Looking Backwards …
LB #1
This past week was a whipsaw of volatility before the long holiday weekend. Nvidia came out with earnings on Wednesday(their stock price fell dramatically), but there was a very shadowing happening that I want to point out that is more important than Dollar General’s earnings and guidance (their stock fell dramatically), Super Micro Computer’s double whammy of accusations of accounting irregularities and then delaying their earnings release the next day(their stock fell dramatically), and Ulta’s inability to put makeup on this pig (their stock fell dramatically). The 2 year/10 year Treasury curve finished the week at one point inverted.
This from Jeff Cox at CNBC “An inverted curve has been the harbinger of most every recession in the U.S. since World War II, as it indicates that traders see growth over the longer term slowing. (1 basis point equals 0.01%.)… In fact, the yield curve generally does normalize just before heading into recessions as traders begin to price in the likelihood that the Federal Reserve will have to start lowering interest rates as way to battle the economic slowdown.”
We have been inverted for the longest time in decades and now the curve is starting to uninvert? Why now? This classic recession indicator sits atop the Sahm rule that we discussed a couple weeks ago which has a 100% track record. We are starting to get lots of evidence that maybe all is not well in Camelot.
LB #2
We now go to the best weather in the world, the wonderful and beautiful San Diego where all that sunshine must be melting people’s brains. This from the College Fix, “The University of California San Diego removed some information about its STEM program only open to female high school students following a federal civil rights complaint. Graduate student Robin Glefke created the program which “brings female San Diego-area high school students to campus for a weekend of hands-on learning, introducing them to career paths in science, technology, engineering and math,” according to the university’s post on X.” This program was called Stem Girl Summer. Now how on earth would you have a problem with that C Thomas? Girls learning about math and science should be a good thing correct? Let’s go back to the movie Mississippi Burning and the closing statement by fresh on the scene actor Matthew McConaughey where he says imagine she’s white. Imagine if this was a boy’s only stem club? The outrage would be so fierce that they would run out anyone involved in this program with nothing but two fish tacos in their pockets and an avocado.
It’s illegal is my point. Graduate students, deans, and faculty should know that it is illegal. Back to the Fix article, “Civil rights activist Mark Perry told The College Fix he believes the university removed the information after he shared a “courtesy copy” of his Title IX complaint. He said in his complaint that the university should open the program to all students or create an equivalent opportunity for male students…
Perry shared an email he wrote to the university counsel and chancellor, which stated:
Based on my experience filing almost 1,000 federal civil rights complaints for more than 2,000 violations of Title VI and Title IX at more than 850 colleges and universities, I would have to describe your STEM Girl Summer program as legally indefensible and unable to survive an upcoming investigation by the San Francisco Office for Civil Rights. Therefore, I would encourage you to conduct your own internal legal review of your discriminatory program while OCR evaluates, investigates, and resolves my complaint. I am confident that if this illegal program had been reviewed by your office for legal compliance with federal civil rights laws before it was implemented, funded, and offered, you would not have approved this program.
This likely led to the change, Perry told The Fix via email over the weekend.
He said:
I’m sure it’s another example of hundreds of when a graduate student, staff member, faculty member, administrator, etc. comes up with a new program that discriminates based on sex and/or race, and they don’t realize the program is illegal, and they never think it’s necessary to get legal clearance from the university’s legal office and so the program goes forward. Once the General Counsel reviews it, it takes only a few seconds for the lawyers to realize it’s illegal and they scrub the website (or change the requirements to comply with Title VI/IX). You would think there would be some process in place at universities where new programs would have to be reviewed and given legal clearance by the lawyers before going forward, but that is obviously not the case. You would also think there might be some internal review/audit process in place where the university lawyers would regularly review all existing programs for compliance with Title VI/IX, but that is also not the case.”
This isn’t about girls learning math, it is about law breaking, continuous law breaking. When thieves shop lift continuously we say oh boy we have a problem and the governments scurry to change their dumb laws that basically legalized stealing below $950, this was also in California by the way. I am glad that there are people out there like Mark Perry who check this stuff to make sure that the law isn’t broken continuously. The problem is accountability. Let me give you an example. This has happened thousands of times. Let’s say the first time the fine is $1 million dollars. The graduate student is expelled, the faculty member and the Dean are suspended for a year without pay, and the college has to write a check to boys soccer of San Diego because the boys of the area were wronged. Now, the next time any college wanted to discriminate against young boys that like math and science there would damn sure be an equitable program. My point is that there are no consequences for breaking the law. This isn’t a rule, this isn’t a policy, this is the law.
I consider this equivalent to the stop light cameras. This is proof that people ran red lights because they think their time is more important than the safety and time of other people. Some fancy lawyers cluttered up the law with appeals and now these tickets are being thrown out because the lawbreaker doesn’t like being held to the same standard as people that do follow the law. How about this? First time, $500 fine. Next time $2000 fine. Third time, your car is impounded and sold, and you lose driving privileges for a year. Hop your selfish ass down to the bus stop to get to work for a year and see if that extra second and half was worth it? The lack of accountability in this country is truly stunning. Mark Perry has a full-time job simply stopping colleges from actively trying to discriminate. This is very very fixable. Actually penalize law breakers and give Mark Perry his time back.
LB #3
I am an analog person in a digital age. I took a picture of a typewriter store the other day and I said these are my people. Therefore, I have never believed in digital money. I believe it is credit at best, created by Bank of America in the late 60s or early 70s that basically is a credit for a month because most people will eventually buy more than they can afford, and then they get to charge usurious interest on them. Hence banks and credit cards are the modern-day loan sharks, which they are for the financially undisciplined. This is just 1s and 0s floating around on a ledger and the next supposed improvement on this usurious system was crypto. Their goal is to take this friction, called billions of profits for banks, and eliminate most or all of it. Well we have seen how crypto has replaced one crook with another, See Sam Bankman-Freid, Mt. Gox, or any number of Ponzi scheme crypto organizations. That being said, I believe in the libertarian ideas of anonymous money, protection from governments, and the freedom to interact peer to peer without charges. Someday perhaps I will get myself a digital wallet, some crypto keys, and put $100 in the blockchain so that I can buy my stamps to mail my bills and checks to my utility companies every month. Call it a blend of the past and the present, a way to dip my toe into the metaversey-waters of online nerd finance. But then I read something like this, and I say aww hell naw. This from the Cradle “Crypto exchange platform Binance has seized the accounts of numerous Palestinian users at the request of the Israeli government for allegedly being linked to “illicit funds” and “terrorist organizations…According to Ray Youssef, co-founder of crypto marketplace Paxful, Binance has “[refused] to return the funds. All appeals denied.”
“All Palestinians are affected, and judging by the way things are going, all Lebanese and Syrians will get the same treatment. Not your keys, not your coins,” Youssef added.”
I was under the impression, incorrectly I now see, that crypto was a way to transact outside the government. How can a request by Israel just get an entire countries assets seized? This is what America did to Russia. How can anyone trust Binance again? The article notes that Palestine’s traffic went up 80% since August 2023. I would say so, Israel has been bombing the shit out of the entire region with everyone afraid to fight back because America is itching to get into a war. Palestinians are trying to put their money is something safe that can’t be taken by force or blown up. I didn’t realize that the sites could freeze assets, so it appears that the crypto is no different that banked assets like Russia had frozen so scratch old C Thomas buying stamps with his new digital wallet anytime soon.
Looking Forwards…
LF#1
We go now to the future of Germany. Germany is flirting with recession and industrial collapse, but they are simply paying for the sins of their past and by sins I mean piss poor decisions. Let’s look at a big one. This from Ross Pomeroy at RealClearWire, “At the dawn of the millennium, Germany launched an ambitious plan to transition to renewable energy…In 2002, nuclear power supplied about a fifth of Germany’s electricity. Twenty-one years later, it supplied none. A layperson might think that cheap wind and solar could simply fill the gap, but it isn’t so simple. Once up and running, nuclear reactors provide reliable, affordable “baseload” power – electricity that’s available all the time. Ephemeral renewables simply can’t match nuclear’s consistency. And since an advanced economy like Germany’s requires a 100 percent reliable power grid, fossil fuel power plants burning coal and natural gas were brought online to pick up wind and solar’s slack.
The net result of German politicians’ shortsightedness in phasing out nuclear power is a vastly pricier grid. The new analysis shows that if Germans simply maintained their 2002 fleet of reactors through 2022, they could have saved themselves roughly $600 billion Euros. Why so much? Well, in addition to their construction costs, renewables required expensive grid upgrades and subsidies. Moreover, in this hypothetical scenario where nuclear remained, Germany enjoyed nearly identical reductions in carbon emissions…Jan Emblemsvåg, a Professor of Civil Engineering at Norway’s NTNU and the architect of the analysis, imagined another scenario out of curiosity. What if the Germans had taken the money spent on expanding renewables and instead used it to construct new nuclear capacity? According to his calculations, they could have slashed carbon emissions a further 73% on top of their cuts in 2022, while simultaneously enjoying a savings of 330 billion Euros.” The average German GDP growth rate from 1992 to 2023 was 1.6%. In the last 20 years the German GDP has grown from $2 trillion to $4 trillion annually meaning adding almost $1 trillion in energy savings over that time would have been worth 1.2%-2.5% in GDP annually. They lost about half of their GDP growth rate by moving away from Nuclear and towards an inferior and more costly energy source. Pomeroy sums up his writing with a gangster quote, “Policymakers in other countries looking to decarbonize their grids should take note.”
LF#2
Well unfortunately Ross Pomeroy, this country didn’t seem to heed your warning. Let’s go to Mike Shedlock’s report on Mishtalk.com that explains what the state of New York is doing with their resident’s money, besides lighting it on fire. “It currently costs NY about $36 per MWH for energy. But the state demanded wind. Let’s discuss the amazing bottom line results.” Now let’s compare the current price to the findings of the Wall Street Journal’s article Why is New Yorkl paying so much for wind power? “New York state signed a contract in June to buy electricity generated by two large wind farms, Empire Wind 1 and Sunrise Wind, off the coast of Long Island. The projects are expected to begin in 2026 and 2027, with power delivered to Brooklyn (Empire) and Long Island (Sunrise). The state will pay $155 and $146 per megawatt-hour, respectively. These prices are steep, at least four times the average grid cost paid over the past year.
States agree to pay wind-power operators—known as the “offtake price”—based on a project’s “break-even cost,” the estimated bill for building and operating the wind farm over its useful life. That is undoubtedly part of the problem. The offshore wind business off the East Coast is in turmoil. Operators have canceled projects from Massachusetts to Maryland that were due to be constructed in the next four years. Some have been delayed, while others have renegotiated their contracts at prices 30% to 50% higher than originally promised.
Two widely quoted sources of break-even costs are the U.S. Energy Information Administration and Lazard, an investment bank. In its most recent estimates, the EIA suggests the average break-even cost of offshore wind farms, adjusted to 2024 prices, is $131 per megawatt-hour, not counting government subsidies, and $101 per megawatt-hour after allowing for basic tax credits. The latter figure is what matters, because every offshore wind farm expects to take advantage of investment or production tax credits under the Inflation Reduction Act.”
Now let’s let Mike respond, “Let’s pause right there because wind is absurd by any measure.
The cost of wind is $131 per MWH without credits and $101 with $30 in tax credits according to the EIA.
A handout of $30 is an 83 percent subsidy (30/36) and the deal still is still nearly 100% per MWH in the red, losing $35 per MWH over the cost of buying energy at market rates…With a break even cost of $101 (thanks to subsidies), Equinor will make $54 per MWH and Orsted will make a mere $45 per MWH on something whose total cost should be $36 per MWH. I believe the math speaks for itself. Not only will New Yorkers pay over four times the going rate for energy, the US will send $3 billion to foreign companies to do so. Congrats team Biden and New York State.”
Folks this is too dumb to make up. This isn’t hidden like the Stem Girl Summer in a college website, this is in the Wall Street Journal. How are New Yorkers not outraged? Is that not why the New York Comptroller is expecting a budget shortfall of $36 billion by 2027. Folks, I can’t determine if this is purposeful financial destruction by outright theft or incompetence not seen since the Los Angeles Clippers of Donald Sterling and V. Stiviano.
LF#3
I have taken up too much of your time today already but I have gotten all fired up on rampant stupidity, but there is one more item of note. I’ve been watching the city of San Francisco slowly slipping into a walking pigpen of hypodermic needles and business vacancy, but let’s not forget that across the bay it is worse. It is Oakland. They have lost their sports teams to San Francisco, Las Vegas and again soon to Las Vegas. Kirk Oneil writes for the street, “After 56 years in business, Park Hotels & Resorts has reportedly shuttered its Hilton Oakland Airport location on Aug. 25 as the neighborhood surrounding the property near the Oakland Airport has deteriorated in recent years. Not only have Oakland’s sports teams abandoned the neighborhood surrounding the Hilton, but many businesses have closed nearby over the past decade because of crime. A Walmart in the neighborhood closed in 2016 because of frequent car burglaries, and a popular In-N-Out restaurant nearby closed in March because of car break-ins, property damage, theft and armed robberies, SiliconValley.com reported. Also, a nearby Raising Cane’s closed its dining room in 2023 because of car break-ins and numerous robberies in the neighborhood, KGO-TV in San Francisco reported.” There are consequences for bad decisions and the examples are all around us, we just have to look. If California financially earthquakes off into the sea or if New York wants to run itself fiscally right into the Long Island Sound I could care less, but as we discussed during many episodes they will go piss poor and hat in hand to the Feds and ask for a bailout just like during Covid and then the Fed will bail them out and those are my dollars. That is when I say choke on it. Don’t give these stupid states a dime. Let them understand their stupidity and don’t let them relocate, let them stew in shit for awhile to see what happens when their brains are full of it.
Sincerely Yours,
C Thomas Printer
My goodness, C Thomas, tell us how you really feel?
Ahh, we have an in-studio visit from Austerity Jones, our former financial contributor. How are you doing and what do you think the Fed is going to do in September, one cut or two?
I’m rising like a tide that lifts all boats. And C Thomas- take it to the bank. One cut, 25 basis points only.
Now you know folks as Austerity is usually spot on.
The Dow Jones finished trading …at 41,563.
The 10-year Treasury bond is at …at 3.91%
The price of Brent Crude is … at $ 78.80 per barrel.
The price of gold is … at $2,536/oz.
The price of silver is … at $29.24/oz.
I leave you with this from the information superhighway what did the buffalo say when his son went away to college, Bison.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.