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To what end if he loses the election? It will be fun to watch as we get closer. I'll be out of the country until 10/5 so I'm going to miss a lot of his whining and shenanigans.
I think more belly flop than swan dive.
CNN has made a career of being useless. They're screaming that this is a "huge" rate cut. Republicans will call it biased. Anyone watching the futures knew there was better than a 50/50 chance this would be the size of the cut. Since the market expected it, there's a lot of smart money taking profits and trying to scare out weak hands when they should be buying.
This is fascinating stuff. We're beginning to see more ice above sea level melt away and this will be the thing to watch. I remember thinking that massive, melting ice shelves which were measured almost 40 years ago, would be a problem for sea level as these ice shelves became icebergs. But it's not true, if anything when ice shelves or icebergs melt they take up less space. It was, of course, great fodder for climate deniers. The problem is not melting ice shelves it's that once gone, there's nothing holding back the land based ice which can be a mile or two thick.
The other more recent finding, actually a decade ago but only recently being widely accepted is that if we begin to seriously lower carbon emissions there is no built in 30 year period before atmospheric CO2 levels begin to fall. This is great news if we actually do something about this problem. But there's a dark side to this theory and it's based on observation of ocean warming over the last 30 years.
You may remember that in the 1970s scientists thought, (rightly by the way), that we were headed into another cooling period. The oceans were cooling and did not stop cooling until the late 1990s. Since then they've been warming rapidly. More heat, more energy, more energy more ability to create damage. What we're seeing is the ocean taking on the great majority of the responsibility for sequestering the CO2 we're adding to the atmosphere. It was a surprise and no one knows what comes next. How soon before we need a scale that measures Cat6 hurricanes?
Not judging, because I certainly don't live in a teepee and walk everywhere I need to go, but it's clear almost no one cares about climate change except to wring their hands now and then and blame big oil. We are truly frogs in a pot that's about to boil in the next 50-100 years.
Not surprisingly, 2023 was a new record because everyone started traveling again, including my family.
We're headed to England next week to visit with family. I think everyone with a brain now gets that Brexit was Russia's trial balloon. It worked so well there, they set their eyes on the US. Let's hope we can again prove like we did ~250 years ago, we're not Britain.
The assassination attempt yesterday is at best curious. Trump's trip to this course was not planned or scheduled. Yet the gunman had been waiting across from the 5th tee for about 12 hours because he was; in no special order:
A. Part of an inside conspiracy to put Trump at the center of media attention and not about dog eating or debate losing.
B. Part of a criminal conspiracy to kill 45, (or 34 if you like), before he became 47.
C. The luckiest would-be killer in the world because he divined Trump would be golfing, he knew which of the three golf courses, all near each other, that Trump would choose. If so, he should have gone to a casino.
C2. The luckiest very poor would-be killer who had no money in his bank account but among other things, flew from Hawaii to Florida, bought an AR15, a Go Pro, a scope, ammunition and had a car.
Not that I feel sorry for him as he flails away but this one made me think of the Eagle's song Desperado.
Desperado, why don't you come to your senses?
You've been out ridin' fences for so long now
Oh, you're a hard one, but I know that you got your reasons
These things that are pleasin' you can hurt you somehow
Desperado, oh, you ain't gettin' no younger
Your pain and your hunger, they're drivin' you home
And freedom, oh, freedom, well, that's just some people talkin'
Your a prisoner walkin' through this world all alone
Headline from Barron's this morning. This one made me laugh. Billionaires need your help.
I don't think the Fed can wait any longer to cut rates. When I moved to Annapolis I signed up for regular updates from Zillow and Redfin for all city of Annapolis homes which go up for sale or have a price change. Until about a month ago, I'd not seen one price reduction. Since then, a dozen or so price cuts have happened. They're all in the 800k-1MM range. They're mostly rather uninteresting two-story boxes built in the 2000s so it's not widespread but it's certainly worth watching.
For any readers not familiar with the concept of builder grade windows, doors, appliances, fixtures and workmanship, stuff begins to break after 15-20 years. Buying a tract style home built in the crazy building boom of 2003-2007 that has not already been properly updated can be a money pit.
As Elroy posted earlier, China is not building ghost cities any longer so commodity prices are heading down. It also appears they're in a recession as the last two quarters have been downward. If it gets much worse there could be a knock-on effect here.
Hang Seng is down ~50% since 2018. Here's my overly simplified assessment of China since ~2000:
1. They were allowed to join the WTO in 2001 - This led to a massive increase in economic growth and foreign trade.
2. Hu Jintao was their leader from 2002-2012 - He focused the government and business on science. He also allowed some freedom.
3. Xi Jinping became the leader in 2013. Xi is a fascist, more concerned about control than leadership. Oops.
4. By 2017-2018 it was obvious China's real estate market would crater.
5. COVID 2020
6. US fires our fascist leader and Xi friend. 2021.
7. US and other countries begin re-shoring mfg. 2022.
It's not going to get better for China until they fire their fascist and wring out all the bad debt. Hard to do the right thing in a dictatorship.
That's the reason OPEC+ has extended their cuts to oil production into 2025.
The debate was boring until Trump asserted that illegal immigrants were eating the dogs and cats of local citizens. I'm really hoping for more crazy.
This one was fun - speaking of Biden: We have a president that doesn't even know if he's alive.
And: The wife of Moscow's mayor gave Biden $3MM. Must have been a good night..:).
Then 89 minutes of either listening to a stump speech or an a*hole blathering.
ABC commentators are idiots, first talking about the handshake. Oh, there was a handshake, we haven't seen that in a long time.
Eating your neighbor's pets was the highlight. I guess I should keep mine in doors from now on.:).
There's a reason I have no subscriptions to cable or satellite or the big streaming services. It's just dumb with an extra serving of stupidity.
And finally a public service announcement: Crypto is almost always a scam, it's not an investment. Below is one of about a dozen crypto scams currently under investigation.
And, in news that's funny but almost no one cares about, Martin Shkreli's $2MM Wu-Tang-Clan album was forfeited to the Feds because Martin is a crook. In a rare example of the federal government making a profit, the Feds auctioned it for $4.75MM. Of course this isn't the end of the story because Martin is a DJT in training..:). Reporting from Molly White:
This hurricane season was supposed to be dramatic, and it started that way. Then, not so much. Scientists have some theories. Explanation from SA.
Atlantic Hurricane Lull Puzzles Scientists
Meteorologists predicted a busy Atlantic hurricane season—and a recent lull in activity doesn’t negate that
Forecasters warned this spring that the 2024 Atlantic hurricane season could be particularly dangerous because of the potent combination of warm sea-surface temperatures and a looming La Niña climate pattern that would favor tropical storm formation. But as the typical peak of the season arrives in early September, the basin has been eerily quiet. The most recent named storm, Ernesto, dissipated around August 21. So were the dire hurricane forecasts wrong? Where are all the storms?
In short, the answers are “no” and “it’s complicated.”
Experts say that despite the current lull, this season has already been strong—and could still become even more active. So far this year the Atlantic has seen five named storms: two tropical storms, two hurricanes and one major hurricane. The major hurricane, Beryl, reached Category 5 status earlier than any previous storm in the Atlantic. “We definitely got started with an extremely active season,” says Brian McNoldy, a hurricane researcher at the University of Miami.
And considering the number and strength of individual storms is only one way to evaluate a hurricane season. Another important tool for understanding tropical activity is a measurement called accumulated cyclone energy, or ACE, which represents the overall activity of tropical storms and hurricanes in the Atlantic. To calculate ACE, every six hours, scientists tally the wind speeds of every storm that is strong enough to have a name—those with peak sustained winds of at least 39 miles per hour. Each storm’s wind speed is squared, and then the values are added together. This is done four times a day all season long.
This year’s ACE score is still 50 percent above the average season-to-date value from 1991 to 2020, according to the National Oceanic and Atmospheric Administration—hardly a quiet year. According to McNoldy, much of the power of the season to date came from Hurricane Beryl, which was both powerful and long-lasting. Ernesto also contributed significantly to the current ACE score.
Moreover the Atlantic hurricane season stretches until November 30—leaving plenty of time for activity to ramp up again and erase the calm of recent weeks. “Just because we’re kind of stumped about the last couple weeks and maybe this week, it’s definitely too early to say anything about the whole hurricane season,” McNoldy says.
But scientists are indeed “kind of stumped” about the current situation. The same factors that had them worried ahead of this hurricane season are still in play, McNoldy says. Sea-surface temperatures across the eastern Atlantic, the Caribbean and the Gulf of Mexico all remain nearly two degrees Fahrenheit (1 degree Celsius) above average, offering ample warm water for tropical storms to feed on. And as predicted, the El Niño climate pattern that tends to suppress hurricanes in the Atlantic has been shifting toward La Niña conditions, which feature lower rates of wind shear that break tropical storms apart.
Thus, the stage remains set for serious storms to grow in the Atlantic—they simply don’t seem to be doing so. The trends are too preliminary for anything more than hypotheses, but to understand the situation, scientists are turning their eyes to Africa, where the seed disturbances of inclement weather that become hurricanes are birthed. Here, two phenomena may be playing a role in the current hurricane lull.
One is the plume of dust that rises off the Sahara Desert and is carried by winds across the Atlantic. It makes sense that this dust could interfere with hurricanes because it travels along a similar route to brewing tropical storms—and because dust is dry, and storms feed on moisture. And some research has shown interactions between Saharan dust and tropical storms, although the relationship is quite complicated, says Yuan Wang, an atmospheric scientist at Stanford University and co-author of one such study, published earlier this year.
That work showed that Saharan dust can reduce the amount of precipitation in a hurricane, yet Wang suspects it could also reduce the formation of hurricanes in the first place. “I think it’s very possible the dust plays a role in this year’s drought hurricane season,” he says, although that explanation remains speculative. “I think we still need very rigorous scientific research to do some attribution analysis.”
A second factor of interest is that the West African monsoon has been unusually wet this year, says Kelly Núñez Ocasio, an atmospheric scientist at Texas A&M University. The West African monsoon is a seasonal wind pattern that carries rain from the Atlantic Ocean over into West Africa between June and September. Núñez Ocasio has studied how the monsoon affects the seeds of hurricanes. And in a paper published earlier this year, she and her colleagues modeled how the atmosphere responds to additional moisture.
Those simulations suggest that in wetter conditions, the West African monsoon pushes a band of air called the African easterly jet northward. Under normal conditions, that jet produces atmospheric disturbances called African easterly waves, which can become hurricanes once they reach the Atlantic. But when the jet is in a more northern position, it seems to inhibit the development and survival of these waves, Núñez Ocasio and her colleagues found, making hurricanes less likely despite all the moisture.
She says those conditions in Africa may continue to dampen this year’s Atlantic hurricane season. “I don’t see it changing so dramatically that we’re going to see, all of a sudden, a fast spin-up of multiple hurricanes before October,” Núñez Ocasio says. “It’s just too stable, and when conditions are stable, it’s hard to make it unstable. It’s going to take quite a bit.”
Núñez Ocasio would like forecasters to start looking beyond the Atlantic Ocean to assess hurricane-forming conditions. But for the general public, she adds that it’s still important for people in the Caribbean and the southern and eastern U.S. to stay on their guard because even unnamed storm systems can cause serious flooding and other damage.
Forecasters agree. “We remain concerned about the entire Atlantic basin in terms of development risks, as it only takes one tropical storm or hurricane to cause a potential catastrophe,” says Dan Harnos, a meteorologist at NOAA’s Climate Prediction Center.
Forecasters also caution that the season could see major storms despite the current lull in Atlantic activity. “Conditions still appear very favorable for above normal activity during the remainder of the hurricane season,” says Jamie Rhome, deputy director of NOAA’s National Hurricane Center. And late-season storms can be brutal: for example, late October 2012 spawned Hurricane Sandy, which affected parts of the Caribbean before becoming racing toward the and U.S. East Coast and devastating New Jersey and New York.
Swings in hurricane activity levels aren’t unusual, McNoldy emphasizes. “You can have weeks of on and then weeks of off, and that’s pretty normal,” he says. He points to 2022, which saw no named storms in the Atlantic between July 2 and September 1—two full months of eerie quiet. But September saw both Fiona and Ian become major hurricanes, with the latter causing severe flooding in Florida and coastal North Carolina.
“I think it’s a little too soon to count this season out,” McNoldy says. “Even if you have this long period of quiet, there’s still a lot of hurricane season ahead.”
Possibly comrade Kapncoh will want to move there. He will learn to choose vodka over wine.
Will be good for real estate.
The August ADP jobs report came in weak at just under 100,000. ADP extrapolates overall employment trends from a list of 25MM employees. This is the weakest jobs growth since January 2021.
Consumer revolving debt began to slow its growth in March and since then has only grown 1.3%. Consumers may be tapped out now that the COVID free money program has run its course and consumer revolving debt has increased by 45% since April 2021.
Student loan debt peaked in Q1 of 2023 at $1.78T, Since then the Biden administration has been able to lower that by 1.75%. They like to use the raw number, $33B, because it sounds like they're making a difference.
Over the last ~15 years, US government debt has increased by over $25T. That's an increase of 265% in 15 years while GDP only grew 92%. The social security trust fund currently has 11 years before its depleted.
As I look at the current level of consumer and federal government debt, I don't see a path out of this that doesn't require some type of painful reset. Who will suffer the most pain and when, remains to be seen.
You can't pick your neighbors. Chicago's gun violence is high because Indiana has gun laws as dumb as Texas. They allow open carry and concealed carry without a permit. Gun shows are the wild west. Buy guns in Indiana and drive less than an hour to sell them out of your trunk in Chicago. Toronto has the same problem with the US. It's about 20 miles across Lake Ontario. Maybe they need a beautiful fence the likes of which we've never been seen before. A perfect fence.
Yes, NVDA is so overpriced the company is buying $50B in their overpriced stock..:). It's difficult to wrap one's head around these large numbers but this is a $3T company so it's just a bit over 1%. Of course that 'bit' over 1% is another $20B. Pocket change.
That's been a nice investment for MSFT.
Looks like the big money has decided to fleece short term retail traders. NVDA will move back up again soon. I guess sales up 122% from the year-ago quarter and $30B in Q2 sales was just too paltry...some would say meager..:). One of the 3 most valuable companies in the world just reported growth over 100% YoY and they really don't have any serious competition. Good time to buy and hold.
Video of solar storms from the International Space Station.
https://www.tiktok.com/@scientificamerican/video/7403388036903423278
I've one other OT comment and then I've got to get back to work. Some people go through deep tragedies in their life and it makes them a stronger, better person. I think Biden is an example of that. Others go through deep tragedies in their lives and it destroys them. Robert Kennedy Jr. is an example. A decade ago he was managing relatively well but now at 70 he's just unhinged. I find it sad.
In case any readers here are thinking BitCoin is the 'safe' one and might be a good investment, see this from the European Central Bank:
From CNBC:
Canada imposes a 100% tariff on imports of Chinese-made electric vehicles, matching the U.S.
Canada’s government on Monday announced it is imposing a 100% tariff on imports of Chinese-made electric vehicles that matches U.S. tariffs and follows similar plans announced by the European Commission.
The announcement followed encouragement by U.S. national security advisor Jake Sullivan during a meeting with Canadian Prime Minister Justin Trudeau and cabinet ministers on Sunday. Sullivan is set to make his first visit to Beijing on Tuesday.
Trudeau said Canada also will impose a 25% tariff on Chinese steel and aluminum.
“Actors like China have chosen to give themselves an unfair advantage in the global marketplace,” he said.
There was no immediate response from China.
Chinese officials are likely to raise concerns about American tariffs with Sullivan as Beijing continues to repair its economy after the Covid-19 pandemic. U.S. President Joe Biden in May slapped major new tariffs on Chinese electric vehicles, advanced batteries, solar cells, steel, aluminum and medical equipment.
“The U.S. does believe that a united front, a coordinated approach on these issues benefits all of us,” Sullivan told reporters on Sunday.
Biden has said Chinese government subsidies for EVs and other consumer goods ensure that Chinese companies don’t have to turn a profit, giving them an unfair advantage in global trade.
Chinese firms can sell EVs for as little as $12,000. China’s solar cell plants and steel and aluminum mills have enough capacity to meet much of the world’s demand. Chinese officials argue their production keeps prices low and would aid a transition to the green economy.
“We’re doing it in alignment, in parallel, with other economies around the world that recognize that this is a challenge that we are all facing,” Trudeau said of the new tariffs. “Unless we all want to get to a race to the bottom, we have to stand up.”
The only Chinese-made EVs currently imported into Canada are from Tesla, made at the company’s Shanghai factory.
Canada “had to go with the U.S. position, when you think about the economic integration that we have with the U.S. More than 75% of our exports go to the U.S.,” said a former Canadian ambassador to China, Guy Saint-Jacques. “This reflects the fear that the next president of the United States might be Donald Trump, and so they know we have to be pretty much aligned in all of this.”
Saint-Jacques said Canada can expect retaliation from China in other industries, adding that barley and pork are candidates because the Chinese can get it from other countries.
“China will want to send a message,” he said.
Well done Elroy.
I don't follow the orange juice futures market but OJ is up over 16% in the last two weeks. You can thank speculators who think weak production will drive prices up even further.
This famous scene from Trading Places will help explain how it can work; for you or against you..:).
Exactly. The OER measures new rental contracts and they've been falling all year. It's likely this will continue for some time. Some of the REITs that are highly levered are going to fail as their income can't keep up with costs and new money dries up - not unlike the example you just posted.
Of course, while this is happening and, at least, the real estate economy drops, interest rates will also fall ensuring prices don't fall much. I don't see anything dramatic unless one owns REITs that are not stable.
I think that's smart Nick. BLS just revised yearly job creation numbers down by over 800,000 and inflation at the consumer level has been all but zero for the last three months. There will be more employment and inflation reporting before the Fed meets next month so it's possible the economy continues to weaken marginally but if it's not serious I expect 25bp. The Fed has another meeting the day after the election so they can drop another 25bp then. In Mauldin's opinion manufacturing has been in a mild recession for a while now with goods prices declining.
Also housing rents have been declining all year. In Fed-speak that's Owners’ Equivalent Rent, (OER). Looking at consumer revolving debt, US consumers were on a debt binge that has been slowing since the 18% growth during the '21-'22 fiscal year. That slowed to 11% the next year, 4% the 1st half of this year and appears headed for 2% in the 2nd half, (data from FRED). It looks like the party may be over for this cycle.
Longer term, we can expect corporations to pay more in taxes if Dems take the executive office and both houses of Congress. It will also be interesting to see how our federal government, military and the MAGA faithful react when Trump again tries to overthrow the election.
Ex Google CEO Schmidt was recorded saying that work-from-home is killing Google's ability to compete in the AI arena. When it came out of course the MSM made that the lead. Below are a few more interesting observations regarding AI. I wouldn't take it as gospel but it's worth taking a couple of notes. He gave this presentation at Stanford.
AI Liftoff.
Here are the four key points from Schmidt that got lost amid the work-from-home noise:
AI agents are coming. Schmidt said “extremely powerful” AI agents that can take simple directions and generate complicated output will soon be available. He said the agents would be able to read through chemistry texts and discover how chemistry works, giving them abilities to understand other concepts.
Schmidt also said users would be able to instruct an AI model to make a copy of TikTok and produce an app that imitates its functionality. “Imagine that each and every human on the planet has their own programmer that actually does what they want as opposed to the programmers that work for me who don’t do what I ask,” Schmidt said.
Making the top AI models is going to cost a lot of money. “I’m talking to the big companies and the big companies are telling me that they need $10 billion, $20 billion, $50 billion, $100 billion,” he said. Schmidt said OpenAI’s Sam Altman told him it’s going to take $300 billion to build out the required AI infrastructure.
Canada is a key ally. With hundreds of billions of dollars going into AI data centers, the amount of energy and electricity required remains underestimated. Schmidt said he told the White House the U.S. needs to “become best friends” with Canada because the country has a lot of hydropower. It’s unlikely the U.S. will work with the Middle East due to national security concerns, he added.
Nvidia wins. Schmidt said the chip maker will dominate the next wave of AI spending because the most important AI frameworks and libraries are optimized to run on Nvidia’s CUDA platform, and there are no comparable alternatives. “If $300 billion is all going to go to Nvidia, you know what to do in the stock market,” Schmidt said.
Apparently it would just be "weird" if the did..:)
Secretary Pete is one hell of a debater. He loves to go on FOX and put their commentators on their heels.
Once the rate cuts begin massive amounts of cash will go into bonds before bonds become less valuable. I think the fear of zero-sum bonds from the past decade is not lost on long term wealthy investors. These are not people who need to make money, they need to not lose money and the last 40+ years have created roughly 30,000 people with $100MM to $200B. The US has $27T in public debt. If inflation is 2% and the 10 year note is ~3.9%, why not sit back and collect the ~2% difference? That's what the middle class is paying for now with their taxes, debt created by the very wealthy.
Construction is just beginning. $50-$60MM, which means $200MM at a minimum..:). There are, just like the rest of the East Coast hundreds of multi-million dollar homes out on the Chesapeake Bay that are 5 feet above mean high tide. No one will help them. My current home is 25 feet above mean high tide. When I got insurance that was one of the questions I was asked. Then they sent an inspector out to confirm that I wasn't just guessing.
The "city dock" area is the only block or two that floods consistently. That photo was taken the night before I walked down to take my pictures. The city, with other government and naval funding is beginning to build out a large park that surrounds this area with an 8 foot sea wall. I'm very familiar with that block of businesses and it's only two short blocks from the Naval Academy which decided years ago to spend the money to ensure their sea wall was high enough that they were not subject to flooding. The eastern shore of Maryland along with the small islands I've mentioned before are not so lucky.
So far, living in an area with no water concerns, one or two flood days a year and no massive fire season is working well for me.
Well, he did stop himself from saying that she got it for her husband's donations. That's got to count for something..:).