Who Planted This Fake News?

• A fake news story: Did it move markets?
• After the Fed “skips” today… Then What?
• Beijing bails from its U.S. Treasury holdings
• The inmates running the asylum
• The Mailbag: Distractions

A Fake News Story: Did It Move Markets?

The absolute stupidest thing ever happened yesterday on “Fintwit” — the corner of Twitter or X or whatever specializing in finance.

It reeled in the anonymous keeper of an enormously popular financial account…

It spread quickly to everyone’s favorite “edgy” financial site (because of course)…

And it even reeled in a fellow for whom your editor usually has high regard…

Believable as the story is… there’s nothing to it. For its part, Zero Hedge had no follow-up story and it has since deleted its tweet.

The genesis of the bogus headline remains murky. While it was attributed to The Wall Street Journal, it appeared briefly on the Bloomberg Terminal.

Bloomberg’s energy reporter Javier Blas — a real straight shooter despite his employer — says it appears the tweet originated with a parody account. “And then re-tweeted as truth by an aggregator.”

And so all we can do is speculate — and fume. As one fellow tweeted, “If a speculator with access to [Bloomberg] feed input released it on purpose… fines and jail time please.”

What happened yesterday is a classic instance of confirmation bias.

As we’ve chronicled before, many U.S. presidents have toyed with the Strategic Petroleum Reserve — the government’s emergency oil stash kept in the salt caverns of Texas and Louisiana.

But Joe Biden took it to a whole new level last year in a brazen effort to keep a lid on gasoline prices and shore up Democrats’ prospects in the midterm elections.

So on the surface, it’s totally believable that Biden would entertain the idea of draining the SPR altogether. Why wouldn’t he?

It reminds me of a rumor that blew up the internet in 2005 — when in a fit of anger, George W. Bush supposedly spat out that the Constitution was "just a g--d--- piece of paper."

Believable? Totally. But the account has never been substantiated — and the website where it originated issued a retraction.

The lesson is that in this day and age, we all need to keep our BS antennae active at all times.

This is especially the case if much of your news is filtered through an algorithm maintained by a Big Tech company. For as much as they engage in censorship, they also let through a lot of garbage that fuels your confirmation biases. (That’s how they keep you coming back.)

In my professional role, I still try to do as much of my informational intake as possible without signing into anything and on a web browser with cookies disabled. (It’s getting harder and harder, no thanks to Elon Musk.)

And I feel as if I’ve retained my old-school journalistic sensibilities — i.e., the motto at the old City News Bureau of Chicago, “If your mother says she loves you, check it out.”

But I can’t allow myself to get complacent — and neither should you.

At a time when the mainstream cares more about narrative than about accuracy — as I said last year, the news has become one giant psyop — it’s incumbent on everyday citizens to be wary. Your freedom and your wealth depend on it.

The Fed: After Today’s “Skip,” Then What?

It’s one of those eight Wednesdays every year when the Federal Reserve issues its latest proclamation on interest rates.

As usual, the Fed has gone out of its way to telegraph its intentions in advance: After raising the fed funds rate to 5.5% eight weeks ago, the Fed will leave the rate alone when it issues its policy statement at 2:00 p.m. EDT.

“The ‘every other meeting’ tempo seems firmly in place,” says Paradigm macro maven Jim Rickards.

“That means we can expect another 0.25% rate hike on Nov. 1, 2023, the Fed’s next meeting after this one. It’s too soon to make that a firm forecast, but that’s the most likely outcome as of now.

“Further evidence that the Fed will hike rates in November comes from the Fed’s Summary of Economic Projections (SEP, also known as the ‘dots’). This is a compilation of forecasts involving interest rates, unemployment, economic growth and other key variables offered by the governors of the Federal Reserve System as well as the presidents of the regional Federal Reserve Banks. The forecasts are displayed anonymously as points on a matrix, which gives rise to the name ‘dots.’

“The Fed dots last released at the June meeting showed a consensus on two additional rate hikes before the end of the year. One of those hikes took place in July. Now comes the skip in September. There are only two meetings left in the year after today’s meeting. Those are Nov. 1 and Dec. 13.

“We’ll get new dots today but they are likely to show one more rate hike this year. That makes November a likely date because it’s consistent with the skip tempo and the Fed would like to be done with this rate hike cycle before we get much closer to the election year.”

Ahead of the Fed announcement, nearly every major asset class is staging a modest rally.

Among the major U.S. stock indexes, the Dow is up about a half percent while the Nasdaq is just barely in the green. The S&P 500 splits the difference, up a quarter percent at 4,455.

Bonds are also rallying, pushing yields down — the 10-year Treasury now 4.33%. Gold has inched higher to $1,942 and silver to $23.44.

Oil is holding steady at $91.43 after the Energy Department’s release of the weekly inventory numbers — showing drawdowns in crude, gasoline and distillates. Inventories of distillates (i.e., the diesel that moves trucks and trains) are 14% below their average for this time of year.

Beijing Bails From Its U.S. Treasury Holdings

And to think there was a time when Americans worried about becoming debt slaves to China.

China’s holdings of U.S. Treasuries have plunged to $821.8 billion — the lowest level since May 2009.

The selling began in July of last year — but according to figures released by the Treasury Department this week, the selling accelerated in July of this year.

The mainstream is trying to write it off to China’s economic troubles. Here’s Reuters: “Analysts said China has been under pressure to defend its weakening currency, the yuan, and the selling of U.S. debt may have been used for intervention purposes to prop it up.”

Maybe that explains the most recent selling. But clearly we’re seeing a reaction to U.S. sanctions against Russia.

As we’ve said from the beginning, Washington’s move to freeze the dollar-based assets of Russia’s central bank in February 2022 was a watershed: Dozens of leaders in other countries are wondering if it could happen to them too.

China is making its way to the exits — not in a panic, but definitely with purpose.

How times have changed in 13 years. In late 2010, a group called Citizens Against Government Waste released a viral video with the title “Chinese Professor.”

Set in the year 2030 at a Chinese university, a lecturer describes America’s downfall and China’s rise. The gut-punch came toward the end: “Of course, we owned most of their debt, so now they work for us.”

It was a powerful reminder of the dangers posed by a ballooning national debt: If you owe too much of it to foreigners, foreigners can call the shots.

Back then, the national debt totaled $13.5 trillion.

This month, it surpassed $33 trillion — and we have a whole different problem. Foreigners want to dump their U.S. debt — which, over time, translates to a flood of dollars returning from overseas to the United States.

Just one more reason inflation is not in retreat and in fact will probably define American economic existence for the rest of this decade.

The Inmates Aren’t Running the Asylum… But the Guests Are Running the Motel

The labor shortage is getting so bad…

[Pause for audience response: How… bad… is it?]

It’s so bad that three guests at a La Quinta Inn in Nashville briefly took over and ran the joint. And chronicled the episode on TikTok…

They checked in late — very late — after a night of partying. “After checking to make sure no one had fallen asleep behind the desk or in one of the back offices,” reports USA Today, “the friends began to answer phones, greet customers, even set up the breakfast buffet.

“They did manage to find one employee, a maid, who didn’t know what was going on but said she had not seen anyone in a couple of hours. They also reached out to the general manager, who was on a business trip in California and wasn’t aware that there were no employees on the floor.”

Soon a manager from a nearby Holiday Inn — another Wyndham-owned chain — showed up and got them checked in, thanking them for the help and promising they wouldn’t be charged.

“The crew headed up to the sixth floor to decompress in one of the only rooms available, thinking everything was fine,” continues USA Today. “But as soon as they entered the room, they spotted a naked woman inside. The lady proceeded to tell them she would be staying at the hotel for the next two weeks.”

Back downstairs, they threw themselves upon the mercy of the Holiday Inn manager: “Can we please just go stay at your hotel?” said one. “Because this has just honestly been a s***show of a mess.”

He agreed. “The friends end up with three suites and free breakfast,” says the article, “after the manager makes a call back to his hotel, gushing over how amazing they had been.”

Good stuff. Who says millennials are incapable of taking initiative?

The Mailbag

After yesterday’s edition, a reader writes with tongue firmly in cheek: “I was aghast hearing that employees of U.S. companies in China are required to attend mandatory training sessions on Chairman Xi’s thoughts!

“What next? Mandatory training on critical race theory? Sessions explaining the evils of white privilege? The truth behind ‘the science’?

“Those Chinese indoctrination methods sure can be heavy-handed!”

We’re not sure what we published that brought on the following broadside but…

“I am fuming at our government, the UN, WEF and Americans who think anything that is being planned and implemented (attack on oil and gas, banning gas appliances, requiring a ridiculous 90% carbon capture from power plants, now attacking cement and steel just to name a few)... Why are we not fighting harder? 

“The media and government fill us with distractions such as our ‘warm’ war with Russia in Ukraine, the transgender conflict, abortion, social issues while real damage is being done to our country with illegal immigration, adherence to outrageous ‘climate change’ globalist agenda, the de-dollarization efforts which have gained steam and can at least be partially blamed on the Biden admin's weak foreign policy and unfriending the Saudis, the allowing of and even supporting Chinese policies and infiltration into U.S. education systems, land and company purchases (even near military bases) and not even trying to counter China's policies/interventions/partnerships in many, many African and Central/South American countries.

“I recently travelled to 10 African countries for 11 weeks and returned home with a heavy heart seeing poverty, corruption and Chinese influence and really economic colonization of many countries.

“I am appalled every day at the lack of regard for the American citizen and our national ideals by the liberals/progressives, the permanent bureaucracy in the U.S... and the easily found support in big corporations, the media, and influential Hollywood folks. 

“I love your columns and what you choose to address. Keep doing what you do — enlightening us and focusing on issues of true importance to Americans.”

Dave responds: That’s a long bill of particulars there. A handful of random thoughts…

• The war in Ukraine is not a distraction — it’s an existential threat to humanity, maybe not as imminent as the Cuban Missile Crisis, but lasting much longer

• China’s overseas strategy was aptly described by our former colleague Neil George as “invest, not invade.” Compared with the economic hit-man tactics Washington has employed for decades, who can blame leaders in the Global South for doing business with China?

• The House of Saud was never friends with the American people — and it’s apparent from the Joint Congressional inquiry into the 9/11 attacks that elements within the Saudi government helped to finance those attacks. Even if they didn’t, it was the presence of U.S. troops in Saudi Arabia that drove Osama bin Laden to do the deed.

“The U.S. owes Saudi Arabia nothing, and the Saudi government has never been our ally,” Daniel Larison wrote for The American Conservative in 2020.

“Whatever value the relationship with the Saudis may have had 40 or 50 years ago has greatly diminished, and at this point they are a liability to U.S. interests.”

Amen. If the Saudi princes want to join the BRICS, good riddance to bad rubbish.

Best regards,

 

 

 

 

Dave Gonigam
Managing editor, Paradigm Pressroom's 5 Bullets