyote. Tunnels that the Road Runner could run through would be walls when Wile hit them at high speed. Trains that somehow missed the Road Runner would run right over Wile. Then, as one very astute reader pointed out (in response to our Celsius 233 report), Wile only fell off a cliff AFTER he looked down and realized that he was standing on air! Maybe the actual inflation data isn’t enough to scare the Fed into pausing, but warnings from big tech should be! Maybe, just maybe, the Fed is finally looking down and seeing the warning signs and much like Wile, they now realize that they are potentially standing on air and are about to plummet.
It may already be too late for a soft landing (or even a mildly bad landing), but if the Fed insists on 75 bps at this meeting and does not balance the outlook, it could get worse in a hurry. I’m stuck betting that unlike Wile E. Coyote (super genius who couldn’t see his own demise time after time), the Fed will start getting cold feet and unwrap fewer of their “Acme product orders” and leave the Road Runner (inflation) alone for a little while.
It is a risky bet to have, but one that I like.
One other thing that we’ve talked about seems to be getting some traction: the possibility that regardless of who wins what in the midterm elections, the politicians will be changing their tune a bit:
A group of Democrats published a letter (later retracted) basically calling for finding a peaceful solution to Russia and Ukraine. While it was retracted, there is a possibility that D.C. decides that politically it is better to find a way out of this war rather than prolonging it.
While politicians of all stripes remain focused on inflation, there are more soundbites regarding the state of the economy than there were a few weeks ago. Post-election, do we get politicians that are more worried about jobs than inflation in an environment where their constituents are experiencing truly awful hits to their wealth?
Bottom Line
Let the everything rally continue for now, and then get prepared for a “risk-off” move as the chain reaction that has been set in motion dominates the headlines.
Lisa Abramowicz did a good job of trying to help me articulate the current everything rally viewpoint that is juxtaposed to my view that we are headed for a longer and deeper recession that will become obvious well before consensus sees it (Bloomberg TV at the 1:50:45 mark).
Good luck and try not to let your inner Wile E. Coyote cause you to do anything that you will regret between Monday’s open and 2:00 pm on Wednesday, which is easier said than done in this extremely volatile market!
Even The Goodwill Cancels Kanye West, Bans Yeezy Shoes From Stores
Corporate America has spent the last few weeks canceling Kanye West, who now goes by Ye, after antisemitic comments. From social media platforms to shoe manufacturers to retailers to talent agents to entertainment companies — they all severed ties with the rapper who was just kicked off Forbes’ billionaire list.
The latest cancellation comes from Goodwill Industries International Inc., a nonprofit 501 organization that operates over 4,000 thrift stores across the US, that sent out a memo to employees to ban selling Ye’s Yeezy products from its physical and online stores. The Twitter account Daily Loud first reported the notice on Friday.
Here’s what the memo said:
Requested Action:
As we strive to maintain the most up to date product information on Elevated Brands available to sell we are sensitive to current events and take action when designers and brands do not align with our Mission and RISE values. We are currently removing the sale of Adidas Yeezy Brand product from all channels, Retail Stores, Boutiques, eCommerce and Outlets. as well from our Elevated Brands tool.
The memo said “effective immediately” all eCommerce stores will no longer sell any Yeezy products. The same goes for physical stores. Any products on store shelves are to be immediately removed and placed in “trash bags.”
Daily Loud provided an image of the memo that was sent to all retail stores.
One Twitter user made a funny comment, considering Yeezy shoes are very expensive and the chances of finding a pair at a Goodwill is near impossible: “The memo includes 6 photos of the shoes bc no goodwill has ever seen a pair of yeezys in their store.”
Someone else said: “If true, this is a meaningless gesture that helps no one & harms some people unnecessarily.”
The same news media that mischaracterized psychosis as fanaticism in the alleged plot to kill Pelosi also downplayed the assassination plot against Kavanaugh by an abortion rights fanatic…
Journalists have described the alleged assassination attempt against House Speaker Nancy Pelosi by a delusional psychotic man in explicitly political terms, but largely dismissed the overtly political motivations of the suspect in the murder plot against Supreme Court Justice Brett Kavanaugh.
David DePape, the suspect in an alleged assassination attempt against House Speaker Nancy Pelosi, wrote a series of right-wing blog posts in recent weeks. “Many of the posts were filled with screeds against Jews, Black people, Democrats, the media and transgender people,” notesThe Washington Post. “In one post, written on Oct. 19, the author urged former President Donald J. Trump to choose Tulsi Gabbard, the former Democratic congresswoman from Hawaii, as his vice-presidential candidate in 2024,” reportsThe New York Times. “In another,” wroteThe Los Angeles Times, “he called ‘equity’ a leftist dog whistle ‘for the systematic oppression of white people’ and ‘diversity’ a ‘dog whistle for the genocide of the white race.’”
But the blog posts confirm my original reporting yesterday that DePape has been, for at least a decade, in the grip of a psychosis caused by mental illness and/or drug use. The Washington Post, to its credit, reports in the first paragraph that DePape’s blog was filled with “delusional thoughts, including that an invisible fairy attacked an acquaintance and sometimes appeared to him in the form of a bird” and that, as each post loaded, “a reader briefly glimpses an image of a person wearing a giant inflatable unicorn costume.” The New York Timesacknowledged that, “mixed in with those posts were others about religion, the occult and images of fairies that the user said he had produced using an artificial intelligence imaging system,” albeit not until the 22nd paragraph.
And now the mother of DePape’s two children, Gypsy Taub, has publicly confirmed that DePape has experienced psychotic episodes. “He is mentally ill,” she told ABC7, “He has been mentally ill for a long time.” Taub said DePape disappeared for almost a year and “came back in very bad shape. He thought he was Jesus. He was constantly paranoid, thinking people were after him. And it took a good year or two to get back to, you know, being halfway normal.” However, it is not clear whether DePape’s psychosis is a result of an underlying mental illness, like schizophrenia or bipolar disorder, or from the long-term use of drugs, particularly meth, which can result in psychosis and permanent changes to brain functioning. Taub’s neighbors, as I reported yesterday, said Taub herself suffered frequent bouts of paranoid psychosis and had repeatedly lied about them to the police.
Many people responded to my reporting yesterday by noting that DePape may have been psychotic but that the real problem lay with right-wing conspiracy theories. “But even if you believe he’s psychotic (which seems plausible),” wrote former New Yorker reporter James Surowiecki in response to my article, “why did his paranoid psychosis take as its object Nancy Pelosi? Because of the ubiquity of right-wing conspiracy theories and the demonization of Pelosi by right-wing media… We can certainly get rid of conspiracy theories being mainstreamed on cable TV and social media by high-profile pundits.”
But we can’t get rid of discussions of conspiracy theories because doing so would violate the First Amendment and, as I noted yesterday, psychotic people construct their delusions from whatever is in popular culture at the time to invent justifications for their actions. In 1981, a psychotic man named John Hinkley, Jr. shot President Ronald Reagan because, Hinkley said, he wanted to impress the actress Jodie Foster. Earlier this month, a man in Washington state shot two 40-something innkeepers because, he said, he heard the voice of Pope Gregory and John Paul say to him, “Are you going to let Bonny and Clyde do that to our family?”
Law enforcement officers stand guard as protesters march past Supreme Court Justice Brett Kavanaugh’s home on June 8, 2022 in Chevy Chase, Maryland. An armed man was arrested near Kavanaugh’s home that morning. [Photo by Nathan Howard/Getty Images]
And if mainstream news journalists are so concerned that political extremism is resulting in more violence against public officials, why did they, en masse, downplay the assassination attempt against Supreme Court Justice Brett Kavanaugh in June? Where The New York Times has put the alleged Pelosi assassination attempt on its front page for two days in a row, it buried the story of the Kavanaugh murder plot on page A20. Three days later, none of the Sunday morning political shows, such as NBC’s “Meet the Press,” even mentioned the assassination attempt.
Today, “Meet the Press,” focused on the Pelosi plot and framed it as overly political, making no mention whatsoever of DePape’s psychotic delusions. “The chilling and violent attack on Paul Pelosi — House Speaker Nancy Pelosi’s 82-year-old husband — is raising fears of more political violence,” said its host, Chuck Todd.
The double standard in news media coverage is brought into sharper relief when one considers that the suspect in the murder plot against Kavanaugh, Nicholas John Roske, 26, has, unlike DePape, shown no sign of psychosis. Rather, he appears to be motivated by the same kind of political fanaticism that has gripped climate activists around the world.
US Financial And Political Leadership: An Embarrassing Shadow Of Its Former Self
In this brief yet engaging discussion with Jim Lewis and Ivan Bayoukhi of Wall Street Silver, Matterhorn Asset Management principal, Matthew Piepenburg, addresses further evidence of the U.S. Fed’s undeniable distortion of basic capitalism, social equality and global currencies.
Matthew opens with a disturbing chart of the ignored yet undeniable wealth inequality (and transfer) created by years—as well as trillions—of misallocated mouse-click money to support a financial system openly rigged to favor a select minority rather than a national majority/economy. This misallocation, as warned by Thomas Jefferson to Andrew Jackson, has direct consequences not only for the financial stability of a nation, but its social and economic health as well. The evidence of such fracturing, of course, is now everywhere to be seen. As Matthew discusses, current economic and political leadership out of DC is but a shadow of its former self and founding principles. In many ways, the U.S. is becoming unrecognizable and one is forced to ask if the modern policy makers are innocently stupid or deliberately destructive?
Equally important are the global ripple effects of the US Fed’s increasingly desperate and distorted actions. The strong USD policies intentionally and currently used by the Powell Fed have had a crippling and destabilizing impact on global currencies, from developed to developing, as the rest of the world has been forced to import US inflation and debase their own currencies to settle trillions in imposed USD transactions. In short, as the USD rises, the rest of the world’s currencies (and hence economies), friend and foe alike, are forced to suffer. As Matthew quips: “With financial and political allies like the U.S., who needs enemies?”
Of course, the Fed’s current policy of a strong USD (and rocketing DXY) is as unsustainable as its is globally and nationally toxic/reckless. At some point the financial system from Tokyo to Athens cracks under the weight of a weaponized USD as more and more nations (i.e., the BRICS) look increasingly east toward new financial partners and alternative currencies to settle trades. Furthermore, with a recession looming (or denied), the Fed will eventually be required to weaken the Dollar and lower rates if it has any honest intention of fighting a recession. At that point, precious metals as measured by the USD, will surpass prior highs.
Morgan Stanley: Why Inflation Is Likely To Fall Faster Than Most Expect Based On M2 Growth
By Michael Wilson, chief US equity strategist at Morgan Stanley
Two weeks ago, we turned tactically bullish on US equities. Some investors felt this call came out of left field, given our well-established bearish view on the fundamentals. To be clear, this call is based almost entirely on technicals rather than fundamentals, which remain unsupportive of many equity prices and the S&P 500[ZH; similar to what Goldman said on Saturday]. The technical picture became more supportive, in our view, after the historic reversal two weeks ago on another higher-than-expected CPI reading for September. More specifically, the S&P 500 gapped lower that Thursday morning, only to reverse 6% and close at the highs. Then, on Friday, stocks had a terrible day, with the S&P 500 trading down 2.4% and closing on the lows. When we studied this price action over the following weekend, we found that Friday’s pullback was a 61.8% Fibonacci retracement of Thursday’s rally that stopped right at the 200-week moving average. The combination of these technical oddities was too much to ignore. Hence, our tactical/technical rally call.
From a fundamental standpoint there are some supportive factors too.
First, CPI is coming down. Granted, it is one of the most backward-looking data series; it says very little about the future and can be misleading about present conditions. Think back to what CPI was telling us at the end of March 2021. The index sat at 2.6%Y after the government had delivered more than $3 trillion in fiscal stimulus during 1Q21. As a result, the money supply (M2) was growing by 27%Y. Never in the history of these data (70+ years) had M2 grown at even half that rate. Given that inflation is always and everywhere a monetary phenomenon, it was crystal clear that 2.6%Y inflation was likely to explode higher. Fast forward to today and CPI stands at 8.2%Y, a 40-year high and marginally below its peak of 9.1%Y in June. However, M2 is now growing at just 2.5%Y and falling fast. Given the leading properties of M2 for inflation, the seeds have been sown for a sharp fall next year. The implied fall in CPI outlined in Exhibit 1 would be highly out of consensus, and while it won’t necessarily play out exactly as in our chart, we believe it’s directionally correct. This has implications for Fed policy and rates. Indeed, part of our call for a rally assumes we are closer to a pause/pivot in the Fed’s tightening campaign, and while we don’t expect to see a dramatic shift at next week’s meeting, the markets have a way of getting in front of Fed shifts. In short, investors may be as offside on inflation today as they were in March 2021, just in the opposite direction. One of the reasons why we did not try to trade the summer rally was that we felt it was much too early to be thinking about a Fed pivot. We turned out to be right as the Fed shift proved to be too far in the future to make the summer rally last. We’re closer today because M2 growth is fast approaching zero and the 3-month-10-year yield curve finally inverted last week, something Chair Powell has noted is important in determining if the Fed has done enough.
Second, while we have been vocal bears on growth all year (calling for fire AND ice), that view is no longer out of consensus. In fact, part of the big sell-off in stocks in September reflected growing concern about 3Q earnings. But, as with 2Q results, earnings have been weak but not bad enough to get the kind of drop in 2023 EPS forecasts necessary for the final leg of this bear market. Instead, we think that management teams have/will remain mostly silent on 2023, which means estimates will stay elevated until it becomes obvious just how negative the operating leverage has become and/or companies are forced to discuss 2023 forecasts during 4Q earnings results in January/February. As an aside, falling inflation is the reason why we think margins will disappoint more than investors have modeled. For most of the year we have had pushback against our lower growth call, with investors arguing that higher inflation leads to higher nominal GDP, even in a recession, so earnings can hold up. We disagree because higher inflation leads to higher operating leverage all else equal and operating leverage cuts both ways. As end-price inflation falls faster than costs, operating leverage turns negative. That’s where we are today with PPI above CPI. That means lower lows for the S&P 500 are still ahead after this rally is over.
Bottom line, inflation has peaked and is likely to fall faster than most expect, based on M2 growth. This could provide some relief to stocks in the short term as rates fall in anticipation of the change. Combining this with the compelling technicals, we think the current rally in the S&P 500 has legs to 4000-4150 before reality sets in on how far 2023 EPS estimates need to come down. We realize that going against one’s core view in the short term can be dangerous (and maybe wrong-headed), but that’s part of our job. It’s like a double-breaking putt in golf – hard to make, but you still gotta try.
More in the full note available to pro subs at the usual place.
Job Cuts At Elon Musk’s Twitter Are Officially On Their Way
In news that should come as absolutely zero surprise to anyone who has been paying attention over the last week, the Elon Musk era at Twitter has begun. And, Musk’s first order of business as “Chief Twit” at the company? Layoffs. Lots of them.
After closing on the deal for Twitter on Thursday last week, Musk has wasted no time in starting to cut the fat off the company. After immediately cutting schlep rock CEO Parag Agrawal and head censor Vijaya Gadde from the company, Musk is slated to continue making layoffs this week, according to the New York Times. After arriving at Twitter on Thursday, Musk also fired the company’s CFO.
According to the Times, managers are “being asked to draw up lists of employees to cut” on Musk’s orders. Twitter currently has about 7,500 employees and the scale of cuts in their entirety is not yet known, the report says.
Layoffs are expected to take place before November 1, the report says. This is the date that “employees were scheduled to receive stock grants as part of their compensation”.
Musk can avoid paying out the grants by laying off workers before the end of the month, the report says.
“I was told to expect somewhere around 50 percent of people will be laid off,” Ross Gerber, the chief executive of Gerber Kawasaki Wealth and Investment Management told the New York Times.
Recall, we pointed out on Thursday that media (for example, Bloomberg) was running rife, citing no sources at all, while claiming that advertisers are nervous of the nazi, child porn and hate-speech that will inevitably return to the social media platform now that the richest man in the world is in charge. The Wall Street Journal also warned that “Madison Avenue isn’t sold on the deal,” suggesting advertisers are anxious to be on the Musk-owned platform.
Tens of thousands protested against the skyrocketing cost of living and against Macron in France October 16, led by left-wing politician Jean Luc Melenchon, but there were few front page or top-of-the hour headlines in the U.S. Huge protests occurred in Rome the same day to demand an end to Italy’s involvement in NATO, but no coverage on the west side of the Atlantic. Thousands protesting in Paris October 22 against NATO, but little notice in North America. Massive protests against NATO and inflation due to sanctions on Russian energy in France, Germany and Austria in September, but little news of it here in the heart of the empire. German police beat citizens protesting energy shortages and record-high inflation, both due to Russia sanctions, the week of October 17, but that was not covered in the USA. Seventy thousand Czechs protested in Prague September 3 against NATO involvement in Ukraine, demanding gas from Russia (before some mysterious imperial somebody with means and motive blew up Nordstream 1 and 2, probably to nip the political effects of those protests in the bud) and ending the war, but that got little coverage in U.S. corporate media.
Ever get the sense there are things our media hides from us? Hmm. Ever wonder why enormous protests against the policies of the Exceptional Empire and its attack dog, NATO, seem, um, to be downplayed? Ever think our corporate news outlets behave more like the propaganda arm of our neoconservative state department and military than a free press? Well, if so, you may be onto something.
Lots of Europeans are unhappy about NATO, the Ukraine war, sanctions on Russia and the wild inflation and deindustrialization – which will result in gargantuan unemployment – those sanctions caused. As their living standards sink like stones, Europeans know who is to blame, namely their supposedly great ally across the Atlantic, and many have soured on their so-called alliance with the hegemon. But Washington doesn’t seem to care. Let the Europeans go broke and protest. The important thing is not reporting this news to the American people, who, if they heard about it, might get a subversive inkling that their government had not behaved in an entirely honorable manner.
Meanwhile lies swarm everywhere. Some unintentional, others not. Most recently we have U.S. joint chiefs of staff chairman Mark Milley claiming that if Ukraine falls, the current world order will collapse. Sadly, this is hogwash. What will collapse are the tumescent egos of U.S. and European politicos and military men. Not surprisingly, they conflate that with the world order. But there are other, far more sinister reasons to make such garishly incendiary pronouncements, namely to prepare the American population for the unthinkable – and it is unthinkable, because if the U.S. attacks Russia with nukes, both the U.S. and Russia will be annihilated. Will Biden and his generals get a nuclear war? Unclear. But what’s clear as day is that Americans travel like lemmings to their doom, thanks to the fibs of their rulers and media.
Somehow all the big news gets blacked out. Like China dumping $100 billion worth of U.S. treasuries and what that means if this becomes a trend (I’ll tell you what it means: we’re $30 trillion in debt and we can’t pay, so when we cart SUVs full of cash to the supermarket, we’ll make those Weimar wheelbarrows look petite). Or how sanctions on Russian energy backfired and caused ruinous inflation in Europe, pretty awful inflation here in the U.S. and pushed the whole west toward recession…or maybe ultimately depression. Or how Biden’s ever more reckless sanctions on China could wind up bankrupting us all. China is, after all the chief U.S. trading partner. Sanction China, as Biden recently did to its chip and semiconductor sector, and prices for everything explode upwards.
But money isn’t everything. What about Biden’s devil-may-care attitude toward continued human life on this planet, which he endangers every time he opens his mouth to bloviate that the U.S. will throw its military into the fray, should Taiwan and China go to war? True, Biden’s bellicose pronunciamentos do make the news – he is, after all, the ruler of one of the most violent empires in human history – but details of their global life-and-death implications, namely that they could kill us all? Not so much.
No, this news is not of interest to the editorial bigwigs who tell us what to think. They’re too busy stuffing our heads with bubble gum for the brain like rubbish about Tik Tok, or celebrity drivel or anything else deeply stupid enough to cretinize viewers and readers, so they won’t notice that their utility bills doubled in recent months, or their grocery bills shot up many percentage points, or the world is closer to being incinerated in a nuclear apocalypse than it has ever been.
But they notice anyway. And even though they may lack the finely tuned mental framework to fit it all together, thanks to their news consumption habits, lots of people have begun to glimpse that Washington’s idiocy could get them blown up tout de suite and meanwhile is bleeding them dry and will very soon be bleeding them drier. Hence the public’s growing reluctance to keep handing Ukraine, the most corrupt country in Europe, blank checks. The GOP even climbed onto the bandwagon and announced it won’t fund this misbegotten war if it regains congress. I, for one, will be astonished if Republicans have the backbone to keep that promise. Anyway, Biden plans to preempt this oath by forking over more billions to Kiev now. This will not, ahem, help the Dems, which is probably what Republicans count on. But then Biden gets to look like he’s a man of principle (the show must go on), while the rest of us go broke and calculate our distance from atomic ground zero. Americans struggle with utility bills, grocery and gas prices, medical and educational debt. They don’t need to fund defense contractors to the tune of billions of dollars so Ukrainians and Russians can kill each other halfway around the world. And they certainly don’t need a war that has humanity teetering on the brink of nuclear Armageddon.
In an unexpected dribble of good news, on October 24 the Washington Post reported that some 30 members of the progressive caucus urged Biden to get diplomacy to end the war rolling. The next day, they sniveled and recanted. This was the first time any Dems had the guts not to cheerlead for more bloodshed and more war on Moscow. What caused this initial sea change, I don’t know. But it was good news. Better late than never, it seemed. It appeared to mean some on the so-called left in Washington had finally come to their senses and just might not behave as disgracefully as so many European socialists did once World War I started, when they abandoned their erstwhile pacifism. For a long time, honestly, it has looked like that was the inheritance Dem progressives wanted to claim, an inheritance not just of shame and mass murder, but, were the Ukraine war to morph into World War III, human extinction.
For less than a day the sun of reason and goodness shone down. Briefly, the people who consider themselves of the left decided this danger of humanity’s mass execution was worth speaking out about and that diplomacy for peace is the only sane route out of the fiasco. But then, the next day they chickened out of bucking their party’s bloodlust. Even their timid gesture was too much to ask. These people are not leftists. They are cowards. They are a disgrace to the left. If anyone in the progressive caucus ever speaks out for diplomacy again, I’ll be very impressed.
Speaking of being impressed, how about that Washington Post actually playing this story big, about progressives calling for diplomacy, instead of burying it? That was unexpected, to say the least. Because it’s long been sickeningly obvious that our mainstream media show one side of the story: the NATO, Washington, imperial, war-mongering side. And it’s been doing that, shamelessly, for a generation. (It did that earlier too, but with a bit of actual embarrassment, whenever it got called out.) Remember Iraq’s infamous weapons of mass destruction? The editors who hyped that lie for months on end went on to bigger and better things, and so did the politicians – Biden even became president! – while an entire country, Iraq, was bombed to smithereens, based largely on mendacious reporting and political chicanery and now, decades later, has simply swirled down the drain.
And who can forget the frenzy whipped up to justify NATO’s criminal 1999 bombing of Serbia? Nowadays Biden and NATO chief Jens Stoltenberg would have you believe NATO is a “defensive” organization. What it did to Serbia should have tossed that mistake in the trash long ago. Instead, the error persists (not accidentally). When Russia reacted to the chance of Ukraine joining NATO and thus the presence of a hostile bomb-happy axis on its borders, western rulers protested that NATO is “defensive.” So also clamor our media, prevaricating just as they do every time they mention the U.S. defense department, which should ditch that moniker and return to the previous, more honest “war department.”
You know things are bad when absurd chuckleheads like former Italian prime minister Silvio Berlusconi are the ones almost nailing reality on the head. He did that October 20 with his remarks that Ukraine provoked Russia into its invasion. It could be argued that Kiev did so by slaughtering 14,000 Russian-speakers in the Donbass since 2014 and then, last winter, massing huge numbers of troops on that region’s border, in preparation for what Moscow took to be a genocide. But actually, Ukraine’s supposed instigation had lotsa help. It would have been more accurate for Berlusconi to say that Ukraine’s puppet master, the U.S., provoked Moscow with its nonstop incitement by expanding NATO eastward since the Soviet Union’s fall, as numerous American experts and diplomats – from cold war brain-trust luminary George Kennan to former ambassador to the USSR Jack Matlock to CIA chief William Burns to great powers expert John Mearsheimer, and others – had warned, and more recently egged Moscow to attack with a 2014 Kiev coup and the eight years of violent nonsense that followed, and that Washington did so with premeditation to rupture the economic relationship between Russia and Europe; but nonetheless Berlusconi landed his verbal dart on the board with the bullseye. And when you have to go to Berlusconi for informed commentary, you’re in trouble, because he recently chose his side in the Italian government and it was the fascist one. So now things are so bad that fascists are among the people objecting to imperial propaganda. Fun times.
But we have the same disastrous mess here in the U.S., where the next presidential election could shape up to be a choice between Trump’s fascism or Biden’s nuclear war. Choice? Ho, ho. That’s no choice. That’s death on the installment plan or instant death. Either way it’s disastrous for ordinary people, because Trumpism either ends what civilization we have in America, which has a dire, global because imperial impact, or Bidenism directly ends civilization on earth.
At the start of the Ukraine war, Biden promised not to launch World War III. He broke that promise, by flooding Ukraine with weapons, CIA operatives and some special forces. To call this reckless is an understatement. Biden’s refusal to use his considerable weight to promote peace negotiations killed thousands of Ukrainians and Russians, will likely kill many more, and also endangers the lives of billions of other people, worldwide – 5.3 billion from nuclear-winter-induced starvation, who would suffer a slow, agonizing death. And I’m not talking about the canard that Russia may use a low-yield nuclear device on the battlefield. I’m talking about Moscow and Washington determining that they really are in a hot war and the long-range, high-yield nuclear missiles that could then begin to fly.
Biden’s sole task is to prevent this. His desire to be seen as the new FDR, as a friend of the unions, as some sort of social democrat, mean nothing if he can’t deescalate this war with Moscow. If Biden wants any legacy other than that of earth’s destroyer, leaving humanity a cold, charred, radioactive planet, he will stop his war-mongering garbage at once and throw his definitive, presidential heft behind peace negotiations with Moscow. And Washington must be an in-person party to those negotiations. Absent that, anything else he does goes down in history, if there even is a history, as a waste.
Eve Ottenberg is a novelist and journalist. Her latest book is Hope Deferred. She can be reached at her website.
Wall Street’s Biggest Bear: The Bear Market Will Be Over In The First Quarter
Last Monday, when discussing Morgan Stanley well-known uber-bear Michael Wilson’s doubling down on his “tactical rally” call (as a reminder, he now expects that S&P to hit 4,000-4,150), we wrote that “Wilson is doubling down on his shift away from uber-bear to not just tactical bull, but full-blown bull, a transformation predicated by Morgan Stanley’s house view that both yields and the dollar have peaked. Of course, if that is indeed the case, then with both yields and dollar sliding, it’s virtually inevitable that the bear market ends somewhere here, because even as earnings slide, PE multiples start expanding again. Of course, Wilson won’t admit any of that just yet (keep an eye on his tone in coming weeks) and instead when sharing his feedback to last week’s notable call as well as color on where Wilson thinks the markets will trade from here, he writes what we first noted more than two weeks ago, namely that the meltup is all in the technicals.”
We didn’t have long to wait, because just two days later Wilson, who correctly predicted this year’s slump, told Bloomberg that he believes the bear market in US equities may conclude sooner than investors think.
Once again unexpectedly echoing everything that BofA’s Michael Hartnett – who is the true forecasting superstar of 2022 – has said this year and more specifically, Hartnett’s latest forecast that the “big rally” hits in H1 2023…
Hartnett Reveals Latest FMS Results: Macro, Investor Capitulation Is Here; Policy Capitulation Starting… The “Big Rally” Hits In H1 2023 https://t.co/eXb6VqWmx3
… Wilson told BBG TV that “ultimately the bear market will be over probably sometime in the first quarter” although since Morgan Stanley still hasn’t even bothered to make a recession its base case, he naturally had to CYA, adding that “all of this is subject to revision. I want to make clear, if the market starts trading off again and the S&P 500 blows through 3,650 on the downside, we will be bearish again.”
In other words, if stocks keep going up, Mike will stay bullish; if they drop, he will turn bearish. Which may or may not be useful information.
As a reminder, Wilson, who was ranked the best portfolio strategist in the latest Institutional Investor survey, said a 19% slump in the S&P 500 Index this year has left it testing support at its 200-week moving average of around 3,600, which could lead to a technical recovery. The S&P 500 has rallied nearly 6% since Oct. 12, when it closed at lowest since November 2020, just days before Wilson (echoing Hartnett before him, and the opposite of Kolanovic who had just turned bearish) predicted a meltup.
Which is not to say that stocks will be at 5,000 this time next year: Wilson is anticipating more pain for equities by the second half of 2023, and Morgan Stanley is forecasting that the S&P 500 will close at 3,900 by next June, according to the latest Bloomberg survey conducted in mid-October. Ultimately, he sees the broad equities benchmark bottoming around 3,000-3,200, although as we will discuss in a note later today, in the latest Morgan Stanley Sunday Start, Wilson writes that “inflation has peaked and is likely to fall faster than most expect, based on M2 growth. This could provide some relief to stocks in the short term as rates fall in anticipation of the change. Combining this with the compelling technicals, we think the current rally in the S&P 500 has legs to 4000-4150 before reality sets in on how far 2023 EPS estimates need to come down.”
In short: the bear market ends in Q1, 2023 but then stocks could go up or down – depending on where earnings guidance comes out – or as he puts it, “we’re probably more bearish than most for the outlook next year,” although he thinks “this tactical rally is going to be big enough to try and pivot and trade it.”
Meet the Illinois government employee $100,000 Club. It’s comprised of 132,188 public employees and retirees who earned a new ‘minimum wage’ of $100,000 or more.
While crime skyrockets in the neighborhoods, test scores plummet in the public schools, and inflation decimates private-sector paychecks, the Illinois public employee class is living the good life.
Our auditors at OpenTheBooks.com found nearly 500 educators in the public schools with salaries between $200,000 and $439,000. In small towns, city managers made up to $341,300. Three doctors at the University of Illinois at Chicago earned incomes between $1 million and $2.1 million.
Barbers trimmed off $104,000 at State Corrections; janitors at the Chicago Transit Authority cleaned up $143,634; bus drivers in Chicago picked up $242,812; and suburban community college presidents made $418,677.
Use Our Quick Search Tool
Using our interactive mapping tool, quickly review (by employer ZIP code) the 132,188 public employees and retirees across Illinois making more than $100,000. Just click a pin (ZIP Code) and scroll down to see the results in your hometown rendered in the chart beneath the map.
Big salaries: Eighteen school superintendents made $300,000+, among them Edward Mansfield (Homewood Flossmoor D233— $434,323); Michael Lubelfeld (North Shore School D112— $392,952); Gregory Jackson (Ford Heights D169—$379,465); Kevin Nohelty (Dolton School D148—$373,626); and Blair Nuccio (Indian Springs D109—$355,154).
Big pensions: Eighteen retired school superintendents received $300,000+ in retirement pensions, among them Lawrence A. Wyllie (Lincoln-Way CHSD 210 – $361,787.64); Henry Bangser (New Trier Township HSD 203 – $351,676); Gary Catalani (Wheaton-Warrenville Unit SD 200 – $350,113.08); Laura Murray (Homewood-Flossmoor CHSD 233 – $344,450); and Mary Curley (Hinsdale CCSD 181 – $334,540.20).
Chicago (28,000) – Why is crime out of control in Chicago? It’s a matter of political will— not pay. The Chicago police and fire departments paid 600 employees between $200,000 and $480,000 in cash compensation last year.
In Chicago, 41 ‘street light repair’ workers made between $100,000 and $196,123 and 61 city ‘sign painters’ made six-figures up to $145,341. The boss at the city auto pound reaped $124,783 while the janitors at the auto pound made six-figures too. ‘Sanitation laborers’ made up to $125,783.
In Chicago Public Schools (CPS), CEO, Janice K. Jackson made $361,762: $298,923 in salary with $62,839 in benefits. Jackson’s salary alone exceeded the pay of the U.S. Secretary of Education ($203,500) — a cabinet-level position – by $95,423.
However, student scores plummeted. Just 26-percent of eleventh graders perform at grade level in math and seven in ten students could not read at grade level.
No matter, we found the average teacher in the Chicago Public Schools made $108,730 last year when including benefits. In addition, there were 1,823 employees across six departments – outside the classroom – now dedicated to diversity, equity, inclusion efforts.
The Chicago Transit Authority, operator of trains and busses, paid rail service supervisors up to $294,609; ironworkers as much as $251,376; and line workers $240,835. A signal maintainer took home $302,075, a telephone line worker was paid $247,677 and a customer service representative made $207,202.
Incredibly, 378 CTA bus drivers took home $100,000+ and top earner Yolanda Harris picked up $242,812.
Colleges & universities (18,000) – University of Illinois basketball coach Bradley Underwood earned $3.2 million last year. Fady Toufic Charbel ($2.029 million); Mark Gonzalez ($1.059 million); and Konstantin Slavin ($1.041 million) are million-dollar doctors at the University of Illinois at Chicago (UIC).
Universities: Highly compensated employees included those that work for the University of Illinois Foundation—a private fundraising foundation for the university. A staggering 42 employees cleaned off nearly $7 million in cash compensation making between $100,000 and $294,700 each. The top-paid employee, Edward Wald ($294,700), out-earned the president at Northern Illinois University and every other state university (except Illinois State).
Retired professors have some of the biggest pensions: University of Illinois at Chicago professor Wolodymyr Minkowycz ($426,656), University of Illinois at Urbana-Champaign physics prof Gordon Baym ($285,669) and engineering prof Vernon Snoeyink ($274,664).
Junior colleges: The top paid presidents included Christine Jean Sobek (Waubonsee Community College — $418,677) and Thomas Ramage (Parkland College—$339,000). Top retirees included Zelema Harris (Parkland College—$253,297); John Swalec (Waubonsee Community College—$239,871); and Vernon Crawley (Moraine Valley Community College— $239,851).
State of Illinois (16,500) – Eight barbers at Corrections made between $102,300 and $104,000. Veterans, Human Services, and Corrections paid 484 nurses between $100,100 and $255,300.
The top paid sergeants at the State Police earned $309,600. We found more state police officers retired on six-figure pensions (1,555) than officers currently paid on six-figure salaries (1,540)!
Cities & villages (14,500) – Small town managers collect high pay, along with perks and pension benefits. Top paid managers were Michael J. Ellis (Village of Grayslake –- $302,408); Reid Ottesen (Village of Palatine — $300,900); Richard Nahrstadt (Village of Northbrook – $280,516); and Stephanie Hannon (Village of Bannockburn – $252,360).
Most local six-figure employees are in the police and fire departments. The top-paid local police officer worked in Deerfield, John Sliozis ($226,241) although the next five officers making more than $200,000 worked for the Aurora department.
The small town of Rosemont (pop. 4,200), near O’Hare International Airport, has three highly compensated officials:
Patrick Nagle ($282,304—head of the Allstate Arena entertainment venue),
Christopher R. Stephens ($278,227—Executive Director of the Donald E. Stephens Convention Center), and
Christopher’s uncle mayor Bradley A. Stephens ($225,652) – who also made $70,100 as an elected state rep. (Bradley is the son of Rosemont’s founding mayor, Donald Stephens, whom the convention center is named after.)
Private associations, nonprofits and retired lawmakers
There are several legal loopholes for individuals to access state funding through private associations, nonprofit organizations, and state legislative bodies.
Retired Chicago Mayor Richard M. Daley (D) double dipped pension systems for nearly $249,636. Daley made $158,076 per year in pension payouts after a short eight-year career as a state senator plus another $91,560 per year in city pension payouts for his 22 years as the mayor of Chicago.
Three top paid earners within the municipal-government pension system work for private associations – not government. Brad Cole of the Illinois Municipal League pulled down $437,447, up from $407,656, (2020). Peter Murphy, executive director of Illinois Association of Park Districts, made $357,816, while Brett Davis, executive director of the Park District Risk management Agency, brought in $342,405.
Former Illinois Governor Jim Edgar (R) double dipped pension systems: General Assembly pension ($186,660 per year) and University Retirement System pension ($90,336). Last year, Edgar’s total payout in pension heaven? $276,996
Since Edgar left the governorship in 1999, we estimate that he earned $2.4 million in compensation from the University of Illinois (2000-2013) and another $2.5 million in pension payments from his career as legislator, secretary of state and governor.
Highly compensated locals
DuPage County employees have a history of hefty salaries and pensions. In fact, the old county Republican guard are all retired on golden-parachute public pensions including former state’s attorney Joe Birkett ($182,910); former sheriff John Zaruba ($165,293); and former county clerk Gary King ($157,513).
Local park district administrators out earned the state director of parks ($158,100). These included James Pilmer ($256,447 at Fox Valley); Raymond McGury ($227,470 at Naperville); Michael Benard ($213,158 at Wheaton). The top pension payments for park retirees also exceeded $200,000 per year: Steven Messerli and Robert Vaughan, each of Fox Valley Park District, respectively took home $225,664 and $219,559 in retirement pension.
Even water district employees tapped into the largess: David Miller (North Shore Water Reclamation District — $235,615); Mark Eddington (Kishwaukee Water Reclamation District— $189,085); and John Spatz (DuPage Water Commission— $225,000). And retirees again received top payments—Albin Pagorski and Gregory Hergenroeder respectively got $226,817 and $216,795 in pensions from the Fox River Water Reclamation District.
Two years ago, Illinois Governor J.B. Pritzker wanted to hike the income tax during pandemic and pushed for a state constitutional amendment to allow for a progressive income tax. However, the voters shot it down, 55-45.
This year, Pritzker is pushing Amendment 1 – which would enshrine long-term employment contracts for government workers, multi-year salary increases, constitutional backed lifetime pensions, the power to strike, and much more.
It would essentially make Illinois “unreformable.” A recent Wall Street Journaleditorial by Wirepoints was headlined, “Unions Ask Illinois Voters To Sign Over Control Of The State.”
Already, updated analysis by the American Legislative Exchange Council shows that an Illinois family of four now owes two and a half times more in unfunded government pension liabilities ($168,000) than they earn in household income ($63,585). In a state of 13 million residents, every man, woman, and child owes $42,000 — on an estimated $533 billion pension liability for public employees.
Illinois may have already crossed the Rubicon. And now the public-sector unions are giving the state the last push off the cliff.
Note: all compensation amounts listed are cash compensation, or pensionable compensation and do not incorporate the cost of benefits, i.e. health insurance, etc., unless otherwise cited.
Biden Claims There Are ’54 States’ In Latest Gaffe
Remember when a group of psychiatrists led by fired ex-Yale shrink Brandy X Lee wanted to impeach Trump for ‘lacking mental capacity to fulfill the duties of his office’?
In his latest gaffe, the ‘most popular president in US history’ claimed that Democrats campaigned in “54 states” in 2018 to defend Obamacare.
“And, of course, they’re going try for their 499th time, or whatever the number is — they’re still determined to eliminate the Affordable Care Act. And, by the way, if they do, that means — not a joke, everybody,” said Biden, not jokingly. “That’s why we defeated it in 2018 when they tried to do it. We went to 54 states.”
“The reason is people didn’t realize that the only reason anybody who has a pre-existing condition can get health care is because of that Affordable Care Act,” Biden continued, warning that “these protections will be gone as well if Republicans get their way.”
Joe Biden now says there are 54 states.
I guess if you count the states of denial, confusion, delusion and disaster that his Regime has caused he just might be on to something.
Amazingly, Biden has his defenders – including this self-described ‘attorney and animal lover’ who claims Biden must have been referencing US territories, while talking about Dems campaigning for Obamacare.
Of course, even if Biden was talking about US territories – their residents can’t vote in US electionsand have non-voting representation in Congress.
